TIMES ARE GOOD IN THE HELICOPTER INDUSTRY. IN some ways, they’re too good. Take Schweizer Aircraft, for example.
The Horseheads, N.Y.-based manufacturer’s core businesses — commercial and military helicopters, fixed-wing surveillance aircraft, unmanned helicopters, and aerospace subcontracting — are all booming.
The same is true for the "new" lines of work added in the last two years by parent Sikorsky Aircraft, which bought family-owned Schweizer in 2004. Sikorsky is tapping Schweizer for rapid prototyping, with its X-2 technology demonstrator as a lead program, and completion of H-60 Hawk variants that aren’t in a standard U.S. Army or Navy configuration. A 100,000-sq-ft (30,490-sq-m) facility dedicated to prototyping and H-60 work is slated to open in June, and the companies already are looking to build a second to handle the expected volume of work.
The problem is that Schweizer doesn’t have the capacity to handle all that work. It’s added about 125 workers in the last two years, and plans to hire up to 100 more this year. Late last year, it struck an agreement with China’s Aviation Industry Corp. 2 for its Jiangxi Changhe Aircraft Co. unit to supply airframe components and assemblies for the 300CBi helicopter as a means of increasing its production capacity.
"We simply don’t have enough resources in Elmira to produce all the product that we need," said Schweizer President Paul Schweizer, son of one of the company founders, Bill Schweizer. "We see China production being a way to supplement that."
But Schweizer’s order backlog exceeds 14 months. At Heli-Expo 2007 last month, the company was booking orders into 2009 and says it sees no sign of demand slackening. In fact, it sees it increasing.
"The reality is for our products, that doesn’t work," Schweizer said. If a customer has a need for a helicopter, "he can’t wait a year or a year and a half for us to deliver a product for him. We’re forcing people to buy our competitor’s products because of the backlog."
The problem is bigger than losing sales now. The company’s stated goal is to be "the predominant worldwide training helicopter," for both piston and turbine, for commercial and military operators, its president said. Schweizer also is looking for its sales to triple in five years. It can’t do either unless it can deliver more helicopters and do so on time.
Schweizer is like most other major Western helicopter manufacturers, and many of their suppliers. Eurocopter’s new chief, Lutz Bertling, has said repeatedly that his company’s challenge is to "deliver, deliver, deliver" on its record civilian and military backlogs and to streamline its production and supply operations. Bell Helicopter’s new president and CEO, Richard Millman, hired in January to fix production and quality problems that have fouled its U.S. military programs, said at Heli-Expo that Bell "has islands of excellence. We need to combine them into a continent." Sikorsky Aircraft spent much of 2006 struggling to overcome production and quality problems stemming from its efforts to boost production capacity by farming out work; those problems pushed the U.S. Navy to threaten cancellation of a major contract unless Sikorsky fixed them.
Individually, these companies face demand that, in some cases, is unprecedented. At the same time, customers want "greater value," which translates to lower prices for or greater performance from those products, or both. It is difficult, if not impossible, to add workers or plants fast enough to increase production and maintain quality. The only feasible option for satisfying that set of customer demands is to extract more production capacity from the existing facilities and workforce. In today’s management mindset, that means implementing "lean manufacturing" practices.
Schweizer’s experiences in implementing such practices shed light on the challenges of going "lean," particularly for smaller manufacturing operations.
These practices entail analyzing the flow of work involved in accomplishing specific tasks, then identifying and eliminating inefficiencies. The goal is to reorganize the workflow to condense and match steps in more efficient combinations, standardize the work done in those steps, and reduce the time required to complete them. Done right, lean practices should enable a manufacturer to increase output and quality without significantly adding workers or facilities.
Lean manufacturing demands that everyone on the payroll thinks differently about what their job is and how it should be done. That can be a challenge in any operation, since people naturally are averse to change. But it would seem a particular challenge at a company like Schweizer, where the average worker has been on the job for well above 20 years. But Schweizer has embraced change since its inception. The three founding Schweizer brothers started out in the 1930s building gliders, and moved on to powered gliders and drones during World War II, subcontracting, agricultural aircraft, fixed-wing reconnaissance birds, and then helicopters. "One of the striking things here is they continue to reinvent themselves," said Randy Simpson, the former Sikorsky executive who serves as Schweizer’s general manager.
