The look of lean

RICK LEPA is sitting in his office at Universal Trailer Corporation's plant in El Reno, Oklahoma, where all of the Sooner and Exiss trailers are produced.

He's talking about how Universal's three divisions produce 60,000 units a year, with revenue of over $400 million.

He's talking about how Featherlite has four plants in Iowa — three in Cresco and one in Shenandoah — and Haulmark has six in Pennsylvania, Indiana, Georgia, Oklahoma, Arizona, and Utah.

He's talking about how the El Reno facility is set on 26 acres and includes 200,000 square feet of manufacturing space.

Lepa, Chief Operating Officer for the Exiss-Sooner division, is excited about that. But what really excites him is how they're using that manufacturing space in El Reno.

“A lot of other manufacturers have individual lines for their products to run down,” he says. “We have literally taken all of our products and made them so we can do one-offs and do quicker turns. You can put any product in any line in any sequence. It gives our customers better times on delivery. We can turn a product in three weeks. There are not a lot of people in the industry who can do that — unless they have it sitting in stock.

“We went to lean manufacturing in 2003. Prior to that, we had seven or eight individual manufacturing lines. From the shop floor space we were using when we had the lines, we've regained 60% of our facility space. You couldn't walk out on the floor before. Today, you can drive golf carts through the plant. We've gained 30% in labor efficiency. We've improved safety by over 300%. We've improved our quality and reduced our finished goods.”

Lepa pauses and leans back in his chair.

“Lean manufacturing,” he says. “It definitely has had its positive impacts. We're embracing it. That's what it's all about today — continuous improvement. If you're not in that mode, you'll soon be eaten up by the competition.”

A tour of the plant, given by manufacturing engineer David Walker, illustrates exactly what Lepa is talking excitedly about.

Walker says the company has worked arduously to create a better, more logical flow throughout the plant. In Building 200, where the components are made, he says they have been installing more automated and semi-automated sawing processes that will ensure that standard parts are produced every time.

“It's basically eliminating waste and trying to create processes so that you must do things correctly,” he says. “You want to get the parts there just as you're using them, keep everything clean, and be able to find everything in a moment's notice.

“It's been a big transformation. It's been progressing slowly but surely. We're trying to get more used storage and eliminate handling as much as possible. The end result is a more efficient process that lowers costs for our organization as well as the customer.”

All of the work centers contain flow racks.

Inventory is kept in small quantities on the production floor in controlled locations called kanbans, and it is replaced only as it is used. Kanban is a Japanese term meaning “signal” — or, as Walker puts it, “Hey, we need more parts.” It signals a cycle of replenishment for production and materials, maintains an orderly and efficient flow of materials throughout the entire manufacturing process, and is usually a printed card that contains specific information such as part name, description, quantity.

Tools are organized so that it takes no longer than 30 seconds to find the desired one.

Bulky, heavy flooring that used to be loaded on trolleys is now put on a conveyor.

“This year, we're in a push for material handling and safety,” he says. “We'll work more with manipulators that grab big doors so people are not lifting them.

“The past couple of years, there's been a big push on getting everything cleaned up. It's created a lot more space on our production floor. One of the things we'll try to do is add new material-handling systems. We'll have train routes throughout the plant, with pick-up and drop-off locations. It's kind of like DisneyWorld, where you ride a little train and everything tracks behind it, picking up and dropping off as necessary.”

New product

In Building 500, where the final assembly is done, they're usually working on a lot of different types of trailers. But at the time of tour, Exiss Sport 8' wide living quarters trailers are dominating space because the new line is being launched.

The Exiss Sport trailers offer more value at a reduced price. Universal's strategy is to hit every price point and have a product for everybody.

The new features of the Exiss Sport trailer include: a heavy-duty king pin that's been painted with electric static paint and attached to an enhanced nose design; an optional heavy-duty drop with two doors and a gravel guard; a solid one-piece manger that prevents leaking; a rear divider that safely tucks away with no need for telescoping; a huge rear tack that's open to the manager; and a 50" load door opening that allows for easy loading of a golf cart.

As is the case for the other Universal aluminum trailers, the fasteners in the main frame are Huck bolts. They are mechanically applied, removing all human error from the installation process.

Sooner trailers make use of .063 T-lock side sheets that are crimped and taped. Sheets are bent at a 90-degree angle with a 3/4" flange using a press brake. These flanges are then butted together and crimped using a hydropneumatic crimping device.

