Employee Owned Companies Look to the Future
Monday, June 6, 2016
A family of small manufacturers in Ohio begin to adopt lean manufacturing, automation
This article was first published in the April 2016 edition of Manufacturing Engineering magazine.
By Bill Koenig
The employee owned companies of Fastener Industries Inc. (Berea, OH) produce some of the most basic products in manufacturing: nuts, bolts, screws, levelers and pins. It began with the Ohio Nut & Bolt Co., founded in 1905 to produce bicycle chains. The company switched to employee ownership in 1980. As acquisitions occurred, those companies were converted to employee ownership as well.
The family of companies, which employ about 160 people, have been managed conservatively as the employee-owners watched expenditures carefully. Divisions of Fastener Industries include Ohio Nut & Bolt, Brainard Rivet Co., Joseph Industries Inc. and Plan-E-Tech Industries Inc., with weld fasteners marketed under the name Buckeye Fasteners Co. The group’s main customers are in the automotive, agriculture and furniture sectors.
Today, the family of companies demonstrates how smaller manufacturers are considering how to add advanced technology and lean manufacturing ideas to become more efficient.
“We’re trying to lean out our plant,” said Jim Troxtell, manager of the Modern Fasteners Plant in Brook Park, OH, near the Cleveland Hopkins International Airport. It’s part of Ohio Nut & Bolt. The plant is installing conveyors to cut down on heavy lifting. Employees and managers also are studying ways to use space more efficiently.
“Once you get rid of some things you don’t need, you find you don’t need a new building,” Troxtell said.“It’s a constant improvement thing, we’re constantly tweaking.” The plant has a “split shift,” that comes in at 9 a.m. (the regular shift starts at 6:30 a.m.) and members are deployed to deal with bottlenecks or areas where extra production is needed on a particular day.
And the plant is starting to bring in more modern machinery. It bought a Shimazu tapping machine to tap small nuts that are very hard to hold. The Shimazu replaced two older machines. The new machine came complete with a touchscreen display – a common sight at larger manufacturers but something new for Modern Fasteners. The touchscreen display provides more visual data for operators than the older machines in the plant with push button controls. It’s a touch of the 21st century in a factory that still has a lot of 20th century equipment.
Similar events are taking place at the Ohio Plant of Ohio Nut & Bolt in Berea. The factory is on Lou Groza Boulevard, named after the long-time kicker of the Cleveland Browns. The factory is across the street from the complex of the National Football League team.
The factory has a new machine for producing welding fasteners for the inside of motorcycle fuel tanks. The machine includes an Epson robot. The work formerly was sent to outside job shops. By acquiring the machine, the work was brought in-house.
Almost Paid Off
“In eight, nine months we almost paid it all off,” said Tim Morgan, the plant manager of the operation.
“This is a very tough part to drill and tap,” Morgan said of the fasteners. Once the new device was up and running, “We load this and the machine does the rest,” he said.
Other newer machines include one from Wafios Umformtechnik that taps a flange nut and runs more than 100 pieces a minute. Another, older Wafios machine taps about 30 pieces a minute. A technician at the Ohio plant of Ohio Nut & Bolt checks a part while standing near an Epson robot.
“We used to tap them one at a time, it was very arduous,” Morgan said.
Like its sister plant in Brook Park, the Berea factory is in the midst of installing conveyors to reduce lifting. In areas where conveyors are operating, “It freed up the operator to run more machines,” Morgan said.
Also, at both plants, tool and machine part storage was centralized, and more clearly labeled so tools could be located more quickly. A small, basic step, but one that resulted in more efficiency.
All of this is causing employee-owners to re-think how their operations are run.
“We used to be afraid to spend the employee-owners’ dollars,” Morgan said. “What we used to do was a time tested method that served well for 100 years.”
That usually meant rebuilding machines instead of buying new ones. In some cases, machines were decades old and had been rebuilt repeatedly.
New Way of Thinking
Over time, managers concluded newer machines were necessary.
“We needed newer machines to the get the numbers we want and the quality we want,” Morgan said. “I like the new way we’re thinking. It’s very invigorating. It’s starting to click. Everybody’s on board.”
Decisions on purchasing new equipment depends on the cost. Managers can make the call up to a certain point (the company didn’t provide the specific figure). Large capital expenditures require approval from the board of directors, whose members are elected by the employee-owners.
At an Ohio Nut & Bolt plant in Brook Park, OH, work shoes of retired employees hang from the ceiling. The Fastener Industries divisions also are confronting modern manufacturing issues, including use of newer materials such as high-strength and stainless steels, and joining dissimilar materials such as steel and aluminum while avoiding corrosion.
“Our engineers are constantly going to trade shows and conferences,” said Larry Kelly, business development manager for Buckeye Fasteners. “We’re investing in new welding equipment” that will “enable you to do better jobs with stainless steel and aluminums.”
In 2015, Kelly said, Fastener Industries benefited from a surge in automotive production, one of the main bright spots for manufacturing last year. Ohio Nut & Bolt is experienced dealing with the auto industry. One of its early major customers was Ford Motor Co., which used the company’s weld screws on the frame of the Model A to allow easier assembly of fenders.
Increasingly, the divisions are doing more custom-made fasteners for buyers. In some cases, custom-made fasteners become stock products as they catch on with other customers.
‘Don’t Waste Money’
While the divisions of Fastener Industries are moving to update operations, there are still reminders how this is not a typical manufacturing operation.
At the Modern Fasteners plant, for example, there’s a part of the operation where work shoes or other objects are hung from the ceiling with small signs. The shoes and other items used to belong to retired employees. When they left the company, they were hung there as a rite of passage.
The Fastener Industries divisions hold on to workers because they’re employee-owners.
“We don’t have a lot of turnover,” Troxtell said. “We’ve had guys who’ve been here 20 years, 30 years.” He said his plant hasn’t had a layoff. “When there is a down time, we get good people who were laid off at other companies,” Troxtell said.
An owner-employee at Ohio Nut & Bolt adjusts a production machine. In the lobby at Troxtell’s plant, there is a screen in the main lobby. One of things it shows is a list of all-time employment duration. The first two listed worked there for more than 50 years.
Business cards for Fastener Industries divisions reinforce the employee ownership. The cards have a symbol saying “ESOP,” short for employee stock ownership plan.” Ohio Nut & Bolt business cards also says, “A Division of Fastener Industries, Inc. An Employee Owned Company.”
What’s more, the thriftiness of the employee-owners still remains.
“We don’t waste money,” Troxtell said. “Look in our office. We have 1960s furniture. But it’s good furniture.”