The Road to Quality
Lawson Products set out to achieve ISO registration three years ago and has since learned that the process is not a sprint -- it's a marathon
By Victoria Fraza -- Industrial Distribution, 1/1/1998
About eight years ago, managers at Lawson Products were invited to a quality seminar hosted by some petrochemical customers in Texas. Thinking the workshop was about quality control, the company gladly accepted the invitation. As it turned out, the focus of the meeting was not just quality control, but the emerging trend of Total Quality Management. The TQM concept was new to Lawson Products, and managers walked away not knowing quite how to tackle it.Jeff Belford, Lawson's executive vice president, admits the company floundered a bit at first, making several attempts to initiate a quality program at the 46-year-old general- line distributorship. It wasn't until late 1994 that the company decided to go after ISO 9000 certification. Within a year of starting the process, Lawson Products' Des Plaines headquarters was ISO 9002 registered, followed a year later by its Addison, Ill. facility. And Lawson hasn't slowed down yet. Its Reno, Nev. facility was recommended for registration in October of 1997, the Toronto, Canada branch expects to be registered by the end of the first quarter, and the company plans to start the ISO process at its Dallas branch this year.
The ISO movement, along with a parallel move towards warehouse automation and centralized purchasing and distribution, has meant a culture change for Lawson. Once a solid company providing good services, it is now a forward-thinking corporation constantly working to improve those services.
The ISO part of that equation has had a significant impact on the company. Belford explains that ISO offers a three-pronged value: First, customers are demanding quality systems these days, so ISO certification has the potential to open some new doors. Secondly, ISO is a morale booster -- a rallying flag for everyone in the company. And last but not least, it's just a good way to do business.
"Financially, it helps you,'' Belford reasons. "We have enjoyed greater efficiencies, which have led to reductions in cost.''
Financials over the last two years prove that. Lawson Products enjoyed a 12 percent sales increase in 1996 -- to $250.3 million -- and expected to see similar gains in 1997. At press time, results through the third quarter of 1997 showed sales were up 11.7 percent as compared to the same period in 1996. Though a significant portion of the sales gain is attributable to the company's April, 1996 acquisition of Automatic Screw Machine Products -- a manufacturing and distribution division -- managers say the quality initiative has played a major role in Lawson Products' overall growth since 1995.
Making the quality move
The decision to embark on ISO in 1994 involved much planning. A steering committee was formed to set the direction of the process. Dan Minkus was named total quality management administrator and given the monumental task of setting the project's wheels in motion. Special teams were established to address quality issues, problems, and concerns. In April of the following year, the Des Plaines location had put together its quality manual, written its quality promise, and gone through a gap assessment -- a procedure that measures what the company needs to do to attain ISO compliance.
The good news was that Lawson Products was doing many things right. What the company lacked was the documentation of procedures and the centralized reporting of customer feedback and ISO discrepancies. So for the next eight months employees worked to improve those points. There were other things Lawson Products needed to work on, as well -- first and foremost was making sure employees understood the importance of the ISO program and knew exactly what quality meant to Lawson Products.
"[Education] is so critical to what we're doing here,'' says Minkus, a nine-year company veteran. "We needed to make sure people understood what quality and ISO meant to the company.''
So Lawson's human resources department developed ISO classes for the 350 Des Plaines employees. The idea was to explain in detail the ISO premise -- that companies create efficient ways of running their businesses to ensure they deliver quality products and services to customers. The first class was called "ISO Awareness'' and was aimed at all employees. A second class, "Awareness Part II,'' focused on what to expect when an auditor came for an inspection. The third class was called "Feedback Fuels Customer Satisfaction,'' and focused on tracking and fixing mistakes. A fourth class was a skills assessment workshop for managers which concentrated on documenting training procedures.
Though all classes were important to Lawson's overall mission, the third class stood out, marking a culture change within the company. Mistakes and problems had always been corrected, but Lawson had never established universal procedures for doing so. Now, in addition to standardized procedures for taking corrective action, each ISO-certified location has a material review board that examines and reviews each action to ensure the right thing was done.
"It forces people to take a look at what's wrong,'' Minkus explains. "Now, there is a standardized method of reporting.''
The problems Lawson Products ran into are common to many companies tackling ISO --though the educational programs the company initiated to solve them are not. Lawson will likely run into similar problems as it continues to certify each of its U.S. locations. The company has a corporate ISO registration certificate, so that each time a branch is registered, it is added to that document. As a result, the scope of the entire project gets bigger each time the ISO process is implemented. And while Minkus points out that with experience each implementation gets easier, he also notes that the road to complete ISO registration is not a sprint -- it's a marathon.
