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Manufacturers turn to a public-private group to help streamline operations and boost profit marginsNEWARK – At a time of rapidly shrinking manufacturing jobs in New Jersey, a non-profit group is quietly working to help the companies that still make products here not only endure but thrive.

“As outsourcing accelerates, creating new business isn’t enough,” says Bob Loderstedt president of New Jersey Manufacturing Extension Program (NJMEP), a Newark-based nonprofit that provides consulting to small-to-medium-sized manufacturers. “You have to take out waste to be competitive. You have to bring your product to market faster than your competitor.”

The program advocates lean manufacturing, whose main tenet is that the processes used to produce things can be made more efficient and therefore more profitable. The steps can be as simple as bringing the machines used to create goods closer together on the plant floor. Since lean manufacturing is a permanent way of doing business, not just a short-term fix, supporters of the concept say it can take years to implement fully.

Loderstedt says NJMEP helped companies develop 338 projects last year. Of these, 160, or 47 percent, focused on applying the principles of lean manufacturing. That was up from about 25 percent in 2003, he says.

NJMEP is part of the national Hollings Manufacturing Extension Partnership, which falls under the U.S. Department of Commerce’s National Institute of Standards and Technology. There are 350 such locations throughout the United States and Puerto Rico, which operate through a mix of state and federal grants and revenue from private companies.

Garden State companies that have hired NJMEP to teach them lean principles include Triangle Manufacturing of Upper Saddle River, Johanson Manufacturing of Boonton, and Avionic Instruments of Avenel.

Neil Strohmeyer, president of Triangle Manufacturing, a contractor that makes products including knee implants for medical device companies, says that since hiring NJMEP in 2003, the company has “spent a fair amount of time evaluating the operation from stem to stern, eliminating indirect and direct activities that don’t add value.”

So far, Strohmeyer says, the results have been gratifying. He estimates that Triangle has paid NJMEP $50,000 over the last few years and has seen a return on investment “that is at least five times that on an annualized basis.” One of the most significant lean improvements that Triangle made was to shrink its quality assurance department from five employees to one—freeing up the other four for different duties. “We trained the workers who would normally have to wait on quality inspectors to do the job of quality inspectors,” says Strohmeyer.

Japanese carmaker Toyota is credited with creating and refining lean manufacturing after World War II. The idea has spread from big manufacturers to small ones and from plant floors to offices and industries that include retailing and health care. But according to the Web site of the Lean Enterprise Institute, a nonprofit education and research group in Cambridge, Mass., “lean consciousness and methods are only beginning to take root among senior managers and leaders in all sectors today.”

Competing schools of thought, such as Six Sigma and the Theory of Constraints, strive to achieve the same results as lean manufacturing, Strohmeyer says. “But if you ask me, lean has been the most user-friendly and sought after in the industry.”

Triangle has about 100 employees who work at two plants totaling about 50,000 square feet in Upper Saddle River. Every worker has gone for at least one day of lean manufacturing classroom training with NJMEP, says Strohmeyer, and the group’s consultants have made many trips to the company’s facilities to evaluate progress and make suggestions. Strohmeyer calls it an ongoing process that will continue for years.

Johanson Manufacturing spent some $150,000 last year for NJMEP’s services, says Don Reilly, president of Johanson, which makes electronic components for the telecommunications and aerospace industries. “We’re expecting to recover that amount in savings” by 2009, he says.

The parts maker has some 300 employees at two facilities totaling some 85,000 square feet in Boonton and the Dominican Republic. Among other things, NJMEP’s consultants have helped Johanson to apply lean principles to the company’s 1,800-square-foot stockroom in Boonton. “We’ve gotten rid of unnecessary inventory and gone to a more visual listing of items that makes it easier and simpler to manage the stockroom,” says Reilly.

The company has freed up about half its stockroom space as a result and now needs just one employee instead of two to oversee the area, he says.

“You map out exactly what your current state is, and based on that you design a new, accelerated flow of the product or process by eliminating waste,” says Reilly.

Johanson first hired NJMEP in 2003. The company, which plans on keeping the non-profit consultants on the payroll for years, is starting to bring lean thinking to back-office functions like processing orders, says Reilly.

Other facets of NJMEP’s business come in the form of advising companies on issues such as how to drive more traffic to their Web sites and maintain compliance with international quality standards.

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