Schweizer began embracing lean practices before Sikorsky bought it in 2004, launching its Partners in Excellence program in league with the leadership of the United Auto Workers’ Local 1752, which represents Schweizer workers. A key provision of that program was that any efficiencies gained through improving the company’s production processes wouldn’t cost workers their jobs. The Partners in Excellence efforts continue in conjunction with the Achieving Competitive Excellence (ACE) initiatives Sikorsky brought.
The biggest challenge for workers is getting used to new ways of doing things, said Jim Dersham, Schweizer plant chairman for the UAW. "We always did the tribal knowledge stuff" — each worker had his or her own "black book" for doing jobs. "Now things are getting done by the people who are writing the specs."
It is critical to involve everyone, not just production workers. "Unless you involve the whole enterprise, the customer doesn’t feel the impact," Simpson said.
That’s particularly true for middle managers, who often feel most threatened by "efficiency" initiatives and typically are best positioned to foil them. Schweizer created a lean council and mandated that middle managers be members of it.
That council oversees more than a dozen efforts to lean out processes. It had the blade shop revamped, for instance, and the number of stations to build its piston-engine 300Cs and CBis pared from seven to four. Schweizer aims to cut the days to make a piston aircraft by 40 percent.
Two initiatives highlight the potential of lean. Schweizer found that it took about four months to deliver an aircraft after a customer made the final deposit. One reason was the time required to design and produce the aircraft’s instrument panel. Unless Schweizer is working on a fleet order, each aircraft’s instrument panel is unique to the buyer. "We needed to just abbreviate the entire process and, at the same time, to reduce the costs," said Barbara Tweedt, a veteran Schweizer’s marketer who helped lead the instrument-panel effort. (Lean also calls for bringing in employees from outside an operation to help assess how to improve it.) "We figured out a way that we could do this, but it meant ‘cultural change.’ We’re not going to do this the same old way that we’ve been doing it."
The instrument-panel group eliminated warehousing of panel faces and scrapped the old start-and-stop workflow, replacing it with one designed to move a panel through continuously to completion and inspection. It also consolidated inspection points.
The changes pared the time it took to produce a panel from more than 100 days (sometimes far more) to about a month, Tweedt said.
Another example is the machining and welding stations for the build-up of the steel-tube frames of Schweizer’s helicopters. When the lean efforts got under way, the stations were manned by two of Schweizer’s more senior workers, Mike Nagle and Ed Warner. Warner alone had 34 years with the company.
"When we had the first meeting that Mike and I get into, I seen the dollar signs," said Warner. He said he realized that with lean they could probably cut in half the time required to produce a frame and improve the quality of it.
The pair came up with a system of color-coding steel-tube sections for the Model 300 frames by the part of the frame they made up. Nagle, who machines the tubing, designed a cart that groups the sections by color. "It pretty well checks itself." He also rearranged the flow of tube section processes.
"Each tube has a home in this cart, and this cart is calibrated and accepted and periodically inspected," said Simpson. "Now Mike just builds one shipset and sticks it in the cart."
After a cart is inspected, Warner welds the tube set into a frame. In addition to working on the color-coding system, he designed new fixtures to speed the assembly of frame sections. In some cases, those fixtures helped cut assembly time for some Model 300 sections in half. "We used to do one frame in 8 hr. Now it’s four."
He added that quality has improved because the machined tubes from Nagle’s station more consistently match specifications. "Quality’s great, because I don’t have to do much grinding at all."
There are still production challenges. In early 2006, company officials said they planned to deliver 78 helicopters. At Heli-Expo, they reported delivering 61. They hope to deliver 80 this year.
"The bottom line on our helicopter production is that we simply are not building helicopters fast enough," Schweizer said. "We’re not meeting the demands of our customers. That really tears the heart out of a guy like me, because I’ve been through the tough times when you couldn’t give an aircraft away. Now we simply can’t make them fast enough."