The DeArment family keeps Channellock competitive with continuous improvement

 

When Channellock Inc. added automation technology to its factory, many employees were intimidated.

“When we first started with the concept of robots, I wasn’t even allowed to call them that,” says Chairman and CEO Bill DeArment. “We called them pick-and-place units.”

Bill DeArment

The company’s workers were afraid of losing their jobs. But Bill says they carefully added the units in places that made employees’ work easier. Channellock also didn’t lay anyone off, relying instead on attrition. It repositioned employees, sometimes retraining and upgrading them into a better paying job.

The company, which employs 365 people, hired more than 50 employees in 2018. About one-third of those filled positions left by retiring baby boomers. The remainder are part of the effort to increase capacity.

“We’re making twice as much product as we did back then with half as many people. So, obviously there’s been a lot of productivity enhancements,” he says of the last 10 years.

To stay competitive and continue to manufacture in the U.S., Channellock uses the lean toolbox to identify and eliminate waste, and invests in new technologies that increase capacity.

“We’re looking at the labor-intense operations, the highly repetitive operations. Those are the kinds of things that we’ve targeted for automation in technology to try to work smarter versus working harder,” says Jon DeArment, president and COO, and part of the fifth-generation of family ownership and operation.

Channellock has a long history in hand tools. The 132-year-old-company, based in Meadville, Pennsylvania, changed its name from Champion-DeArment Tool Co. to Channellock in 1963 to protect its valuable trademark. But no matter the storied history, it works hard to remain competitive.

“The goal is to really get back into a growth mode, which we’ve been in now for about a year and a half,” Jon says.

He says for nearly two years, Channellock has struggled to keep up with demand and get its fill rates back up. It’s working to catch up by investing back into the business.

“A long time ago, somebody once told me, if you’re not reinvesting the amount of your annual depreciation, you’re in liquidation,” Bill says. “That’s just a rule of thumb, but basically you need to make sure your equipment is up to date and running. You need to make sure that you’re not asking your equipment to do things it’s not designed to do.”

Automation and efficiency

You’ve also got to try new things from a manufacturing standpoint, whether it’s robotics or lasers or whatever, Bill says. At the same time, you’ve got to make efficient use of your direct labor, watch your overhead and indirect labor, and be in the marketplace, learning your customers’ needs and trigger points.

Robotic innovation provides repeatability, which is the kind of investment that’s worth spending money on, Bill says. If it’s a new concept, he says there’s a research and development risk. That can be worthwhile to take if it means significantly upgrading a worn-out piece of equipment.

Channellock uses robotics to reduce the cost of labor-intensive polishing. It also added precision CNC equipment to file or mill the cutting edges. Complex machines can combine three, four or five steps to save time, reduce the inventory and ultimately reduce cost with increased throughput.

In addition, the company has two fully automated robotic hammers for its forge. It’s the only hand tool company to use the technology that way, as far as it knows. Jon initially had trouble convincing his father to make the investment. They ended up taking a trip to France to see the equipment in action first.

Channellock is also exploring the idea of co-bots, which are collaborative robots that work side-by-side with humans.

“We have a couple college interns now that are working with the unit that we just picked up to try to see what they can come up with in terms of using that type of technology versus the traditional industrial robots,” Jon says.