Ruari McCallion looked behind the figures to see why Alexandria Extrusion
Company is such a productive company Not everybody in an enterprise can be actively
engaged in productive work on the
shopfloor. As well as the accounting function,
the IT, sales, and general administrative
employees have essential contributions to make.
But a manufacturing company with a total payroll
of around 280 and sales revenues of $45 million is
doing pretty well. Alexandria Extrusion Company
(AEC) is such an organization, and it has achieved
it by investing in its people. It works closely with
Alexandria Technical College—rated in the top 10
of its type in America—in the belief that an
educated workforce is a productive workforce. The
idea seems to be on the right lines, as it’s reaping
the rewards and has been able to retain business
when competitors are seeing jobs exported across
the Pacific.
Founded in 1966, in Alexandria, MN, AEC’s
production facility now extends to 150,000 square
feet. The company prides itself on producing highquality
extruded aluminum components for a
diverse range of customers, from recreational products through boat manufacturers
and exercise equipment to the medical equipment sector. In
1996, it became one of the first aluminum
extruders in America to achieve ISO 9002 and now
holds ISO 9001:2000. It’s a relative newcomer in
the medical market but it already has a clutch of
awards, including the 2003 MDEA Design
Excellence Award, and both the MEDTRADE
Distinction Award and Innovation Award in 2002.
Twice recognized by the Minnesota Quality Council,
it has received the Minnesota Governor’s
International Trade Award, also.
Minnesota gets its fair share of jokes about the
extremes of weather that it experiences but, come
rain or shine, the people of the state get on with it.
But talent and a positive approach can only go so
far. AEC was founded on the philosophy that it
should always give the workforce the best tools
and let them get on with the job. Those tools are
both physical and mental. Somewhere around half
of the people on the payroll have graduated with a
two-year degree from Alexandria Technical College, in various disciplines,
and approaching 90 percent have passed through some kind of
extension training.
Machinery hasn’t been left behind, either. AEC
has invested in advanced CNC centers and a
completely new automated plant, opened three
years ago. The layout was decided upon only after
an extensive global tour, which looked at no less than
280 operations over a period of two years. They took
the “best of the best” that they encountered, with the
clear objective in mind reducing non-value added
activity and about helping the
operatives to achieve smooth
material flow.
The process of producing
extruded aluminum requires
large machinery, which isn’t easy
to move, once it’s in place. And
automating processes is a
double-edged sword: it can
produce savings in time and
labor but it “freezes the process
in place,” whether good or bad.
AEC has sought to get the best of
both worlds—productivity and,
at the same time, flexibility. The
factory has been laid out so that
material moves much shorter
distances. The larger machines
form the core of production, with
loading and transfer very largely
automated. Lighter machines are surface-mounted
around their big brothers, and so are easier to
rearrange, if necessary. Materials handling has
been designed to be very visible. No station can
produce at any time any more than can be
handled at the next stage.
The benefits of reorganization can take time to
show up in the figures, but AEC can already point
to measurable, positive outcomes. Inventory turns
have been improving year by year. Raw materials
inventory turn is up to 45 to 50 a year; overall, it’s
achieving 25 to 30 turns annually—which includes
items that it holds for customers.
It’s common knowledge that robots are very
good at doing dirty, dangerous, or repetitive work
very well, exactly the same way, time after time.
The drawback was that everything had to arrive
and be aligned in exactly the right way. It’s not
unknown for the time taken to layout work for
robots to completely offset the theoretical time
savings. AEC has adopted a Vision System that
allows it to run multiple parts down the same line.
It identifies which particular part is arriving, for
which job, and how the item is oriented, which
allows the robot to pick and place everything as it
as required—even if it’s out of standard alignment.
Robots have helped AEC to reduce labor costs:
in some cells, one operative can complete work
that previously took three people—but the
automation is there to assist, rather than to
replace workers. In some areas, labor costs have
been reduced by as much as
80 percent, but that hasn’t
resulted in cutting staff.
Instead, the company is able
to undertake more
work—and retain a contract
that would, otherwise, have
been outsourced to China.
The improved efficiencies
enabled AEC to compete
effectively on the total
package of labor costs,
flexibility, and lead time.
AEC has been working
with its suppliers and has
not restricted its drive for
improvement to the
manufacturing area. It has
arranged its work cells
around common needs,
rather than individual markets, and the groups
extend to the administration floor, where there are
big opportunities to pick low-hanging fruit.
Customers deal with the same group of people—all
the way from first-call customer service to finished
goods. AEC has eliminated those frustrating and
annoying phone calls that are answered by
someone who doesn’t have a clue what you’re
talking about and hands you on to someone else,
in exactly the same boat.
But, as the saying goes, improvement is a
process, not a destination, and the lead-time
reductions of 50 to 70 percent that have been
achieved in those areas already modernized are
being extended to others, in a rolling program of
test and implementation. Reorganization—and a
well-educated workforce that is flexible and willing
to embrace change—has enabled AEC to achieve
world-class production levels and remain
competitive in a global marketplace. |
