Empire is Obsessed With Change
Michelle Segrest | November 16, 2016
A transformation in management and culture, combined with an investment for future growth, revitalizes a 97-year-old tool-manufacturing company.
For Empire Level, giving new life to a company that was family-owned for five generations is more than an investment. It is an obsession.
“There is a big difference between passion and obsession, and we are truly obsessed,” said Richard Gray, the senior vice president and general manager of Empire Level, Mukwonago, WI, a division of Milwaukee Tool Corp., Brookfield, WI. “Anyone can be passionate, but we go beyond that. We are obsessed about our brand being the best, obsessed about the quality of our manufacturing, obsessed about how clean our plant is, how happy our people are, and how well they are trained. We are obsessed about how much fun we have watching the company grow every day. This obsession really drives us.”
Empire Level built its renovation effort on this obsession, combined with seven other core values it shares with Milwaukee Tool—empowering leaders, agility, speed, urgency, high performance, candor, and a commitment to always improve. This redefined culture and a $12-million investment in equipment and people in the past 18 months has set the groundwork for the revitalization of a company that takes pride in manufacturing high-quality products made in America. Another $4-million investment is planned for next year.
In business since 1919, Empire Level is one of the oldest brands in the level and squares business. The company makes tools and solutions for users including contractors, MRO and industrial professionals, electricians, plumbers, mechanical and maintenance technicians, cabinetmakers, welders, other trades, and general consumers. The Torpedo level is its core product, and the company invented the bubble Monovial that is found on almost all levels worldwide.
Milwaukee Tool, a manufacturer of professional heavy-duty tools and accessories, made a strategic decision to purchase Empire Level in the Spring 2014 because the manufacturing of its hand tools was being outsourced. The acquisition allowed the companies to be vertically integrated and keep the manufacturing in the U.S., Gray said. “Empire Level is a highly respected brand that has been around for almost 100 years,” he said. “The trades all know the brands and know the quality. Combining that brand equity just made sense.”
However, upgrades were needed in the equipment, culture, and processes, and employees needed to be inspired and recharged.
The Empire renovation began with a coat of fresh, electric-blue paint. It quickly ran deeper, seeping into the bloodstream of the 200 employees. Buy-in from upper management all the way to the operators on the floor began to become infectious throughout the 120,000 sq. ft. of manufacturing space. The arrival of new equipment, upgrades to old equipment, new people, training opportunities, and efficient processes made it tangible.
“Our revitalization is not just new paint on the wall,” Gray said. “The change is coming from within. It’s a feeling. It truly is an obsession that is built on trust. The people who are building our products are building trust and understanding. The result of these efforts is the complete transformation of a U.S.-based company through people and technology.”
Empire Level’s new management, led by Gray, found many opportunities to reconstruct and rebuild the culture, as well as the equipment and processes. “The first thing we did was have a company picnic,” Gray said. “This seems simple, but there are people who have been here more than 30 years who told me they had never had a company picnic. This gave us an opportunity to build friendships and bond together as a company family. We had our marketing department demonstrate our products. Many of the people who worked in our factory didn’t even have a basic understanding of how our products were marketed or used by our customers. This really opened a lot of eyes and helped to add layers to our tagline and company mantra of ‘Built on Trust.’”
Starting with a blank canvas, the Empire Level team was able to craft their own renovation story without being crippled by processes that didn’t work, Gray continued. Some machines were more than 45 years old and had never been upgraded. The maintenance department used a strictly reactive approach, without any predictive maintenance best practices or documented history for repairs.
“Our biggest challenge was that we didn’t just want to fix things. We wanted to improve them and continue to grow the company,” explained Gray. “We not only had a factory full of machines and assets that were way beyond their useful life, but we didn’t have any systems in place to monitor and improve. There was no base foundation, so we started from scratch.”
Change in culture
Gray’s manufacturing leadership team includes director of operations Steve Lallensack. The facilities and maintenance responsibilities are led by manufacturing-services manager Steve Tolfa. The team’s first challenge was to establish a culture that would inspire ownership and empowerment among all employees.
