William Sinn Implements Lean Manufacturing Techniques
To Turn Around Actron’s China Operation
China factory improves quality, delivery and gross margins

History
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.

The Result
“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 five years.”

William Sinn estimates he helped Actron lower pricing by 30 to 40 percent through three strategies:
  1. Lean Manufacturing training,
  2. A cooperative joint venture in south China to design and develop new products, and
  3. 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.