March 26, 2010 Lean, Mean Flying Machine

Volume 13 | Issue 2

In business for 35 years, Koss Aerospace prospered by providing precision, machined components for leading aerospace industry customers. But

Founded in 1975 by Drago Cajic, Koss Aerospace enjoyed a steady ascent. During a 30-year flight, the Mississauga, Ontario-headquartered enterprise achieved a lofty altitude, becoming one of Canada’s leading aerospace businesses.

Koss serves major aviation industry customers, supplying them with complex airframe components and subassemblies. Its international clients require unerring precision and quality, and those are the attributes upon which Koss built its reputation.

Koss boasts extensive expertise, and it applies this to a full range of integration, manufacturing, processing and assembly capabilities for commercial, business and defense aircrafts. Highly skilled personnel specialize in structural components, producing parts found in specific areas that comprise an entire aviation structure, such as wings, fuselage and landing gears, indicates Alex Cajic, the founder’s son and Koss Aerospace’s vice president of business development.

However, in its 35th year, the company has experienced some turbulence. In 2009, Koss Aerospace, like just about everyone else, suffered the negative impact of the economic downturn. “We were fortunate to be involved in pretty healthy programs, such as Bombardier’s Global Express, which kept our machines busy. We were also able to retain all of our key employees, which was critical. But our sales went down about 25 percent,” reveals Cajic. In response, Koss focused on operational excellence to help weather the storm as well as prepare itself for the future. Specifically, it implemented an ongoing and aggressively lean manufacturing and continuous improvement program. “We wanted to make improvements for the present and position ourselves for the next economic upswing,” says Cajic.

Additionally, Koss has felt pressure from the presence of emerging markets in China and India. “That’s another reason why we wanted to make sure that we were as lean and, in turn, as competitive as possible,” says Cajic. “So, we’ve focused on plant production and all of the supporting activities. We hired a consultant from Lean Manufacturing Solutions and collaborated to co-create solutions to improve, implement and sustain the best business practices.”

This entailed three focus areas. The first involved reducing business process transaction time. “We wanted to improve lead times and ensure smooth flow,” Cajic explains.

The second involved reducing setup times to allow for quick changeovers. “Because of the nature of our product, we have a lot of part numbers and short production runs, so we needed to become quicker with our setups,” says Cajic.

The third activity involved reducing inventory through just-in-time strategy.

EARLY RESULTS ARE IN
Koss soon realized a substantial impact on cycle time. “For instance, we did a time study on one setup,” relates Cajic. “The setup took 32 minutes. After we implemented a better organizational approach, we reduced it to seven minutes. Obviously, that had enormous impact on that one particular cell, which was involved in a parts family. So, 40 different part numbers were positively affected.”

Koss also upgraded its enterprise resource planning (ERP) system. It worked with Epicor, a leading ERP software provider to implement a full ERP. “This allowed is more just-in-time and more accurate information for data collection, and it enabled us to carry much less inventory,” says Cajic. “We’re already realizing the benefits. We have much less lead time and we’re putting out less fires.

The software also enables Koss to accurately assess its current capacity and perceive future requirements. Cajic explains why this is important for Koss: “Our customers are always interested in our capacity level, and now we can provide them with real-time information.”

WASTING TIME NO MORE
In seeking to increase efficiency, Koss also looked closely at its manufacturing activities and supporting processes. “The so called ‘time wasters’ don’t reside on our manufacturing, or machining, side. That’s one of our strengths. We determined that they resided in the supporting areas – such as quality, deburring and planning. We felt those were the areas where we needed to minimize bottlenecks for greater efficiency,” says Cajic. “We’re reinforcing those areas, making them more efficient, so that when the next upswing occurs, we’ll have everything in place to handle the anticipated increased volume of work.”

That’s the overall process, and Koss began this journey in late 2009. It will involve continuous implementation and the company expects that it will reach full maturity in about three years. “By 2013, we should have the entire organization operating in the lean mode,” anticipates Cajic.

AVIATION INDUSTRY VISIONARY
While the process came in response to recent circumstances, it doesn’t really represent a new direction for Koss. The company has always focused on organizational excellence, and its history is hallmarked by resourcefulness, capital investments and innovative business approaches. This proved crucial to success. Koss established long-term relationships with major aviation industry players like Bombardier, Viking, EADS and Goodrich, and even the U.S. Army.

After Drago Cajic established the company in 1975 by purchasing small equipment, he grew his business by engaging the interest of local Canadian aerospace companies. From there, Koss took flight.

Through the years, the company garnered numerous organizational capabilities, such as complete manufacturing solutions that encompass high-speed multi-axis machining, subassembly, kitting and metal finishing. Further, Koss Aerospace enhances its know-how with state-of-the-art CNC machinery and full in-house programming.

The company increased its ascent in 1992, when it established its Brampton Processing facility, an addition that offered comprehensive metal finishing services that include anodized chrome plating, passivation, cadmium plating, painting, aluminum heat treatment, MPI, LPI, stress-relief embrittlement, shot peen, hard chromium plating and alodine.

This development enabled Koss to perform its own processing, as opposed to subcontracting the work, which can be inefficient and expensive. It also enabled the company to become vertically integrated, from manufacturing through processing and assembly, which enabled it to take control of each step.

PRODUCTION FACILITY
Koss’ main production activities are housed in a modern, 40,000-square-foot facility located right next to Toronto’s Pearson International Airport. In recent years, the company has invested about $6 million into the building and its equipment. “We have about 24 machining centers with capabilities that cover the spectrum of small-to-large components. We can do parts as big as 14 feet,” says Cajic.

Specific technological capabilities include CNC milling (horizontal and vertical machining, 5-axis machining, high-speed multi axis machining up to 15,000 RMP), extra-large CNC milling and CNC turning. The company works with a variety of materials, as it manufactures parts from aluminum, brass, carbon, alloy and stainless steels, aerospace plastics, titanium, exotic alloys and copper, among others. Indeed, Koss is always looking at new equipment and processes to keep up with changing industry needs.

Koss currently has about 150 employees who either work at Brampton or in the main production facility. The highly skilled individuals are as important to the company’s success as Koss’ embracement of total quality management concepts that engender a team-oriented environment focused on excellence. Registrations and certifications that Koss has earned through the years include SAE AS-9100 and ISO: 9001:2001.

As far as the future, Cajic is confident, both for his company and for the economy. “We see the economic rebound coming,” he says. “With our recent activities, we’re prepared to prosper during the anticipated upswing. We’re very optimistic.”

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