$3.3M Increase in Annual Revenue Achieved by Steffes Corporation by using Lean to Decrease Lead Times and Increase Capacity
Steffes Corporation is a private company which began in the 1940’s in western North Dakota. Over the years, Steffes became known for its creative and innovative solutions that could respond to a wide variety of customer problems. An example is the research and design of the first American made electric thermal storage (ETS) heating unit in the mid 1980’s.
In 2007, Steffes became the leading manufacturer of oil tanks in the development of the Bakken Formation in North Dakota. In addition to tanks, the company offers the oil industry additional metal products for each production location including walkways, staircases, steel berms and cattle guards.
Most recently, to assist in the safe and environmentally friendly combustion of oil production gases, Steffes has introduced engineered flare systems. Each system is manufactured by Steffes to ensure oil field operators have a consistent means of burning gases regardless of the gas pressures.
As production operators seek to maintain a safe and clean work environment at the production location the specially designed flare systems and customized controllers have provided an invaluable addition to handle the unique oil and gas production conditions found in North Dakota.
Needed to Increase Capacity to Achieve Growth
Steffes has realized significant company growth over the past several years – this growth is a challenge as the company operates in an area where workforce availability is a major problem. So how could they ramp up the production of controller systems – the ‘heart’ of the flaring systems – in order to help their customers reduce their exposure to oil field cases in the field? And at the same time, meet their company objectives for on time delivery, quality and inventory levels?
Lean Enterprise Certification Program (LECP)
Steffes has not only been recognized for their creativity and innovation in the design of products but also in their ability to solve problems and make improvements to their production system. They have consistently invested in their employees in order to empower and engage them in continuous improvement.
One of those investments has been in the Lean Enterprise Certification Program (LECP) with Impact Dakota. LECP is an Impact Dakota customized program that provides participants with an introduction to Lean and in learning how best to apply Lean Tools to opportunities they have in their companies. Upon completion of the four month program, LECP participants successfully prove their mastery of Lean through building a portfolio of improvement projects and in passing a national Bronze Level Lean Certification test.
As part of a recent LECP program that Steffes participated in, Mark Volesky (Impact Dakota Senior Business Advisor) worked with the company’s leadership and staff to help them apply many of the Lean tools in the planning and execution of a two day kaizen focused on building a production area for the Flare System Controller that would help them meet company and customer objectives. The kaizen was a resounding success.
Annual Increase in New Revenues of over $3.3M
As a result, Steffes developed the production capacity for this new product that not only met but exceeded their goals. They reduced their lead time for production controllers from 26 days to 9 days. They reduced their controller build time from 2.7 hours /unit to 26 minutes / unit. While reducing inventories from 26 days to 8 days, they positioned their capacity to support increases in sales from $44K per month to $330K per month (an annual increase in new revenues of over $3.3 M)!