Michele Nash-Hoff: Louisville Knocks Manufacturing out of the Park

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In mid-November, I had the pleasure of touring manufacturing plants in the Louisville, Kentucky region as the guest of the marketing consortium of the Greater Louisville Inc. Initiative. Well-known as the home of the Louisville Slugger baseball bat and the start of the "Bourbon Road" tours of bourbon and rye whiskey distilleries, Louisville has a much more diverse manufacturing base than I expected. My hostesses for the plant visits were Eileen Pickett and Ceci Conway, members of the marketing consortium.

[Reposted from savingusmanufacturing.com  |  Michele Nash-Hoff  |  December 22, 2015]

Our first visit was  FirstBuild,which is a partnership betweenGE Appliances and Local Motors.We met with Director Venkat (Natarajan Venkatatakrishman) and Randy Reeves of Operations. Venkat said that they are creating "a new model for the appliance industry, engaging a community of industrial designers, scientists, engineers, makers and early adopters to address some of the toughest engineering challenges and innovations." He explained that "Firstbuild's mission is to invent a new world of home appliances by creating a socially engaged community of home enthusiasts, designers, engineers, and makers who will share ideas, try them out, and build real products to improve your life."
 
The Microfactory is divided into four sections: an interactive space for brainstorming, focus groups and product demonstration, a lab for prototyping, a fabrication shop, and assembly area. In the interactive space, there were some current projects on display: a smart chillhub refrigerator with two integrated USB hubs, an easy-load double oven with a sliding drawer, a wall-mounted pizza oven for home use, and a micro kitchen. Randy Reeves gave us a tour of the fab shop, and besides the expected 3D printers, they have a CMC mill and lathe, a small turret press, a press brake, a small stamping press, and a laser-cutting machine. The shop is capable of producing up to 2,000 units per year of a new product.
 
Venkat said, "We test the market for a new product using innovative techniques including Indigogo for crowd funding and preordering of the products. If there is sufficient interest in a new product, we can then manufacture those designs in our Microfactory for rapid product introduction and iteration. We are pioneering the future of work with a new model for inventing, building, and bringing the next generation of major appliances to the market. Since we opened on July 23rd, 2014, we have launched 10 products, and one has been scaled up to mass production."

After lunch, we visited D. D. Williamson (DDW), the world leader in caramel color and a leading provider of natural colors for major food and beverage companies. DDW's natural colorings are used in everything from beer, malt ale, soft drinks, sauces, baked goods, cheese, ice cream, and confectionery products.

I was frankly astonished when Chairman and CEO Ted Nixon told me that the company had been founded in 1865 by Dutch immigrant Douw Ditmars Williamson in New York to manufacture burnt sugars for the brewing industry. He said that the company was well positioned to provide caramel color when the cola soft drink industry started and then expanded into colors for other products in the latter part of the 1900s. The company set up a plant in Louisville in 1948, and then moved its headquarters to Louisville in 1970.
 
Nixon said, "We set up our first plant outside of the U. S. in Ireland in 1978 to produce caramel for the European cola industry. Then, we set up a plant in Shanghai to manufacture caramel color for customers in Asia. In 1999, we began producing in Swaziland to supply customers in Africa, the Middle East and South Asia. In 2001, we opened a plant in Manaus, Brazil to service the South American market and acquired a company in Manchester, England in UK in 2004. Now we have nine plants on five continents."
 
He added, "About ten years ago, we launched the first certified organic caramel colors in North America and added annatto extract, turmeric, paprika, and red beet to our natural color portfolio. Our lab is continually working on new natural flavors to keep us as the leading producer of natural colors."

Our last visit of the day was to  Peerless Distillery in downtown Louisville. Chairman Corky Taylor gave us a brief history of the company. He said, "The company was originally founded in 1881 by Elijah Worsham and Capt. J. B. Johnston as Worsham Distillery Company in Henderson, Kentucky. My great grandfather, Henry Kramer, purchased the company in 1889 after Mr. Worsham died and reincorporated as Kentucky Peerless Distilling Company in 1907. My great grandfather invested in new equipment and built the company up from 300 barrels of bourbon a year to a peak of 23,000 barrels in 1917. He stopped production when America entered WWI that year to aid in the conservation of corn for the war. Production did not resume after the war because prohibition went into effect. The 63,000 barrels in the warehouse were sold for medicinal use during prohibition. My great grandfather invested in and became president of First National Bank of Henderson. My dad went to military school and went in an army. During WWII, he was one of the aides to General Patton."

I asked him what his prior career had been and why he chose to recreate Peerless, and he said, "I owned successful financial services that focused on designing pension systems for government agencies. About five years ago, I sold my business and retired to Sarasota, Florida. Walking the beach one day, I realized that being retired and boring was depressing and boring, so I moved back to Louisville to resurrect my great grandfather's business and leave a legacy. I needed something to make life worth living."

