Lean Manufacturing Case Study –

Buck Knives

For

Lean Production Systems

by

Harsh N. Modi
(C0799355)

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 Table of Contents Page No.

I. Company Overview………………………………………………………………………………. 03

II. Lean Journey of Buck Knives………………………………………………………………… 03

III. Principle 1 : Long term Philosophy………………………………………………………. 06

IV. Principle 2 : Continuous Flow Process…………………………………………………. 06

V. Principle 3 : Use of PULL system to avoid Overproduction………………….. 07

VI. Principle 4 : Level out the Workload…………………………………………………… 08

VII. Principle 5 : Following the Standardized processes for continuous

improvement and employee empowerment………………………………………. 08

VIII. Principle 6 : Build a culture of stopping to fix problems to get

quality right………………………………………………………………………………………. 09

IX. Principle 7 : Use of Visual Control to support people in Decision

making and problem solving…………………………………………………………….. 09

X. Benefits after implementing lean principles…………………………………….. 10

XI. References………………………………………………………………………………………… 11

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Company Overview

Buck Knives is a more than hundred-year-old American knives manufacturing company

founded by Holy H. Buck in the year 1902 in Mountain Home, city of Idaho (USA). Buck

Knives is renowned for manufacturing the world’s best pocketknives, hunting knives, and

other cutlery for hunters, sportsmen, the US

military and others. The company has invented

hundreds types of knives in these years. Apart from

USA, Buck knives also have their manufacturing

unit in china. After implement ting the lean oriented

Figure 1 Buck Knives
manufacturing approach in the organization, in

2005 company moved their headquarter to Post Falls in Idaho state of USA from San Diego.

Today Buck Knives became the largest knives manufacturing company in the world all

thanks to all four generations of Buck family who successfully led the business by choosing

the right decisions at the right time.

Lean Journey of Buck Knives

Lean Principles and practices have broad application in the manufacturing sector. But, the

there are some attributes which makes the each manufacturing organization’s lean journey

different and also how easily one can implement the lean in organizations depends upon

certain attributes such as what is being produced to whom it is being sold, competitive

pressures, location, corporate structure, workforce characteristics, availability of raw

materials, contractual obligations etc.

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It was not easy for Buck Knives to implement the lean principles and to do lean oriented

practices in the organization as there were certain factors that they had to deal with for the

smooth journey of lean such as:

 Their three biggest retail customers had the inconsistent sales forecast accuracy.

 It was not easy to make high quality knives as for that they needed the workers which

had high craftsmanship skills.

 They had to procure both kind of materials which had long procurement cycles and had

complicated procurement requirements.

 It was very difficult to forecast the sells as the 40 to 45 percent of the sells were come in

the last three months of the year.

Buck Knives management to transform their enterprise to lean oriented because the

company was experiencing major losses in the year 1998 because of the failure in the

product line and for it was difficult for them to survive in the United states as the cost of

doing the business had risen dramatically in California and the sales drop plummeted

suddenly. Simultaneously, competitors in china were becoming better at manufacturing

quality knives and Buck management calculated a 30% cost differential between their

company and its overseas competitors. Hence, the company decided to reduce the cost by

at least 30% in the next five years in which they included three major key elements:

moving to a state with lower energy, labor and regulatory costs; buying new ERP systems

and created lean oriented culture within the organization. From this the lean journey of

Buck Knives has started. So it was important for the Buck management to teach the lean

oriented culture to their employees of the organization. So, for that they hired veteran

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consultants who have the knowledge of lean and sent a group of 25 employees for off site

training of lean and began targeting the production for improvement. So the Buck

management first started their mass production unit to assembly cell with the help of

veteran managers. Their first assembly cell was created during the initial lean training, and

one by one with the help of trained leaders they started to convert their plant in to various

assembly cells. They even organized several seminars of lean accounting which helps the

employees in understand the reward of implementing the lean approach like reduction in

inventory, give accurate portrayal of cash flow and costs, favor value creation over piece

part pricing etc.. Buck Knives management identified four value streams based on knife

designs and added fifth value stream to represent sourced knives. They chose value stream

managers internally and picked the leaders based on the experience. Despite of creating the

assembly cells for continuous flow manufacturing, still some amount of batching takes

place in the heat-treating function, griding and stamping of blades in the fabrication unit.

For reducing the overproduction or we can say inventory, they started to work according

to a 30-day forecast that is produced at monthly meetings involving executives from the

departments of sales, accounting and operations. They mutually forecast the sales in the

upcoming year and the panning of operations done according to that forecast sales.

To track the performance of each assembly cell they started to use multiple Kanban

systems. They started to write the production plan for each shift and also metrics on how

each cell is performing compared with the plan. Each individual value streams are

responsible to manage their own costs. For larger retail customers like Walmart which

were not so good to forecast the sales month to month basis, but they were good to predict

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the sales in a year. So, to deal with that kind of unlevel demand, Buck management divided

the Walmart’s 12 month’s forecast sales in to 10 equal amounts and made plan according

that. Buck management increased the flexibility in packaging though launching 5S. so this is

how by putting lean principles in the right place, Buck management has consolidated space

and increased output by creating workflow through the entire manufacturing processes.

Now, we will see how the Buck Knives follows the first seven principles of lean

manufacturing in their organization one by one.

Principle 1: Long term Philosophy

After three consecutive non profitable years from 1999 to 2001, Buck Management decided

to transform their traditional manufacturing to lean oriented manufacturing. For that the

company created a five-year plan to reduce costs of manufacturing by at least 30% and

manufacturing the one of the best quality of knives of the world, so that the company

would not pass from the situation where they have to face loss of money again in the

future. In this five years of strategy, the major three key elements : To move their

headquarter to where the cost of energy, labor and regulatory costs was cheap. For that

they decided to move their organization headquarter to Post Falls (Idaho) from San Diego.

