MEDIA SPOTLIGHT: PennEngineering Thrives with Mini-factory Approach

Jason Sandefur

Editor”s Note: Articles in Media Spotlight are excerpts from publications or broadcasts that show the industry what the public is reading or hearing about fasteners and fastener companies.
PennEngineering Fastening Technologies has attached the future of its Winston-Salem operations to advanced manufacturing and teamwork, according to the Winston-Salem Journal. Instead of operating independently, PennEngineering”s 270 local employees work in teams organized by product category and expertise. The teams set their own production goals, arrange their hourly and weekly work schedules and compete for a team-of-the-month rewards program. This gives them an active role in securing their jobs and attractive benefits packages against competition from low-cost imports.
“Some people were reluctant to buy into the team concept because they”ve always depended on themselves for how well they did their job,” 12-year employee Thomas Hicks told the Journal. “But as time has gone along, people have realized the value in working as a team. There”s better communication when someone has a problem. And there”s no boss breathing down our necks.”
PennEngineering Fastening Technologies is the largest of three divisions of Danboro, PA-based PennEngineering and Manufacturing Corp. The division accounted for 53% of the parent company”s $125 million in sales during the first half of 2004.
The division expanded to Winston-Salem in 1973 when it bought former supplier Harvin & Co. The local operations make self-clinching fasteners and other products that are used in computers, toys, appliances, electronics, medical machines and lawn equipment.
The Winston-Salem teams make more than 2 million pieces a day on $5 million worth of machinery. PennEngineering introduced the team concept with the new equipment in 1997, but management initially set the goals for “the little factories,” according to Winston-Salem operations manager Robert Gentile. The company also has drawn teamwork philosophies from a variety of sources, including former NFL coach Vince Lombardi, Thomas Edison and Mother Teresa.
Analysts say that U.S. manufacturers focusing on custom or niche production with highly efficient equipment will have the best chance to compete with lower-cost imports.
Jack Meredith, a business-management professor at Wake Forest University, claimed that PennEngineering”s teamwork strategy represents “fairly innovative thinking for a manufacturer.”
“New technology often requires more teamwork among employees so that everyone understands the goals and how to achieve them,” Meredith mentioned.
Although the team strategy was boosting production at Penn-Engineering by 6% a year, Gentile said the concept did not reach its full potential until managers read The New Shop Floor Management by Kiyoshi Suzaki. Suzaki emphasized that manufacturers and employees must become savvier in reducing costs and coming up with product innovations to stay ahead of emerging technology.
“In the past year, we went from production decisions being top-down driven to team- leader driven,” Gentile noted.
The division also put more emphasis on five teamwork goals quality, cost, delivery, safety and morale. “Everything we do in this plant is affected by those measuring sticks.”
When the technology bubble burst and orders decreased following the Y2K scare, PennEngineering”s sales fell about 30% during the economic downturn of 2000-01. The company laid off about 79 local workers from its peak workforce of 320 in 2000. The parent company also closed a Virginia plant.
“Everyone knew something had to change because the threat to our jobs was very real,” related Thomas Parish, a team manager and a 16-year employee.
Three years later customer demand, particularly in the computer and automotive industries, has increased to where most production employees are working 45 hours a week, with ample opportunity for more overtime. The company recently added 21 employees and plans to expand its workforce further.
Adding employees in a team enviroment, however, is not a simple task.
“We don”t feel a person is completely trained for all of their job responsibilities until they”ve been here two years,” Gentile noted. “That”s why we have two full-time industrial trainers.”
But the investment in people is paying off. Gentile said he expects PennEngineering to benefit from its teamwork strategy for years to come.
“I don”t know how a plant or a business can survive unless its employees don”t have their heart into what they”re making or doing,” Gentile remarked. “We”re all in this together, but they ultimately have to answer to the customer with the quality and timeliness of the product.
“As long as we keep the customer satisfied, we”ll be around for a long time to come.” \ �2004 FastenerNews.com