Process Improvements Produced an Economic Impact At Riva
Riva Jewelry (Long Island City) was founded in 1988 by two friends, Ted Doudak and Bill Antzoulis. Riva manufactures chains and other jewelry for an American brand renowned for its high quality. ITAC first worked with Riva Jewelry in 2001, and over the following years, Arthur Davis, Client Advisor, ITAC, met with Ted to update him on opportunities and discuss issues where ITAC could advise and support Riva’s operational and growth initiatives.
In early 2011 although the company was very busy, Ted sensed that profits were not keeping up with the organization’s sales growth, and he invited ITAC in to find out why there was not a proportional increase in margins and profits.
As part of ITAC’s MoveSmart/GrowFast program, underwritten by the New York City Council, Michael Duch, Senior Consultant, ITAC, performed an operations assessment that identified opportunities to improve process flow and plant layout, such as the creation of production cells. The first cells related to gold jewelry and diamond setting. The change emphasized the practicality of the cell concept. Diamond setting productivity increased significantly. In addition, the company eliminated an inefficient individual time reporting system and began measuring group productivity. The “gold” cell formation started a “cultural” change at Riva. Employees working in the traditional environment soon requested similar cells in their areas, saving time and money by reducing duplicative actions and cycle times. Similar styles of jewelry were grouped together to eliminate the back and forth “travel time” among work stations and the time wasted with over $500,000 worth of metal in a “holding pattern” on dollies, waiting for the next step in the production process, at any given time.
Within ten weeks, production was organized into manufacturing cells, but in a way unique to Riva Jewelry. Typically, companies organize cells according to process function, e.g. all grinders grouped together. At Riva they organized cells according to a particular jewelry item or groups of products — people working together to complete a product. When manufacturing a new design proved challenging, Ted pulled together a team of one person each from jewelry, polishing, and assembly and told them: “We have a problem. Please use your experience to a find a solution. I cannot teach you new things that you don’t already know, just work as a team. You have the knowledge. Try things. Make mistakes.” In one day, the team generated several great ideas, and in two to three days, the problem was under control.
Ted empowered his employees to exercise their experience — “You know better than us” — and tied productivity to a new incentive program. This unique, empowering partnership yielded 30-35% more production, but more importantly, less repairs andless re-work — things were done right the first time around. Historically product errors were around 50%. After ITAC’s project work, errors are down to about 15%, and management no longer needs to mediate the process.
In talking about the changes, Ted described his relationship with ITAC: “ITAC benefited me through people, not consulting brochures and presentations. It was really the experience Michael Duch brought to us.”
This success led Ted to want to make further changes to improve his organization’s administrative functions such as human resources, customer service, and accounting, and to reduce multiple overhead layers. ITAC is now advising Riva on how to implement a better system of financial controls and forecasting and connect the manufacturing operation to the accounting department.
By drawing on the breadth and depth of ITAC’s 150 years of combined consulting experience and knowledge, Ted implemented changes that help to free him from managing day-to-day activities and allow him to focus more time on driving Riva’s strategic vision for growth. Riva is currently upgrading its technology and changing its company name to Riva Precision Manufacturing. The name change reflects the expansion of business activities and capabilities. In talking about the future, Ted said, “My success relies on having my customers close . . . new ideas and new methods keep prices low and quality high. If it’s innovation, you can only make it at your place.”
This article, written by Marion Lunt, ITAC’s Marketing and Communications Director, is based on a recent interview with Ted Doudak, President, Riva Jewelry.