In January 2012, David Ott moved to Wilmington from Long Island after retiring as a senior executive with a $100 million electronics company. Three months later,he was searching for something meaningful to do.

Ott met Dallas Romanowski of Wilmington’s Cornerstone Advisory Partners, and the two started talking. In April, Ott became one of Cornerstone’s consultants, ready to share knowledge about operations management and sales management.

A year later, Ott and one star client, Manufacturing Methods, are eager to talk about the dramatic improvement in a small business by instituting lean manufacturing and continuous improvement practices.

Lean manufacturing, a management philosophy that gained worldwide recognition through Toyota’s streamlined production system, concentrates on preserving value with less effort. Work is made as simple as possible with process planning and plant design.

“I am a ceramics engineer with an MBA, and I’ve been involved with many companies,” Ott said. “I’ve set up manufacturing plants in China, Costa Rica and Mexico. I ran a lean manufacturing facility for 10 years, so I have a hands-on viewpoint.”

Ott’s experience and his hands-on consulting with the Leland-based company have helped it design not only its physical facility but also the way it organizes and thinks about its work.

Manufacturing Methods, founded in 2007 by Pete Peterson and Matt Gunning, started out as a tool and die and mold maker, turning out parts for local customers.

The business grew. By 2011, Manufacturing Methods was designing, manufacturing and assembling components for customers in the power, communications, medical/dental, marine and industrial automation industries. It was filling orders from customers in many states.

“After the first couple of years, we realized our potential and expanded our mindset,” Peterson said.

Looking for a source of ideas and feedback, the company enlisted Romanowski as a business coach, and Peterson began participating in one of Cornerstone’s Alternative Boards, a peer advisory network.

“Being affiliated with Dallas Romanowski has made a huge difference; it has left me open to new ideas,” Peterson said.

By being open to new ideas and seizing opportunities, Manufacturing Methods maintained healthy growth, grew to occupy three buildings and netted $4 million in 2010.

While the company was doing well and thinking creatively, the truth was that its processes and operations were limited.

“We’d hit the ceiling in terms of revenue level,” Peterson said. “We were doing great, but we were stuck.”

Peterson and Gunning diagnosed the limiting factor as their facility, so they began scouting possible sites in Leland where they could construct a building that would house their scattered operations under one new roof.

Soon after Ott joined Cornerstone and was looking for potential clients, Romanowski suggested he meet with Manufacturing Methods.

The timing was ideal. The partners were planning their new facility. Ott began helping them examine their design, operations and processes with a goal of efficiency. As a result, the new building gave them more than additional space – it enabled them to leap into lean manufacturing.

Ott’s analysis showed that the company was not fully using its capacity.

“We thought we were at 100 percent capacity, but we were only at 56 percent,” Peterson said.

With input from Peterson, Gunning and their employees, Ott guided a planning process that organized the plant around work stations, with an eye to making each worker as productiveas possible. The team dissected every aspect of production to rethink placement of tools, machinery and other equipment.

“Every machine is a cell, and everythingyou need should be organized and laid out within reach,” Ott said. “Tools are color coded for each work station and rest on foam inserts so, if tools are missing, you can easily see which ones they are.”

As plans progressed for the new building, the company piloted lean practices at the old one.

“We installed a temporary setup in the old building to train people and get some ‘lean champions,’” Ott said. “Lean manufacturing is a culture change, for which you need top management support.”

The new processes focused on reducing wasted time and motion. Ott used the example of NASCAR pit crews to suggest how Manufacturing Methods employees might streamline their machine changeovers. With planning and practice, the workers cut average changeover time from four hours to two – a major savings.

The problem of accounting for expensive cutting tools was solved by having the supplier install a vending machine that dispenses each tool as needed, logs who takes it and keeps track of inventory. The practice was so successful that the company now uses a vending machine for paper and other supplies.

Jobs are tracked electronically, so the company’s general manager can view the status and costs of all projects at any time.

“We can be more competitive now that we know what our true costs are,” Peterson said.

But, as Ott points out, employees are at the heart of a successful lean manufacturing operation. They must understand the value and benefits of a culture of continuous improvement. And to commit to change, he said, employees must be involved in making those changes.

“Each month, we scheduled a training meeting with employees and focused on lean problem solving,” he said.

“The key part is employee empowerment– [management] going to them, asking for ideas. They have a voice. Then they start coming to you with ideas. They have a lot of pride in what they do. They are craftsmen. As they attain more skills, they can work on more machines. Cross training makes the whole shop more efficient.”

Since January, when Manufacturing Methods moved into its new building, the company has picked up another large customer. Peterson said revenue is up 20 percent, and profits have increased between 30 and 35 percent because of greater operating efficiencies.

The company currently employs 20 people; Peterson thinks he’ll hire five more within the next 12 months. 

Ott’s expertise helped Manufacturing Methods in other ways as well. He made Peterson aware of funding available from the federal and state government, such as Trade Adjustment Assistance (TAA) matching grants from the U.S. Department of Commerce. TAA funds pay for half the cost of projects that improve a manufacturer’s competitiveness against imported products.

Peterson continues to think about progression. With Ott’s help, he has developed organizational charts for what he sees as the company’s next three phases. After years of setting up operations abroad for his employers, Ott says it’s satisfying to help grow companies at home.

“It’s nice to give back to small business; setting up offshore operations was frustrating,” he said. “I wanted to create jobs in the U.S.”