About Chester Labs
Chester Labs can trace its roots back to a tobacco warehouse in Erlanger, Kentucky. In 1939 that warehouse and a nearby garage were the birthplace of the Thermocor Company. Canned heat was to be this forerunner of Chester Labs’ original product. The soldiers in the field used it during World War II to heat and keep their food warm. At the end of the war as the demand for canned heat waned, Thermocor survived by diversifying into the pottery industry. By the late 1940’s Thermocor expanded again, this time into the medical products market. With the same facilities and staff, lotion and enemas were manufactured for hospital use. The revolutionary one-piece enema tube that was developed and patented at this time is still in use today!
In the late 1960’s the original owner, Chester Eaton, passed away and the company was sold. In 1973 it won an exclusive contract to produce enemas for Armour Pharmaceutical. This event changed the face of the old production facility and created the new nameplate of Chester Labs. Thermocor was still producing for its existing customer base, while Chester Labs was responsible for the Armour products. The contract only lasted a few years so new products had to be developed to sustain the growing business. To that end liquid soaps and shampoos were added to the product line.
With the help of ambitious sales and marketing programs, Chester Labs continued to grow, and the Thermocor name was eventually dropped. A new warehouse was built; increasing space from 10,000 to approximately 25,000 square feet. Compounding equipment was installed. Chester Labs’ lotions and enemas were being used in hospitals and nursing homes across the United States. With an expanded product line and increased customer base, Chester Labs was rapidly outgrowing its manufacturing facility. So in 1994 a new, 42,000 square foot facility was acquired in Cincinnati, Ohio. A fresh look and new marketing approach for its products, as well as improved inventory and customer service abilities has positioned Chester Labs for the success it currently enjoys. As it continues to grow, Chester Labs will always strive to maintain its “family feeling” while providing superior, cost-effective products for its customers.
Chester Labs’ core competency remains the manufacture of liquid products through compounding and bottle filling.
Chester Labs is ISO-9001 certified, and has received many customers’ awards for outstanding quality and service. The company outshines its competition with its FDA compliance systems and abilities.
Chester Labs’ market is mainly in the Midwestern and Southeastern United States. Its strategy is to offer a one-stop shop for the personal care industry. Chester Labs strives to achieve this with a broad product offering, innovation in blending and filling, and superior customer service.
By mid-2001, John Armstrong, Chester Labs’ Owner and President, realized that Chester Labs was poised for dramatic growth. With several new and prospective customers presenting the promise of dramatic sales increases, John knew a stronger company focus would be a necessity. Business conditions at this time demanded that Chester Labs take full advantage of recently installed equipment and acquired products. To spend time on growth, John recognized that Chester Labs needed to reduce daily fire fighting through significantly improving employee communications. John knew that the capacity of the plant needed to be more fully realized with increased throughput if it was to turn these prospects into customers. Chester Labs was a good company that was open to change.
Prior actions for growth included the formation of Kaizen Teams for shop improvements. These teams utilized members from all departments of the company to focus efforts on individual equipment and areas. To this end new compounding and filling equipment was installed in early 2001. John also insisted on a good attitude, good attendance, developing team skills, and doing your job so that your supervisor doesn’t have to do it for you. These expectations aligned with Chester Labs’ time-honored, family atmosphere. Growth and improved customer satisfaction would not be possible with too much equipment downtime, long changeover time, over-production, very little cross training of employees, minimal organization, and overly complex planning/scheduling.
Growth and improvement goals were established for the entire company. These goals included improvements in sales, establish visual management, improve quality procedures and measurements, equipment downtime, improve productivity, minimize employee turnover, improve planning and scheduling procedures, and improve product lead time, and reduce inventory.
Despite these efforts and a rigorous cost reduction review, Chester Labs’ financial performance was not where it needed to be. John understood that only a continuous drive to improve the business would generate the results that were desired. Only then would Chester Labs be able to grow to fulfill its business plan. He envisioned a company with a world-class look and real time performance measurements that the employees owned. He envisioned truly empowered employees working as a team and a company capable of record levels of productivity, performance, and results. John decided to invest in his employees, improve operations, and organize the entire business.
