By Marilyn Odendahl, Truth Staff
NAPPANEE -- A little more than 10 years after the Shea family founded Gulf Stream Coach, the sons began taking a close look at the way Toyota Motor Corp. builds cars.
The trio of brothers, Jim, Dan and Brian Shea, visited the Camry manufacturing facility in Georgetown, Ky., and saw the concept of lean manufacturing in practice. Innovations came from the factory floor and the workers were trained to respond to problems, while the finished cars rolling off the production line were some of the best-built, most-reliable automobiles on the market.
During those three heady days in 1995, the siblings concluded if they could institute lean manufacturing into their facilities, they could lead the recreational vehicle industry.
"Lean is kind of a term that people have interpreted as 'We're trying to lean down the number of people,'" said Brian Shea, president of Gulf Stream's motorized division. "Lean really means we're really reducing waste."
For the past three to five years, the recreational vehicle maker has been building motorcoaches and towable units under the principles of lean manufacturing.
Company officials credit the move with improving their sales of Class A motorhomes 7 percent in 2006, a year when overall the entire market for motorized units fell 11 percent. In addition, since the 44th Annual National RV Trade Show in November 2006, the company has ramped up production 11 percent.
As RV manufacturers have loaded their units with more amenities and recently launched another phase of their national advertising campaign, the industry is attracting more consumers onto dealers' lots than ever. Recreation Vehicle Industry Association often calls up surveys and studies that forecast increasing demand for RVs, driven, in part, by a growing number of families wanting to spend their vacations together.
The sunny outlook, however, is tinged by the shadow of customer satisfaction.
Consumer surveys rate 72 percent to 75 percent of RV owners as satisfied, leaving up to 28 percent unhappy with their RV experience. That is an uncomfortably high figure for RVIA President Richard Coon who, along with a specially appointed task force within the association, believes a key to improving customer satisfaction lies with bettering the quality of the RVs coming from the manufacturers.
Building a travel trailer, fifth wheel or Class C motorhome that lives up to consumers' expectations eventually leads to rethinking and changing the assembly process, as well as training the production workers.
Going lean
When Bob Miller took his place on the production line in 1971, just about anything that was built could be sold. In the 35 years since, codes and regulations have crept into the industry, and customers' demands for units that last, work well and look good have led to the current crop of RVs being built to higher standards.
"Things that used to be OK" are no longer acceptable, said Miller, now a plant superintendent at Jayco Inc. "It needs to be done right the first time."
As an example, he pointed to poor seals and ill-fitting windows, which can allow rainwater to drip into the units, causing serious damage. Today, many units rolling off the production line are tested in rain booths, where they are drenched with water. This compares to the earlier days when, at most, one unit might be pulled aside and have a running garden hose placed on its roof.
For Gulf Stream, improving quality and becoming a leader in the highly competitive RV market means embracing lean manufacturing.
"You're always a little skeptical when trying something new," said Dan Shea, president of Gulf Stream's towable division. "The difference is that Brian and I went through the training ourselves."
Such a move, he explained, showed employees this was not the manufacturing principle of the week but a philosophical change starting with company owners.
At first glance, the production line at Gulf Stream's manufacturing facility for its Class A luxury motorhome is very similar to the production line at any other RV company. The chassis are prepared and turned into RV skeletons with the bathrooms and interior walls placed before the sidewalls are added.
Once the exterior is completed, the units make their way through two production lines, where mostly male crews transform the product from a vehicle into a lifestyle by installing posh interiors that rival many stick-built homes.
However, the principles of lean production are in practice. The company credits the manufacturing concept with:
* Improving efficiency by enabling low- and high-priced models of the same type of unit to be built on the same production line.
* Increasing the safety of workers by cleaning and reorganizing the work stations along the production line.
* Making employees accountable for their work.
* Quickening response time to consumers' demands and desires by emptying the warehouse.
Brian Shea remembers making a model change but still having millions of dollars of fast-becoming-obsolete parts and components in his warehouses. Thus, the RV maker was forced to take a loss by selling those materials for pennies on the dollar.
Going lean, Shea explained, has reduced the inventory and enabled Gulf Stream to become more nimble in implementing new styles, colors and models without having to worry about disposing of inventory.
"We believe that there is no other company that can bring a product to market that is as innovative and as fast as our facilities here at Gulf Stream," said Philip Sarvari, executive vice president.
The work force
Unlike the auto industry, which makes heavy use of automation on its assembly lines, the RV industry remains dependent on physical labor. Productivity and quality still rest on the backs, hands and shoulders of the workers inside the RV plants.
Miller took a job in an RV factory after earning his bachelor's degree. He remembers getting that look that questioned why a college-educated young man would work in trailer factory where "any hillbilly" could get a job. However, he has always enjoyed the people, the variety of duties and the fast pace.
It is still an industry where a recent high school graduate can find a good-paying job.
"As long as they are willing to work, we can train them in almost anything," Miller said.
But it is no longer an industry that swings from the extremes of high employment and overtime to low employment and layoffs. At Jayco and Gulf Stream, production schedules are monitored and controlled to help keep employment levels constant throughout the year and eliminate the cost of hiring, training and then laying off large numbers of workers.
In addition to investing millions of dollars into training its workers in lean manufacturing, Gulf Stream offers its employees programs where they can study for and receive their high school equivalency diplomas or associate or bachelor's degrees. Having an education, Sarvari said, will enable the employees to recognize, analyze and recommend ways to implement corrections whatever problems arise.
"It's a lot easier to make the product right and fix it here," Sarvari said. "Our belief is, at the end of the day, the manufacturer with the best quality is going to win. As customers spend their hard-earned money, they do not expect to have any issues or problems."
The bottom line
Coupled with quality, RV makers also must maintain a healthy bottom line, said RVIA's Coon. Stable profit margins will enable manufacturers to continue to make the investments necessary to improve quality of the end product. Companies that do not take care of their financial health may become vulnerable to takeover bids by other RV manufacturers.
"If the market slows and gets softer for whatever reason, there will be more consolidation," Coon said. "If the market continues to grow, I think we'll still see consolidation."
On Brian Shea's desk, tucked under a file folder, sits a hardback book titled "The Toyota Way," Gulf Stream's instruction manual for maintaining and even expanding its place in the RV market.
Roughly 15 years before Toyota opened a manufacturing plant in Kentucky, the late James F. Shea founded Fairmont Homes, a manufactured housing company in southern Elkhart County. His three sons soon joined him in the business and eventually helped him start Gulf Stream in 1983. Today, as Brian and Dan Shea run the RV company, James Shea Jr. presides over Fairmont.
Asked what his father would think of lean manufacturing, Dan Shea smiled broadly and said his dad would particularly like the resulting bottom line.