2. Achieving Certainty and Flexibility | 2
IndustriesthroughouttheUnitedStatesandtheworldfaceanincreasinglychallengingmarketplaceinwhichtoprovide
superiorquality,innovation,andsustainability.Businessrelationshipsthatfosterthesevaluesareessentialtotransform
today’schallengesintoadvantages.Inmeetingthespecializedidentificationandsafetyneedsofitscustomers,LEM
Products,Inc.recognizesthatitisresponsibleforprovidingsolutionsnotonlytoend-usersperformingessentialfunctions
thatrequireidentification,butalsotobusinesspartnerssharingthesupplychainfortheseproducts.Thiswhitepaperaims
toillustratesomeofthewaysinwhichLEMmeetsbothofthesedemands,withparticularemphasisontheutilitiesand
constructionindustries.Byimplementingefficientpracticesandprocessesthatensurequality,innovation,and
sustainability,LEMdeliversbothasuperiorproductandacompetitiveadvantage.
Background
Founded in 1967, LEM Products, Inc. has steadily grown from a national source for
electrical identification products to a global provider of custom and stock identification
and safety products with an ever-expanding range of applications. Today, the Company
serves a variety of industries, including Utilities, Electrical, Telecommunication,
Petrochemical, Construction, OEM, HVAC, Facility Maintenance, Food Processing,
Transportation, Marine, and Aerospace. Across these industries and many others, LEM’s
products are relied upon to simultaneously convey crucial information, fulfill regulatory
and commercial standards, and withstand extraordinary conditions. By their nature,
products that provide clarity, compliance, and durability must be available
on short notice, with immediate customer response;
in limitless customizable configurations;
with options for both repeatability and refinement; and
without forcing unnecessary inventory on the customer.
LEM recognizes that the technical requirements for a product are accompanied by the
practical needs of a customer, and is uniquely positioned to meet both categories of
demand. The Company’s leadership and staff are comprised of industry experts in the
design, engineering, and fabrication of materials for diverse applications, both
established and emerging. An average tenure of over ten years among the LEM staff
contributes depth to the existing breadth of knowledge at every level of the business.
Manufacturing and management processes adhere to best practices, including just-in-
time production and the Six Sigma system. This combination of personnel and
operations expertise gives LEM the ability to efficiently respond to the needs of
customers in real time through fast turn production and low minimum order
requirements. Moreover, the Company excels at providing updated design and
engineering information to its distribution alliance partners, ensuring consistent
compliance and performance in the field. The majority of LEM’s existing customer base
has relied on the Company to provide products and solutions for fifteen years or more.
At the core of relationships such as these is LEM’s commitment to passing the benefits
of efficient management and manufacturing on to its partners.
3. Achieving Certainty and Flexibility | 3
Supply chain challenges
Users of identification and safety products, particularly in industries such as utilities and
construction, where product needs tend to be extremely diverse and highly specific, are
often handicapped by manufacturers with inflexible minimum order requirements,
which forces excess inventory upon the customer and creates tension and waste.
Studies of supply chain management have shown that production-inventory
relationships between manufacturers and customers are dictated by three factors:
Customer demand;
Effectiveness of the production process and the subsequent
transportation of goods; and
The inventory replenishment policy, by which customer demand is
mapped into orders placed with the manufacturer.1
Unnecessary minimum order requirements are often a reflection of inefficiencies in the
channels of communication and production at the manufacturing level.
Because identification and safety products must consistently convey information while
maintaining compliance with regulatory and commercial standards, customers need
both repeatability and adaptability from a single manufacturer. Product variation and
product noncompliance create uncertainty in the field with consequences for users and
businesses.
The ability to customize identification products is crucial in industries such as utilities
and construction, where tags, labels, and signs are utilized in proprietary settings or to
convey job-specific information. As with forced inventory, repeatability, and adaptability
challenges, the responsiveness of the manufacturers’ process is integral to providing
customization solutions.
Even with the capabilities for low minimum order requirements, repeatability,
adaptability, and customization, a manufacturer must be able to provide the products
on short notice to ensure compliance in the field. Efficiency at the production,
transportation, and support stages each contribute to the overall level of
responsiveness at the manufacturer level.