Corky's son Carson was a building contractor and they hired an associate of his, Michael Vaughn, to rehab the building they selected in the historic downtown area being redeveloped. It took over a year to rehab the building, and they began production last February. Michael Vaughn stayed on as Operations Mgr. and is working to become a Master Distiller. Michael gave us the tour of the distillery and told us that it takes four years to age bourbon and two years to age rye whiskey, so they are producing moonshine in the meantime. They have developed unique flavors, and we were each allowed to have a half ounce of two flavors. As a virtual non-drinker, I liked the Green Apple and Chocolate the best. The moonshine is only 44 proof, about the same as wine, and it was a nice way to end our busy day.

The next day, we visited  Amatrol, located across the river from Louisville in a 120,000 sq ft. headquarters plant in Jeffersonville, Indiana. President Paul Perkins said that his parents, Don and Roberta Perkins, founded the original parent company, Dynafluid, Inc. in 1964. He said the company started as a manufacturer of industrial automation systems for many Fortune 500 companies including Coca Cola, General Electric, Alcoa, Ford, Chrysler, and others.
Perkins said, "Many of our customers wanted help in training their employees to use and maintain the automation systems and other equipment we built, so Amatrol was created as the educational division of Dynafluid in 1978 and was formally incorporated as a separate company in 1981." Amatrol, short for Automated Machine Controls, first provided training equipment to industrial and educational clients for new technologies like those being implemented in Dynafluid's systems."

Perkins said, "Amatrol was in a unique position to effectively develop training programs for these technologies because its engineers and technicians were thoroughly familiar with the design, application and maintenance of them. Since that time, Amatrol has grown significantly, becoming the leading company in our primary market segments."
Over the years, Amatrol focused its business model by providing training equipment and highly engaging interactive multimedia online training software in the following areas for high schools, colleges, and private industry: Advanced Manufacturing, Biotech, Certified Production Technician, CNC Machine Operator, Construction Technology, Engineering Technology, Green Energy Technology, HVAC, Industrial Maintenance, Iron and Steel, Mechanical Maintenance, Mechatronics, Mining, Oil and Gas, Packaging, Power and Energy, Solar Technology, and Wind turbine technology.
Perkins said, "A key factor to our success is that we have a group of people who have developed a very close connection and understanding of the needs of our customers and a realization that satisfying the needs of our customers to make them successful makes our company successful."

Our next visit was to Rev-A-Shelf, back in Louisville. Rev-A-Shelf was originally a division of Ajax Hardware in California. In 1978, it was established as a division of Jones Plastics and Engineering, a family owned injection molder of appliances parts, and other custom polymer components that now has five manufacturing facilities in Kentucky, Tennessee, and Monterrey, Mexico.

General Manager David Noe said, "We began making metal and polymer Lazy Susan components for some of the largest U.S. cabinet manufacturers. We are a family owned business with a national scope and a passion for innovation. We have grown our product line from Lazy Susans to Kitchen Drawer Organizers, Base Cabinet and Pantry Pull-Outs, functional Waste Containers, LED lighting systems and Childproof Locking System to become a market-leading innovator of quality, functional residential cabinet storage and organizational products. We have factories, warehouses and satellite offices strategically located to serve our expanding customer base of kitchen dealers, architects, furniture manufactures, cabinet industry distributors and retail home centers worldwide."

We toured the assembly plant and didn't visit their plastic injection molding facility down the street. The two buildings total 315,000 sq. ft. of space, and the company has about 250 employees. When I asked about Lean, Noe said, "We are currently implementing a comprehensive "Lean Manufacturing" initiative throughout the company. Our goals are to add value to our customers with quality, service, and innovation in everything we do. We are committed to a more functional and organized life for our consumers. Our Marketing Slogan is "We Are Going to Change the Way You Think about Cabinet Organization!"
 
The last company I visited on my trip was  Dant Clayton that manufacturers bleachers and stadium grandstand structures. Founded in 1979 by Bruce Merrick, the company started out making bleachers for Little League ball fields and has grown to providing everything needed for up to 60,000 seat stadiums.
 
We toured the two production plants built next to the corporate headquarters of the Dant Clayton campus, consisting of 350,000 sq. ft. of production space, spanning 25 acres. The company has a full range of material finish capabilities in-house, including powder coating of steel and aluminum and blasted slip-resistant deck. It was astonishing to see 3 ft. X 12 ft. steel beams attached to hooks moving down the 600 ft. robotic powder coating line before entering the oven to cure. I have never seen such a large supply of aluminum extrusions anywhere. I am sure that having these capabilities and equipment internally allows for greater quality control and continuous improvement.
 
Merrick said, "For the first few years, we experienced 20% growth before flattening for awhile. Thereafter, we would experience growth spurts for two or three years, and during the growth spurts, we doubled the seating capacity of our bleachers from 500 to 1,000, to 2,000, to 5,000, to 10,000, to 25,000 and then 50,000." Merrick explained that they are the most competitive when they get involved at the design stage and provide engineering, construction management, and installation services."
 
