The Lean Way to Get Bigger

February 6, 2008

TOPSHAM, Maine – At one point in his life, Nick Whatley planned on being a dancer. Today, he’s still concerned about controlled movements and smooth, continuous flow – and countertops.

After a serious injury ended his dance aspirations, Whatley had a couple different careers. From working as a mason, he started doing granite countertops at a time when they were still the exception rather than the household standard, and his business – Morningstar Marble & Granite Inc. – took off.

His turning point, however, came when a local planning official determined the shop needed to be relocated. While saying it was probably a good thing, Whatley quickly determined that bigger would definitely be better and opted to make what had been a small shop into a medium-sized one.

More space and more people, though, brought other issues. Whatley’s still in the process of figuring out how he can do good work at less cost, while maintaining the company’s reputation for putting extra quality and attention into jobs for its high-end residential clientele.

THE RIGHT TIME

Nick Whatley definitely followed the road less-taken on his path to being a stone entrepreneur. A Texas native, he went to college in Vermont. Then, when the injury put an end to his dancing, he quit college after three years and moved to Topsham, where he pursued another passion: gardening.

“I market-gardened for about four years, raising vegetables for restaurants,” he explains. “I still raise most of what I eat.”

Although he says that, in those days, he never envisioned himself as a business owner, his early gardening experiences probably whetted his interest.

“In retrospect, I was always enterprising,” Whatley says. “If I was growing radishes in my backyard, I’d always raise too many and try to sell some to somebody else. I realize I’ve always been like that.”

From the garden, Whatley moved on to masonry. He started Morningstar Masonry in 1984 with his brother and his brother’s best friend. They started as bricklayers, building fireplaces and chimneys and other small projects and learning the trade together.

While the other two moved on to other things, Whatley found himself attracted to natural stone.

“I gradually started adding a few pieces of stone to my fireplaces, such as keystones and hearths,” he says. “Once I got the bug for stone, I started offering a little bit more and a little bit more until we were doing stone fireplaces, walls and walkways, and pretty much left brickwork behind.”

As he honed his skills splitting and finishing stone, people kept asking for more. Then, 20 years ago, people started asking for granite countertops.

“I’d never heard of it, but in one of the houses we were working on, another company was installing granite,” he says. “I thought it looked neat, and I decided I’d figure out how to do that, too.”

Whatley says he was fortunate that, at that time, he was mentored by the people at Kingston, R.I.-based New England Stone, including company founder Tony Ramos.

“He sold me a few pieces of stone to work on and gave me some good advice about starting in the stone business,” says Whatley. “I spent a lot of time there talking with people and watching, and gradually I bought some of my own tools and learned to use them.

“In 1990, one of my masonry customers asked me if I’d do a granite countertop, and I finally said, ‘Yes,’” he adds. “I did it with a circular saw and a hand grinder, and it was close to a disaster.”

However, he kept at it, and as his skills improved, the circular saw was joined by a track saw and then a bridge saw … and more people kept asking for countertops.

In 1991, Morningstar Masonry gave way to Morningstar Marble & Granite Inc.; within a couple years, Whatley had phased out the masonry part of his business.

“We decided to get more focused and more specialized on countertops,” he says. “I believe I got into this at just the right time.”

GETTING BIGGER

As with many other start-up businesses, Morningstar began with space in the family home as the showroom, and set the shop in what had been an old chicken barn. As the operation moved toward countertops, Whatley tore down the old barn and built a 30’ X 50’ concrete-block building which served the company until 2000.

Then, the town got a new planner, and the business was given a less-than-cordial invitation to move.

“The new town planner decided we weren’t grandfathered in anymore, and they needed people like us in an industrial park,” Whatley explains. “They were selling land in the new park for $20,000 an acre, so I bought 2.5 acres and built a new shop.”

At that point, Morning Star was running with a crew of nine. When Whatley put pencil to paper he couldn’t see how that same operation would work in the new location.

“To get the shop built that I wanted, I had to get bigger; the economics of having only nine people and building a new building weren’t there,” he explains. “When I worked out the budget for a jump to 15 people, then the numbers worked. So, we built a 10,000 ft² shop and a 1,500 ft² showroom attached to it, and moved in in May 2001.”

Today, the company operates with a staff of 17, with Whatley directing operations, aided by a core of senior employees including Colleen Spofford handling sales/design, Jason Kramer directing the shop, and Travis Barton supervising the installation crew.

“We have a very strong core group of lead people who are the backbone of any success we have had,” says Whatley.

He adds that employees come via word-of-mouth, or through newspaper advertising. Rarely, he says, does he get someone previously trained in the industry who sticks with it.

“The rest we train from scratch,” he says. “We tend to get people who have experience in related fields, such as cabinet installation, carpentry or metal work.”

The shop’s clientele is also fairly select. Living in the populous part of his small state, Whatley focuses on offering a higher-end product to a high-end clientele within approximately 100 miles of the shop.

The company stocks about 700 slabs – which Whatley admits may be quite a bit, given the size of his market. Rather than going with Uba Tuba, Santa Cecelia and other standard materials that everyone else offers, a lot of his stock is from Africa.

“We have a relationship with G&L Marble in Atlanta, and they quarry and import a lot of really beautiful stones from Namibia,” he explains. “More than half the work we do is with these wonderful stones that are heavily figured and strong in earth tones.”