Solutions in manufacturing and management
Given the number of challenges faced by users of identification and safety products in
industries such as utilities and construction, solutions must originate at the planning and
production level, where manufacturing and management strategies have the ability to
heighten efficiency throughout the supply chain. In addition to quality and price point
benefits, maximizing efficiency eliminates the waste associated with forced inventory,
inconsistent and nonconforming products, and slow production and support response
1
René Caldentey, Lawrence M. Stein. 2003. Analysis of a Decentralized Production-Inventory System.
Manufacturing and Service Operations Management 5 (1) 1-17.
4. Achieving Certainty and Flexibility | 4
times. LEM implements an integrated framework of best practices in manufacturing,
such as just-in-time (JIT) production and kanban systems, as well as management,
including lean operations and Six Sigma.
JIT production is itself an integrated set of activities designed to achieve high-volume
production using minimal inventories. A central element in JIT production involves the
timing of resources so that each stage of production receives the necessary materials
“just in time,” eliminating
waiting time between
stages and identifying
defects early in the
production process, saving
downstream products and
allowing greater
responsiveness to variable
demand throughout the
manufacturing process.
Kanban systems are used in conjunction with JIT production to ensure that work in
progress does not accumulate between stages but moves directly to the production unit
where it is next needed. These systems are based on the flow of information regarding
demand at each level of production, reinforcing the JIT production system’s focus on
communication and planning. The flow of information in kanban systems is
characterized by the use of kanban cards, which are withdrawn at each stage to
represent the amount of demand at that stage. Withdrawal cards are in turn replaced
by production cards when the demand is met. At LEM, kanban has been implemented in
the production of wire and cable marker books and other products with multiple stages
of assembly.
In addition to JIT production and kanban systems, LEM also adheres to best practices in
the management sphere in order to ensure quality and efficiency. These include lean
operations, also called lean production or lean management, and the Six Sigma system.
Often implemented as an extension of JIT production, the lean paradigm seeks to make
production directly responsive to demand, thereby reducing waste throughout the
supply chain. LEM’s use of lean production relies on effective vendor and customer
communication to shape accurate demand forecasts. Together with the manufacturing
discipline resulting from JIT production and kanban systems, lean operations maintain
low minimum order requirements together with high responsiveness and customization
capabilities.
Figure1 | KeyelementsofJITproduction
Product&processplanning,focusedonvariancereduction
Setuptimereduction
Smalllotsizes
Qualitymanagement
Communicationlinkswithsuppliers&customers
Balancebetweenproductionstability&responsiveness
Redefinedinventoryprocedurestoeliminateinter-process
waste
5. Achieving Certainty and Flexibility | 5
LEM also embraces Six Sigma, a statistics-driven program to
improve quality and efficiency. Much like JIT production, Six Sigma
is based on minimizing variability in the manufacturing process.
However, Six Sigma’s methodology seeks to measure the
process’s ability to turn out products that are free of defects.
Eliminating defects in every aspect of production allows LEM to maximize both quality
and efficiency. This is achieved by monitoring and managing each stage of production
where defects may have a statistically significant effect – from product design to quality
control.
Each of these methods and philosophies requires the development of specific
techniques for implementation. At LEM, staff cross-training programs and enterprise-
resource-planning (ERP) software ensure adherence to these practices at every stage of
management and manufacturing. Cross-training among staff members reinforces the JIT
production paradigm, ensuring each member is familiar with product planning and can
contribute to different tasks as needed. This allows for both flexibility and predictability,
as the manufacturing process can better respond to customer demand.
LEM’s ERP program orchestrates ordering, production,
and delivery of products. More than a tracking system,
the ERP software uses a visual engineering application
to maintain consistent products throughout multiple
runs, as well as to modify products to adapt to changing customer needs or regulatory
requirements. This enables the entire supply chain to minimize inventory and maximize
efficiency in accordance with JIT production, the kanban system, and lean operations. It
also provides the Company’s management with essential metrics such as inventory,
product demand, and lead-times, which are used in Six Sigma statistical analyses of
overall quality and efficiency and to coordinate inventory and manufacturing resources.
Ultimately, LEM’s integration of manufacturing and management processes and
methods allows the Company to provide quality, efficiency, and communication
solutions to its customers. JIT and lean production reduce waste and minimize inventory
forced on to the customer. Similarly, reduced inter-process inventory and the ERP
system’s visual engineering program result in simultaneous repeatability and
adaptability. Customization is also achieved most effectively in a supply chain such as
LEM’s, in which an efficient production process is the foundation for modification.2
Finally, at the core of these solutions is LEM’s dedication to enhancing and updating the
flow of information between the Company and its customers. Forging relationships with
distribution alliance partners and OEM users alike, LEM can respond to the demands of
customers in diverse industries while extracting, defining, and cultivating standards at
the operational level.
