etitive ligence On time, in fulland on the money

By Carla Waldemar

nUE to the April deluge that l-rTswamped the East Coast, the phones at New England's Jackson Lumber & Millwork wouldn't be working anytime soon.

Not to worry. While this predicament could cause major mayhem at many a company, it was business as usual (well, almost) for this outfit.

Phones are fast becoming antique collectors' items at Jackson since the company recently reinvented the way it operates its manufacturing plant. These folks have executed a bold. 18O-spin from "how we've always done it" in the good old days. (And those days had been good, indeed, to Jackson's three-location, 157-employee operation, founded 5l years ago, with Al Torrisi at the helm today.)

But who's to say that "good" can't get better, with a couple of new best-practices put in place? By reinventing its complete manufacturing operation, the facility has dramatically reduced lead time, improved service, cut back on manual labor, and dropped operating costs by an enviable 2.4Vo.

Here's the backstory, as told by Joe Torrisi, Al's nephew and v.p. of millwork operations, talking via cell while the land lines were down. Business didn't take a hit because, under Joe's lead, those phone lines have been replaced by faster, more accurate communication on computer programs.

"When I first started," recalls this third-generation member of the Torrisi leadership, "the manufacturing plant in Lawrence, Ma., operated in a very large, very old textile mill"-four floors that involved schlepping product by elevator to loading dock and back. "We had a six-day cycle to build, process and ship an order, after a three-week lead time for us to buy materials. We thought we were doing well till we hooked up with [industry consultantl Ruth Kellick-Grubbs. She put me in touch with other people around the country, where we talked about 'just in time' and other nifty little buzzwords. You learn plenty from those roundtables, where you see what other people do. I'm in marketing, not a manufacturing engineer, so I tap into others."

And then proceeded to walk the talk.

Backstory to the backstory: "We were doing our millwork in that very difficult space," Joe continues. "We decided we needed more room for the windows division, so we rented space a mile away-but it was bad: 40 by 350 feet, with doors in the middle, so everybody was always walking 150 feet. My uncle Al owned a 22-acre parcel in Raymond, N.H., half an hour north-an old asphalt plant with I I acres wide open. We were already paying rent, so we decided, why not operate there and pay the rent to ourselves?

"We decided to expand our market into New Hampshire and open a lumberyard there. But lo and behold," Joe laughs, "that meant we'd need an office and a showroom. too. So. 'Okay, let's move the window division up there, too.' We did thatmoved up all exterior products four years ago."

One good move inspires another. Joe kept tuned to how other successful companies ran their business and then, in turn, convinced Jackson to adopt those tricks as the way to go. "We changed our business model for shipping," Joe explains.

The company had been running trucks back and forth countless times a day. "Instead, it made sense to buy new trucks-the biggest ones on wheels-and do one daily bread run, jam-full."

Centralized shipping made sense. So did realigning Jackson's properties. "We worked from two locations, 10 miles apart. So we decided to ship from Lawrence and moved millwork to the building we'd just built in Raymond-54,000 sq. ft.-which opened in January 2006."

The new building was designed with efficiency at the fore. "Here, we can use more machinery instead of labor to move product." (People were not laid off, but put to better use, he hastens to note.) "We used our vertical space, installed racking-and didn't move it around by hand. We found out, right in the first few months, that it gave us better efficiency."

But it didn't chisel away at lead time, still stuck at six days. "So I put out a call for help to our lead man, who knew a consultant I could hire for a four-month project," Joe says. "We started the LEAN initiative (modeled on the Toyota plan aimed at doing more and more with less and less: improving your systems so you can increase capacity). We got that six-day lead time down to"-gasp!-"a day and a half. What we produce today will leave tomorrow," he can guarantee with pride.

Here's the way it worked. Joe brought in his own company's "resident experts," as he calls them-guys from the shop, to walk Joe and his consultant through their procedures in order to shed light on how to tighten them up.

"But with those changes came a culture change for the guys on the shifts," he points out. "They were used to more time. Some were a little slow to jump on board, but actually it ended up making their day easier. Now, at the end of the day we say, 'Here's a piece of paper. Here's tomorrow's order, so they know exactly what they need to do."

"And as a manager," he adds, "I get a report every day"-via email, of course-"that tells me if the order was completed OTIF (On Time,In Full, to borrow Ruth Grubbs' favorite mantra). We're big on measuring, so now I know that if, say, 150 widgets had been scheduled that day and the order went out 98Vo complete, I have a benchmark. I can track it and work toward achieving shipping in full."

"I can do this now," he unfurls the story a bit further, "because we have in-house software, not a canned program."

Another of those aha! moments: "We had a salesman on staff who'd been embellishing our program, on and off, over the years. I went to my uncle and said, 'Having a computer tech is so important, so let's get him off the road-others can go out and sell.' So now he's on board in an upper-management position in IT."

Part of that OTIF mission was made possible thanks to the software he tailored, which prints reports. These days, salespeople receive emails at 8 p.m. asking what order the plant should produce for them. "They must proactively acknowledge it right away," says Joe. "Then we execute it. Also, they get automatic emails regarding back orders so they can notify their customers immediatelyand it's all done via computer," Joe glories in the time and errors saved: "The computer spits it out: No more sitting on the phone."

It also compiles those individual orders into one grand mega-order for the next morning. "At l0 a.m. there's a freeze," Joe says. "Then it prints out the next day's door line work, for instance, so guys can pull tickets and do the prep work that afternoon." Best yet: "We're making exactly the parts we need, so there's no storage. ("Can we add one order to the day?" they still may ask, and it's always "No,we can't.")

That's because, rather than order-by-order, the computer compiles all door orders for the coming day. Then it breaks them down, starting with the most challenging ones-grouping, say. all those that require one color of hinge; then combining them by height and size into a single run-down.

