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January 08 www.bus-ex.com 85 National Rubber Technologies of Toronto, Canada, traces its history back to 1927. Over the course of the next few decades, it grew the way so many businesses do—in fits and starts, adding assets and facilities as the need arose. The result was an unwieldy process for the recycled rubber products manufacturer, shuffling work in progress between plants that drove up the costs of production. So, when the company emerged from bankruptcy protection after reorganization early in 2007, it’s no surprise that streamlining the After re-emerging from bankruptcy and completing a major acquisition, National Rubber has invested heavily in improvement. CEO Greg Bavington tells Keith Regan how the company is now positioned for long-term growth NationalRubberTechnologies Newopportunities

86 www.bus-ex.com Janurary 08 manufacturing process was a top priority. “There has been an enormous effort to drive the entire footprint of the company towards lean manufacturing,” says chief executive offi cer Greg Bavington. “The company had grown organically, so it grew when and where space was available, without any grand plan guiding it forward. We ended up with a process that hopscotched from building to building, with a lot of forklifts, trucks and drivers involved and a lot of handling of material. This is a fairly bulky product we’re talking about. We’re not moving iPods here. There is a low value per cubic foot, so being effi cient can make an enormous difference.” The need to reduce the company’s footprint is exacerbated by its position in downtown Toronto, an urban location where real estate costs are high. “A big aim of the restructuring was rationalizing that footprint and doing away with unnecessary handling and moving,” Bavington adds. In doing so, National Rubber kept most of its product lines intact, though Bavington concedes that the company has allowed some of its noncore offerings to fade in favor of focusing on its core products. National Rubber recycles hundreds of thousands of used auto tires at its Toronto plant each year into a range of products for automakers and other original equipment manufacturers, making acoustic wall panels and fl oor underlayments as well as a range of custom molded rubber products. It produces 50 million pounds of rubber products annually, many of which are sold under the Symar brand name. The lean focus was helped by senior management having a background in the automotive industry. Many of the transfers between buildings were eliminated, enabling the company to reduce the total number of square feet used in production. All of the operations except the tire-grinding plant were combined under a single roof. “Having multiple buildings means that every one needs a supervisor or a mechanic or a security person 24 hours a day,” says Bavington. “A lot of labor is required and it’s not necessarily going into profi table production.” In addition to the overhaul of operations, National Rubber took a major step by acquiring the Koneta rubber accessories division from the Lancaster Colony company, obtaining customers in the large-truck business where it was not a major player, along with US manufacturing assets in Ohio, where Koneta had focused on recycling post-industrial scrap rubber rather than tires. “It was a classic dovetail in terms of capabilities and opportunities,” Bavington notes. That purchase and integration has gone as smoothly as could be hoped, he says. “It’s fairly rare when organizations are able to solidify all of the synergies that are talked about in an acquisition, but we have executed on all the savings we said we could execute on.” The recent surge of the Canadian dollar against the US greenback has also impacted the company’s bottom line, since much of its sourcing is still done in Canada. “That’s just a good healthy reminder that we can never take our eye off the cost base and supplier base. It’s been a wake-up call that you need to constantly “It’s fairly rare when organizations are able to solidify all of the synergies that are talked about in an acquisition, but we have executed on all the savings we said we could execute on”