Frozen food manufacturer Kahiki Foods bounced back from financial woes with a strong commitment on behalf of management to study and adopt lean principles.

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Lean manufacturing principles may have taken hold in  many organizations, but few companies can attribute their success and longevity to those principles alone. However, when Gahanna, Ohio-based Kahiki Foods went through a rough time after its founder and President Michael Tsao passed away in 2005, it wasn't until the frozen food manufacturer adopted lean practices that it got back on track, according to President and COO Alan Hoover.

“At the time, we were in a severe cash shortage, and many vendors were demanding payment,” Hoover says. “We had a freezer full of finished goods, but we were missing shipments to our customers because we didn't have the right product. We had unreliable machinery that experienced a lot of downtime, which caused us to be in firefighting mode on a daily basis.”

Hoover, who was named interim president at the time, knew the company had to make a major change. During his initial meeting with the executive management team, he suggested that they consider laying off 30 to 40 people in order to reduce costs. However, CFO Julie Fratianne suggested he read the novel The Goal by Dr. Eliyahu M. Goldratt, which focused on lean manufacturing.

“I had been exposed to lean manufacturing in the past, and was open to it, but I didn't want to do anything rash at that point,” Hoover says. “I bought the book Lean Thinking and handed it to 25 of our executive and middle managers. We met every Friday to discuss the book and learn from it.”

Hoover developed tests and helped employees learn vocabulary to fully understand the concept. “We soon started incorporating some principles of lean into our business here, and we saw significant improvements,” he says.

After implementing its own version of lean, the company enlisted the help of a lean consulting firm. Hoover's longtime friend, Stephen Ndukwe, operated as the productivity expert at the consulting group, and examined Kahiki for a week before determining that these principles could save the company a million dollars by eliminating wastes that had been built into its systems. “We used them for about seven months, which was key,” Hoover says. “We realized we couldn't teach our way into lean, and that we had to use experts. Little by little, we started doing things a lot differently, by thinking in different ways. “

For example, the company changed its system for making tempura products to reduce the number of people needed to get the job done. It automated the process, which increased the speed of output per labor hour. “We started seeing some really good improvements to our processes, and we even had two companies knocking on our doors to purchase the company,” he says. “Eventually, we were purchased by ABARTA, a third-generation family owned company based in Pittsburgh.”

A New Outlook
As company operations grew stronger, Hoover felt he needed to learn more about the maintenance of its machines. He enrolled in a manufacturing seminar sponsored by textile manufacturer Milliken & Co. “Milliken was very much like Kahiki,” Hoover explains. “Around 1994, they had a major burning platform, and had to reinvent themselves, or they would die out. The Milliken Performance System system they were using was incredible. The company had gone from near extinction to one of the greatest manufacturers in the world in just 12 years. Milliken’s system was was built on a foundation of safety and equipment reliability, which it said would eventually lead to high quality.”

In addition, Kahiki encouraged each vice president of the company to in effect own a piece of equipment on the manufacturing floor, by taking ownership of its maintenance and functionality. “We ask them to go to the production floor each day and observe the machine and check it for quality,” Hoover says.

Employees embraced the changes, and Hoover ensured that while implementing new management practices and lean, no one would lose their job. “Employees really bought into lean and the performance system we learned from Milliken, and saw the results,” he says. “We haven't had any layoffs since making these changes, and turnover has virtually ceased.”

A Strong Operation
The company has expanded its product line extensively, growing from its restaurant-quality egg rolls and appetizers to single-serve, multi-serve and family pack entrees. Its most popular products today include spring rolls and entrees that feature rice, vegetables, tempura chicken and special recipe sauces.  

Last year, the company developed Kahiki Naturals, which feature all-natural and organic ingredients. “We've become the first Asian foods company to offer a complete line of natural products, from wraps and egg rolls to entrees,” Hoover says.

All employees are involved in new product development and quality control efforts. “Every day, we all gather in our R&D test kitchen, and test the products that we've made for the day,” Hoover says. “We each rate how we like the product, because we're all our own harshest critics.”

It plans to continue implementing the performance system from Milliken and continually improve its operations. “Our goal is to be known as a world-class manufacturer, making and marketing the finest Asian frozen foods in the industry,” Hoover explains. “We want to be known for integrity and the quality of our products.”