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In Dubai or Grand Island, smart manufacturing keeps Allmand Bros. competitive

This is not an easy time to be a manufacturer in America — and especially not in rural Nebraska. According to the U.S. Department of Labor's Bureau of Labor Statistics, the number of U.S. workers employed in manufacturing has been in serious decline over the past decade, with annual employment dropping from 17 million in 1997 to just 12.7 million in 2008 — and that’s before the latest recession. In 1958, 28% of employed Americans worked in manufacturing; in 2008, only 8% did so.

Manufacturing is even more of a challenge in rural areas, where companies must also contend with additional shipping expenses and a smaller overall workforce in addition to labor costs much higher than overseas competitors.

But this is not a story about gloom and doom. It’s a story about bucking the trend.

An innovative pair of brothers

Allmand Brothers, Inc. was started in 1938 by Walter and Les Allmand in a garage. Ambitious and innovative from the outset, Walter and Les’ first successful invention was a portable electric farm welder, followed in 1951 by a permanent-magnet brushless generator sold to the U.S. Navy. The company really found its manufacturing niche, however, when they became the first to manufacture and market a portable light tower to brighten construction job-sites.

When they grew older, Walter turned management of the company over to his sons, Roger and Steve, who continued to innovate, extend the product line, and expand into new markets such as mining, oil and gas, and emergency services. Waiting in the wings were their sons, Matt and Brad, but that was a management succession that almost didn’t happen.

A modest rebellion

The way Matt Allmand remembers it, he was caught up in the family business from the time he was a child: first, licking envelopes in the office and then sweeping floors. By the time he was in high school, he had a position on the assembly line. After he earned his degree in business administration from the University of Nebraska at Kearney, Allmand had moved up to the much more responsible post of materials purchasing for the company. But like many – even most – young persons in their 20s, he felt a restless need to get beyond the known and familiar. And that meant getting out of the family business.

Allmand and his wife, Lori, moved to Minnesota where he took a job with the McNeilus Truck Division of Oshkosh Trucks, an international supplier of specialty trucks for defense, fire and emergency, concrete and refuse. He started out in materials purchasing, moved up to project management and business analysis, and eventually was made part of a team charged with restructuring the McNeilus Division.

A lesson in “lean”

“My team analyzed every aspect of the company, broke it down and examined it, and then decided on the best way to put it back together,” Matt said. Because Oshkosh was on the leading edge of business and manufacturing processes, Matt got massive exposure to the latest project management methodologies as well as “lean” manufacturing techniques which are geared to maximizing production efficiency.

The restructuring of the McNeilus Division was an exciting, interesting project, but when it was over, Allmand said the work became stale. Although Allmand Brothers wasn’t really on his radar, Matt said his father encouraged him to visit and talk with them at the Holdrege facility.

“I found that everything they were struggling with here were the things I’d been trained to deal with, and where I was weak they were already strong,” he said. “It was all very complementary.”

Matt returned to Allmand Brothers in 2005, then took part in a management succession in 2008 that named him president and cousin Brad Allmand CEO of the company.

Efficiency is the key

Especially for manufacturers in rural areas, Matt Allmand says the key is taking a hard look at the ways you’re doing things to make sure you’re doing them in the best way possible; trying to continually improve; and tracking everything with metrics to make sure you are.

The company has implemented a host of lean manufacturing techniques to improve productivity, Allmand said. For example, to make sure they always have the parts they need but don’t have excess inventory, they developed a two-bin system; when the parts are gone from the first bin, it triggers an order to manufacture the parts needed to fill the second bin.

“We’ve added production lines and done a lot of work balancing the work station to station, so you always have the right number of people at the right place,” he said. “We’ve also moved the manufacturing of the sub-assemblies right to the point where they’re added onto the main unit. So now instead of assembling the engine in another part of the plant, we’re putting it together five feet from where it’s bolted into the light tower.”

Allmand said the company also gains in productivity by being transparent with employees about operations: numerous measurements of the company’s health, including units shipped, sales and profits are posted for everyone to see.

“We have always treated employees with integrity and respect,” Allmand said. “Sharing performance metrics brings everyone into the same cause. They can see how their performance affects the value and stability of the company; I think you get a lot more buy-in and understanding. And you get help.”

Competitive in Grand Island and Dubai

Allmand said the efficiencies have allowed Allmand Brothers to remain competitive in both foreign and domestic markets.

“In most of the developed world we’re right in there,” Allmand said. “You can get more of our units in a container, so we have a shipping advantage, but whether we’re in Grand Island or Dubai, we’re mostly coming up against the same competitors.  We’re priced a little higher, but we have more quality and performance. If they’re just looking for the low bid, we never get the deal, but if they look at the cost over the life of the unit, the amount of light, the quality of light and the ease of use, we definitely have a chance.”

The recession that began in 2008 was a major setback to Allmand Brothers, which lost almost half its workforce when demand dropped off a cliff. Matt said the company used the time and the remaining workers to upgrade the infrastructure and hone efficiencies even further, preparing for the day when the economy would turn around again. Today they’ve rehired about half the lost workforce and are eager to hire more.

While many of America’s manufacturing jobs have moved overseas, operations such as Allmand Brothers are proving that smart manufacturing techniques can keep companies competitive — and keep jobs in rural Nebraska.

Who To Contact...

Allmand Bros., Inc.
Matt Allmand
1502 West 4th Ave.
Holdrege, NE 68949
(308) 995-4495
www.allmand.com

Phelps County Development Corp.
City of Holdrege Building, 502 East Avenue, Second Floor
PO Box 522
Holdrege NE 68949-0522
(308) 995-4148
Fax (308) 995-4158
www.justtheplacenebraska.com

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