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.

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.

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.
 

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.

• Compounding throughput increased by 21%
• Compounding productivity is up by 17%
• Filling line downtime reduced by 12%
• September’s shipped dollars represented a 29% increase over the average of the first eight months of 2001

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.