Running Lean and exemplary customer service have allowed this Michigan converter to thrive, in spite of significant challenges.
MAC ARTHUR CORP.
3190 Tri-Park Drive. Grand Blanc, MI, USA
Established in 1970 by a former General Motors employee, Mac Arthur Corporation in Grand Blanc, MI, USA, is today an efficient, international and (very) Lean supplier of custom labels and diecuts for both industrial and commercial markets. In just over 40 years, the company has gone from a two-man operation to a nearly 50 person company. It’s withstood the ups and downs of the North American automotive industry, a mass exodus of Michigan-based manufacturers, and a recession. And it all started because someone wasn’t ready for retirement.
After working as an engineer at General Motors in Flint, Jack Mac Arthur retired a relatively young man. Rather than enjoy his newfound freedom, though, he instead took notice of the multitude of salesmen in the area. “He decided to become a manufacturer’s representative,” says Tom Barrett, Mac Arthur Corp. president. “He sold whatever you needed: nuts, bolts, screws. And then this label thing happened…”
Mac Arthur decided that his retirement was the perfect time to start a company. He hired away someone who was working at a local label company, and established Mac Arthur Corp. as it’s known today. He remained involved with the company until the late 1980s. In 1991, Mac Arthur Corp.’s sales manager Thomas Barrett, Sr., along with the company’s operations manager at the time, purchased the company.
“They took it and grew it pretty significantly over the next 15 years or so,” Barrett says. “I joined in 2005 and then bought out my father’s partner to become president in 2008.” Barrett’s wife, Christie Wong, joined the company at the beginning of 2012 and became CEO at the end of last year.
The Mac Arthur executive team
Much like Mac Arthur himself, the husband-and-wife team at Mac Arthur Corp. was well-prepared to transition into this industry. Between the two, they have nearly 40 years of corporate experience. Wong is a former senior manager of operations at global management consulting firm McKinsey & Co. She has an undergraduate degree in engineering from the Massachusetts Institute of Technology, and an MBA from Northwestern University’s Kellogg School of Management. Barrett also has his MBA from Kellogg, and a Bachelor’s degree in finance from Boston College. He’s a former business manager at Microsoft, and has experience working in private equity, startups, and Fortune 50 companies. Both have extensive international business experience.
Today, the company produces durable labels, tags, diecut components, and RFID labels. The company delivers to more than 21 countries and most states in the US. It has sales offices in Juarez and Guadalajara, Mexico; warehousing in Laredo and El Paso, TX, USA; and a joint venture with Etisoft in Poland. Other European sales offices are in Germany, Czech Republic, Slovakia, Ukraine, Denmark and Hungary. Mac Arthur is currently working towards a presence in China. Wong says, “We feel it is important to be able to serve our customers wherever they are in the world.” The company is an Underwriters Laboratory approved label supplier, ISO/TS 16949 certified and ISO 14001 certified.
The Mac Arthur headquarters in
Grand Blanc, MI, USA
A particular point of pride for both Barrett and Wong is that Mac Arthur Corp. has been a certified Minority Business Enterprise for more than 20 years. Recently, the company earned national certification as a Women’s Business Enterprise by the Women’s Business Enterprise National Council. Of this achievement, Wong says, “We are proud to be recognized as a certified WBE. Inclusion into the WBENC network provides visibility on new business opportunities with corporations and capability development for our organization.”
Capability development was an immediate focus for Barrett when he took over as president. While he says that the company has typically focused on the automotive industry, he set out to expand not only what the company does, but also how they do it.
“This company grew up very much in the auto industry,” he says. “That’s where our bread and butter is. We understand automotive customers who have specific application needs and certification requirements. What we find, however, is that industrial customers in a variety of industries have similar sets of requirements. So, it’s a very translatable set of skills for us to serve the electronics industry, for instance.”
In order to ensure that the company operates as efficiently as possible, Barrett began the company’s “Lean journey” in 2007. “We saw it as a real opportunity for our business. We have great people with a lot of expertise, and we wanted to tap into that,” Barrett says. “We started in 2007, which was great, because it really set us up to weather the downturn in 2008 and 2009.”
Barrett emphasizes that a transition to a truly Lean operation requires a lot of change, and a willingness and openness from employees. “We have an amazing group of people who were really receptive to it. It just wouldn’t have been successful if not for the people who were doing the front line work,” he says. “It hasn’t been easy every step of the way – its certainly been a challenge – but people have been willing to embrace that change and really drive it, which has been critical.”