2
Haim Mendelson, Ali K. Parlaktürk. 2008. Competitive Customization. Manufacturing and Service Operations
Management 10 (3) 377-390.
Ifitcan’tbemeasured,
itcan’tbecontrolled
6. Achieving Certainty and Flexibility | 6
Putting Best Practices to Work at LEM
Any number of products illustrate the Company’s success in executing the various
methods of maximizing quality, efficiency, and communication. Custom product lines
are particularly demonstrative of LEM’s capabilities at every stage of planning and
production.
Sequence Cards
LEM was approached by an integrated distribution partner to design and
produce a unique line of labels for a customer in the telecommunication utility
industry. This product was to be used to mark terminals within electrical panels.
LEM’s solution was a set of 2 x 5 inch cards, each with 20 die-cut vinyl labels
featuring sequential numbers. The cards are covered with a pre-mask, which is a
clear low-tack adhesive laminate designed to allow the labels to be lifted off the
cards in strips and held until applied to the panels.
Having successfully designed an innovative new product for the customer, LEM
next had to develop a cost-effective way to print, sort, collate, and inventory the
product, which ranges from one card (sequenced from 1-100) to 54 cards
(sequenced 1-100, 101-200, up to 5301-5400). Directly utilizing JIT production
and kanban to reduce wasted time and material in manufacturing, LEM
Figure2 | LEM’sCustomer-DistributorRelationships
Customer
Distribution
Partner
The customer is 1) aligned with a distribution partner and 2)
selects LEM for its identification and safety product needs. LEM
3) forms a relationship with and provides the customer’s desired
products to the distribution partner; who 4) in turn provides them
to the customer. Throughout the cycle, LEM maintains its
relationship with both the customer to understand operational
needs, and the distribution partner, to meet the demands of the
entire alliance.
7. Achieving Certainty and Flexibility | 7
designed a bin system to inventory completed individual cards. This allows the
finishing team to draw the necessary cards, which are in turn organized into a
custom sorting box where up to 54 cards can be stacked while maintaining
separation of each number series. This
unique system, combined with the
strength of the distribution alliance
relationship, allows each stage of
planning and production to respond
effectively to changes in demand,
even for custom products.
Self-Laminating Barcode Tags
A firm in the manufacturing and construction industry specializing in pipe
fabrication contacted LEM for a product that would allow barcoded
identification to be applied to their inventory. In addition to customization,
these tags required the durability to withstand years of outdoor storage in
industrial settings. The resulting self-laminating tags were designed with
grommets in each corner for adjustable application along and
around bundles of piping, and in an array of stock and custom
colors for differentiation and organization of job lots in the
field. Though created for use with barcode data, the design
accommodates information of any kind, including pre-printed
and handwritten messages.
This design, originally created to address the specific needs of
a single customer, has developed into one of LEM’s most
popular standard product offerings.
LTC Maintenance and Deficiency Tags
One of the largest utilities in the United States, providing electric, water, and
sewer services, turned to LEM for a recordable, traceable method of
documentation for work within nuclear facilities and other generating plants. To
create a single product to simultaneously provide information at the site of
maintenance and allow that information to be recorded and transmitted within
the appropriate channels of communication, LEM applied its expertise in
laminated tag production to develop a modified version, the LTC line of
maintenance and deficiency tags. In addition to a weatherproof vinyl base and
self-laminating polyester cover, LTC tags feature removable paper inserts and
carbon paper. Information is filled out on the paper, which is removed for
recording or reporting purposes, while the vinyl base retains and protects the
duplicated information at the work site.
8. Achieving Certainty and Flexibility | 8
LEM’s deficiency tags, in particular the LTC line, have been recognized by the
leading authority on industrial maintenance planning and scheduling, Richard
“Doc” Palmer’s Maintenance Planning and Scheduling Handbook. Now in its
second edition, the book provides strategies and techniques developed by
Palmer over the course of three decades’ experience in maintenance planning
and scheduling, primarily in the electric utility industry. Palmer references LEM
deficiency tags throughout his book to demonstrate their usefulness in the
maintenance planning process. In particular, he finds that the LTC tags allow
greater efficiency in the identification and coordination of maintenance
functions.3
Fittingly, customers can look to LEM to deliver increased efficiency
not only through
products like deficiency
and maintenance tags,
but also through the very
business relationship that
provides such items.
