Lift trucks made lean and green

Tom Andel, Executive Editor -- Logistics Management, 5/14/2007

NEW BREMEN, Ohio—Everyone knows the impact a new lift truck can have on a purchaser’s logistics operations, but sometimes the biggest news is the effect it has on the lift truck manufacturer’s operations. Crown Equipment Corp. invited Logistics Management to a gathering celebrating the release of its RC 5500 Series stand-up lift truck. Crown’s executives demonstrated why standing in the ergonomically engineered cab of its new baby can have a more beneficial effect on an operator’s body after an eight-hour shift of loading and unloading trailers than if the operator were sitting.

But after outlining features such as greater operator visibility, FlexRide cab suspension, the Intrinsic Stability System, a real-time diagnostic system and the intelligent e-Gen braking system, Crown officials completed the story about what makes this company truly unique: the logistics of its lift truck production.

Crown makes about 85 percent of everything in its lift trucks, on average. That includes motors, controllers, mast assemblies and the trucks themselves. The motor plant is three miles down the road from its New Bremen, Ohio, assembly plant, so the company uses less transportation than most manufacturers that source parts from distant states or from overseas. This is all about “vertical integration.”

“If we were buying motors in Europe and had to ship them over here, there would be more transportation costs,” said Don Luebrecht, senior vice president. “Years ago we looked at getting out of the cylinder business. Our facility was getting pretty run down when we made cylinders, with chrome plating. But when we looked at what it cost to build a new facility and stay in the business, we found we could save a 7-figure sum of money every year and get paid back in a couple. It’s all about quality and having the right cylinder at the right time so we don’t carry so much inventory.”

Luebrecht said environmental stewardship plays into Crown’s logistics strategies. The company’s manufacturing plants recycle substantial amounts of material every year, including thousands of tons of steel, paper, wood, and paperboard. They also remanufacture drive units, motors, and circuit boards. Luebrecht said the company didn’t start out doing these things to be green, but now that green is “in,” so is Crown’s strategy—with many like-minded customers.

“Our customers wanted to buy remanufactured components,” he said. “Our purchasing is also involved in our environmental efforts, and as part of that initiative we’re focusing on approaching suppliers to help us with our environmental efforts. Our transportation providers will play a part in that as well. We’ll brainstorm with them on how they’ll cut costs, looking at their routes and different ways to move materials.”

Lean is another important part of Crown’s logistics strategy. It has manufacturing plants in Australia, China, Germany, and two in Mexico, but its core manufacturing is in New Bremen -- 1.6 million square feet of it among eight primary facilities. Five are 100% lean and two are in process. That entails one-piece flow for masts between welding, fabrication, machining and assemblies. The finished-truck assembly plant has the same type of technology on all four assembly lines.

“We took out four brake operators and two routers, and increased velocity by 60 percent and decreased inventory by 33 percent,” explained Dave Beddow, vice president of manufacturing operations.

Even RFID-controlled tool inventory plays a part in Crown’s lean logistics gameplan. Employees in the machining plant walk into tool storage with an RFID tag and the computer recognizes the worker, who is then free to use the tools until the end of the shift. By that time the supervisor and plant management know which tools were used and who used them, which also tells them where there may be problems. This creates both a training opportunity as well as a means to improve tool inventory accuracy.

Tim Quellhorst, vice president of engineering, concluded that being vertically integrated allows a company to respond quickly whenever it finds an issue that needs attention.

“The speed of response provides a far greater opportunity to keep our brand in the position we want it to be in,” he said. “The supply base we used to deal with wouldn’t respond with the speed we wanted. Now we’re even providing remanufactured components to customers with the current generation of features.”