Wayne's Computer-Designed Plant Spurs Quality, Efficiency, Growth

A JOINT EFFORT between the collegiate and corporate worlds has produced a truck body manufacturing plant that combines new technology and proven manufacturing techniques to significantly improve efficiency, capacity, and quality at Wayne Engineering Corp in Cedar Falls, Iowa.

A manufacturer of refuse bodies, Wayne teamed up with the Center for Industrial Research and Service (CIRAS) to design and build a plant twice the size of the company's previous location but with three times the production capacity. Wayne and CIRAS accomplished that objective with some new equipment, but primarily through considerable analysis of how fabrication is done-and where.

Long before the plant was designed, CIRAS conducted a fee-for-service project for Wayne. An extension office of Iowa State University, CIRAS was responsible for several areas, including:

* A detailed analysis of Wayne's existing plant and cycle times.

* Using and guiding teams of Wayne employees to study alternative plant layouts.

* Selecting the most effective material handling equipment.

* Developing a final layout.

Critical Beginnings A CIRAS spokesman believes that knowing in detail how a fabrication operation works is critical to finding ways to make it more efficient. For example, an early study of Wayne's machine shop showed that parts traveled 90,299 feet through that department alone.

"We started by constructing a model of their facility to use as a baseline in evaluating layout alternatives," says Mike Willett with CIRAS. "This is a crucial step because it is easy to improve a layout design but difficult to compare alternatives without factual performance indicators."

Wayne employees performed much of the legwork that the researchers required, particularly in the area of measuring the machine location and material travel. After the exercise was over, management could pinpoint the amount of travel required to produce each product. Analysis of this information identified ways to manufacture products with a minimum amount of material handling.

"CIRAS worked with our employees to identify what worked and what didn't work," says Wayne Worthington, vice-president. "Team facilitators helped employees to share their ideas and to train them as a team."

Crunching Numbers CIRAS fed the results into a computer for analysis. The resulting report helped management make a wide range of decisions, including how many mounting bays that the new plant would need.

"They told us that if we built 12 mounting bays, we could achieve a 98% on-time schedule rate, based on the time and variation of the products we manufacture," Worthington says. "If we decreased the number of bays to 10, we still would be on schedule 89% of the time. Given construction costs and a variety of other factors, we chose to build 10 mounting bays in the new plant. That was a decision that was easy to make once we had good information on which to base it."

Even with good data, designing a new plant was a difficult process, Worthington says.

"The number of decisions that need to be made are incredible," he says. "Where should this go? How big should this be? What type of that should we use? CIRAS' researchers brought a lot of insight into the process."

Getting It Built Wayne broke ground on the new plant in January 1996 on a 15-acre site in an industrial park that the City of Cedar Falls gave the company.

"We also received some state and federal grants that further reduced the cost of the plant," Worthington says. "And the University of Northern Iowa bought our existing plant from us for its appraised value."

Nor did the new location require a significant increase in plant equipment, given the plant's size and the amount of fabrication required to produce refuse packers. However, Wayne did make some major acquisitions, including three paint booths, 23 underslung cranes, and a 300-amp ESAB plasma cutting system.

The paint booths are semidowndraft models. As such, makeup air flows into the booth at the top and is exhausted from the bottom of the opposite end. Two of the booths measure 20' x 60', while a third is 18' x 35'. Each booth has its own air makeup unit.

Construction of the facility was completed in October 1996. After a four-month ramp-up, Wayne reached full production in February 1997.

Accent on Efficiency So what does a computer-generated truck body plant look like? One of the more interesting features of the new plant is an automated system for keeping plenty of hydraulic oil on hand. The facility is equipped with a tank that has a sensor to monitor the level of oil. When the level is low enough, the sensor activates a modem to contact Wayne's supplier to restock the supply.

However, the major emphasis was not on high-tech devices, but on basic efficiency-efficiency in terms of the way material is handled, the way energy is consumed, and the cost-efficiency of expanding the facility to accommodate future growth.

Lighting plays a key role both in terms of employee productivity and in the amount of energy used. The plant uses 2,000-watt sodium vapor lamps, selected after computer simulation.

"CIRAS had the software that enabled us to see what effect various variables had on overall plant lighting," Wayne Worthington says. "We could adjust lighting levels on the screen so that even the darkest areas of the new plant receive more light than the brightest spots did at our old plant. The general light in the new location is so good that we have all but eliminated task lighting."

The sodium vapor lamps are superior to the eight-foot fluorescent tubes that generated light in the previous plant. And they are not as prone to collect dirt. As the tubes collected dirt, output diminished.

Other Steps to Save Energy The plant also saves energy by means of:

* A rotary-screw air compressor. In addition to reducing energy consumption, this type of compressor does not generate the noise of a conventional unit.

* The heating system. Four 2.2-million Btu heaters use less energy than the multiple small heaters that the previous plant used.

* Using a 480-volt electrical system for the plant instead of 220 volts. The higher voltage results in less amperage draw, Worthington says.

The plant is designed to be able to be expanded in proportion to the amount of fabrication, assembly, painting, and mounting bays that would be required to handle additional growth.

The Need to Grow Wayne built the plant in response to a steady increase in demand, particularly for its Curbtender automated sideloader. The Curbtender has become more popular for several reasons, including an industry switch to automated sideloaders and a marketing agreement the company has with the Leach Company.

