Consumers Interstate Corp. has been helping customers reduce their procurement costs for more than 20 years. But these days, the Norwich, Conn.-based company has put a name and a trademark to its process of streamlining procurement efforts for manufacturing customers throughout the Northeast: Lean Procurement is this distributor's twist on lean manufacturing, the quality improvement process that has become a top priority in business management circles around the world.

CIC's president and CEO Kenn Fischburg explains that his company is “connected to the lean manufacturing evolution.” CIC began applying lean principles to the procurement process in the late 1980s as a way to stay competitive; helping customers consolidate suppliers and eliminate steps in the purchasing process made CIC a valuable ally in the supply chain, Fischburg says. With the advent of the Internet, CIC developed a patented e-commerce system for ordering safety, janitorial and office supplies, taking even more steps out of the procurement process and eliminating many of the headaches that go along with buying MRO products.

As Fischburg describes it, Lean Procurement is a strong procurement process that has no waste. And his goal is to deliver that experience to customers as a value-added service.

“We help customers streamline their procurement process,” Fischburg says matter-of-factly. “[Because], if you are not involved with lean, or any of the methodologies to become streamlined, my prediction is that you will not survive as a manufacturer.”

Lean manufacturing is a process of improving efficiency and eliminating waste in manufacturing production cycles. The theory dates back to at least the early 20th century and has many predecessors, but is most often linked to Toyota Motor Corp. and its focus on continuous process improvement. Simple steps such as adjusting the amount of inventory on hand for a particular job or reducing the number of steps it takes to complete a task are hallmarks of the lean process.

Companies that embrace lean manufacturing instill a “lean culture” among employees, creating teams or groups charged with reviewing processes and making suggestions for improvement—typically called “kaizen” events. Today, lean manufacturing has extended beyond the factory floor to other departments and to non-manufacturing industries.

Enter Consumers Interstate Corp. Fischburg admits to being a lean junkie, having spent a recent Saturday morning creating a value stream map (a diagram of a business process) of his company's entire workflow—from the time they target a customer to the acquisition and servicing of that customer and on through to invoicing and payment.

CIC is just beginning to formalize an internal lean culture, but has been focused on eliminating waste in the procurement process since 1985. That's when the company developed its Priority Program, a process that consolidates customers' supply base and simplifies their ordering process.

Under the Priority Program, CIC analyzes customers' procurement processes, identifies wasteful activities and implements a streamlined solution. That includes consolidating customers' purchases of janitorial, packaging, safety and office supplies to CIC; taking the ordering process out of their computer system and putting it into CIC's system; and replenishing products as needed based on pre-set inventory levels.

The advent of the Internet gave the program a boost of adrenaline, as CIC was able to move the ordering portion of the system to the Web. Customers were able to log on to CIC's e-commerce site, supersupplies.com, and re-order their regular items through CIC's “favorites” system, now known as its Internet Procurement Method. Fischburg received a patent on the Internet-based system in 2005.

There are no separate fees for the Priority Program or the Internet Procurement Method. As Fischburg explains, the system is designed as a competitive advantage for CIC and as a value-added service for customers.

“When we first came out with our Priority Program in 1985, nobody was doing that,” he explains. “We were focused on telling people they could consolidate and buy many supplies from one distributor. … And in that time period, we had a nice leadership niche in our marketplace.

“Fast forward to 2000 when we came out with our e-commerce strategy and helped [customers] work into an e-commerce plan. We really took a leadership role then as well.”

Now CIC is focused on the next level. The company is training its sales reps to be experts on CIC's Internet Procurement Method so they can act as consultants, showing customers how to apply CIC's brand of lean principles to their procurement process. This means analyzing customers' processes with value stream maps and kaizen events, identifying unnecessary activities and implementing the Internet Procurement Method for their purchase of MRO supplies through CIC. The distributor now markets its Priority Program and Internet Procurement Method under the Lean Procurement umbrella.

“My objective is to have our customers realize that our objective is to help them streamline their procurement process,” says Fischburg. “All of these things are pointed toward efficiency.”

For customers, Lean Procurement is a way to outsource the pain and cost associated with buying those small items that keep their machines running and their plants safe and clean. Just ask Bill Greider, vice president of East Hartford, Conn.-based Dur-A-Flex, which makes polymeric flooring materials used in commercial, industrial and institutional markets. A CIC customer for six years, Dur-A-Flex has experienced the advantages of Lean Procurement first-hand, buying all of its cleaning supplies, packaging products, plant safety items and office supplies through CIC's Internet-based system.

