N-K Manufacturing & Engineering: Lean Practices Net Growth & Efficiency

Armen Kassouni, vice president of N-K Manufacturing & Engineering, will tell you there’s nothing extraordinary about his company and yet it’s obvious this company is positioned for continuous growth and success in the Midwestern U.S. despite the challenges the industry is facing due to offshore competition. 

Established in 1995, N-K is a family-owned subsidiary of Nicholas Plastics, a full-service profile extruder and molder of precision parts. Terry Nicholas, son of Nicholas Plastics founder Jim Nicholas, is CEO at N-K and Kassouni’s brother, Haig, is president.   

Kassouni says there are no plans to take N-K public; and in fact being privately owned has enhanced the company’s ability to remain competitive and focused as an American company. 

“We’ve had a long history of maintaining private ownership in West Michigan and at this juncture we have no plans to change that,” he says.  “We are committed to the Western Michigan area for the long-term and to the country as a whole.  Sometimes some of that [commitment] is lost when companies go public.” 

The Kassouni and Nicholas families actually have a long history in the industry together, as the Kassouni’s father, Sarkis, and Jim Nicholas partnered in various businesses together going back to the early 1960s.  Nicholas Plastics first opened its doors in 1978.  Armen and Haig Kassouni had worked for Nicholas and other plastics processors in the area for 15 years prior to starting N-K.  At that time, Nicholas Plastics customers were asking the extruder to provide plastic injection molding services as well.  With that, N-K was formed. 

The company opened in a 9,000-square-foot facility with two molding machines and four employees, he says.  The primary industries served were automotive and office furniture.  Today, N-K is housed in a 75,000-square-foot plant in Grand Rapids and has grown to 144 employees.  In addition, the company recently expanded into Mexico through a joint venture agreement with molder Industrias Gesta in Monterey. 

“Right now that company is supplying products to other Mexican companies,” Kassouni says.  “The expansion was done without a single net job loss in Grand Rapids.  It was done to afford regional advantages to our customers in Mexico.”  

The joint venture allowed N-K to more fully serve its automotive and appliance customers who have operations in Mexico.  Industrias Gesta’s plant is approximately 70,000-square-feet in size and employs 127 employees.  Like N-K, the facility is ISO 9000 and QS 9000 approved.  N-K is also ISO 14001 certified.  Kassouni says the two companies are learning a lot from each other through the partnership. 

In addition to automotive and appliances, N-K also molds parts for the office furniture industry, once a large part of the business. 

“Four years ago, we saw the shift happening,” says Kassouni.  “The percentage of business we had from the auto industry either maintained its place or showed some growth while the office furniture sector dropped off significantly compared to what it was five years ago.  It’s my belief that the drop can be attributed it to the economic downturn that hit several industries, including the dot-com industry and others who put on hold new furniture purchases or remodeling their office spaces.” 

Automation and Maintenance are Key 

It’s clear the drop in office furniture work has not adversely affected N-K’s growth and success.  The company is particularly strong in automotive and appliances, and it’s done much to streamline processes within the plant.  Automation plays at least a partial role in the company’s growth strategies. 

“Automation is a portion of why our company is growing,” Kassouni explains.  It’s one of several things we’ve put in place: Automate where practical, apply lean manufacturing concepts to diminish raw or finished goods inventories and operate in a more just-in-time mode, and therefore reduce carrying costs.   

“For example, we’ve been in this building for five years,” he continues.  “We have added at least 16 additional presses and have not had to increase our warehouse space.  Instead we have actually reduced it significantly.  It’s really more an act of discipline than anything else.  Inventory used to order for ‘just in case,’ instead of ‘just in time,’ and we wanted to change that.” 

Kassouni says his company strives to “make to order.”  When a customer has an emergency demand, expediting raw material in or working over a weekend are among the ways the company responds. 

As for automation, robots have been installed on quite a few of the machines to help with the loading and unloading of materials and parts, according to Kassouni.   

“Everyone wants to automate, but sometimes it doesn’t make sense – sometimes the volume or the part design just doesn’t justify it, or you just can’t do it,” he says.   

N-K also has automated assembly equipment for driving rivets, pad printing and applying tape.  The company started automating earnestly about five years ago, says Kassouni.   

“Automation doesn’t necessarily mean the elimination of an operator as much as it means allowing them to work smarter and more efficiently,” he said.   

Likewise, N-K has invested in a formal maintenance program to further ensure quality output and efficiency. 

Shotscopeä, a process and production monitoring system for injection molding, monitors machine parameters, gathers data on the processes that are running, verifies cycle history and gives real-time status of every job, among other things. 

“Our software program tracks the history of every tool,” Kassouni says.  “After X amount of run time certain components will be replaced; we’ll have the last shot for part review; and cleaning and maintenance are regularly scheduled.  We’ve reduced downtime and improved productivity because of Shotscope. 

"In the first year of implementation, we have seen overall plant efficiencies improve by 5%,” he added. “As we utilize more attributes of the system we expect to see further improvement." 

About a year ago, Kassouni says the company took streamlining operations a step further by incorporating the Six Sigma Black Belt techniques into its system.  Key personnel are trained with the Six Sigma Black Belt tools they need to manage their specialized area – a very stepped approach. 

As part of the implementation process, N-K Manufacturing has also streamlined the physical layout of machinery and operations at its plant. 

“We have always tried to lay out our machinery intelligently and have rearranged areas more than once for more effective results,” says Kassouni.  “We are constantly reevaluating how we might improve workflow. 

“Since we’ve implemented lean manufacturing concepts we have reduced our use of raw materials by 50% compared to just three years ago,” he asserts.  “Like most other processors, we’re under continuous cost pressures, but the different disciplines we’ve introduced have allowed us to absorb a lot of the costs we’ve incurred so that we don’t have to pass them along to the customer.”  

Kassouni says automation and lean manufacturing practices have indirectly benefited sales, too, explaining that it has allowed the company to be more competitive in the marketplace.   

“We like to say we’re not necessarily the most expensive bid, but we’re certainly not the least expensive,” he says.  “Our sales have increased about 10%-15% over each of the last five years – since implementing lean manufacturing principles.” 

N-K’s molding capabilities include horizontal molding, two-shot/multi-shot molding, In-mold Decorating and EMI / RFI Shielding, vertical insert molding and profile extrusion (the latter provided through its parent company, Nicholas Plastics).  In addition to plastic injection molding services, N-K also offers rapid prototyping and design services as well as assembly and finishing.  Kassouni proudly states that if it’s plastic his company should be able to help anyone. 

“We try to really offer the best service possible to our customers, but having said that, also recognize when it’s time to say no,” he explains.  “At some point you have to say, ‘I can go no further,’ and there have been times when that had to be done.  We couldn’t give our customers what they wanted and we had to part ways.  It’s certainly nothing I like to do, but sometimes it’s better to contract than expand with no endgame in sight.” 

To find out more about N-K Manufacturing Technologies, Inc., call 616-248-3200, or visit the company’s website at www.nkmfgtech.com.