Buck Knives finds success through ‘lean manufacturing’

POST FALLS – About five years ago, CJ Buck picked up a fishing knife made in Taiwan, tested its blade and studied its craftsmanship.

In spite of himself, the fourth-generation knife maker was impressed. Buck is president and chief executive officer of Buck Knives Inc., a privately held family firm whose products enjoy iconic status with hunters and fishermen, a clientele loyal to “Made in USA” labels.

The fillet knife from Taiwan, however, was comparable to in quality to products made at Buck Knives’ San Diego factory. And it sold at a 30 percent discount.

It was truth time for Buck.

“We had a choice to become an importer, or to maintain a manufacturing connection,” Buck said. “The family wanted Buck Knives to continue making most of its product right here in the United States.”

To do that, the company turned to lean manufacturing.

Since Buck Knives’ move to Post Falls last year, most media reports have focused on how Idaho’s lower labor and energy costs will help the company, founded by Buck’s great-grandfather, compete against Asian imports. Lean manufacturing is a less heralded, but equally critical component of the company’s cost-cutting plan.

“It’s made us faster and more flexible,” Buck said of lean manufacturing, a business philosophy of identifying and eliminating waste.

Since 2001, when Buck Knives embraced lean manufacturing, the amount of time each knife spends in assembly has dropped from six weeks to less than an hour. The company is nimbler at responding to orders. The faster turnaround time allows Buck Knives to build each knife to order, instead of stockpiling expensive inventory.

“The goal is that you don’t manufacture something until you’ve sold it,” said Phil Duckett, the company’s executive vice president of operations.

Lean manufacturing has already reduced Buck Knives’ costs by more than 20 percent. Savings from the move to Idaho, still undefined, will come on top of that, Buck said.

“I’ve got a gut feeling that we’re going to be able to compete with any country in the world, except for China,” Buck said last week.

About 15 percent of Buck Knives’ lowest cost products are made in China. The issue is sensitive enough for some customers that Buck and his dad, company Chairman Chuck Buck, personally handle complaint calls about country of origin.

The term “lean manufacturing” was coined in 1990, with the publication of James Womack’s book, “The Machine that Changed the World.” The book describes Toyota’s rise in the auto industry.

After World War II, Toyota executives came to the United States to learn from Ford Motor Co. They studied principles of Henry Ford, who wrote extensively about waste, including waste of people’s time, and waste of raw materials and resources.

“They decided that waste was a driving principle of manufacturing,” said Ross Robson, a Utah State University professor, and director of the Shingo Prize for excellence in manufacturing. “They refined the concept beyond what anyone in the world has ever done.”

As a cash-strapped young company, part of Toyota’s focus on waste reduction came from necessity. By the 1980s, however, the automaker’s “just-in-time” manufacturing philosophy was filtering back to the United States. Now, it’s an industry standard.

Robson estimates that 50 percent of U.S. manufacturers refer to themselves as lean operations. Probably less than 5 percent meet the standard set by Toyota, though global competition is forcing companies to constantly reevaluate their operations, he said.

“To be globally competitive, you’ve got to produce the highest quality, at the lowest cost, with 100 percent on-time delivery,” Robson said.

Buck Knives’ dates its existence to 1902, when Hoyt Buck, a 13-year-old blacksmith apprentice in Kansas, started forging knives. In 1963, his son, Al Buck, designed a single-blade knife that locked into place, and folded into a wood handle. The invention revolutionized the knife industry, and established Buck Knives as a recognized brand.

The company, which had nearly $35 million in sales last year, maintains a folksy reputation. CJ Buck and Chuck Buck are barrel-chested men who favor casual Hawaiian shirts and show up at store openings to engrave their autographs on knife blades.

With a long history, and established traditions and culture, Buck Knives’ employees were initially skeptical of lean manufacturing. The 25- and 30-year veterans, in particular, regarded it as the latest “flavor of the month” management initiative.

“The beauty of lean is that it’s not a management incentive,” Duckett said. “Shop employees design their work environment.”

Lean manufacturing is designed around cells, where workers are cross-trained for multiple tasks. The focus is on finishing small batches of product, and flexibility to respond quickly to new orders. Regular “kaizen” meetings, literally “change good” in Japanese, encourage employees to continually evaluate tasks to find new ways to reduce waste.

As a result of the kaizen meetings, Buck Knives scrapped its finished product inspectors. Those employees now do spot checks on the line, catching flaws earlier. The company also cut its inventory of finished product in half.

According to Duckett, a frequent question from the shipping department had been: “Why are you working overtime to make product that we don’t need yet?”

Whiteboards in the new Post Falls factory track hourly production goals, and record how each cell is performing. The plant is producing about 11,000 knives per week, with a goal of hitting 30,000 by mid-June.

Lean manufacturing also became the trigger in Buck Knives’ move to North Idaho. The San Diego factory was 4 ½-acres under one roof. When the company reconfigured its production line, about 40 percent of the building sat empty.

As company officials looked for a smaller facility, they started checking out other states.

“We got more from lean than we ever envisioned,” said CJ Buck.