Quality Management Helps Mohawk Strength its Bottom Line
After surviving a sluggish economy, most manufacturers would eagerly invest time and other resources to quickly respond to requests for proposals (RFPs), and then anxiously wait for the result. Savvy manufacturers such as Mohawk Electrical Systems do this and much more.
Mohawk analyzes new business opportunities and invests resources as appropriate in order to grow and to substantially improve their bottom line. The company recently received RFPs from two large prospective customers located halfway around the world. Although Mohawk’s management team was eager to gain the business, they wanted to be certain they could stand up to global competition and meet all customer requirements.
For almost 50 years, Mohawk has been making electrical cable and harness assemblies, electro-mechanical assemblies, elastomeric and plastic moldings, and printed circuit board assemblies in Milford. Today, with 33 employees, the company provides prototyping and pilot production, build-to-print manufacturing, in-house tooling design and manufacturing, and design assistance.
Mohawk’s customers typically require high-quality products for demanding applications, from cable assemblies and printed circuit boards for medical instruments, to power supplies for fiber optic modems, cord sets for electrical blasting caps and harness assemblies for radar systems.
Although Mohawk sells to many local and regional customers, such as Dade Behring, ILC Dover and the US Department of Defense, opportunities for substantial growth are emerging in other parts of the world.
Although these recent sales opportunities were new for Mohawk, they brought with them a new set of operational challenges.
Operational Challenges
The two new international contracts were not only large, but they were also demanding. They called for consistent, on-time delivery of products that met clearly defined specifications, and they required Mohawk to acquire ISO 9001:2000 registration from the International Organization for Standardization (ISO).
Mohawk management knew operational changes would be needed to meet customer demands. “Achieving sales growth of more than 20 percent per year while maintaining or improving profitability requires careful planning and effective execution,” says Scott Welch, Mohawk president.
After reading the initial RFPs, management knew their production capabilities would be tested. “We had to quickly earn ISO registration, and we had to streamline operations to improve productivity and increase throughput,” says Welch.
Management realized the company could not do the job alone. About 80 components are required for molded and bridged assemblies for the devices Mohawk supplies to one of its new international customers. “Some of the production technologies needed to fulfill customer needs were beyond our capabilities,” says Welch. “We needed to build partnership relationships with selected manufacturers and we needed to manage the relationships to ensure that quality products would be delivered on time and on budget.”
To supplement their capabilities, the company partnered with several other Delaware manufacturers, including Atlantis Industries, Inc. in Milton, Clariant Corporation in Milford, and First State Manufacturing in Milford. “Outsourcing is a critical element of our growth strategy,” says Welch. “Although quality is a key factor in our selection criteria for partners, working with outside suppliers presents additional quality management issues.”
All these changes required a commitment of substantial resources, Welch continues. Overall, they believed the time and money invested would strengthen the company and help position it to thrive in the future. When Mohawk was faced with these major challenges, they knew where to go for help.
Finding Solutions
Welch had previously worked with the Delaware Manufacturers Extension Partnership (DEMEP) on several projects to strengthen Mohawk’s business. He called on Kim Kilby, DEMEP manufacturing specialist, for help.
“We addressed Mohawk’s challenges by establishing a quality management system that included ISO registration,” says Kilby. To make certain Mohawk’s quality initiative met all their needs, the DEMEP partnered with Linda Bankoski of Quality Leadership Associates and Kathleen (Kit) Eisel of Quality Performance Services, Inc.
“Linda and Kit worked closely with the Mohawk staff to design, develop and implement a quality management system that would meet all the requirements for ISO 9001:2000 registration and would help prepare the company to compete globally,” says Kilby.
THE RESULTS
Twenty-one Mohawk employees participated in ISO 9001:2000 training and four additional employees were trained as internal auditors. As a result of Mohawk’s quality management initiative, the company is reaping the following benefits:
Increased Sales – Mohawk has already enjoyed a substantial increase in sales during the past year. As a result of its ISO 9001:2000 registration, the company has locked in two substantial new sales contracts, and it has opened several sales opportunities with prospects in the U.S. as well as in other parts of the world. “Based to a large extent on the widely recognized benefits of our ISO registration, we forecast an additional 20 percent increase in sales each year for the nest two years,” says Welch. “We expect this success to generate momentum for continued growth in the following years.”
Improved Quality – “By establishing performance metrics and implementing the company’s new quality tracking system, Mohawk is holding its suppliers accountable for quality,” says Kathy Cooper, Mohawk’s quality assurance supervisor. “In one case, we concluded that a major supplier could not meet our new quality standards, so we developed a partnership agreement with a more reliable source.” The company’s quality tracking system not only monitors supplier quality performance, but it also detects in-house non-conformance, and labor and material cost estimates versus actual costs.
Improved Productivity – By applying quality management techniques, Mohawk has reduced in-house reworks from about 10 percent to approximately 5 percent. Further reduction of reworks is expected within the next six months as more production experience is gained with the quality management system and with the new products. Manufacturing process times were reduced by more than half, from three to four days to one to two days. Floor space in several areas was reduced by 20 to 50 percent, allowing Mohawk to increase capacity.
Project management and scheduling has become much easier because procedures are documented, work processes are standardized and quality issues are identified earlier in the process.
Improved Employee Performance – Skills training prepared workers to make more decisions independently. Cross training provided depth and a more flexible work environment because employees were prepared to assume several responsibilities. Improved communications and a sense of urgency across the company provided a strong team atmosphere.
“This was particularly noticeable when all employees were involved in the company’s effort to obtain ISO 9001:2000 registration,” says Welch. “We all had a short timeframe to fulfill the requirements of the new contracts. As employees completed quality management training, they became more comfortable and confident that they could assume the new roles and responsibilities needed to meet increased demand. Employees took the initiative to assume responsibility for production lines.”
“Although establishing our quality management system was challenging, there is no doubt our company is in a stronger position to grow,” says Welch. “As a result of our quality management initiative, productivity is improving, sales are increasing, costs are decreasing, and our employees know that Mohawk is moving toward a bright future.”
Mohawk is well along its way toward substantial, sustainable and profitable growth, and its employees are committed to continuous improvement. “Our next major initiative will be to assess opportunities to apply Lean Manufacturing techniques that will help prepare us to compete in additional industries and in other countries to further expand our business,” says Welch.