“Change is hard, and it can be especially hard for people who have been doing the same thing for many decades,” Lallensack said. “We knew we needed a culture that was agile and could help our people to adapt to changes—not only changes in equipment and technology, but in attitudes and responsibilities.”
The team began with candid meetings that clearly defined the plan for growth. They made sure that employees had an understanding of what was coming so no one would be blindsided by changes they didn’t anticipate. The team admitted there was skepticism at first as positive change had often been promised in the past, but not always delivered.
“When you candidly communicate the plan from the start, you would be amazed at the results you can get when the changes start happening at a rapid pace,” Tolfa said. “The bottom line is we did what we said we were going to do, and this speaks to the integrity of the company and helps to build trust.”
Gray said the management teams included all levels of employees in their meetings, and then they listened to their input. “This gives people a feeling of ownership and helps them to feel more comfortable with the changes. We said what we were going to do, and then we did what we said we would do.”
Significant investments were made in facility cosmetics and infrastructure, including new air compressors and internal systems. “There may have been some skepticism, but when the new manufacturing equipment began to show up about six months later, this made believers of everyone in the building,” Lallensack said.
Investment was also made in the people. “It wouldn’t matter if we have all this brand-new equipment if we do not have the people to run it,” Gray explained. “We made sure we were taking care of our people. We made sure their compensation and benefits package were the best they could get in this area. This also helped to build trust. As we got new technology in, like robotics, this replaced the work of some people. But they didn’t lose their jobs. They got special training so they could do something different and grow with the company.”
Change in processes
With the employee buy-in and equipment upgrades, the next step was ensuring there were effective processes to pull it all together.
Before the new management stepped in, the engineering-quality systems were not the most effective, Gray said. “The average tenure of the people on the floor was 25 years, so everybody that was out there worked on tribal knowledge,” he added. “They have been here forever, and they all knew how to make a level and a square. If there was a problem, they all just got together and fixed it. They didn’t have a system to document anything.”
With the new upgrades in technology and equipment, additional skill levels for the maintenance team were required. The 16-member maintenance-and-operations department was also upgraded with automation specialists, electricians, tool designers, engineers, and diversely skilled mechanics.
“We already have strong maintenance professionals, and now we are adding people with special skills who can work on specific technology,” Lallensack said. “Some of them have crossover skills, but we have also added technically sound specialists. Our manufacturing and engineering teams also help with maintenance, repair, and preventive-maintenance best practices.”
When the plant renovation began 18 months ago, preventive maintenance did not exist in many areas, Lallensack explained. “The process was to run everything until it breaks. Now, we are bringing in new pieces of equipment and setting up the preventive-maintenance program, literally, right now as we speak.”
Not all machines have been replaced. For the older, but more reliable mainstays, preventive maintenance plans are being put into place.
Change in maintenance philosophy
The maintenance team was outsourcing much of its work. Lallensack collaborated with Tolfa to hire many new skilled positions, particularly in electrical and automation disciplines. Now, the majority of maintenance is handled in-house while a preventive-maintenance program is being developed. Facilities coordinator Kristy Stichmann coordinates maintenance activities.
The process continues to evolve, Tolfa said. “A year ago, I would walk in and talk about what [machines are] up,” he said. “Now we talk about what is down. On a typical day, we look to see what the hot spots are out in the shop. Then we can deploy the staff, address the issues, and set priorities.”
The shift in culture has also affected how the maintenance team functions. “It’s the people we have who make the difference,” Tolfa said. “Our guys have ownership in the machines they are responsible for.”
The maintenance team handles an average of 10 to 15 work orders each day. The team is implementing a CMMS system, but currently works from logs and worksheets.
“You can’t improve what you don’t measure,” Tolfa said. “The engineering staff helped us develop tracking boards. These have taken us from being good to being great. They help us identify where to focus our activities. Data is the key to improving. It helps us get to the root cause so we don’t keep doing the same repairs.”
“Making improvements using the data is the next natural step,” Lallensack said. “We have problem-solving tools to identify issues and apply systemic corrective actions. We have just started recording the breakdowns and labor involved. A year ago there was no documentation. The beautiful thing is we have a clean sheet of paper, and this gives us the opportunity to craft our own system.”
