Everett aerospace supplier Korry Electronics goes lean

EVERETT — The team lead had to shout for his line workers to hear him.

“Cadence and quality, those are the drivers,” he said.

Behind him electric drills buzzed, scissor lifts beeped, and contractors shouted back and forth. Esterline’s Korry Electronics plant at Paine Field had become a construction site.

The plant was stripped and reassembled to make it run smoother and faster with more flexibility. The physical changes, though, are only part of Korry’s comprehensive overhaul into a “lean” operation.

Lean is a business philosophy pioneered by Japanese carmaker Toyota to relentlessly focus on reducing waste and increasing customer value.

Amid the reconfigured production lines, workers were figuring out how to make the overhead control panel for the cockpit of Boeing’s 787 Dreamliners at the plant’s new pace of 17 minutes per station.

“Do what work you can in 17 minutes and pass the whole kit to the next person,” the team leader said.

Finding the new pace will lead to smooth work flows that turn out high quality parts, said Steve Dardaris, Esterline’s lean evangelist.

His vision is to cut production time for one of the control panels from more than 30 days down to five.

Beyond the shopfloor changes, the transformation also means changing how the business is run, including the role of managers and workers.

“The organizational change part is probably the most important part,” and the hardest, Dardaris said.

He will measure success by how much Korry cuts the time needed to make a part, to make design changes and to adapt production.

The goal is a smoothly moving line. Workers are encouraged — and expected — to stop it if there’s a problem. When that happens, line workers and team leaders try to quickly solve the problem — and not shuffle it off to the side, he said.

If the problem can’t be immediately solved, the team leaders’ higher-up comes in, and so on until, it is either fixed or the CEO is working on it as well.

Stopping the line forces workers to eliminate problems, rather than letting them continue to happen.

Lean manufacturing is often called just-in-time manufacturing, but it could be called “in-your-face manufacturing,” said Jeffrey Liker, a professor of industrial and operations engineering at the University of Michigan. “People will respond to avoid pain. When you stop the line, it’s painful.”

Most companies, though, opt to skip that pain all together. Instead, they adopt a lean practice here and there. They say they’re lean, but they “have diluted it into nothing,” Dardaris said.

Too often company leaders grab onto the philosophy as a way to cut workers and costs, James Womack said.

The former Massachusetts Institute of Technology professor introduced the phrase “lean production” to the general public in 1990 when he co-wrote the book “The Machine That Changed the World.” He is now senior adviser at the Lean Enterprise Institute, which he founded, in Cambridge, Massachusetts.

“Most management today is business school management,” he said. Business schools don’t teach people how to lead, “they teach you how to keep score.”

Womack was impressed when he checked out the Korry plant in Everett a couple of weeks ago. He has no connection with Esterline.

“What I saw there, I hadn’t seen in years,” he said. “They’ve got as good a grasp as anybody out there.”

The site has about 680 workers, who make knobs, switches, control panels, displays and other parts for a wide variety of aerospace programs. Korry parts are used by every Boeing commercial airplane program. Earlier this year, Esterline, which is based in Bellevue, won a work contract for Boeing’s new 777X, which will be assembled at the airplane maker’s Everett plant. It also bought the defense, aerospace and technology division of Belgium-based Barco for about $175 million. It is moving Barco’s American-based operations into the Korry plant.

“We were talking about adding a mezzanine” to make room for the new work, said David Rhoden, vice president of operations for Esterline’s Control and Communications Systems unit, which is based at the Everett plant.

After reorganizing the plant, they were able to find room for the Barco work and open up about 20,000 square feet of floor space. And the plant will be able to do the new work with its current workforce, he said.

Lean’s long-term focus can be tricky for a publicly traded company, such as Esterline. “It is a balance, because there is extreme pressure to hit the numbers,” Rhoden said.

Esterline CEO and President Curtis Reusser made it clear when he unveiled the lean initiative, called E3, this past January that it would take several years to implement.

That frustrated many investors, who either didn’t want to wait that long to see results or were skeptical that the company could achieve the gains. The company’s stock price fell from a high of $120.71 in early December 2014 down to a low of $69.77 in early October. The closing price Friday was $77.05 a share, slightly less than the $80.70 per share price Oct. 28, 2013, when Reusser took over as CEO and president.

Reusser first overhauled the corporate office, making it lean and building a team that believes in the philosophy.

With that phase largely finished, production sites are now being transformed. Korry, one of Esterline’s best performing sites, was tapped as the lead plant in North America. The company plans to overhaul four more facilities in the next couple of years.

At Korry, production time is already being cut in production lines that are running again, Dardaris said.

“We’ve seen parts that took hours to make come down to one hour.”

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.