Crayola CEO leaned over automation when others were offshoring, but now he’s earning a reward
Twenty years ago, the name of the American manufacturing game was offshoring. It seemed like all US companies, just as China entered the World Trade Organization and was increasing its capabilities. General Motors Dell was competing to move operations abroad. The spirit was exemplified General Electric CEO Jack Welch, a ruthless cost cutter who led the “Supplier Transition” meeting And once, in an ideal world, I stopped working. I’ll do it “Set all the plants you own on the barge to move along with the currency and change of the economy.”
But against this background, Crayola, the world’s most widely sold crayon manufacturer, has acquired another tack. Pierugiero, an operational executive at the time, believed that having children’s arts suppliers near their home could make them more efficient.
“I saw him writing on the wall that was coming,” CEO Peter Ruggiello said. luck. “When so many people were making decisions offshore in 2007, as I strategically told our CEO at the time, this close-to-market responsiveness is a key capability.”
Ruggiero, then executive vice president of the company’s Global Operations Technology, was well positioned to survive Again, Again’s tariffs when President Donald Trump announced last spring, and Crayola announced last spring.
Today, Crayola sources in many countries, including Brazil and Vietnam, “we make 70% of what we sell worldwide in the Lehigh Valley,” Lugiero said. luck.
Provided by Crayola
The company, 140 years ago, has been in eastern Pennsylvania since 1902, and today it employs 500 manufacturing workers in the area. When did it move to the area Founder Edward Vinny and Harold Smith built a small facility there to take advantage of the area’s hydropower and its abundant slate. (Before Crayola makes the crayon, it was known for its slate pencil and the first “dustress choke”, popular with teachers.)
However, this process wasn’t as easy as sitting down and watching money roll in. Therefore, in 2007, the company began self-improvement, eliminating waste and increasing production by automating key processes. This includes investment in new high-speed production processes and Lean Six Sigma Methods, corporate philosophy that workers are encouraged to cause problems.
“We invested in people who are in Lean Six Sigma Training. We invested in technology. So there’s a very automated process and there’s a scale,” Ruggiello said. luck. He wasn’t sure it would work anytime soon. “When we did that, we imagined that old thing. I love Lucy The episode where she’s trying to stuff her with chocolate and I’m saying, there’s no way our employees can do this whole job,” joking Logiero.
Rick Smith — AP Photo
However, this process worked, increased capacity and created a better product. According to the software provider, the first wave saved the company $1.5 million Mini tab,Crayo lavender. Today, all of the 3 billion crayons the company manufactures each year are manufactured via high-speed rotary molds that allow 1,300 crayons to be stirred up per minute.
The company is not completely immune to the anguish of the supply chain. Inevitably, you will procure colored pencils From Brazil’s renewable pine forest– There is no such forest here, so it cannot be reproduced in the United States. “There’s really nothing we can do. That’s just an extra cost for us,” Ruggiero said. Forbes recently.
But that relative insulation means that you can focus on building other revenue streams rather than scrambling to find new sources of products.
“We feel that the location we operate today will be better than the location we operated in 2019, but the size of our business has increased by 30% or 40% at the time.” “We’ve grown, we’ve grown, we’ve grown, and now we’re still growing.”