As illustrated by products like sequence cards, barcode tags, and the full range of
maintenance and deficiency tags, LEM is unmatched in its ability to respond to
individualized identification and safety requirements. In addition to providing efficient
solutions through specific products, the Company strives to maintain a fundamental
awareness of the industry frameworks within which its customers are operating. Though
LEM provides products to a wide array of industries, the Company recognizes that
utilities and construction tend to be unique in terms of the regulatory and commercial
standards that drive their needs for identification and safety products.
Despite regulatory and economic challenges, the utilities and construction industries
feature the highest rates of reinvestment of any sector and are poised for consistent
growth even amid uncertainty surrounding costs, demand, and competition. Expanding
transmission and distribution is at the core of the utilities industry, where residential,
commercial, and industrial consumption levels continue to rise. In the construction
industry, spending has grown most significantly in heavy construction, where
identification and hazard products play an important role in both compliance and end-
user safety.4
As these industries and others move forward and look for new ways to
promote growth and certainty in an uncertain environment, LEM is moving forward with
them, creating and developing relationships that are responsive to the fundamental
need for quality and efficiency throughout the business cycle.
3
Doc Palmer. 2005. Maintenance Planning and Scheduling Handbook. McGraw-Hill, 360.
4
Federal Energy Regulatory Commission, 2010 State of the Markets, 21 April 2011.
9. Achieving Certainty and Flexibility | 9
Data: Value Line (Public Companies), January 2011.
Leadership
LEM’s ability to effectuate manufacturing and management best practices is a product
of a culture of quality, innovation, and sustainability fostered by the Company’s
leadership. By identifying, embracing, and implementing the standards and processes
needed to enhance quality and efficiency, LEM’s executives work to ensure the
Company exceeds the expectations of its customers and partners in every facet of the
business relationship.
As CEO of LEM for over twenty years, Maureen O’Connor has guided the Company
through changing economic conditions, growing global competition, and the evolving
methods and technologies of the identification product industry and the many
industries it serves. Maureen provided the impetus for LEM’s emphasis on maximizing
quality and efficiency in 1994 when she became a certified facilitator for the Total
Quality Management (TQM) system of W. Edwards Deming, which was a precursor to
today’s model of lean manufacturing. By instituting the continuous improvement
programs of TQM, Maureen established the foundation to later adopt JIT production,
lean manufacturing, kanban, and Six Sigma.
Maureen’s leadership of LEM has been recognized throughout her tenure by the
National Manufacturing Summit, the National Association of Women Business Owners,
the Women’s Business Enterprise Council of Pennsylvania, Delaware, and New Jersey,
and the Women’s Business Enterprise National Council. In addition to specific
recognition of Maureen and LEM, the Company has been reviewed and certified by the
Women’s Business Enterprise National Council (WBENC) and qualifies for both first- and
second-tier diversity spend initiatives. Maureen’s leadership extends beyond LEM to
other institutions in industry and the community, including positions with the
MidAtlantic Employers’ Association (MEA), the Family Business Alliance at Temple
University Fox School of Business, the Comprehensive Learning Center, and the Union
League of Philadelphia.
Industry NumberofFirms ExpectedGrowthinEarnings
Electrical Utility (East) 25 7.09%
Electrical Utility (Central) 23 5.65%
Electrical Utility (West) 14 6.89%
Construction 17 0.16%
Natural Gas Utility 27 3.41%
Water Utility 12 6.80%
Figure3 | GrowthinUtilitiesandConstruction
10. Achieving Certainty and Flexibility | 10
Conclusion
Faced with the challenges of the modern global economy, industries such as
construction and utilities increasingly look to their own business relationships in order
to identify those partners with the ability to work together toward quality, innovation,
and sustainability. By maximizing the quality and efficiency of manufacturing and
management, LEM Products Inc. has consistently provided its customers and
distribution alliance partners with not only the highest quality identification and safety
products, but also the certainty and flexibility that are essential to achieving these goals.
LEM’s internal best practices allow it to deliver products with as few limitations as
possible, whether in terms of minimum order requirements or customization options.
LEM continually strives to achieve success not only within its own operations, but for its
end-users and business partners as well. This combination of cultivating effective
methods and robust business relationships has allowed LEM to emerge as a trusted,
solution-driven source of identification and safety products across industries and
throughout the world.
