The CEO of Crayola looked for automation when everyone was relocated and now he harvested the awards
Two decades ago, the name of the game in American manufacturing was relocated. Just as China entered the World Trade Organization and increased its capacities, it seemed that all American companies from General Motors in Dell were running to move its operations outside the country. The ethics was illustrated by the CEO of General Electric Jack Welch, a ruthless boost that led “supplier migration” lectures and took once, in an ideal world, a company “would have all the factories you have on a barge to move with currencies and changes in the economy”.
In this context, however, Crayola – a best -selling pencil manufacturer in the world – has made a different accent. Pete Ruggiero, at the time, a manager of operations, thought that the children’s art supply manufacturer could be more effective by staying near his home.
“I have somewhat seen the writing on the wall that would happen,” said CEO Peter Ruggiero Fortune. “In 2007, when so many people made decisions abroad, I somehow strategically said to our CEO at the time, this reactivity of the end of the market was a critical capacity.”
Ruggiero, who was then the executive vice -president of the company for global operations and technology, turned out to be just – leaving Crayola well positioned to release the booming prices when President Donald Trump announced them last spring.
Today, while Crayola gets in with a number of countries including Brazil and Vietnam, “70% of what we sell on a global scale, we do in the Lehigh Valley,” said Ruggiero Fortune.
With the kind permit of Crayola
The 140 -year -old company has been in the east of Pennsylvania since 1902 and today employs 500 manufacturing workers in the region. He moved to the region when the founders Edward Binney and Harold Smith built a small installation to take advantage of the aquatic energy of the region and its abundant slate. (Before Crayola made pencils, he was known for slate pencils and the first “dust -free chalk”, popular with teachers.)
But the process was not as simple as sitting and looking at the money riding: Crayola wanted to become more efficient and more profitable. Thus, in 2007, the company embarked on a wave of self-improvement to eliminate waste and accelerate production by automating key processes. This included investment in new high -speed production processes and waste distress thanks to the Lean Six Sigma method, a corporate philosophy where workers are encouraged to pose problems.
“We have invested in people with Lean Six Sigma training, and we have invested in technology. So we have very very automated processes, and we have the scale,” said Ruggiero Fortune. He was not sure that it would work immediately. “I imagined, when we did it, this old man I love Lucy Episode where she tries to make chocolates, and I say, there is no way that our employees can do all this work, ”joked Ruggiero.
Rick Smith – AP Photo
But the process has worked, increasing capacity and creating better products. The first wave saved the company $ 1.5 million, according to the minitab software supplier, a Crayola supplier. Today, the 3 billion pencils that the company makes each year all made via high -speed rotary molds capable of producing 1,300 pencils per minute.
The company is not completely immune to supply chain problems. By necessity, it supplies colored pencils of a renewable pine forest in Brazil – something that cannot be reproduced in the United States, because there is no forest of this type here. “There is really nothing we can do. It’s just an additional cost for us,” said Ruggiero Forbes recently.
But its relative insulation means that, rather than rushing to find new sources of products, the CEO can focus on the creation of other sources of income, including entertainment programming and by expanding the theme of the Crayola experience through the United States and in the world.
“Even if we sometimes have the impression of being able to be better where we operate today, compared to the place where we operate in 2019, the magnitude of our company is up 30%, 40%” since that time. “We have grown, grow, grow up and now we are still growing.”