Greider says the main advantage of the program is that it saves time.

“They have one of their people come into our company once a week and figure out what we need to buy so we don't run out,” he says. “No one in our company has to think about that anymore.”

Dur-A-Flex's purchasing agents can spend more time sourcing big-ticket items—raw materials and machinery, for example—when they leave the ordering of paper clips and safety goggles to the experts at CIC, Greider adds. And he says it only took a matter of weeks to get the system up and running. CIC reps formed a kaizen team of Dur-A-Flex and CIC employees, analyzed the manufacturer's MRO procurement process and recommended a leaner process to management. CIC documented all the steps and savings along the way before implementing the final solution, which Greider says eliminated virtually all of the work involved in purchasing MRO supplies. In particular, he says Dur-A-Flex's computer system is no longer bogged down with an electronic trail of purchase orders and invoices.

And that means cost savings. Greider says CIC has eliminated hundreds of purchase orders for janitorial, packaging, safety and office supplies. When you figure the average cost of a purchase order is about $100, that translates to big savings.

“We had 150 invoices before from 25 suppliers; now we're buying all those items from CIC and they summary invoice once a month,” Greider explains. “[That] saves tons of money in not having to process invoices.

“For example, previously, for a $26 invoice [we required] a sign off, an approval, etc. Then, just to cut the check was $80 to $110. It's kind of crazy.”

Though Dur-A-Flex has worked with CIC for the last six years, the company has only been using Lean Procurement for the last eight months or so. Greider explains that he needed to have his own company well-versed in—and accepting of—lean manufacturing principles before CIC's system would work. Dur-A-Flex has been implementing lean manufacturing since March 2005. CIC's Lean Procurement method is just another step in the continuous improvement process.

“This is the most I've thought about MRO items since we put this system in place,” Greider says.

Consumers Interstate Corp. has taken its lean program a step further in 2007 by hosting Lean Procurement seminars for existing and prospective customers. The full-day seminars feature presentations by lean manufacturing experts, a tutorial on CIC's Lean Procurement program by new business director Ivan Owen, breakout peer discussion groups and a tour of CIC's facility. The invitation-only seminars are free for all attendees; Fischburg describes them as yet another value-added service.

“We're providing extra value for our customer base in order to keep the customer relationships that we have and grow with more of them,” he explains, emphasizing the educational and relationship-building aspects of the seminars. “The real thing is to provide value to our customers.”

CIC presented two seminars this year, one in June and one in mid-September. The September session hosted 38 manufacturer customers, all at varying levels of familiarity with lean. Speakers included lean expert Jose Garcia, president of CGI Engineering, a continuous improvement firm specializing in Lean Six Sigma training, design and project management; Drew Hatteberg, senior vice president of operations for Pet Food Experts, a New England-based distributor that is implementing lean manufacturing principles internally; and Don Gordon, supply chain manager at saw blade manufacturer Disston Co., which is also involved in lean manufacturing. Garcia gave an overview of lean concepts; Hatteberg and Gordon followed with examples of how they've applied those concepts at their companies.

“It was a 10 out of 10,” Fischburg says of the seminar, which was a $5,000 investment for CIC. “Every attendee gave us a hearty thank you and everyone went away with an action plan.”

That includes Fischburg and his colleagues.

“I'm practicing the lean manufacturing tools by finding processes inside my company that are cumbersome and organizing kaizen groups to improve those processes, eliminate the waste and decrease the lead time for responses,” he says.

Customers have been energized by CIC's outreach efforts. Rick Budlong, corporate lean manager at International Packaging Corp. in Pawtucket, R.I., attended CIC's spring seminar and said at the end of the day he walked away “re-energized in my own passion for lean improvement.”

Budlong went on tell Fischburg in a statement endorsing the event that, “The fact that Consumers Interstate, one of our company's vendors, would host such a grand event as a value-added service to us was the icing on the cake.”

CIC limits participation in each Lean Procurement seminar to 40 people; that's the maximum number the distributor's training room can hold comfortably, Fischburg says, adding that it also helps to keep the afternoon discussion groups small. He says he expects to continue hosting the events as part of the company's next phase in its journey to extend lean manufacturing concepts throughout the supply chain.

“You can see that we're helping people implement something in their own industry. We're not even making a sale on the lean manufacturing [services]. We're just a part of their executive team,” Fischburg explains. “What we offer is a way to help our customers be more competitive in their own environment.”