Pelican Products Inc. has pushed forward lean manufacturing and quality efforts and substantially increased output without expanding physically.
During three years, the firm pushed on-time delivery to 80 percent from 57 percent and increased annual turns of finished inventories to 30 from about 13.
The company received ISO 9001-2000 certification in October 2002.
``Keeping everything as lean as possible is a good thing in the long run,'' said David Parker, president and chief executive officer.
He tries to apply realism to the ongoing continuous improvements. Sometimes, he noted, people may spend time trying to solve a situation that is not broken. ``You can kaizen something to death,'' Parker said.
Parker started the business from his garage in 1974 and incorporated in 1976. Essentially, he parlayed his scuba-diving hobby and common sense into a profitable enterprise. He brought production in-house in 1989.
Pelican ``is a great example of continuous improvement,'' said Jerry Feingold, president of Continuous Improvement Consultancy in Ventura, Calif. ``They keep building on past gains.'' Feingold assisted Pelican with some early implementation of its strategy.
``We needed to start changing the culture,'' said Scott Nicholson, Pelican's director of quality assurance and manufacturing engineering.
The company, which makes high-quality flashlights and protective equipment, still faces stiff foreign competition.
``It took 18 months for [employees] to understand it'' and work past some initial resistance, Nicholson said during a plant tour. ``Now people ask for kaizen events.''
From 2001-03, the Employment Training Panel, a California program, supported skill-development instruction for 140 Pelican production and administrative employees. Topics included value-stream mapping, continuous improvement, ergonomics, workflow balancing and waste reduction.
Pelican staff members trained each of the employees for 80 hours with some assistance from the Lean Enterprise Institute Inc. of Brookline, Mass. ETP reimbursed $145,600 to Pelican for 80 percent of the employees' time away from production.
In addition, Pelican provided training for 30 workers with hourly salaries under the ETP program's guidelines, said Dana Brooks, human resources manager.
Beyond the training, Pelican has invested $60,000 in its initiatives and is ``reaping large benefits from them,'' said John Hoven, vice president of operations and engineering. ``The payback is huge.''
With the culture understood, Pelican aims to control processes through Six Sigma initiatives.
``This whole planning system is being put into place to help us effectively hit 52 turns'' of finished inventory per year and serve customers better, said Steve Hochheiser, information technology director. That is on top of going to 30 turns now from 13.
Within the first six months under kaizen disciplines, Pelican ``had a 33 percent reduction in inventory, based mostly on finished goods,'' Hochheiser said. ``Since that time, our sales have grown, and our inventory hasn't.''
Nine engineers design products, and three handle manufacturing development. Pelican is launching 17 new products and conceptualizing another 13.
Pelican introduced a $375-retail Cube Case with 20-inch-long sides and removable casters in 2003. The cases have a water- and dust-proof Neoprene O-ring seal, automatic purge valve with Gore-Tex membrane and double-throw latches that can withstand 400 pounds of strain. The firm is adding to the line.
With a new mold, ``we will be capable of shooting our large cases with part weight up to 48 pounds,'' especially for a new 24-inch cube coming this year, said Martin Campbell, molding plant manager.
Pelican molds the cases of a specially formulated high-impact polyolefin. Flashlight bodies contain engineering thermoplastics such as ABS, polycarbonate, the PC-polybutylene terephthalate blend Xenoy and the PC-aliphatic polyester blend Xylex. GE Plastics makes Xenoy and Xylex.
``We just started using Xylex,'' Campbell said. The material is targeted for three new flashlights including two utilizing popular light-emitting diodes.
Pelican operates 18 Milacron presses and one Engel and plans in September to add a new 1,100-ton Milacron unit with a tie-bar puller.
Each press carries a name. Large capital letters on the enclosure identify the largest press, a 1,760-ton unit, as King Kong, and a 1,500-ton press is Godzilla. Both Milacrons - part of Pelican's latest expansion - arrived in late 2003. An earlier manager from the Midwest tagged Millie, Polly and Carolyn onto smaller machines, which start at 55 tons.
In cutting steps, Pelican moves an injection molded component directly to assembly, packaging and finished inventory.
``From pellets to machine to finished goods, we have cut the lead time by 75 percent,'' Nicholson said.
Pelican is perfecting a portable work cell for the new Versabrite III LED flashlight. Positions exist for the head assembly, head pin, screw holder fixture and clip pin and, nearby, for blister packaging and master packing.
On another workbench, a crew of engineers and assemblers experimented with ways to link assembly and molding procedures for another new product. The design phase since September has explored ways to manufacture more efficiently.
``They have to make sure everything is working correctly,'' said Lisa Richardson, senior manufacturing engineer. Trials with toolmaker-supplied prototypes occur on the table and again at the press. Initial production runs will take place once the new tool arrives.
Pelican seeks to ``minimize or eliminate gluing and heat staking and [is] going more toward mechanical assembly using screws and press fits,'' Nicholson said.
Pelican employs 450, occupies 145,000 square feet in Torrance and had 2003 sales of $72 million. About 30 percent is shipped outside the United States. Pelican has sales offices and warehouses in Edmonton, Alberta, for Canada and Barcelona, Spain, for Europe.
Other output goes to Asia. ``We sell a great deal to the fire departments of Hong Kong and Taiwan,'' Hoven said, and ``we have a presence in Singapore, Australia and New Zealand.''
``We have averaged [sales gains of] over 20 percent per year over the last 10 years,'' Parker said. ``Our goal is $85 million this year and $102 million for 2005.''
Despite the growth, ``we have not added any space or appreciable people,'' Hoven said. ``We have been able to do that growth by lean manufacturing.''
Pelican disdains copying and aggressively protects trademarks and trade dress, according to Richard Kern, vice president and chief financial officer.
In December, Pelican reached an agreement in a trademark infringement dispute with Team Products International Inc. of Parsippany, N.J. In July, Pelican obtained an agreement from Ningbo Toco Electric Co. Ltd. of Yuyao Zhejiang, China, to cease the sale and distribution of copies of five of Pelican's flashlights. In May 2002, Pelican obtained a confidential payment from Koehler-Bright Star Inc. of Wilkes-Barre, Pa., and Hubbell Lighting Inc. of Spartanburg, S.C., in settlement of a suit. Other infringement actions are pending against firms in Hong Kong and Vernon, Calif.