AERCO International, Inc., of Northvale, New Jersey, is a manufacturer of gas and steam-fired hydronic boilers and water heaters. With 106 employees, the company is known by HVAC and plumbing engineers worldwide for its innovative product designs, a renowned manufacturing process, a strong reputation for consumer education and a solid network of sales agencies.
Although AERCO had long been recognized as a reliable manufacturer of high quality and innovative products, President Fred Depuy contacted NJMEP in 2002 to obtain assistance in achieving his goal of establishing AERCO as a world-class company. His plans entailed increasing overall quality of the product line, improving operations, bolstering operational safety and expanding the product line worldwide.
As a starting point, AERCO managers visited the L.A. Dreyfus Company, which had recently completed a successful 5-S project with NJMEP. During these visits, the managers benchmarked specific elements of the Dreyfus operation. The principals then determined that the Dreyfus model would be extremely useful in the AERCO project, and thus decided to establish it as the foundation for quality improvement and implementation of NJMEP’s Quality Management System.
NJMEP performed a Quick View Assessment of AERCO to obtain a “snapshot” of operations. Based on the Quick View results, NJMEP instituted a 5-S program led by two highly qualified trainer/consultants specializing in 5-S. The trainers developed a solid understanding of AERCO’s goals and overall culture, and connected well with the entire AERCO team. NJMEP also participated in each 5-S training class, and provided input and support to the 5-S activities.
The 5-S program was followed by a Root Cause seminar, conducted by third party resource Prism eSolutions, which taught employees the methods used to identify the true cause of a problem. Following AERCO’s plan, this led to the implementation of a Quality Management System, which currently is in the procedural and process mapping stage. NJMEP also aligned AERCO with E Prism as a training consultant and provider of project management software designed to support the Quality System implementation.
Throughout the project, the NJMEP field agent worked closely with AERCO to determine the company’s goals, desired time frame and budget. The agent prepared the proposals, obtained and processed the order, selected the most suitable resources, and managed the project to ensure effectiveness, professional oversight and on-time, successful completion.
The AERCO project, implemented over a period of months, achieved and, in some cases, surpassed its goals. AERCO’s participation in the 5-S training was 100 percent. The company committed to – and succeeded in – sending over 75 percent of its team to the benchmark visits, many of which were arranged and supported by NJMEP.
The project had a positive outcome for the entire AERCO team. The operation is more efficient and safety has improved. The 5-S implementation is being utilized as a sales team support tool in selling AERCO’s product line. Prospective customers now deal with a more organized, cleaner, more efficient operation. This positive image has helped to bolster sales and solidify company morale.
According to the NJMEP field agent, AERCO is unusual in the commitment of its personnel in acting as a team. 5-S proved to be an excellent tool to foster a positive team environment. Even all members of the management team scrubbed, painted and worked their way through the entire 5-S process. The extent of benefits realized by the company’s participation in this project can largely be attributed to this extraordinary display of teamwork.
AERCO is now focused on implementing its Quality Management System over the next six to nine months. This is an essential support component to AERCO’s aggressive growth plan. NJMEP will provide support through training as necessary.
For the future, AERCO plans to continue its partnership with NJMEP on the addition of new training programs and skill sets. AERCO also will provide potential NJMEP clients with access to on-site training overviews and facility tours to highlight how 5-S works in “real world” application.
AERCO has defined its Ideal State of operations according to the following principles: Safely produced; Defect free – zero defects; On demand: to every internal and external customer’s needs; No waste in our operation; and One piece flow: 1 x 1 through each process.
In reviewing the joint NJMEP/AERCO undertaking, AERCO President Depuy said, “The project was aggressive but well managed, and the overall operation is a much more efficient and safer environment to work in. It is the foundation to the implementation of our Quality Management System,” he continued, “and improving the overall quality of processes, products and services to both our internal and external customers.
“NJMEP is an excellent organization to work with” Depuy assessed. “They provide a wide variety of training and services. They provide a network of contacts to support manufacturers in that journey to improve your business.” In summary, he concluded, “It was a positive experience – a “win-win” experience for both teams!”