Layton Truck Equipment applies lean manufacturing principles to distribution

Lean. It's not just for manufacturers anymore.

Layton Truck Equipment, a distributor with locations in Denver and Colorado Springs, has found that the same basic principles used by such companies as Toyota to control quality and improve efficiency also can be used successfully as a management tool for truck equipment shops.

Layton is part of The Auto Truck Group based in metropolitan Chicago. The lean approach is the direction the entire company is moving, and the program has been particularly helpful in keeping each location — including Layton's new 40,000-sq-ft shop in Denver — running smoothly. But beyond just the shop, the company is using lean philosophies in managing the entire operation, including the parts department, sales, and administrative office.

Among the elements that the company has implemented (or will put into effect soon):

• Five S

  Five S stands for sort, set in order, shine, standardize, and sustain.

• Value stream mapping

  The idea is to look at every activity that the company does and ask one simple question: Does it add value? If not, eliminate it.

• Kaizen

  These are events designed to improve the way things are done — anywhere in the company. The goal is to create a culture in the company in which performance is improved continuously.

• Value-added sales training

  The idea is for the sales person to be able to understand the customers' business to such an extent that the sales person becomes the customers' partner and not just a seller.

  “It helps develop the skill of asking questions,” says Steve Hayes, general manager of the Layton Truck Equipment operation. “When you can do that, you are on target with the customer's needs. You go beyond just having a canned recitation of what you have to sell.”

• TWI training

  Training Within Industry teaches people to do a specific task consistently. The method has its roots in World War II, when men went to war and women were needed to work in the factories. The war effort required a huge increase in skilled personnel, and they had to be trained fast. Under TWI training, an instructor demonstrates a task three times as the trainee watches. The first time, he explains how the job is done and identifies the essential steps. The second time, he points out the key points to the important steps. The third time around, he gives the reasons for the key points.

After having seen the job done three times, it's the trainee's turn. He repeats the process one time without explanation, then three more times, mirroring what the instructor has said and done.

“Too often we say, ‘Here's how you do it. Got it? Bye.’” Hayes says. “I think the key to the success of TWI training is teaching the reasons why we do things the way we do. When we know why we need to do things in a certain way, it really sinks in. It also helps us maintain quality standards. We don't have to have one guy do the same job over and over. TWI training helps give us consistent execution from one technician to the next.”

Getting help

Layton is in the process of implementing the program under a government grant. The Colorado Association of Manufacturing and Technology is helping the company implement the changes — a process that is still going on.

“We are still being trained,” says Dave Asmus, manager of the Denver branch. “We have not yet had training for value stream mapping, but we are well down the road for some of the others. For example, we do our Five S audits twice a month.”

Under Five S, management establishes what a particular work area should look like. For a sales desk, the top should be completely clean at the end of each day. Managers evaluate the areas within their department, assigning a score from one to four.

“It's not just about being clean,” Asmus says. “It's about being efficient.”

The Colorado Association of Manufacturing and Technology is training Layton twice a month on how to conduct kaizen events.

“When the training is over, we will be doing kaizen events at will,” Hayes says. “But we don't want to just do an event. We want to be able to constantly do things better.”

New shop

Layton got its start in 1976 in Colorado Springs. The company branched out to Denver in 2004. After four years of operating in a 15,000-sq-ft facility, the branch moved into a 40,000-sq-ft shop in August 2008.

The facility, built originally as a machine shop and most recently occupied as a warehouse, had to be converted for use as a truck equipment shop. Several key installations have helped the branch serve its customers.

• Air supply

  The shop area was plumbed with drop-down air hoses. Each bay has drops that extend down from the ceiling to just above head height. This places them within easy reach of mechanics, yet out of the way when not needed. When technicians need to power a tool, they simply reach up to plug into a quick disconnect. They do not have to step over air hoses running along the floor.

  “The air compressor runs only as needed,” Asmus says. “You can hear it hum when demand is light and ramp up when demand is heavier. But even when it is running at full speed, it's quiet. It's right here in the shop — no special room was required to keep noise levels down.”

• Lighting

  The existing building had 275 fluorescent light fixtures. Before moving into the building, they replaced the 275 fixtures with 75 new T-5 fixtures. The new lighting system is significantly more energy efficient, yet it generates more light — 60 candlepower — than the older lighting system.

