High-tech Hunt for Waste

San Francisco Business Times

From the July 7, 2000 print edition
Plastic profits
Technology molds Harbor Plastics for future success
Christine Kilpatrick Business Times Staff Writer

Jonathon Lawlis has nothing but time on his hands -- all the time he can sell.

Time on one of his 12 injection molding machines, shiny gray monsters with 50 to 300 tons of clamping pressure that spit out plastic knobs, toothpicks, fishing boxes and yellow metric measuring cups for elementary schools. Lawlis measures profits in seconds and fractions of seconds, earning Richmond-based Harbor Plastics Manufacturing Co. nearly $7 million in 1999.

But time is a double-edged sword. A half-hour of down time can cost hundreds to thousands of dollars. A malfunctioning machine produces only wasted hours and misshapen parts.

Technology was the answer, Lawlis realized back in the 1983 while working his way up from a $2.50-an-hour machine operator to owner and president of Harbor Plastics. Lawlis and his wife ran a little accounting software business on the side in the mid-1980s, and he saw how tracking money and inventory (and eventually operations) could save time, and therefore money.

But convincing Wes Seapy, then owner of Harbor Plastics, was another matter. Lawlis had great respect for Seapy, his mentor and a father figure.

"There was a dichotomy of style between us -- the young and the old. He didn't want to take any risk," Lawlis says. "People were also afraid, saying `You're going to do this and cut me out of a job.'"

Lawlis set about the delicate business of converting his boss and the workers, slowly introducing the accounting software he had written for the company.

"It was pretty good software and I was the only one who knew how to use it," Lawlis says. "I thought about expanding it, and I realized I could either be in the software business and develop this or stay in manufacturing."

Seapy, who was thinking of retirement, stepped in at that crucial juncture with an agreement allowing Lawlis eventual ownership of Harbor Plastics. Lawlis leaped at the chance, although the early '90s was a good time to start a software company for a very traditional industry like plastics manufacturing.

"In the back of my mind, I still think about how it could have gone," he says.

High-tech hunt for waste

Lawlis eventually invested more than $150,000 in technology that ferreted out any waste or inefficiencies in Harbor Plastics' accounting, inventory or manufacturing tasks. Buckets of plastic pellets -- once hauled up and down ladders by hand -- gave way to fat tubes feeding precise amounts of pellets into machines. Tortuous counting systems evolved into neat, automatic spreadsheets.

The difference computers made was stark. Harbor Plastics made $3.5 million in sales in 1996 with 65 employees. In the next year, the company made $4.5 million with 63 employees.

The company's success impressed Jim Baird, head of SBA loan lender Bay Area Development Co. in Walnut Creek, which helped Lawlis finance two expansions in the last decade.

"Our target markets are small, growing companies, but not the type of companies trying to go from venture capital to an IPO," Baird says. "We go for traditional companies like this one with good foundations and capacity to grow."

Since just molding the part won't keep Harbor Plastics competitive, employees do assembly work as well, slapping on stamps, decals, shiny writing and colorful logos -- anything to add value to the part.

Cutting-edge welding machines eliminate danger and pollution by stitching parts together with a supersonic squeak. The sound vibrates through the two parts, causing friction and heat, and melts the plastic a bit to weld them securely.

Back in his office, Lawlis glances at the 12 green machine-shaped icons on his computer screen. Machine No. 6 turns yellow, reporting that only 91 percent of its parts are good, instead of the 99 expected. The glitch will either be fixed, turning No. 6 green again, or get worse, turning the icon red.

"Someone will take care of it," says Lawlis. "I don't look at it much anymore. At one time, it used to drive me crazy."

All this technology has allowed Lawlis to ease back on work, taking Mondays off to spend more time with his wife. With low turnover (an employee's average tenure is four years), his staff can run Harbor Plastics without heavy supervision.

"I could get hit by a Mack truck tomorrow," Lawlis says proudly. "What has been my greatest desire is a knowledge transfer from me to my people."


© 2000 American City Business Journals Inc.