When I asked what are the key factors are that have led to his company's success, he said, "A culture of continuous improvement that goes beyond lean manufacturing to include product development, R&D efforts, and discovering latent customer needs, as well as rigorous hiring practices, and a culture of personal development and accountability by all employees."
 
The examples of commitment to excellence and continuous improvement displayed by the companies I visited in Louisville are what make America great. And, yes I did get to visit the home of the Louisville slugger between appointments. The company was wooed back from Indiana to set up their manufacturing plant right on the main street of downtown Louisville, and you can watch the bats being made through windows on two sides of the building and visit the museum that houses the model bats for all of the famous baseball sluggers.

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  • commented 2015-12-25 10:16:34 -0500
    This was my “Letter to the Editor,” published by the San Angelo Standard Times.

    Buy American

    Recently, I found a stack of ladders, on sale, with the words LOUISVILLE LADDER all over them.

    I wondered, at the time, if they were really manufactured in Louisville. I looked all over the various labels for the words “Made in USA,” or “Made in China.” I couldn’t find either.

    Surely, I thought, they wouldn’t have the word LOUISVILLE in bold print on all sides of the ladder and a dozen places on the marketing labels, if they were made in China. I was right.

    You see, I grew up in Kentucky. We have family in Louisville. We spent many wonderful weekends in Louisville and I have only fond memories of that town.

    We never went to the Kentucky Derby, but I did spend a day at the Derby Trials at Churchill Downs, and it was magic.

    Louisville was also home to General Electric’s amazing “Appliance Park,” which once had over 25,000 employees. Two of my brothers-in-law went to work there right out of high school and raised their families on GE wages and benefits. They built new houses, bought new cars, saved money for college and took vacations to Florida. They are both comfortably retired now, thanks to GE.

    Appliance Park now has fewer than 2000 employees, and GE is looking to sell the property.
    GE now has fifty plants and 15,000 employees in China. In 2010, GE paid no U.S. income tax.

    The “progressives” drove GE and thousands of other manufacturers OUT of the US and into China and other places. They did it by steadily ratcheting up the regulations and taxes and then by opening up the back door with NAFTA and the WTO.

    When I got my ladder home and went over it with a magnifying glass, I found the words, “Made in Mexico."
  • commented 2015-12-25 10:10:36 -0500
    This was my “Letter to the Editor,” published by the San Angelo Standard Times.

    Trump to Challenge China

    For decades, our government steadily ratcheted up the regulations on manufacturing, making it more and more difficult to operate profitably.

    For decades, the greedy labor unions, supported by our government, steadily ratcheted up the wages and benefits, threatening to close plants with costly strikes until they got their way.

    Meanwhile, the government of Communist China saw an opportunity to take advantage of our beleaguered manufacturers with their combination of dirt cheap labor, no unions and no regulations.

    The Chinese communists realized that, in order to succeed in manufacturing, they would have to allow certain entrepreneurs to become wealthy, while still keeping the majority of their people poor.

    All the Chinese needed was access to our market. Thanks to our greedy, incompetent government, they gained full access through the World Trade Organization.

    Once China got a foot in the door, they started cheating in every way possible. In the book, Death by China, authors Peter Navarro and Greg Autry document the many ways in which China is robbing us blind. In addition to stealing millions of our jobs, they have stolen our technology and our intellectual property.

    I have been waiting for someone – anyone – to speak to this issue. In 2003, Warren Buffett recommended that our government impose “balanced trade” to eliminate the growing trade deficit with China. He realized that the trade deficit, while enriching China, was destroying our middle class, and robbing our treasury of tax revenues.

    Finally, Donald Trump, a candidate for President, has offered to challenge China for cheating, and to force them to “play fair.” There are many reasons to support Trump, but this is the most important.

    Our nation became wealthy and powerful through manufacturing. We cannot continue to protect our citizens and our allies unless we remain wealthy and powerful.
  • commented 2015-12-25 10:05:00 -0500
    In 1982, General Electric’s Appliance Park in Louisville had around 25,000 employees — all earning excellent wages and benefits. 25 years later, GE had built dozens of manufacturing plants in China and Mexico. Employment at Appliance Park had dwindled to around 2,000 employees and GE was looking to sell the property. Due to public pressure, GE has started to “revitalize” Appliance Park by dabbling in some “high end” products that might or might not be successful. If these new products “take off,” they will probably be outsourced to China or Mexico.

    This “U.S. Manufacturing Renaissance” is hogwash! All it does is create false hope for the low-information folks, and give our greedy, incompetent government an excuse to drag its feet.

    Anything that can be manufactured, can and will be manufactured in China, at one-third to one-tenth the cost. Despite all the happy talk about “reshoring,” there continues to be more jobs leaving than there are coming back.