Success Story: PVA Achieves Rapid Growth and Manages its Stresses with CEG’s Help
The Situation
Precision Valve & Automation (PVA) is a manufacturer of fluid dispensing solutions and custom automation products. Its automated dispensing, coating, curing, board handling and printing systems are used by an array of industries, including from solar, semiconductor packaging, printed circuit board assembly, medical device manufacturing, and consumer electronics. The 29-year-old manufacturer in Halfmoon, New York employs more than 200.
In 2019, PVA was poised to increase its annual sales revenues by more than 40 percent after working with the Center for Economic Growth (CEG) on several initiatives. For the past six years, CEG, a National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership (MEP) center, had been working with PVA on a variety of projects one of which was a supply chain productivity project that involved a Value Stream Mapping project of supply chain flows. These initiatives, coupled with a Lean Kaizen training, set PVA on a course for rapid growth.
“The biggest change we made was going to a single-piece flow,” said Frank Hart, PVA’s managing director of global sales and marketing.
PVA New Global Headquarters in Halfmoon, NY
PVA annually produces 350 to 400 robots. Traditionally, the company was making them in batches of about 25, and the single-piece flow process change meant they are now making one at a time. PVA’s move from batch flow to single-piece manufacturing meant customers were getting their robots weeks faster and the company was getting paid faster. However, the switch also meant parts for each robot must be ready at every stage of the rapidly moving manufacturing process. That resulted in stress and pressure on the company’s operations, mostly due to inadequate documented processes, risk assessments, and metrics/key performance indicators in both productivity and growth areas.
Solution
CEG helped PVA secure $16,800 in National Grid Manufacturing Productivity Program (NGMPP) grant funding for initiatives that would address these stressors. More specifically, CEG connected PVA with CEG’s strategic partner, Relay Integrated Logistics & Solutions, and this project looked at key indicators of successful supply chains. It also focused on what strategy would be implemented at all facets of the supply chain to ensure that the growth of the company did not consume the supply chain thresholds.
Relay’s Larry Treen and Jeff Snow developed for PVA a Supplier Scorecard that enables the manufacturer to better track on-time delivery, vendor accuracy, purchase price variance and quality. The consultants also drafted policies and procedures that established a standardized system for rapid training/growth and scalable business continuity environment. This included supply chain work instructions for purchasing inventory, receiving, shipping, warehousing and cycle counting. It also included a method of formal corporate risk assessment for driving actions to promote both short- and long-term preventive/corrective actions and minimize/eliminate risk.
Results
These initiatives resulted in clear, precise work instructions for PVA supply chain areas and created an environment for documented and scalable processes and work instructions. It also created an easier ramp of employee new hires and succession planning for future organization advancement plus a suitable and stable organizational design, process controlled, measured and monitored internal supply chain. The cumulative impacts of these initiatives were:
- Quantified Increased Sales Amount: $5,000,000
- Quantified Retained Sales Amount: $40,000,000
- Quantified Jobs Created: 10 Jobs
- Quantified Jobs Retained: 165
- Quantified Cost Savings Amount: $3,000,000
- Quantified Increased Investment in New Products: $10,000,000
- Quantified Investments in Workforce Practices: $200,000
PVA New Global Headquarters in Halfmoon, NY
On top of these financial impacts, Hart said the move to the single-piece flow process and the standardization that CEG helped facilitate enabled PVA to become certified by the International Organization for Standardization for the first time. In October 2020, PVA announced it received certification for the ISO 9001:2015 standard.
Hart said PVA’s revamped production process also simplified its search for a new facility. This August PVA relocated to a 76,000-square-foot building in Halfmoon from its larger 115,000-square-foot headquarters in nearby Cohoes. If the company had continued to manufacture robots the way it did 15 years ago, it would have needed a space twice as large.
“CEG’s support as the Capital Region’s MEP Center over the past six years has been a vital contributor to our growth,” said Hart. “Their proactive approach before and during the COVID-19 pandemic helped us not only survive but thrive; the work was enabled by the success of the supply chain project and contributed to PVA being classified as an essential business and achieve the reported impacts. Furthermore, this allowed us to keep 100 percent of our workforce engaged during the pandemic, and directly correlated to retaining additional sales of $10m that we possibly would have lost if we had to reduce our workforce to 25 percent per government guidelines that were issued. We are grateful for the work done by the entire CEG team and we look forward to an ongoing relationship in the years to come.”
– Frank Hart, Managing Director – Global Sales and Marketing
