Mass. manufacturers slow to adopt lean practices;

As the state's manufacturing footprint continues to wither, shops of all sizes are facing an ultimatum: Reduce costs or get undercut by competitors and lose more jobs.

Given the grim outlook, some shops are changing the way they do business by adopting more cost-efficient processes -- lean manufacturing -- as the state encourages the transition with grant programs.

But despite the claims of increased productivity and the praises by shops that have adopted lean practices, high initial costs have enabled just a fraction of local manufacturers to make the change to lean.

Only about 5 percent of state manufacturers have adopted the lean process, according to the Greater Boston Manufacturing Partnership, the state's largest lean-training nonprofit. Still, experts say the long-term viability of manufacturing in Massachusetts hinges on an industrywide paradigm shift.

"Because we are a very expensive place to do business, if a firm wants to stay here, it's mandatory that they adopt lean practices," said Brian Gilmore, vice president of public affairs for the Associated Industries of Massachusetts.

Lean manufacturing, a philosophy developed by Toyota Motor Corp., eliminates waste and reduce production times and inventory levels, thereby lowering production costs. Adopting lean practices is a long and expensive process, costing anywhere between a few thousand dollars and hundreds of-thousands of dollars, depending on the size of the shop, according to GBMP Vice President Chris Martin.

The state Department of Workforce Development offers funds to help defray the costs of lean training. In fiscal 2007, the state awarded 74 grants worth $6 million through its workforce training fund.

"We're always looking to reach out to companies to work with. It's an investment, but it can pay dividends down the road," said Linnea Walsh, spokeswoman for the DWD.

The Massachusetts Manufacturing Extension Partnership, another lean-training outfit that is affiliated with the U.S. Department of Commerce, recently commissioned a study of the companies it has worked with since 2000. The research showed that the companies were able to raise and retain $538 million in sales and prevent 5,000 job cuts.

Boston Centerless, a machine shop in Woburn, started thinking about lean manufacturing in 1995 when the company was doing aerospace work.

"We knew we needed to drive costs down to stay competitive," said Steven Tamasi, CEO of Boston Centerless.

Between 1999 and 2007, the company used $168,000 in state grants and contracted with GBMP to train workers on process improvements. Most recently, the company spent about $100,000 rearranging its machines for better workflow. The result: a doubling in revenue over the past four years.

Goodrich Corp.'s facility in Chelmsford adopted lean practices to cut costs in its surveillance-systems business. Working with MassMEP, the company has seen a 30 percent cut in production time, 60 percent cut in scrap metal costs and a rise in employment from 140 to 260.

The company says if it had not gone lean, it would have been forced to hire more people while also absorbing higher operating costs. "We've seen the benefits," said Daniel Nash, director of operations. "The numbers don't lie."

But no one suggests that lean is a panacea for the state's manufacturing woes. A report last month by MassINC suggests that manufacturing jobs represented just 9 percent of the state's total labor force in 2006, compared with 13 percent in 2000.

"There are narrowed options for success in manufacturing," said Dana Ansel, research director for MassINC.

But Gilmore believes that if manufacturers as a whole change the way they do business, the industry's labor force will stabilize as companies remain in the state.