Ashe County’s Gates Corporation Wins Prestigious N.C. State Award

Kevin Grayson (far right), Six Sigma trainer for NC State’s Industrial Extension Service, presented a 1B4NC award to the Gates Corporation’s Six Sigma Green Belts who spearheaded projects that saved the company $3 million in production costs. Funding for the Six Sigma Green Belt training was provided through a federal Workforce Investment Act incumbent worker grant administered through the High Country Workforce Development Board.

A $37,500 investment that yields a $3 million payoff in cost savings and a $1 million economic impact may sound like the kind of wheeling and dealing that brought down Wall Street, but in this case it’s not only real, but quantifiably real. In just more than two years, Ashe County’s Gates Corporation manufacturing facility translated a federal training grant into huge financial returns that have not only saved jobs, but have also won the company a prestigious award from N.C. State.

On September 14, representatives from N.C. State’s Industrial Extension Service (IES) presented Gates Corporation with the $1 Billion Award for North Carolina, formally recognizing Gates’ successful implementation of lean manufacturing and Six Sigma techniques, the cost reductions resulting from the successful implementation of on-floor projects and the economic impact to the region.

The money for the Six Sigma training at Gates Corporation came from the federal government. In early 2007, Ruby Greene of the High Country Workforce Development Board worked with principals at Gates to prepare a proposal for an incumbent worker grant. Through incumbent worker grants, the federal Workforce Investment Act provides funding for training employees at existing businesses with the idea that such training will enhance employees’ skills, will increase the business’s productivity and will increase the potential for company growth. Gates won an incumbent worker grant in a statewide competitive process, and IES trainers Kevin Grayson and Christy Guion brought their expertise to the Jefferson plant.

The Gates facility in Jefferson manufactures belts for automotive and industrial original equipment manufacturers, including Ford, GM, Chrysler, John Deere, Freightliner and others. Gates also serves aftermarket distributors such as Napa, CarQuest and O’Reilly.

Attending the award ceremony at Gates Corporation on September 14 were Ashe County Economic Development Director Pat Mitchell and State Senator Steve Goss.

When they came under pressure three years ago to commit to price reductions to retain GM’s business, Gates’ principals evaluated the pros and cons of relocating production to the company’s existing Asian and Mexican manufacturing operations. Recognizing that labor cost is only a small portion of the total product cost and that significantly greater cost reduction opportunities existed in waste reduction and process efficiency improvements, the company’s executives decided to try to capitalize on these opportunities to remain competitive at its U.S. manufacturing facilities.

Subsequent to the award of the incumbent worker grant, 11 associates at Gates received Six Sigma Green Belt training, and the result to date is 13 completed projects. Most of the projects reduced material costs, slicing more than $3 million from product cost. “We dramatically reduced cycle times and got so efficient at manufacturing that at one point we were waiting for a label at the very end of the process,” said Dwayne Howell, Gates’ human resources manager. “So we made that a Six Sigma project and improved the delivery system. Everything is tracked electronically so we have excellent inventory management and visibility now.”

Warehouse Supervisor Debbie Copas, a Six Sigma Green Belt, spearheaded the label project that saved almost $500,000. “Going to these classes helped me think about different ways to do things; ways I can make my job safer, leaner and easier,” she said.

Another Six Sigma Green Belt, Safety Tech Garvey Pennington, was searching for a better way to complete a changeover on a profile grinder and simplified the process by changing three bolts to one centering bolt—now known at the plant as the Garvey bolt. That project has saved the company more than $800,000 annually by dramatically reducing changeover time and improving machine precision. Plus, the changeover process is now much safer.

At the award ceremony, Howell acknowledged the hard work and dedication of the company’s employees. “The people on the floor led the change,” he said, “and that’s why we’re here today.”

Thanks to additional funding from the Golden LEAF Foundation, six of Gates’ Six Sigma Green Belts will soon begin Six Sigma Black Belt training because, as Howell pointed out, improvement and process efficiencies are ongoing processes. “We see the opportunity for implementing higher technology in the manufacturing process,” Howell said, “and the Black Belts will be positioned to take advantage of that.”

To learn more about Workforce Investment Act incumbent worker grants, contact Ruby Greene at the High Country Workforce Development Board at 828-265-5434 or rgreene@regiond.org.