D&M uses lean practices to engage workers

Burlington, Ill. — Chip Owen admits he has a lot of "wild ideas" about how to run a manufacturing company. Since 2013, he's had a chance to implement some of them at D&M Plastics LLC.

Owen didn't have a background in plastics when he and Chief Operating Officer Scott Hagen bought D&M Plastics in 2013. In fact, he had spent the previous 30 years in real estate before they bought the Burlington-based custom injection molder, which has a reputation for being ahead of the pack in terms of technology.

Owen had spent five years commuting to New York City from his home in Illinois to a private equity job. He was tired of the travel and intrigued with the idea of owning a manufacturing plant.

"I have this quaint belief that in order for America to be strong, it has to make things," said Owen, whose full name is Peyton Owen Jr. — but everyone calls him Chip.

"For me, it was a big deal. It was my opportunity to run a business the way I thought it should be run. I have a lot of wild ideas."

For example, he thinks employees should be able to afford to retire someday. So the company has a profit-sharing program that contributes up to 13 percent of their annual pay each year into a retirement account.

Other wild ideas are still in the planning stages. For example, he thinks workers should own a stake in the company where they work, so he plans to eventually introduce employee ownership. He has ambitious plans involving worker medical care, too.

Another change that he has already implemented is an emphasis on lean manufacturing. Owen is a big fan of the 2-second lean philosophy made popular by author and manufacturing guru Paul Akers. So every shift change at D&M starts with a team meeting where workers first talk about safety, then share ideas for process improvements that can save time and money.

Employees have contributed more than 4,000 lean ideas since they started the meetings four ​ years ago, and the company has implemented about 3,200.

"We're generating ideas every single day," Owen said. The result is that although the company's annual sales have been flat since the change in ownership, profitability has improved.

"But it's not really about profit; the money is a side benefit," Owen said. "The real advantage is being able to engage employees in a way that they haven't been asked to engage."

Owen is serious about engaging employees, even when there's a language barrier. He estimates Spanish is the first language for about half the company's workers — more than half when he counts temporary workers.

So to really engage with them, he's made it a personal goal to learn Spanish. He studies about an hour every day and has a one-on-one lesson with a language coach, via Skype, every week.

"I'm getting better, picking up words here and there," Owen said. "I can read Spanish pretty well. The problem is when they speak so fast. And also there's so much slang.

"It's all about relating to your employees. I think it makes me more approachable and more real."

D&M was founded in 1972 and molds for the medical, automotive and electronics sectors. The company says it was the first U.S. full-service turnkey manufacturer to achieve ISO certification, back in 1993. D&M was an early adopter of the IQMS manufacturing system, too, and officials are proud of the company's external defect rate of 17 parts per million.

"I would guess we're one of the more robust users of IQMS," Owen said. D&M has been an IQMS customer since 1998, and "it is integral to how we do business," he said.

Mary Lake, the company's materials manager, is the longest-serving current employee, with 34 years at D&M. She said the biggest culture change since Owen bought the company is how managers interact and get input from everyone.

"I enjoy it myself. Every leader who is here has their own unique qualities, and we find a way to blend them," she said.

While Owen has a degree in mechanical engineering, he admits that for manufacturing expertise he leans on Hagen, who has a background in quality.

Hagen said D&M is known for molding parts that other companies don't want to do, or consider too difficult. That includes geometrically complex, high-precision, high-volume parts made from engineered resins.

Burlington is a small rural village located roughly halfway between Chicago and Rockford, Ill., so it draws workers from both areas. The company has between 75 and 80 workers, and 29 injection presses, ranging from 40 to 310 tons of clamping force. Workers perform a variety of secondary operations, and the plant has a portable ISO 100,000 clean room. Annual sales are about $8.5 million.

D&M is based in a 57,000-square-foot plant that was built in 1993. Manufacturing currently runs on a 24 hour/five days per week schedule. Going to 24/7 is a short-term goal, and Owen has ambitious plans to boost sales.

The company also has a mold shop that it uses to repair and maintain molds. It contracts out mold manufacturing to Chicago-area mold shops.

Employees have contributed more than 4,000 lean ideas since they started the meetings.