Eighteen months ago, Buckell Plastic Co., a custom thermoformer in Lewistown, Pa., went to one of its largest customers to negotiate price increases for packaging products. Instead, Amp Inc., the world's largest supplier of electronic connectors and interconnection systems, turned the tables, demanding more from Buckell for less money. Additionally, Amp told Buckell it no longer would pay set-up charges, said Ted Bickel, general manager for Buckell.
Bickel said the Harrisburg, Pa.-based connector giant basically gave Buckell a wake-up call.
``They asked us to make all the concessions and basically said they wouldn't pay for our inefficiencies,'' he said.
Prior to that meeting, Buckell had been doing business the way it always had: thermoforming hundreds of parts for its largest customers, putting those parts in inventory and shipping them when the customers said to ship. That meant operating with a huge raw materials inventory, an enormous finished goods inventory and uneven cash flow.
``Our material suppliers weren't happy, our customers were not happy and we weren't happy either,'' Bickel said.
With Amp's help Buckell began to reorganize the way it did business to match the way Amp operates. Today, Buckell has a new way of doing business. The firm is on a just-in-time system with its raw materials suppliers and with Amp, a system that has helped Buckell reduce manufacturing costs tremendously.
``We're turning both our raw material and finished goods inventories every seven days instead of every three to four months.'' said Bickel. ``Now we make just what we ship each week.''
Buckell no longer inventories parts, depending on the fluctuations in Amp's business to determine when Buckell gets paid for the often-erratic shipments. In turn, Amp provides Buckell with a yearly purchase order for each part it produces, with a forecast window of three weeks.
``We've gone from making parts that laid around in the warehouse for three to four months to making parts on Monday and shipping them on Friday,'' Bickel said. ``Our throughput is more efficient, our quality level has improved greatly and we're servicing Amp better.''
Buckell just completed six consecutive months of supplying Amp with zero-defect products. Recently, Buckell received Amp's Supplier Performance Award for 1994 based on its success in turning its systems around to meet Amp's needs.
Amp measured the quality and delivery quantitatively and customer support qualitatively. In all three categories, Amp found Buckell one of only 200 packaging suppliers to achieve levels of nearly 100 percent in 1994.
Alan Thompson, supply base manager for Amp, said Buckell was able to maintain acceptable levels of quality and delivery while under extreme delivery pressure.
``They did the job we expected them to do under our strict guidelines,'' he said.
Amp's refusal to pay set-up charges resulted in Buckell being forced to look at tooling change methods. What the company found was that the length of time it took to do a changeover had more to do with the mind-set of the employees than any mechanical delays.
``They knew they had eight hours to do a set-up, so they took eight hours,'' said Bickel. ``Correcting the mind-sets of the people and getting them to buy into what we were trying to achieve for our customers resulted in them coming up with their own ways to be more efficient in their jobs.''
Buckell's set-up people can now do a tooling changeover in 45 minutes to two hours, depending on the tool. The re-engineering of Buckell's operating systems also allowed it to downsize from 60 employees 18 months ago to 32 today, despite a 30 percent increase in work load and twice as many set-ups over the same period.
Buckell expects another year of 30 percent growth in 1995, and is in the process of upgrading and converting its light-gauge equipment from roll-fed to automatic, in-line machinery that will form parts, die-cut them, stack them and place them in boxes in one continuous operation.
In the heavy-gauge department, Buckell just purchased two 4-foot-by-6-foot Triple-A thermoformers with 24-inch depth of draw capabilities.
Buckell offers a variety of secondary services such as computer numerically controlled routing, hot stamping and silk screening in 50,000 square feet of a 108,000-square-foot facility it purchased three years ago. It currently sublets the balance of the building.
The company's 1994 sales were about $2.5 million; the goal for 1995 is $3.3 million in sales.
The lesson Buckell learned, said Bickel, is that companies often need to look internally rather than externally for answers to profitability.
``We finally had to have someone - a good customer - show us there was room for improve-ment,'' said Bickel. ``And it's paid off.''