The payoff: Operating costs have plummeted 2.4Vo. "We couldn't have done it in the old location, blut we can do it here, with the help of new technology and the software guy. We rolled it out slowly, in three different steps. But at the end of the day," he grabs another quote from Ruth, "it boils down to three factors: location. software and the person."

Cost-savings lead the benefits, but consider this: Jackson' s new business model requires fewer bodies to do the same amount of work-bodies put to better use elsewhere in the company. Deliveries are better and back orders are fewer. "And now," Joe adds, "I can track my labor utilization. If it takes 100 hours, now I charge my customers for 100 hours; I can pass that cost along to my customers. Before, I was making up the difference with lower margins. Now, I'm more confident that our margins are what they need to be."

Adds Ruth, "Jackson has transformed the manufacturing process to one that's the most flexible, most responsive system I've seen. They can flex their workforce, dramatically reduce their lead time, and improve their service."

"Fewer men, better turns. It's all good," agrees Joe. "Everybody's happy-the c.f.o., the customers-and Ruth."

- A former award-winning LBM trade magaTine editor, Carla Waldemar writes frequently on the industry. Contact her at cwaldemar@mn.rr.com.

Rslrrrns

84 Lumber finalized a $200million sale/leaseback deal with Spirit Finance Corp., Scottsdale, Az., which purchased 53 stores and one truss plant that 84 will lease for at least 20 years ...

True Value Hardware, Mariposa, Ca., within three years will build a 20,000-sq. ft. home center on 3.6 acres across the street from its current 4,800-sq. ft. store ...

Mission Supe rH ardware, San Gabriel, Ca., acquired Alosta Ace Hardware & Paint, Glendora, Ca., from Bob Brown in mid-May and renamed the store Mission Ace Hardware

True Value Hardware,Taft, Ca., opened an adjacent King's Nursery & Outdoor Living June 2; Eric Cooper, owner; Lowell Bennett, ex-Cornerstone Nursery, nursery mgr....

Lowe's Cos. anticipates new stores openings in 4th quarter 2O07 in Vernal and W. Bountiful. Ut., and Dublin and Puente Hills, Ca....

Lowe's will build a 140013-sq. ft. store with 32,940-sq. ft. outdoor garden center in Spokane Valley, Wa.; received approval for a 140,000-sq. ft. store with 31,000-sq. ft. garden center in Hollister, Ca.; won rezoning of a new store site in Eugene, Or., and is considering discontinuing efforts to build in Vallejo, Ca., due to environmental regulations

Lowe's is increasing its current share repurchase program by $3 billion through fiscal 2009 ...

Home Depot continues negotiating to build in a new development planned for a former Weyerhaeuser site in North Bend, Or.; applied to build on 30 acres in Placerville, Ca.; received approval for a second store in Pleasanton, Ca., and evacuated its store in Ontario, Ca., for nearly two hours after a forklift broke a natural gas line connected to a heater inside the store ...

Kihei Ace Hardware, K\hei (Maui), Hi., held a grand opening May 19

Rex Ace Hardware, Petaluma, Ca., will reopen next month, l3 months after the facility was gutted by fire ...

NorthWest Floors is building a new 7,500-sq. ft. showroom in Billings, Mt., to relocate its retail and commercial divisions: an Oct. 1 completion is forecast

Wmrrslrrns/ilrrurrcrur:rs

Anthonv Forest Products has placed its-Power Building System, LtC distribution facility in Riverside, Ca., up for sale

Ore gon Woodworking, Bend, Or., will permanently close this summer and sell off its remaining lumber inventory, blaming competition from China ...

Nevada Wood Preserving, Silver Springs, Nv., suffered a May 20 fire that destroyed $20,000 in inventory, but caused no other damage ...

Timberlake Forest Products, Spokane, Wa., permanently shuttered its fingerjoint stud mill May 4 due to market conditions

RSG Forest Products has resumed production at sawmills in Kalama. Wa.. and Mist and Molalla, Or.; its Estacada, Or., mill remains idle

Arch Wood Protection, Smyrna, Ga., had three of its treated wood products added to the GreenSpec DirectorvSillBor. Wolmanized L3, and FiameGuard ...

Boise Engineered Wood Products has completed a two-year expansion project, significantly increasing capacity at plants in White City, Or., and Alexandria, La....

Masco Corp. has acquired wall panel/millwork installer Erickson Construction Co., Chandler, Az., and millwork/door/windows/hardware installet Guy Evans, Inc., Indio, Ca., as part of its Masco Services Group division

Canfor Corp., Vancouver, B.C,, has idled indefinitely its sawmill in Mackenzie, B.C. ...

Quanex Corp. is reviewing strategic alternatives for its building products group, including selling it, spinning it off, or forming a joint venture ...

Masisa USA announced that its MDF interior moulding products are in compliance with new formaldehyde emissions restrictions to be implemented in California in Jan. 2OO9 ...

National Frame Builders Association will be renamed National Frame Building Association, reflecting its service to the entire post-frame industry, not just builders

APA-The Engineered Wood Association is now accredited as a standards developer by American National Standards Institute

New Web site; Lumber Association of California & Nevada, www.lumberassociation.com

Anniversaries: Larsen Bros. Lumber Co., San Leandro, Ca., l25th A.L.L. Roofing & Building Materials Corp., Los Angeles, Ca., 7Oth ... Forest Products Society, 60th ... Long Beach Plywood & Lumber Co., Signal Hill, Ca., 60th Arrow Lumber & Hardware. Eatonville. Wa., 10th...

Housing starts in April inched up 2.5Vo to a seasonally adjusted annual rate of 1.528 million single-family starts clirl:f,ed I.6Vo to a 1.225-million pace, while (Please turn to page 67)