The Mac Arthur team
One of the first steps that Barrett took to go Lean was reaching out to the Michigan Manufacturing Technology Center (MMTC), which aims to help Michigan manufacturing companies become more competitive. The Center, which is an independent organization, offers courses and helped Mac Arthur procure some training funds that had been allotted by the state. Those funds were able to help pay for some of the initial costs associated with going Lean.
After getting a strong commitment from the executive team at Mac Arthur, the team of employees championing Lean decided that their first project would be to optimize the plant floor layout. Though it was a fairly common layout in the label or diecut business, Barrett says that it wasn’t reaching its full potential.
“We put a lot of it in the hands of people who work in that environment all day. They redesigned how this plant floor ought to be and they made real improvements,” he says. “That was the point for me when I got to see the real power of Lean as opposed to just intellectually understanding it.”
He adds, “A big part of what we do is try to make sure that people are heard. We really believe that if you’re a press operator or a finishing operator and that’s what you do all day long, you probably know more about how to make your job better than I do from where I sit. Sometimes outside perspective is useful, but they’re the folks who are really going to understand it at a level that I don’t.”
In 2010, Barrett brought on a new vice president of operations. “In the last three years, he has really moved the company pretty significantly,” Barrett says.
That VP of operations, a former operations manager at Lear Corporation, has implemented a multitude of visual management techniques on the plant floor. Everything from overhead signs which outline the flow of the floor to foam cutouts in press operators’ drawers to ensure that each and every tool has a place are in effect at Mac Arthur.
“There’s a tremendous amount of waste that happens when someone is looking for a tool, or a material, or there’s no operator at the press, or the job’s at the wrong press,” Barrett says. “Those types of things are not part of what people are worrying about now. They’re just doing their job.”
Now that the plant floor is much more optimized, Barrett says that the company is looking seriously at equipment investment. He says because the company runs Lean, they can accurately measure what it will gain from a piece of equipment, as opposed to just assuming they will be more efficient if they make a purchase.
“Compared to historical levels, we’re investing pretty highly in what we’re doing and in different pieces of equipment,” he says. “The amount of capital that we’re looking at is more than we’ve invested in quite a few years.”
The transparency and accountability that Mac Arthur Corp. displays through visual management on its plant floor is directly mirrored in its sales philosophy. According to Wong, their approach is thorough and holistic.
“We try to think about servicing our customer needs at multiple levels,” she says. “It’s a business-to-business environment that we’re in, so we’re not usually selling directly to an end consumer. We have to make sure that we understand our customers’ corporate strategies. We try to develop and maintain relationships at a corporate level to understand what they’re trying to do and what their needs are. We want to know how Mac Arthur can help them meet those needs.”
The redesigned, Lean plant floor
Wong says that managing executive relationships and understanding how their customers’ strategies are changing is just the first level of Mac Arthur’s sales approach. “It’s also important to understand the needs of the purchasing and engineering stakeholders within our clients. We have a portion of our sales team that understands application engineering in the label category and also understands the needs and problems of the engineers and purchasing agents. Finally, there’s yet another set of relationships at the most tactical level, which includes the plants and end users. It’s a multi-level customer management approach.”
Because of the nature of Mac Arthur’s customers, Wong and Barrett say that it’s essential that they go the extra mile to ensure that their customers’ needs are met, and that any issues are not just resolved, but tracked.
“A lot of our customers are big companies, and communication within those organizations isn’t always perfect,” Barrett says.
Wong adds, “Let’s just say there’s a guy at the plant who wants a box of Label X. He put in a request through inventory management for the product, but for some reason, that order didn’t get to the purchasing agent. So, there was no purchase order issued. All this poor person at the plant knows is that they requested something three weeks ago, and it’s not there. When we get those phone calls, we help them figure out how that process is broken dow. We do everything we can to help connect those dots for them.
“These are large, multi-national corporations,” she says. “We’re shipping to multiple facilities worldwide. People can be out sick, things happen.”
Barrett says that he and the entire executive team try to align themselves as much as they can with their customers in order to focus on their specific needs.
“We’re trying to make sure that our customer builds and ships their product on time with high quality at maximum profit. If we do that for our customers, they’ll be successful and that helps us in the long run. Sometimes that’s challenging, but we try to make sure that we stay focused on the fact that they’re the ones who keep us employed.”