  “We had an electrical engineer do the calculations,” Asmus says. “We were a little skeptical that we could do away with 200 light fixtures and still get better lighting, but that's exactly what happened.”
• Paint booth

  Layton did not have a paint facility in its previous shop in Denver. The new location provided space that the company has used to install a paint prep area, 44-ft drive-through booth, and a Sikkens paint mixing room that enables the company to mix virtually any color the customer requires to match his truck — or tastes.

“We used to farm out our paint work,” Hayes says. “We decided to install our own system and do the work ourselves in order to have better control over when the work gets done. We couldn't always do that when we depended on someone else to do our painting.”

A tighter ship

One difference between the company's old shop and the new one is the chain-link fence that separates the shop from the warehouse.

“At the old shop, there was no line of demarcation between the shop and the warehouse,” Hayes says. “Now when a part passes through that gate and into the shop, it leaves our inventory and becomes work in process.”

The fence is a visible way to see the inconspicuous. It is a tangible representation of how the company keeps track of its operation. When shipments arrive in the warehouse, they go from the receiving dock to a specific location in the warehouse — and in Layton's computer system.

“We barcode everything,” Hayes says. “If we get something that does not have a barcode, we apply our own.”

The Auto Truck Group has three information technology specialists whose job is to develop ways to utilize technology in order to make the company more efficient and productive.

An example of Auto Truck's use of technology is the Web-based quotation program that the company developed in house. With it a salesperson can log onto the site using a company-issued laptop computer. The site has a point-and-click system that the salesperson can use to spec out about 80% of the jobs that move through the Layton shop.

“The expectations of the customer have risen a lot in recent years,” Hayes says. “One thing I've noticed is that customers don't want to wait on quotations anymore. The Web-based system we have makes it possible to produce a quote right there at the truck dealership.”

The Auto Truck Group uses a computerized management system from Spokane Computer to help run its business. The quotation system, however, is something that the company developed outside the Spokane program.

“We have been using it for years now,” Hayes says. “”It really works well.”

Tale of two cities

Layton's operation includes two locations: Denver and Colorado Springs. The company started in Colorado Springs in 1976. The Denver branch opened in 2004.

A full range of chassis pools are based in Colorado Springs, including Chevrolet and GMC, Dodge, and Ford. A separate Dodge pool operates in Denver.

While Colorado Springs gets most of the chassis pools, Denver gets most of the outside sales staff. The company has three in Denver and one in Colorado Springs. Each outside sales person, regardless of location, has a dedicated inside salesperson to provide support.

“We want to keep our outside sales guys on the road,” Hayes says. “Our outside guys can do that when they each have inside support.”

Like most in the truck equipment business, sales have been off at Layton Truck Equipment. But a diversified approach to the market has helped. The company markets to truck dealers, end-users, municipalities, fleets, and railroads.

“Auto Truck's philosophy has been to get into a lot of market segments.” Hayes says. “It's been a real good year for snow and ice control equipment. Overall, the fleet business has been soft, but there are some niche fleets that are still going strong.”

Another sales tool

Even when sales get lean, though, the principles that Layton has been implementing help make the company more profitable — and more attractive to customers.

Dave Asmus, for example, is a big supporter of the company's Five S program.

“Improved housekeeping leads to improved efficiency,” he says. “But beyond that, it gives us a better reason to use the new shop as a sales tool. We are encouraging our salesmen to bring customers here to see how things are run. We get a lot of compliments from truck dealers who tell us they can't believe how clean the shop is. And when customers see a clean shop, they become more confident that they will get quality upfits.”

The new shop, combined with the lean programs Layton has implemented, has helped improve morale, Asmus says. He says that everyone is appreciating the improved lighting, the cleanliness, and the organization. And by bringing in a consultant, the transition went more smoothly.

“Bringing in someone from the outside really helped us get the program going,” Hayes says. “It wasn't just Dave or me telling guys they need to clean up their work areas. We have had experts come in to implement an effective way to conduct business. It's an approach that the U S started, and we used it to help Japanese companies rebuild after World War II. The Japanese took the concept and ran with it. I think it's time that we put these ideas to use so that we can be a more effective company.”