O’Neal Steel | Birmingham, Alabama
Company Information:
O’Neal Steel is a full-line metals service center with a vast array of products and multi-stage processing capabilities that enables them to service fabricators, job shops, and a wide variety of OEMs. After more than 80 years in business, O’Neal Steel is now the United States’ largest family-owned metals service center.
Situation:
O’Neal’s Birmingham, Alabama facility, with approximately 255 employees, is the largest of 30 district operations strategically located throughout the country to provide easy access to their products and services. They are also the corporate hub for distribution to the other 29 O’Neal district locations. Three years ago, a client of O’Neal Steel Birmingham district asked for them to double production on one of their major product lines. To assist in accomplishing this goal O’Neal Birmingham began implementing Lean Enterprise principles to improve their operations.
ATN Assistance:
O’Neal Birmingham has utilized the assistance of the Alabama Technology Network center at the University of Alabama in Huntsville (ATN-UAH) in the implementation of Lean principles at their facility. ATN-UAH began by facilitating a team of O’Neal employees in a kaizen event to improve the web burner operation in June 2004. This event created an impact of over $1.5 million dollars and helped O’Neal Birmingham achieve their goal of doubling production with no additional equipment investment and the same number of employees. The immense improvements generated a great deal of momentum and O’Neal Birmingham decided to train all 255 employees in the Principles of Lean (Lean 101) 8-hour training course.
O’Neal Birmingham’s relationship with ATN-UAH has continued into 2007, with ATN-UAH facilitating two Value Stream Mapping events (one on the sales order-to-invoicing process and one on the manufacturing operations), five kaizen improvement events (three in manufacturing and one in shipping and receiving and one in the sales office), and delivering additional training to O’Neal employees in Lean Office and Lean Enterprise tools. Additionally, because of the training provided and the experience gained from previous improvement events, O’Neal employees have begun initiating Lean improvement efforts internally.
Results:
Based on the efforts of the employees of O’Neal Steel Birmingham, and the assistance of ATN-UAH, the company has been able to realize considerable impact from the implementation of Lean. The overall economic impact of the events held through 2006 is over $2.5 Million, with 30 jobs reported to be retained and 7 jobs created. Among some of the results reported by the company include:
- Web Burning kaizen event- The team made several improvements to the web-burning process resulting in a 100% productivity increase without adding equipment or people. The 3 day event resulted in a total economic impact of $1,500,000.
- Value Stream Mapping – Sales Order to Invoice and Manufacturing/Fabrication Value Streams were mapped to identify waste in these processes, countermeasures were developed to eliminate the waste identified, and an implementation plan was created for improvements to be made.
- Burn/De-slag kaizen event – the layouts for the cleaning/de-slag areas for Oxy-fuel and Plasma areas were completely changed resulting in a much more organized and efficient flow of materials. Work in process was reduced considerably.
- 2nd Opps Supermarket kaizen event – A supermarket with a maximum capacity of 2 days inventory was created between the burning department and 2nd Opps, this resulted in a 50-75% reduction in the amount of work-in-process inventory cluttering the 2nd Opps area. This eliminated searching for material and allowed 2nd Opps to work on what was needed for the customer. With the reduced WIP, there was a noticeable improvement in velocity of product through the 2nd Opps area.
- Value Stream Mapping- Shipping and Receiving activities were mapped to identify opportunities to improve these processes resulting in approximately 20 countermeasures to implement.
Comments:
“Financially, O’Neal Steel is a solid company. We wanted to see what we could do to improve our company utilizing Lean Enterprise techniques while keeping capital expenditures to a minimum. The professionals from ATN have performed a great service for O’Neal. They are fantastic trainers and facilitators who helped us to achieve goals that we thought were unobtainable. We were so impressed that we developed a national program with ATN and NIST to help our other 28 locations and our corporate office. I would highly recommend them to any company wanting to use a holistic Lean implementation approach to continuous improvement.” – Kevin Cooke, Corporate Manager of Process Improvement