Change in continuous improvement
Doubling the size of the company in two years requires deployment and reorganization of people and assets, Gray said.
“We have brought in more people trained to handle automation and robotics,” he said. “So the people that were previously working on those lines have been retrained and reassigned to work in other areas. We have training classes as we bring in new equipment.”
In addition, the Empire Level team uses a large continuous-improvement tracking board that emphasizes a 6S program, which is the standard 5S program—sort, simplify, shine, standardize, sustain—plus safety.
“This has become the backbone of our plant in the revitalization effort, not only on the equipment and process sides of things, but also in the cleaning and organization of the plant,” Lallensack said. “In January, we set a baseline, and every department is audited on a monthly basis.”
The company also implemented a suggestion board where employees can submit feedback about anything from workspace, to accommodations, to the cafeteria, to processes on the manufacturing line.
The company also uses a color-coded equipment-status maintenance board that reflects each production line, machine statuses, and value streams. Green indicates that a machine is running, red means the machine is down, and orange indicates that the machine is running, but not at ideal capacity.
“The board is right next to the time clock and status boards, so, at a glance, anyone can see the status of any machine,” Tolfa explained. “Our machine set ups are listed in priorities, which helps us make informed maintenance decisions. We can easily communicate through our material-review board any quality concerns or actions that need to be taken.”
“When we embarked on this journey, the attitude when we walked out on the floor was, ‘Ok, what is the good news today?’” he said. “The question was never what was down, but what was running. Today, the production meetings have changed. Now we can talk about what is hot, what are the equipment issues, and what needs to be expedited. Most days, everything is running.”
Empire is also implementing an OEE (overall equipment effectiveness) system. “Now we can see the combination of uptime and downtime and determine the reasons for it,” Lallensack said.
Change in equipment
Replacing and upgrading equipment can be the most expensive, time-consuming, and laborious part of a company’s revitalization, Lallensack said. It begins with the infrastructure, but also includes consideration of space and organization, upgrades in the air-handling system, and considerations for better energy efficiency.
Lallensack, Tolfa, and Gray likened the process to a tile game in which all of the pieces and parts must constantly be moved around and reconsidered when putting together the final puzzle.
“Bringing in a new piece of equipment crosses a lot of departments—from process engineering to work instructions and documentation, the quoting process, training with the technicians, and figuring out where that piece of equipment fits into the manufacturing line,” Lallensack explained. “We work closely with the manufacturer to get the spare-parts lists, proper ongoing training and service, and we also have to consider centralization of the MRO inventory.”
Along with new equipment comes commissioning, new tools, programming and understanding of the controls, and software training. “We also rely on the resources of experienced operators and technicians that we have here at Empire,” Lallensack said.
Often, it can take one to three weeks or longer to fully integrate a new piece of equipment. Sometimes the new equipment must be disassembled and rebuilt when it is brought into the facility, and some equipment is held in a storage facility until it’s ready to be implemented. All of this must happen without disrupting production.
“When we started our revitalization, it really began as a recovery phase that evolved into a revitalization phase,” Lallensack said. “We have to constantly think about bringing in the new equipment while still running the old equipment and how it all fits into the tile game. We must ensure that there is a good manufacturing flow, while also enhancing our technology and value stream. There also has to be a smooth transition. And when you move one piece, you have to move another one out of its way. We do this using the same square footage we have always had.”
The new equipment, automation, and technology are the most obvious parts of the renovation, but perhaps not the most important, Tolfa said. “We have taken an operation that was good, improved it, and continue to make it better,” he said. “And we’ve used a complete team approach to do it. From the senior vice president to the individual standing at every machine, everyone is united, all the arrows are aligned, and we are moving in a forward direction.”
Lallensack emphasized that the movement’s success started with the employees.
“We always had good people,” he stated. “We just needed to reorganize and restructure and add to the skill set. The new equipment is the sexy part, but the people really are the base. Add to that advanced technology, a Made-in-America product, and we can all say we have a truly exciting story to tell about rebuilding a company from the ground up.”