New culture at Collins Industries results in improved efficiencies, expansion of Type A product line

In south central Kansas lies a 247,000 square-foot plant that manufactures Type-A school buses with a renewed dedication to precision and efficiency amid a paradigm shift in company philosophy.

The plant located in the Wichita suburb of Hutchinson is the home to Collins Bus, and it’s the site of a monumental face lift from public to private entity, a transition performed in the past year. Collins Industries — the operating company for small school bus OEMs Collins and Mid Bus of Bluffton, Ohio, as well as ambulance and trucks, was purchased last November by American Industry Partners/Steel Partners for approximately $110 million, and the private equity teammates quickly made their presence felt. Not only did the deal immediately double investor money, but it signaled a new way of doing business at the small school bus leader.

Since 1967, the year company founder Don L. Collins developed the industry’s first small school bus from a van conversion in his apartment complex parking lot, Collins has been at or near the top of annual production and sales. But with the arrival of AIP/Steel Partners, the gauntlet was laid to build something truly special, the likes of which had never been seen around these parts.

“They saw an energetic management team with goals and objectives similar to theirs,” said Kent Tyler, who was named president of Collins’ small bus units after previously serving as Collins Industries vice president of sales and marketing. “They have worked with us to help us run our biz in a better and more efficient manner. Truly it’s been a team approach.”

Realized Efficiencies

A shared goal of incorporating lean manufacturing into the company’s operations is a realization. A new philosophy borrowed from the Japanese now reigns supreme in Hutchinson, a quiet town situated in the rolling prairie about 45 minutes northwest of Wichita. This principle is called Kaizen.

The Japanese word literally translates to change (Kai) and good (Zen), a microcosm of the company’s evolution over the past 11 months.

AIP/Steel saw the success of its new venture resting in the existing people at Collins Industries and set out to enhance the company’s already-strong position through a dedication to training and increased manufacturing efficiencies.

Essentially it equated to a cultural shift minus the demographic one that hits most companies after similar deals. In fact, company reps said only two executives at Collins Industries left the company, and one of those was a scheduled retirement rather than a forced one.

The prospect of new ownership can be cause enough for concern among employees even under the best circumstances. But when phrases like “new philosophy” and “changes” are bandied about, some real heartburn is bound to erupt.

So, with the resources provided by AIP/Steel, Collins set out to indoctrinate all its employees on the principals of Kaizen, namely those tied to lean manufacturing and, as a result, continuous improvement. And the plant workers at Collins Bus have served as an example for those producing the company’s other vehicle lines.

That fundamental change from the old guard to the new has been “absolutely refreshing,” according to Tyler, as the new environment is ripe with communication and teamwork.

“As the leader in Type A buses in North America, it is incumbent upon us to continue to look for ways to provide our dealers and customers with the safest and best quality buses in the industry,” he added. “Lean manufacturing is not only a philosophical change; it is a physical production change as well.”

The result over the past nine months has been an increase in quality, said Tyler, plus the increase in production capacity to more than 4,000 buses annually in Hutchinson alone.

The Buy-In

One of the key cogs that remain for this redesigned wheel is Bryce Pfister, Collins’ director of operations. It was he who led the team who implemented the principles and lean manufacturing into the Hutchinson plant. And it was Pfister who was responsible for getting the employees to embrace the myriad changes expected of them.

And he tirelessly worked with consultants brought in by AIP/Steel to teach the principle of the focused team efforts of Kaizen company-wide. So called “Kaizen events” continue to this day, nearly a year after the sale, to empower employees to control costs and improve workflow. Those from different departments regularly congregate to identify waste, whether that be of space or movement in the plant, and to suggest improvements to management.

Take for example the “Wall of Quality,” a grease board at the entrance of the plant that tracks efficiencies and manufacturing schedules.

“Each day, members from various departments meet at the Quality Wall to provide instant feedback on the issues each was seeing in production,” said Pfister. “We found that a great number of issues could be improved simply through communicating the issues to those that could help address them.”

But the company face lift goes beyond trimming the manufacturing fat. Tyler said Collins has its sights firmly set on expansion. According to company officials, the new day is one of not only respecting the past, from the company’s humble beginnings as a small bus provider for a local school district facing the growing transportation needs of its rural students, but also embracing the future, one that entails more than $100 million in annual sales between its two small bus properties alone.

“There’s a legacy there,” Tyler added. “It’s important we remember to respect the past and to embrace the future.”

The phrase respect past and embrace the future stuck and became the new motto around these parts.

It helped that AIP/Steel poured millions of dollars into the Collins bus facility over the past year, not only in manufacturing improvements but employee training.

The result has been a doubling of production at a fraction of the cost, two main characteristics of a successful lean manufacturing venture. And Collins competitors are surely taking notice.

Collins’ presence in Canada has historically been nil. But as the company was poised to release a new small bus product this month at the NAPT show in Grand Rapids, Mich., it is also ramping up its dealer presence. North of the border alone, the current market is 800 to 1,000 units. and that’s not to mention a new dedication in pursuit of the lucrative northeast U.S. market, namely New York.

Besides adding new products, Tyler said the changes are expected to make timelier deliveries to dealers and customers.

“These types of changes will enable Collins Bus Corporation to not only sustain our leading position in the Type-A market, but expand our market share and customer base in the coming years,” he said.

Evolution continues at Collins Industries, but one thing is for sure: Big things are coming in small yellow packages.

Reprinted from the October 2007 issue of School Transportation News magazine. All rights reserved.