The Company
Steel America, a division of Colonna's Shipyard Incorporated, was established in 2000 to address regional opportunities in heavy machining, fabrication and repair. In addition Steel America supports ship repair, maintenance, and overhaul markets that require steel, stainless steel, or aluminum as materials of construction. A staff of over 70 supports their large facility conveniently located on the Elizabeth River in Norfolk, Virginia to handle both small and large projects (500 ton maximum) requiring custom solutions and appropriate logistics.

The Situation
Steel America had outgrown its current physical plant and was in midst of an expansion plan. The existing facility consisted of approximately 14,680 square feet of fabrication and 9,600 square feet of machine shops, with some operations in temporary shelters. The expansion plan included the addition of 9,840 square feet of fabrication shop and 11,200 square feet of machine shop in a high-bay facility with appropriate services and bridge cranes up to 100 ton capacity.

Management initially sought assistance in optimizing flow and operation of their fabrication business through the Old Dominion University Business Gateway (ODUBG), a service delivery partner of GENEDGE ALLIANCE. Given the new challenges associated with a rapidly expanding business, Vice President Kenneth Mebane requested assistance once again from ODUBG for transitioning to the newly expanded facilities. Mike Cory, a Principle Consulting Engineer from ODUBG, would lead the project given his extensive experience with optimizing job shop environments.

The project's objective was to assure that the significant capital investment ($5 MM) made in new capabilities would be supported by future sales growth profits, through capacity gains in the machine and fabrication operations. A bonus benefit would be adding more skilled, well paying jobs to the payroll to sustain future growth.

The Response
The following action items were common to both operational shops:

• Job Packets to aid in visual management of production jobs. Fabrication included a "First Article Inspection" check off strategy to bolster quality. Machining included a “Sequencing Board”. "Traveler" in job packets following piece through production.
• Material Storage areas were established. Fabrication identified types and control of "certified" materials. Machining created specific storage to visually management "stock" and “certified” materials including “commercial” grade raw material inventory.
• A Safety Recognition program was established with visual displays for communication to all employees. Monthly safety lunches to reward efforts of the program. This program moved Steel America to the top division with this pilot program and as a result has had no time lost to injuries for over the past two years.
• A Central Computerized Project Management Strategy was implemented to aid in project management and project document control. Machining created theirs to better sequence drop-in work orders from internal shipyard customers.
  Several new training programs were kicked off in both divisions for inspection processes. This program assisted Steel America to move forward with a full Quality Management System.
• Improved our team effort atmosphere
• Created work station environments

The Results

The following results thus far from the fabrication and machine shop areas have been:

• Sales increase $800K
• Sales retention $50K
• Cost savings in materials $100K and labor $10K
• Increased investments in plant/equipment $1.3M and workforce practices/skills $43.5K
• Investment avoidance $2M
• Investment savings $500K
• Creation of 8 jobs
• High reduction in rework

Management’s Comments
"With ODUBG's assistance, Steel America has been able to successfully address expansion issues as our business continues to grow. Utilizing Mike Cory'’s expertise to optimize our fabrication and machine shops was well worth the time and capital investment. The return on such an investment continues to exceed our expectations." Our plans are to continue to utilize the services of ODUBG’s assistance as a service delivery partner of GENEDGE ALLIANCE." - Kenneth Mebane, Vice President

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