Lean and Green at Florida Heat Pump (FHP)

Applying lean principles has dramatically improved productivity at FHP Manufacturing Company, the market leader for water source and geothermal heat pumps. Todd Young and colleagues talked to Bernie Sheehan.

South Florida is not a heavy manufacturing area, and one of the biggest challenges for Fort Lauderdale–based FHP Manufacturing Company is obtaining skilled employees. However, thanks to $100,000 in state grants obtained by VP of Human Resources Sandra Blake and the South Florida Manufacturing Association, FHP has been able to undertake ISO, 5S, and lean training in recent years. The state now uses the company as a model lean operation.

One of FHP’s most innovative concepts is a separate training line for new employees, where they learn ISO, lean, 5S, manufacturing processes, and safety principles before joining their co-workers on the floor. “What came out of our kaizen events and discussions was that better training was needed for new employees and cross-training for existing ones, so now they spend a week on the training line,” explained Todd Young, vice president of manufacturing. “While training and cross-training, they are reworking equipment that may have been freight damaged or have component failure, so it’s very efficient. The cross-training of our employees supports our use of employee flexing from one manufacturing process sequence to another when needed to maintain a balanced manufacturing flow. They also learn where our philosophy of manufacturing is coming from.”

Founded in 1970, FHP Manufacturing leads the water source and geothermal heat pump industry, with the widest product offering in the market. “Our products are very energy efficient and are used primarily for high-rise buildings with a tower/boiler combination. They are also used in domestic heating and cooling, using a geothermal system, and in commercial applications such as industry and schools,” said Young. “We supply products throughout the US and around the world—Poland, England, Turkey, Russia, South Korea, Hong Kong, and China. The US market is still our main market; however, the Asian market is growing rapidly. They’re building a lot of malls, hotels, and so on, and they’re catching on that geothermal is a very efficient form of energy.”

An ISO 9001:2000 certified company with 225 employees, FHP operates from a 100,000-square-foot state-of-the-art facility. Every unit is run-tested on the production line, and all products are designed in close consultation with customers. “We have a distributor/representative council–type meeting with those serving in the field, such as contractors, AC installers, engineers, and architects,” continued Young. “We take their ideas and design them into our own products. As well as custom offerings, we have standard products that are modified to meet the desires of the industry.” For example, a new two-speed scroll compressor has been incorporated into FHP’s designs, which allows the compressor to adjust its speed to run at different loads, whether 60 percent or 100 percent.

FHP’s lean journey kicked off with preparations for its ISO 9000 program in 2003. “We started to document our manufacturing procedures and build flowcharts,” said Vera Vanicek, plant manager. “It took us a whole year, but it gave us information about where there were bottlenecks and so on. We used gap analysis to find out which areas to focus on.”

The lean process got under way initially with the implementation of a 5S program, in conjunction with past- and future-state activity. “We began with the sheet metal area because it’s the front end of the business, where the raw materials come in to make the panels and components,” explained David Francis, assistant plant manager and process engineer. “We did kaizen events and a current-state flow map, and they showed that most of the initial problems were around access and work-in-progress, and also that there was no organization of process flow. Toward the end of 2004 we took hundreds of pictures around the facility, which showed the actual condition of the areas, the work-in-progress, and all the clutter.”

Action was taken to improve processes in the sheet metal area, and 5S implementation has continued step by step through the manufacturing process. “We have six lines, all conveyor-driven, and the sequences were very inefficient in terms of material flow,” said Francis. “So we started with lines 1 and 2, based on our experience in the sheet metal area. Improving the processes on the lines has cut work-in-progress by 50 percent.”

Young also notes the benefits of “quick wins.” “Once we finished the 5S program in the sheet metal area, it set the ball rolling. Other areas of the business saw the success of the implementation, and it really took off. We got employee buy-in. Now all the areas are neat and organized; everything has a place. It has really snowballed.”

The result of FHP’s lean efforts is that labor hours per unit have decreased by 6.1 percent the last quarter, while the defect rate has gone down to less than 0.25 percent of the company’s yearly output from nearly 1 percent a couple of years ago.

Involving staff in the process improvements has paid dividends. “Getting everyone together helps us design products that work best for everyone,” said Young. “When David produced different layouts as part of the workflow changes, everyone had a look at them and commented on what worked best for them. We incorporated them into our kaizen events.”

Overall, FHP’s process improvements have contributed to a 46 percent increase in output in the last quarter. Yet Vanicek acknowledged, “Lean has been instrumental in all the efficiencies FHP is trying to achieve, but it has been a challenge to communicate the principles to all employees.” Young agreed, “Some people have been with us 10, 20, even 30 years, and it hasn’t been easy to help them understand and see the benefits of lean. Changing the culture of what is considered acceptable is the biggest hurdle we’re meeting, but seeing people beginning to grasp and implement lean on a daily basis is very exciting.”

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Manufacturing in Action, Source : The Manufacturer US
Published : January 2007