Only rarely does Morningstar venture into commercial work, because it doesn’t fit the firm’s personality. While Whatley does some advertising, his main method of gaining clients is through word-of-mouth – from one satisfied customer to the next.

“Our marketing is focused on making sure that our customers know where we’re coming from and making sure that every one is more-satisfied than they thought they would be,” he explains. “We want to exceed their expectations. We’re also looking for a trail of quality referrals from each job, and we’re pretty disappointed when it doesn’t work out.”

That involves developing close, one-on-one partnerships with customers who want high-quality jobs and are willing to be educated on quality. Rather than just popping in for a look around, would-be clients are urged to make an appointment with one of the two people on the sales floor.

“We want to set time aside so we can get real serious about finding out what they want and getting to know them,” Whatley says. “We’re looking to get to know them pretty well.”

CONTINUOUS IMPROVEMENT

It sounds like a formula for success, but – as in the days when he was refining his skills making countertops with a hand grinder and a circular saw – Whatley is focused on getting better. These days, he says, his biggest problem may be that his product is high-priced.

To remedy that, he’s been working at incorporating a couple large-shop concepts into his operation, with a goal of reducing production costs while keeping the utmost quality.

The first is continuous production.

“The scale was much too large for us,” Whatley says. “It was not until doing more-extensive reading that I could see the application for a small shop such as ours.

“During that time, Thibaut began to introduce automated machinery scaled more towards small- to medium-sized shops, and since then we’ve updated all our machinery with Thibaut.”

While Whatley was doing Web surfing on manufacturing techniques, he also came across information on Lean manufacturing. The process, first pioneered by Toyota, focuses on organizing and managing all facets of the manufacturing process from product development to customer relations – using less of everything, including human effort, tooling and manufacturing space.

“I just wanted to get some idea of what other people do; I saw something about Lean and I liked the sound of it,” Whatley explains. “I did some searches and found the Lean Enterprise Institute (based in Cambridge, Mass.).”

After ordering some books on the topic and doing additional Internet research, Whatley came across the Manufacturing Extension Partnership (MEP) of Maine, a group that trains people in Lean techniques.

“They do introductory training, and it’s been quite helpful,” he says. “I’m working with Dennis Mercer from Maine MEP, who’s gotten to know our company very well.”

One of the things Whatley is working on learning is how to do kaizen (a Japanese word for “improvement”) events.

“We’ve already done a value-stream map,” he says, “where we took the portion of the business from the saw to the loading dock, extracted every detail, put them in order, and then analyzed each step of the way for efficiencies and waste that could be eliminated.

“From that, we came up with sets of objectives of ways we can reduce the number of actions necessary while producing a countertop.”

For example, a three-day session with six shop employees determined each piece of stone was lifted 108 different times from when it came in the door as a slab to when it went back out as a finished product. After the first session, that number was reduced to 64, and Whatley says it can go still lower as he firms up his continuous-flow shop design.

“I haven’t put conveyors in yet, but now I know the number of lifts I can reduce when I put the conveyors in,” Whatley says. “We’ve redesigned the loading dock and the hand-finishing tables, and begun work on fabricating the conveyor tables.

“All these are different little factors that add up to a materials-lifting savings of 50 percent for really not much expenditure.”

And, as he notes, by cutting the numbers of lifts, pieces are less prone to breakage and employees are less likely to be injured, cutting his costs in the process.

A select group of employees recently began a kaizen event on the loading dock, and the people involved spent a day coming up with a redesign for Whatley’s approval. The new design reduces lifting and handling of finished pieces, and increases the safely of the installers through better ergonomics.

“Then, we come up with an action plan for what resources we need to put into it, schedule the actual reconstruction of the loading dock, and then allocate enough people so we can rapidly take it apart, build the new one, and be back in production as quickly as possible,” he explains.

What’s been most difficult for him to adjust to, Whatley adds, is that the shop is a work in progress, and it’s impossible to solve all his problems in one day.

“We are learning to rapidly rework one section before going on to the next,” he says. “The theory is that after you’ve fixed everything, then you fix them all again. The idea is continual improvement, and it’s a big cultural change from just pushing to get a job out the door.

“When you’re busy trying to get a job out the door, it’s hard to be concerned about waste,” he adds. “But, there’s so much wasted energy that you’re either overworking yourself or not getting the results you want.”

Whatley admits it’s also required a lot of work to introduce employees to the culture of continual improvement. However, he says even after doing a small improvement exercise, employees can feel the difference.

For instance, he says, when the shop first added a new Thibaut five-axes saw, they didn’t know exactly how they wanted the space organized.

“After working for a few months, we took the time to focus on how best to set up the workspace by focusing on the most-efficient setup of tools to enhance the flow,” he explains. “We then built a tool cabinet stocked with tools specifically chosen for the saw, and set up a rack next to the saw to hold all the saw blades, routers and drills used on the saw. Tool change is now a very quick and effortless process, and the sawyer job is much more fun.”

Ultimately, his goal is to create perhaps the rarest of shops: one that can turn out a fairly high volume of work without becoming a production operation. Not only is his plan to stick with one-of-a-kind jobs, but to enhance the shop’s reputation in such areas as producing handcrafted farmhouse sinks, along with butterfly- and vein-matching.

“We’re just looking to do everything with stone that’s interesting,” Whatley concludes. “We’re not just trying to get jobs out the door. There are different ways of doing business, but we want to be known for our customer service, for the details of our jobs, and for doing the best possible quality.

“Hopefully, we’re always improving.”

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