Parallel improvements
While the quality movement was gaining momentum, a parallel move toward centralized purchasing and distribution was also taking place. In the early 1990s, upper management met with the company's regional managers to find out what aspects of the business needed improvement. The outcome caused another cultural change within the organization -- one that, like ISO, was focused on the customer.
Belford explains that Lawson Products had been measuring success in its own terms rather than in the customer's. To measure performance, for example, each branch tracked the number of orders taken, packaged and shipped on a daily, weekly and monthly basis. After talking with regional managers, it became clear that customers didn't really care about that at all -- what they cared about was the accuracy, brevity and completeness of their orders. Lawson needed a better way to make sure customers were getting the right products in a timely manner. To combat that problem, the company decided to implement warehouse automation and begin to centralize some of its key functions.
"We started to change the corporate thought process,'' says Belford, explaining that automation and centralization went hand-in-hand with ISO because they showed that Lawson cared about the "ABCs of quality'' -- accuracy, brevity and completeness.
If you walk into the Des Plaines, Addison, Ill., or Reno, Nev. locations today, you will find what looks like a factory's assembly line weaving through a painstakingly organized warehouse. In Addison, blue plastic totes move along a conveyor line waiting to be filled with the products for a specific order. Products are placed in carousels or bins at different stations along the assembly line. As each tote passes by a product station, a scanner reads the bar-coded label attached to the outside of the tote. If the order requires a product from that station, the tote is taken off the main conveyor line and sent along another line to where it can be filled. A warehouse clerk fills the totes in his station from the rotating carousels. A sophisticated computer software package tells the clerk which products go where. Once the totes are filled, they move back on to the main conveyor line and eventually make their way to the packaging and shipping area.
The Reno and Des Plaines facilities work in similar ways. Belford explains that automation has significantly increased both the speed and accuracy with which orders are filled. But that is only part of the project they started five years ago. The project calls for inbound and outbound facilities -- the former is where bulk products will be received, inspected, packaged in Lawson boxes and sent to the distribution centers where they will be warehoused until needed to fill an order. Outbound facilities will function as distribution centers -- receiving the packaged products from the inbound facility and then shipping them to customers. Addison is the company's first fully automated outbound facility.
The Des Plaines headquarters is the inbound facility (and the purchasing center for all locations). Right now, 100 percent of the products needed at Addison and Atlanta come through Des Plaines, while 25 percent of those going to Dallas are funneled through the headquarters. Belford expects to have all locations receiving 100 percent of their products from Des Plaines by the end of the year. One exception will be the Reno, Nev. facility that functions as a back up -- working as both an inbound and outbound facility.
Though a significant investment -- Belford would not reveal the cost of the project -- the new system has proven beneficial. Today, performance charts at the Des Plaines, Addison and Reno facilities measure the ABCs of quality, not just the ratio of orders taken to orders shipped. And like ISO, the results have been increased efficiency and improved customer satisfaction -- which has benefited Lawson's relationships all around.
"As far as customer service goes, that's the heart of their business,'' says Jay Hebert, vice president of sales for Lake Erie Screw Corp. in Cleveland, Ohio. Lake Erie has been a supplier to Lawson for over 30 years, providing standard as well as private label fasteners. "Lawson has always been concerned about quality...their name is very much a high-quality name.''
An essential part of Lawson's commitment to quality is its commitment to technology and electronic commerce, says Hebert. Because Lawson is always trying to find better, faster ways to deal with customers -- whether over the Internet, through CD ROM catalogs or by warehouse automation -- Lake Erie Screw Corp. is able to feel that much more secure in its relationship with Lawson.
What makes leaders at Lawson Products feel good is knowing that their investments in quality and efficiency over the last few years have paid off. And one way to measure that is through employees. Minkus recalls the original quality promise written back in April of 1991 -- a promise aimed at customers and employees. A year later that promise was revised to include customers, employees, suppliers, sales agents, the community and shareholders. Employees made those changes, says Minkus, because they began to internalize the idea of quality and accept it more as a mission statement than anything else.
With that kind of commitment from the inside, Minkus and Belford say that just about anything is possible.
AT-A-GLANCE
Lawson Products
Headquarters: Des Plaines, Ill.
Founded: 1952
Locations: 9
1996 Sales: $250.3 million
Primary Products: MRO fasteners, parts, chemical specialties, welding rods and supplies, hydraulic and other flexible hose fittings, and electrical and shop supplies.
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