BURLINGTON — After surviving a drastic loss of sales during the Great Recession, Nordic Tugs is streamlining boat-building operations and plans to increase production and employment by getting rid of waste.
In this case, between 35,000 and 45,000 square feet of production space is unused or underutilized between the company’s three buildings at the Port of Skagit’s Bayview Business Park, said General Manager George Armendariz, along with employee hours squandered carting parts and boat decks from one building to another.
Currently, the builder of trawler-style recreational yachts operates out of three buildings with a combined 130,000 square feet of floor space.
By selling a 50,000-square-foot building to the port and consolidating operations into two other buildings designed for boat manufacturing, Armendariz plans to reduce time spent transporting boat pieces and parts between buildings and improve plant efficiency.
The move also frees up a building for other uses and possible tenants at the low-vacancy business park.
As could be expected, the most Great Recession was not kind to the pleasure boat industry. Armendariz said Nordic Tugs sales tracked an industry trend of 80 percent sales losses between 2007 and 2013 in the recreational trawler segment.
Sales and employment have picked up recently for the company; Armendariz said employment has doubled since hitting a trough in 2011. A port tenant employee census showed the company had 28 full-time employees in October.
The building Armendariz plans to sell on Wednesday was originally built for Jansport to manufacture backpacks before Nordic Tugs moved in, he said.
Karmen Hardy, who deals with leasing and special projects at the port, said Nordic Tugs moved into the business park in 1998.
The building currently houses offices and meeting space, a carpentry and countertop workshop, the deck assembly area and the company’s parts storage, but is not used to its full capacity.
“At best, 25,000 to 30,000 square feet are used,” Armendariz said. “The rest is literally mothballed, sealed off or not used.
When the move is complete, unused space in the company’s main assembly building will be better utilized, and production work flow will be streamlined.
Company offices and a conference room will be moved to an empty mezzanine above the production floor. The deck assembly line will slot in next to the final boat assembly line, and the parts warehouse will relocate to the production floor beneath the mezzanine.
Under the old configuration, decks left the lamination building and moved into the old Jansport building, where they were equipped with stainless steel bits and wiring, Armendariz said. The huge decks were then moved again to the main assembly building to be joined with the hull.
Having both the deck and main assembly lines in one place eliminates a trip for each deck, while putting storage close at hand cuts hours of time employees spent walking building to building hunting for parts, said production manager Buddy Brown.
“It’s going to bring all assembly of boats into one place … ” Brown said. “We spend a lot of time walking, making many, many trips a day walking from building to building.”
The entire carpentry and countertop workshop will move into a lightly used storage room between the company’s lamination and assembly buildings.
“It’s going to be a little bit more compact, but a lot more efficient,” said lamination manager Brian Fleming.
The lamination building — where boat hulls, decks, tops and any other fiberglass parts are made and finished — will not see any changes, Armendariz said.
“We’re going to make much better use of lean manufacturing processes,” Armendariz said. “We won’t have people walking between three buildings all day long.”
Lean manufacturing techniques are embraced by many Skagit County manufacturers, from De Laval’s Mount Vernon plant that uses a modified version of the ultra-lean Toyota system, to Nordic Tugs’ neighbor Hexcel, which also keeps parts storage on the production floor to facilitate faster assembly.
Armendariz said the move should actually increase Nordic Tugs production capacity, which currently turns out smaller models in around 16 weeks. With the improvements in efficiency and building sales momentum, Armendariz projects sales growth of 10 to 15 percent this year while adding 10 employees.
Port Director Patsy Martin said she is in negotiations to bring Gielow Pickles, a Michigan-based pickle and sauerkraut producer that temporarily leased a building at the port’s La Conner Marina, to the building Nordic Tugs is selling.