William Sinn Implements Lean Manufacturing Techniques
To Turn Around Actron’s China Operation
factory improves quality, delivery and gross margins
Tom Slater knows all about doing business in China.
As the former owner and CEO of Cleveland-based Actron
Manufacturing Company, Tom was an outsourcer before
outsourcing was the hot business strategy. Founded
in 1964, Actron is one of the world’s leading
manufacturers and marketers of diagnostic and test
equipment, accessories and performance instrumentation
for the automotive aftermarket. A self-described pioneer
of global business and sourcing, Slater started a
China-based manufacturing company in the late 1980’s.
Actron acquired a factory in Taiwan to make tachs,
gauges and accessories, but was experiencing wage
inflation with a shortage of workers for available
jobs. Slater partnered with the Taiwan factory’s
previous owner to move the factory from Taiwan to
China, where prices were stable and the workforce
was virtually unlimited.
But as Actron developed new products and applied new
inventory and speed-to-market techniques, the China
factory began to lag behind in areas of quality, delivery
and inventory. In the U.S., Actron’s employees
were learning new Lean Manufacturing techniques that
greatly improved productivity. But these manufacturing
techniques were not being transferred to their Chinese
counterparts. Actron needed to implement the same
streamlined operations and cost cutting measures overseas
that had been successful in the U.S.
William Sinn’s Solution
William Sinn was hired as Vice President of International
Operations for Actron in 1999. He was immediately
put to work managing the firm’s China subsidiary
factory and Pacific Rim supply chain. William began
to train Actron's U.S. engineers to work directly
with their Chinese partners, teaching both sides to
communicate new ideas and processes.
“In order to reduce costs, control inventory
and be responsive to customer demand, the China intermediaries
had to understand what it takes to do good business
in the American market,” Sinn explained. After
introducing lean manufacturing techniques at Actron’s
China factory, response to customer demand increased
dramatically, as did profits.
William continued to teach the Chinese employees to
do things quicker and better. Actron has been able
to implement further quality improvements that enables
them to produce more goods at lower cost.
“Now inventories are lower, and the cash flows
are higher,” says Slater. Gross margins have
moved from the high teens to mid to high 40s in just
William Sinn estimates he helped Actron lower pricing
by 30 to 40 percent through three strategies:
- Lean Manufacturing training,
- A cooperative joint venture in south China to
design and develop new products, and
- New outsourcing options.
He saved Actron close to $2 million a year in material
costs, increased the China facility’s output
and boosted profits by a half-million dollars annually.
“William is able to see the big picture and
then break it down into small parts. He is able to
analyze where you are, tell you what to do and how
long it’s going to take. He took us to a whole
new level of quality and lower cost,” said Slater.
Sinn & Company is located at 23 Lyman Circle, Shaker Heights,
Ohio 44122. For more information contact William Sinn at
216-292-4880, or visit www.sinn-co.com.