“It's an extremely strong bond, and a very clean look,” Walker says. “I think it sets us apart.”

The shell of the trailers is produced in the El Reno plant and then the trailers are shipped to Sierra Interiors in nearby Yukon or Elkhart, Indiana, where the living quarters are installed before they are shipped back to El Reno for final inspection.

Walker says that when they're making the shells, the platform and side walls come in at exactly the right time to be put together.

“There's no buffer zone,” he says. “They come off the line at the same time the guys need it. That's pretty lean.

“At the wiring station, the technician sees all the part numbers he needs, gathers them up and installs them online. The materials and assemblies are stored at point-of-use, so when this trailer moves down, the dividers will be installed next to the stored location.”

In the break room, the company has constructed a huge board with the header, KEY PERFORMANCE INDICATOR STANDINGS. Below that are charts of the company's quality, productivity, sales, safety, operation scrap, inventory turns, incomplete trailers, and continuous improvement.

“The idea is to keep up on the main things we're hitting on,” Walker says. “Everybody keeps track of it. It's kind of, ‘Hey, here's how things are going. Here's where we need improvement.’”

The dream comes true

Universal Trailer is the culmination of Roy C Culp's dream.

For 22 years, Culp worked for American Trailers — which specialized in semi-, over-the-road-type aluminum trailers — and then went into business for himself late in 1973. He thought there should be a market for small aluminum gooseneck-type horse and cattle trailers, since all of the small gooseneck trailers were manufactured using steel components.

With just one welder and two employees, he started Featherlite, building a new facility in Tuttle, Oklahoma, in 1974.

Six years later, Culp, his son, Rodney, and a Featherlite dealer put together a package that allowed the construction of a 30,000-square-foot facility in Cresco, Iowa, and all Featherlite production moved there.

Featherlite was sold in 1988 and the Culp family agreed to a 5½-year non-compete period, which allowed the family to continue selling Featherlite trailers retail.

In 1994, Lepa hooked up with Rodney Culp.

“We came up with a concept: What if we were to give the customer super-high value and go to modular-type construction — do the lean, pull the labor out of it?” Lepa says. “We went to a dealer meeting and said, ‘What if we could actually give you this Mercedes, and instead of it costing you $42,000, we're going to sell it to you for $20,000 and still make a profit?’ We sold 2500 units at that show. We came over here to El Reno, bought the land and put the plant up.”

The new trailer company was Exiss Aluminum Trailers. Within six years, there were over 900 employees and $70 million in revenue.

That's when Culp started developing a vision of initiating a market consolidation that would create the largest manufacturer of specialty trailers in the country.

“I looked at the management team and said, ‘OK, we can grow slower or take advantage of what I think is an opportunity to consolidate the industry,’ ” he says. “So we went shopping for an equity partner. I said, ‘It's kind of like getting married.’ And one of my friends said, ‘No, you can get out of a marriage. You get an equity partner and you're pretty well in.’”

In October 2001, Dubin Clark & Company became that equity partner.

Dubin Clark, founded in 1984, is a private equity investment firm whose sole activity is buying and building businesses in partnership with their management teams. Dubin Clark provides the capital necessary to support internal growth, completes add-on acquisitions to build market share, and helps to develop new strategies for the future, while protecting the independence, culture, and values that made the company successful in the first place.

The group's first purchase was Haulmark Trailers in Bristol, Indiana, a market leader in the cargo and car trailer industry that has six plants nationwide and over 400 retail dealers. With that purchase, the company became the largest specialty trailer manufacturer in the country and grew from $70 million to $185 million.

In 2003, the group was named Universal Trailer Corp and a strong management team was assembled, with a strategy to drive revenue to $500 million by 2008.

In 2004, it acquired Sooner Trailer Manufacturing in Duncan, Oklahoma, and reached $250 million.

The next year, it acquired the Miley name and trademark. And in 2006, Universal acquired Featherlite Trailers.

Today, Universal is at over $400 million in revenue and still eyeing $500 million.

Culp remains a board member and minority shareholder, but his plan is to “fade away” and let everyone else be more involved.

“It's been fun watching it — the process of an equity partner going out and recruiting the management team and seeing it all take place,” he says. “It's put all the employees here in a better situation, because they have a lot more security being part of a larger organization. They have a lot more opportunity to do things in a bigger organization.”

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