Also, they decided to purchase new Enterprise Resource system (ERP) to track their day-

to-day manufacturing activities. For manufacturing the better quality of Knives, they

decided to give the training of lean to each and every employee of the company.

Principle 2: Continuous Flow Process

Before heading to lean approach, they were following mass production model which had

disconnected functional areas. Also, the Finished goods and Work in Process (WIP) were

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scattered everywhere in the plant. So, when they decided to transform their organization to

lean oriented, so first they started to convert the mass production to assembly cells step by

step. The first assembly cell was created during the initial lean training and it became

successful. Then the trained group started to give training to another group and helped

them to build assembly cell one by one. These assembly cells help to manufacture the knife

one at a time. This helped to reduce the fabrication time from six to eight week to two to

three weeks. Still there are many fabrication operations operating in batching like grinding

and stamping knife blades and also small amount of batching takes place in the heat-

treating function and calm shell packaging. Otherwise, entire production floor is organized

into assembly cells that are part of value streams.

Principle 3 : Use of PULL system to avoid Overproduction

When the Buck Knives were following mass production, there were everywhere finished

goods and Work in progress (WIP). As a result, they easily had two to three months of

inventory at any time in each production area. They had thousands of Knives in inventory

within the organization. So, to overcome from the problem they started to communicate in

a new way to reduce this excessive inventory. By doing the meeting eith the mangers from

the employees of sells , accounting and operational, they started to forecast the sales in

keeping the context of sales of previous years and according to that forecast sales they

started manufacturing. For raw material procurement they started to follow multiple

Kanban system. Each assembly cells started to write their performance on white boards

and also they are listing their production plan for each shift each day and also the metrics

of how each cells is performing compared with the plan.

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Principle 4: Level out the Workload

Buck Management decided to create level loading production for their largest client

Walmart, which has been good at forecasting their 12 month’s sales totals, but not so good

at month-to-month forecasts. Buck management divided the Walmart’s 12 months forecast

into 10 equal amounts to be produced Each month between January and October and

started to manufacture according to that forecast sells. In case of forecasts change, they had

enough time and inventory that can easily cover the remaining demand due to the

assembly cells. So there was no tension remain for Buck management to mitigate the

demand of their largest retail customers after implementing the lean principles.

Principle 5: Following the Standardized processes for continuous improvement and

employee empowerment

Buck Knives established the standardized manufacturing processes which helps them in

continuous improvement in getting the better quality of knives. Buck management

identified four value systems based on knife designs and added fifth value stream to

represent sourced knives. Such injection of these new lean accounting principles into Buck

knives’ helps them in continuous improvement of the manufacturing the processes. Also,

they decided to hire the new employees and give them the knowledge of the lean principles

by hiring the veteran consultants which directly benefits to the company to achieve the

ultimate goal of the company. Moreover, they chose value stream managers internally and

picked the leaders based on the experience. In each assembly cell they followed the best

processes which can give the best quality of knives and also hire the best operators and

employees and trained them according so that they can produce the best product from the

manufacturing products without spending excessive cost.

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Principle 6: Build a culture of stopping to fix problems to get quality right

Buck management trained their employees and operators the way if they see any failure in

product fabrication or assembly line, they immediately start to identify the reason behind

the failure of product or assembly line and immediately start to fix the problem. They

majorly believe in the Quality Consciousness. They believe that Quality is more than tools

and they build a culture that even the negative feedback is valued and they used the

negative feedback for continuous improvement. They also believe that customer feedback

is very important for them to build the quality of knives and they design the knives

according to that it followed by the manufacturing.

Principle 7: Use of Visual Control to support people in Decision making and problem

solving

Buck Management implement 5S – sort, shine, standardize, sustain, straighten tool to

create visual workplace and for continuous improvement. For instance, Buck management

increased flexibility to sell finished goods through 5S effort which ultimately led to

dispersing the packaging function to individual cells within value streams. Buck

Management launched 5S initiative for packaging in the assembly cells itself, which

ultimately helped the company in the reassignment of several employees to other areas

because cell-based task requires fewer people and also helps the company to accept and

completed all the orders in the final quarter of 2007 when the 5s was launched within the

organization.

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Benefits after implementing lean principles in the Organization

One of the benefits the company realized after creating the assembly cells that they had

consolidated the workspace into an area that was about the half the size and they had

reduced work in progress (WIP) BY 60%. Moreover, the manufacturing cost also reduced

by 30% all thanks after creating the assembly cells in the organization. The fabrication

cycle time also reduced by 40% means it had dropped from six to eight weeks to two to

three weeks . After creating communication between the executives from sales, accounting

and operational departments the inventory cost also reduces and they even completed

their all order within the specified timeframe easily. After implementing 5S principle they

were able to put the packaging department within the assembly cells and helped them in

the reassignment of several employees to other areas as assembly cell task requires less

manpower. So, after implementing the lean principles in the organization Buck Knives

revived from the losses and made his place in the market as a best knife manufacturer in

the world with reasonable price.

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References

Official Website. https://www.buckknives.com/

Buck Knives – Wikipedia.

https://en.wikipedia.org/wiki/Buck_Knives#:~:text=Company%20origins,-Hoyt

%20H.&text=Buck%20became%20a%20blacksmith's,would%20hold%20an%20edge

%20longer

Toyota, Vinas. (2008, May 6). Knife Company Hones Competitiveness by Bucking the Status

Quo. https://www.lean.org/common/display/?o=811

Buck Knives finds success through ‘lean manufacturing’ (2005, March 20). The

spokesperson- Review. https://www.spokesman.com/stories/2005/mar/20/buck-knives-

finds-success-through-lean/

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