Leach had been searching for a way to augment its line of rear loaders. Under the terms of the agreement, which the two companies reached in 1994, Wayne manufactures the Curbtender, and Leach markets and services it through the Leach distributor network. Wayne builds the units, puts Leach decals on them, and ships them directly to the customer or Leach customer or dealer.

"Leach has a strong distributor network," Wayne Worthington says. "And we had a product that fit well with the Leach product line. The agreement has really increased our sales of sideloaders."

Back from Bankruptcy The new plant culminates a long climb for Wayne. The company is part of an elite group that has successfully emerged from Chapter 11.

"If I had known going in that only 3% of the companies filing Chapter 11 ever get out, we probably would not have made it," says Cynthia Worthington Goro, president. "We just didn't know any better, so we succeeded."

Shortly after receiving her MBA, Goro joined Wayne, only to discover that her family's company was in difficult financial circumstances. The year was 1983, and a series of events had the company on shaky financial ground. Among the factors management cites as contributing to the bankruptcy:

* Wayne's product liability insurance company went out of business.

* The Russian grain embargo implemented by the Carter administration was a major blow to grain body manufacturers. Until then, grain bodies had been a major product line.

* With an exceptionally slow economy, bad debts began to increase, creating cashflow problems.

* The hydraulic motors used on the company's Gruncher refuse bodies began to fail. The Finnish manufacturer of the motors refused to honor its warranty.

Fresh from Notre Dame's graduate school, Goro had the distinction of being the first one in her class to lead a company into bankruptcy.

"We discovered that a lot of what we considered to be fixed expenses really aren't," she recalls. "The copy machine lease, for example, can be extremely short term when you tell the vendor that you can no longer make the payments. We had to renegotiate a lot of our commitments, and our employees were asked to accept some pay cuts.

"The key to operating under conditions such as these is to communicate openly. We kept close to our vendors. We told them what we could do, and then we did it. Being honest with people is extremely important. If you lie to a vendor and betray his trust, it will take at least three to five years to be able to earn it back."

Expanding Horizons Wayne Engineering did more than just cut costs, however. The company also intensified efforts to increase sales. One major source of new business was the export market.

Getting into the export market in a major way was a result of legal action the company took against the manufacturer of the hydraulic motor used on the Gruncher. Stan Worthington was spending considerable time in Finland. While there, he began making sales calls and found considerable interest in the company's refuse equipment products among Europeans.

"Stan has become our export guru," Wayne Worthington says. "Because of his efforts, we have an on-going relationship with companies in Europe that buy our products and give them local brand names. We also have a partner in the Far East."

Wayne has agreements with companies in Europe, Thailand, the Philippines, Mexico, Venezuela, two in the Caribbean, and one in India. Under the terms of the agreements, Wayne provides the offshore manufacturers with drawings, engineering assistance, and hydraulic components.

Wayne also exports manufactured goods. The company's rear loader can be exported in kit form. The automated side loaders also are exported. But because of their complexity and integrated design, they are shipped as completed units.

The fact that export customers use the metric system has not been a significant obstacle to international acceptance.

"We can't buy metric steel here in the U S," Wayne Worthington says. "Even so, that has not been an issue. But we are in the process of supplying metric hoses and fittings on those units built for use internationally."

Winning Awards Having bounced back from bankruptcy so strongly has won President Cynthia Goro several awards. Among them:

* The 1997 Turnaround Entrepreneur of the Year Award from Ernst & Young for Iowa and Nebraska.

* The 1996 Working Woman of the Year Award from the Cedar Falls Chamber of Commerce.

* The 1997 Development Partner Award from the Cedar Falls Chamber of Commerce.

On the international front, Wayne recently earned its certification required under a January 1995 regulation for companies selling products in Europe. To earn the certification, Wayne had to document how its products are made, show their safety aspects, and prove that it meets applicable European safety guidelines.

Earning the certification involved shipping a completed refuse truck to Europe and hiring Lloyds Register of Shipping to evaluate the documentation. Wayne has certification for its Royal GT, Super Eight, and Super Six refuse packers.

In addition, the company is working to earn its ISO 9000 certification by the year 2000.

"We believe that the export market will demand ISO certification," Wayne Worthington says. "Plus, we believe that having the systems in place to earn ISO certification will improve our quality and lower our costs."

Family Operation >From the very beginning, Wayne Engineering has been a family company. Wayne H Worthington and his son Stan formed it in 1964 to manufacture the Cargomaster, a bridge crane that mounts inside a semitrailer.

Shortly after the introduction of the Cargomaster, Wayne entered the refuse equipment business with its Mighty Pack sideloader. The Cargomaster remains in production, while Mighty Pack has since given way to a broader line of both side and rear loaders.

Stan Worthington remains active in the company, traveling the world to develop an increasing volume of export business. His wife and children are back at the plant handling day-to-day operations.

Daughter Cynthia Worthington Goro is president, and sons John and Wayne are vice-presidents. John is in charge of operations, while Wayne heads up sales and engineering. Stan's wife, Linda, is the company's export sales coordinator and serves as secretary-treasurer on the company board of directors. In 1992, the U S Department of Commerce appointed her to the district export council of Iowa.

The third generation of the Worthington family now is in executive positions with the company. The members of that generation can draw both from their graduate school degrees in business administration and the hands-on experience that comes with running a family business. And with a new plant in place, they are looking for more.

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