Alex Lawton sits down to chat about labor, economic, and political challenges
Aside from the health, political, and economic challenges we’re all facing, The C.A. Lawton Co., the foundry industry, and all of manufacturing are being confronted by specific challenges today. As a small manufacturing company within the industry, we’re striving to overcome them. Perhaps hearing what we’re working on can help you with similar challenges.
The two key challenges that really impact us directly are 1.) labor and 2.) the economic and political landscape.
Skilled tradesmen and women that want to work in a foundry or machine shop and dedicate years to becoming a master are hard to come by. Right now, there are more people that fit that description retiring than entering the workforce. Even general labor, people who come in for a year to a few years, are safe, and do good work are hard to find.
To overcome the labor issue, we brought in teams from Puerto Rico in June 2019. It was a win-win scenario. We talked about it in one of our other articles, but Puerto Rico was devastated by Hurricane Maria, and the unemployment rates in Puerto Rico were at 80 to 90 percent.
We wanted to get them acclimated, make them feel welcome, we had to get housing sorted, and overcome obstacles. All the effort we put into this has been worth it.
Another way we’re tackling the labor issue is through outsourcing. Some of the toughest jobs are in the cleaning and finishing room. We’ve started working with a supplier in Ohio that isn’t traditionally in that business, but they do a lot of similar things, and we’re willing to try it out for us. Now they take care of a substantial part of our cleaning and finishing. This is a first for us. Usually, only in random busy peaks or emergencies do we have another place clean some castings for us. It’s also not normal in the industry, but not normal can be good. We’re all about innovation, and finding solutions, and this seems to be working for us.
For a while, we struggled to staff the core rooms, and that regularly held us up. Buying cores, outsourcing, is more normal in the industry, but not for Lawton. We haven’t done it other than in a pinch. We didn’t have a very good experience with it.
We run furan-based no-bake sand. The good places to outsource from run phenolic-based no-bake sand. If we introduce too much phenolic into our furan system, it starts to cause problems with the castings, so we don’t necessarily want to do that. But now we ended up working with one of these places who was willing to get us what we needed and carve out a cell to make furan cores, and now we’re the anchor customer for that business.
The next thing we’ve done is revamp training. Last year we did a kaizen on onboarding, everything from finding folks who want to come here and work to training them and getting them started on their job. With this kaizen, we really upped our game on orientation, asking the right questions, ticking all the right boxes, getting them to meet the right managers and see the right presentations and so on.
People were feeling really good. They got here and felt like everything was organized and whatnot, but when it came to training people to do their jobs, whether it be making cores or molds or something else, that was our downfall. It was so variable because if you came into a department that was well staffed and the supervisor had a lot of expertise in that area, or had a love for training, you got really good training, but it was random how that worked out because those things weren’t consistent across all areas.
In some areas, as long as you weren’t a safety hazard, and as long as your attendance was good, you would stay on. With this kind of situation, the people who are going to leave are the ones that are bored because they aren’t learning anything and can’t add value. Most of the time those are the employees we want to keep around. The ones that end up staying are the people who think it’s great that they can get paid to do nothing, and those are the kind of people we don’t want.
With that in mind, we started thinking about what we could do to affect retention, and improve training, and make sure we’re keeping the right people. We found two more long-term guys, one production and one in quality. We took elements of TWI or training within industry, which is sort of under the umbrella of LEAN. We came up with our own “Lawtonesque” version of that. We’re putting together standard work, taking a really hands-on approach, and so far, we’re seeing good results.
Doing this is important for the company itself. Our capacity goes up, quality goes up, we don’t have to remake parts because of errors, and we’re able to keep the good employees who want to learn.
Economy and politics
The second challenge that comes to mind right now is the global economy and the current political landscape. With unresolved conflicts, customers get a bit uncertain and hold off from buying. They want to see what will happen with the coronavirus, with this policy, or that election. That makes sense, but while they’re doing that, projects get put on hold or pushed out, and this is a real challenge for the businesses that serve them.
From a raw material standpoint, this level of uncertainty can mess with the supply chain. Lawton is usually a small part of a larger supply chain where our products go to our customers and then on to end buyers who might have another supply chain for the end products they manufacture. Issues with trade result in a lot of complications and delays in the supply chain; the cost can be affected, and the rate at which companies like us receive raw materials can slow way down.
There are fewer companies like ours, but there’s also less labor, which means less capacity to meet demand. But there is demand, there is opportunity. To take hold of these opportunities, we must overcome these challenges. To do so, this sometimes involves reconstructing supply chains, a great deal of analysis of the situation, and continued exploration of new options.
As a company, we are all about Continuous Improvement. Having that at our core allows us to be successful at overcoming these obstacles and whatever others may come our way.
CEO Alex Lawton has over 15 years of experience operating businesses as an owner and executive. Now with oversight of not only The C.A. Lawton Co. but also Temperform and Damascus Steel, that experience is being put to work across a growing platform of metal-casting businesses.