Jim Rakievich didn’t really know anything about lean manufacturing back in 2003. The president and CEO of McCoy Corp., an Edmonton-based manufacturer of truck trailer and energy industry products, was running a successful company with annual revenue of $31 million and heading into a hot economy. Demand was growing, but McCoy seemed to be spending a lot of money and putting a lot of effort into trying—not altogether successfully—to keep up.
Then he heard the CEO of a Calgary-based firm extol lean’s virtues.
“They had a great product, but they weren’t meeting delivery dates. They didn’t have the plant capacity to meet their customers’ demands. They had design flaws and high inventories. They didn’t have their manufacturing side up to the level that was going to make them successful. Just prior to the company going bankrupt, one last shot, he had heard about lean manufacturing, did some reading, got some advice, hired some consultants and started his lean journey,” says Rakievich. “When I spoke to him, it had saved his business. They ended up several years later being a market leader.”
His interest was piqued. As head of McCoy, which was founded as a blacksmith shop in 1914 and now has 600 employees, Rakievich oversees three divisions that provide services and manufactured equipment primarily to the North American energy, forestry and construction sectors. The divisions are: Truck and Trailer Products and Services; Trailer Manufacturing; and Energy Products and Services. By 2007, after implementing lean manufacturing principles, McCoy’s revenues had grown at an annual compounded rate of 43% from $31 million in 2003 to $161 million.
That’s an impressive gain, and he shared McCoy’s lean success at the international Good to Great lean conference presented by the Association of Manufacturing Excellence in Toronto on Oct. 20-24.
Delegates learned that achieving that success was a challenge.
Meeting customer demands
“In 2003 our markets were really ramping up, the economy was really going strong for the products we sell,” says Rakievich. “I thought, ‘we’re doing okay, but man, our inventory is high and we’re struggling with that. We’re trying to meet our customer demand and all we’re doing is building up inventory, hiring lots more people, looking for more capital equipment, and just throwing money at trying to keep our customer satisfied. We’re not in trouble financially, but [lean] sounds like it could help us deal with these other problems.’”