Who Says We Can’t Compete?

“We went from the black sheep of our company to one of the bright spots,” was how Jim Harden, plant manager of Schneider Electric’s Huntington, IN plant explained the turnaround that occurred. He has gone from 140 employees making transformers in early 2004 to 220 today and already has record sales for the year locked up.

In 1996 the Huntington plant was the only one in the company that went out on strike. Schneider moved ½ of the production out of the plant in 1997. Harden, who came from the engineering side of the business was made temporary plant manager after the strike and became full-fledged plant manager in 2000. About that time the French parent company began looking at how to rationalize global production. Did Huntington, IN make sense in today’s world supply chain, especially when you threw in the past strike at the union plant and a wage/benefits structure much higher than most other plants?

“We saw that the trend was for the high volume, stock items to move production overseas. Seventy to eighty percent of our business was in these items. We were making transformers that were the size of your fist up to the size of a picnic cooler. They were easy to transport and there were five other factories making these same items.” Harden told me.

“We looked at our strengths and weaknesses. We went to the workforce and asked them to get involved and they bought into the changes that we had to make. Most people want to be successful and ours weren’t any different than anyone else. They just needed to understand what we were trying to do and why. They knew that we were on several internal shut-down lists and that our backs were up against the wall.”

Harden did a lot of benchmarking of his plant and developed a new strategy of changing the focus from high volume, commodity products to one of specialty products that had a much lower volume. “This was not a market that we had traditionally played in. We became a technical resource for R & D, got all of the bugs out and then handed off to the high volume plant in Mexico. Today that plant and ours are the only ones left of the six. They even closed another Mexican plant that was similar to us because we were able to offer a better quality product.”

Today the plant’s average production size is only 10 pieces with 70% of the product made one at a time, compared to an average production run that ran into the hundreds of parts. Harden is big on communications, sharing financials, budgets and other key metrics and the workers have responded. Today his union plant logs only 5 grievances/year.

Harden’s plant is a great example of what an innovative, forward looking company can do in today’s fast paced manufacturing environment. There are many others like it throughout the USA.