Dave Polan, VP of Manufacturing and veteran of Chester Labs’ Kentucky roots, also had to strong desire to grow the business. He saw Chester Labs poised to take the personal care market by storm. Dave believed that their unique abilities to compound and fill within the often-difficult guidelines of FDA regulation gave Chester Labs a competitive advantage over similar sized competitors. Dave envisioned a dynamic company that could capitalize on these opportunities. Mark Kramer, Plant Manager, also desired this forward-thinking environment for his manufacturing floor. Mark’s needs stemmed from the dramatic physical changes that had taken place in the shop. Additional equipment, relocated departments, and new product offerings had conspired to increase the need for management and system controls. In addition Mark wanted to improve his leadership skills, and grow personally and professionally. Both men felt it was important to demonstrate leadership and take this need for change and improvements company wide. Motivation and desire were needed to successfully improve the business, with special attention to the production process and systems. This energized leadership would provide Chester Labs customers and employee’s greater benefits and therefore drive sales and employee morale.
In order to make these changes and continuously improve, Chester Labs wanted to make these improvements quickly to capitalize on the available opportunities. This meant that the company had to improve employee development as well as create a management communication system that would foster a self-motivated workforce.
Definity Partners Plan
Taking its cue from these desires of its management staff, Chester Labs set out to create a culture of continuous improvement. Operational objectives of increased productivity and throughput were to be realized by tapping into the underutilized creativity of Chester Labs’ workforce. Waste would be attacked in order to satisfy their customers’ demands on delivery, cost and quality.
This improvement journey was to begin with the heart of the organization: the shop floor. It meant that the status of orders needed to be visually understood and clearly communicated to all. The first steps in achieving this aim were the installation of schedule and production boards to provide simple and immediate feedback on the status of the plant’s workload. Shift start-up huddles were instituted to communicate the results from yesterday and the goals for tomorrow. Production measurements were established and posted so everyone could monitor the effect of the changes. At the same time Chester Labs regularly invested in training for employees and then immediately applied that training. One result was that Chester Labs began a 5S Management System – Sort, Sweep, Straighten, Schedule, Sustain. This management system allowed employees to assess their work areas, charting results visually, tracking issues, and then documenting daily, weekly, and monthly performance results.
Schedules were set with often aggressive goals in order for obstacles and bottlenecks to be quickly revealed. At times employees were even asked to calculate efficiencies hourly. If hourly or daily goals were not met, then the problems that faced the employees were identified, prioritized and then attacked. These obstacles were non-value added and needed to be removed. Only then could the desired growth levels be attained and in the end pushed even higher. Such actions and others like them allowed Chester Labs to strive for increased value for itself and its customers.
Some of these obstacles materialized in the physical setup of the plant and its departments. Raw materials and finished goods inventories were reorganized and re-arranged, and point-of-use dispensing was instituted. Sometimes a lack of sufficient management was the culprit. To that end both a departmental supervisor and an assistant plant manager position were defined, created and then filled from the Chester Labs team. At other times a lack of interdepartmental communication was the source of the waste. A realigned shift schedule and consistent informational exchanges were implemented to address this need. Changeovers and downtime were carefully measured and then pursued for improvement. Training needs were identified and then addressed by the employees themselves. These actions and others like them helped to increase productivity, efficiency, and effectiveness, while at the same time improving overall schedule turnaround.
Later, additional operational goals and measurements were created for key indicators in other areas of Chester Labs: financial, sales, shipping, schedule, and quality. In some cases, this was the first systematic monitoring of various areas of the organization. As before, this information was shared with the employees for review and evaluation.
By taking these convincing actions, the desired culture of continuous improvement began to emerge. Chester Labs also began implementing additional actions to sustain the initial improvements. Chester Labs is now driving to reach the next level with strategic planning for the overall business, additional education, teamwork, and of course continuing to nurture a culture of continuous improvement.
Less the four months into their focused initiative, the results are already becoming clear:
Today every Chester Labs employee has begun to understand how their goals and performance is linked to their customers’ needs. They are encouraged to educate themselves to identify obstacles, analyze problems, and then push forward with self-generated solutions.
So what has Chester Labs achieved in such a short time? They are generating confidence in today and optimism for their future. That future for Chester Labs now includes using continuous improvement as a competitive tool to better serve its customers and its people.