PBN Manufacturing Awards 2024
EXCELLENCE IN LEAN MANAGEMENT: Hexagon Manufacturing Intelligence Inc.
IN LESS THAN three years, Hexagon Manufacturing Intelligence Inc. is reaping the benefits of lean manufacturing.
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Hexagon, a Sweden-based manufacturer with North Kingstown being home to its North American operations, provides digital reality solutions that combine sensor, software and autonomous technologies. The company’s Continuous Improvement Journey, Lean Six Sigma Green Belt Certification Program was designed to create a culture of continuous improvement that empowers all employees to identify and eliminate inefficiencies, optimize processes and drive innovation.
Employees participating in the program receive tools, resources and training to achieve the goals of identifying and eliminating waste, streamlining processes and increasing productivity at Hexagon.
While the program’s original focus was on manufacturing, Steve Ilmrud, vice president of Hexagon’s North America operations, says the program extends beyond manufacturing and includes areas such as finance and human resources. He says it is now a companywide effort, providing the company with savings outside of manufacturing.
“All groups have problems that they don’t have time to figure out,” said Ted Coppa, director of Hexagon’s business operations for the manufacturing intelligence division who oversees the Continuous Improvement program. “We work on the business, put people and resources on the problem.”
Green Belt projects are tied to business goals and seek to provide cost savings, cost avoidance, generate revenue, reduce time and boost customer excellence. The target areas for cost reduction include direct labor, direct materials, design costs and factory overhead, among others.
“The savings have exceeded our expectations,” Ilmrud said.
There’s no shortage of success stories. Hexagon avoided spending $2.1 million in freight costs by improving its inbound freight costs. The backstory is that in 2022, Hexagon faced challenges in meeting customer orders, particularly due to a lack of part availability issues from its suppliers.
Company officials say it was necessary to use air freight to expedite those parts to avoid delaying customer orders. In 2023, the team shifted from air to sea freight to be more cost-effective, optimizing inbound logistics, meeting customer orders and decreasing its carbon footprint.
Another change generated $588,000 and improved customer satisfaction by proactively reaching out to customers, improving the conversion percentage of quotes aged three weeks or older by 5%. The follow-up process was standardized to contact customers sooner to remind them of the open quotes.
The numbers speak volumes. The Americas Lean Six Sigma Program has resulted in $550,288 in cost savings; $2.4 million in revenues; saved 13,259 hours; and $2.2 million cost avoidance for a total financial impact of $5.1 million.
The program has been good for the business and employees. Program participants get mentors, coaching, training, learn skills, apply them to a project they are assigned and share their skills and experience with other employees they work with.
“The program has taken on a life of its own,” said Melissa LeBron, senior operations analyst for North America, who also oversees the Continuous Improvement program. She said there is a waiting list of employees wanting to volunteer for the program.
“Employees who go through the program feel empowered. We’re creating a more engaged, satisfied workforce,” Ilmrud said. “They feel like the company is investing in them and they do more. We get cost savings and an improved employee base. It’s a win-win for everyone.”
Perhaps the biggest win the program delivered, LeBron says, is changing the employees’ mindset and behavior. Initially, she says people were hesitant about change because they had been doing things a certain way for a long time.
“It’s outstanding how things have evolved. Employees have opened up to better ways of doing things,” LeBron said.
The program continues to evolve. This year the Black Belt program was added. Ilmrud described it as being more advanced and taking on more complex problems at Hexagon.
“The real challenge is to develop a culture where the entire workforce is always looking for better ways to do things, and not just the people who have been in the program,” Ilmrud said. “This will produce more ideas that improve our business.”
