Excerpt from Crain’s Detroit Business, read the article here: https://www.crainsdetroit.com/manufacturing/walmart-kroger-shopping-scooter-supplier-races-meet-demand
By Kurt Nagl
Walmart, Kroger shopping scooter supplier races to meet demand
Posted on March 15, 2023
Bridgeport-based Amigo Mobility International Inc. had a problem.
The nation’s largest manufacturer of motorized shopping carts could not wheel them off the line fast enough to meet demand from stores flush with cash amid the COVID-19 pandemic.
The family-owned company, whose biggest customers include Walmart Inc. and Kroger Co., has seen top-line growth. Headcount has grown at a similar clip, to about 145, with eight positions still open.
“It went absolutely nuts,” said Jordan Thieme, Director of Operations. “Our orders went to like nothing, and then over the course of a couple months, we had record years since then … Our business is still growing like crazy.”
The surge has led to large-scale expansion and vertical integration plans for the company, which aims to bring more business and manufacturing to its home base, about 10 miles south of Saginaw. Amigo Mobility is investing more than $4 million to grow its footprint and production capabilities, and it bought one of its main suppliers in January.
Growth has not been a given, though. While Amigo stood to capitalize on grocers reinvesting record profits into stores, manufacturing problems stood in its way. Supply chain constraints and operational inefficiencies, which have been especially hard on small manufacturers, threatened to stunt expansion.
Being family owned and operated has been central to the company’s identity since its inception. It was founded in 1968 by Al Thieme. His wife Beth is president and CEO, while their children Jordan Thieme and Jennifer Thieme-Kehres also work in leadership roles. Al remains active in the company, turning 86 years old next month and looking to retire “never,” according to his son.
Being family owned and operated also has its challenges. For instance, Amigo doesn’t have the same level of resources or operational efficiency tools wielded by larger corporations or private equity owners, which limited its ability to pivot quickly. Another thing lacking: a fresh set of eyes.
Streamlining and scaling is the bread and butter of Plymouth-based Michigan Manufacturing Technology Center, a government-funded consultant and training organization for smaller manufacturers. With the help of a $10,000 grant through the Great Lakes Bay Manufacturers Association, the company hired the MMTC in 2021.
It didn’t take long for Chuck Werner, manager of operational excellence for the MMTC, to find the problems and prescribe solutions.
“They are very businesses savvy, a very knowledgeable group,” said Werner, who spent three days with his team working on site with the company. “But what they didn’t have was information.”
Step one was a 40-question assessment completed by the company, followed by a walk through of Amigo’s value stream and Lean Six Sigma training. The MMTC also installed Tulip operations software on the shop floor to measure output and detect snags.
The first problem it identified appeared harmless enough. The machine printing stickers for the motorized shopping carts was delayed by a couple of minutes. But that’s a world of time on an assembly line, Werner said.
“When you’re trying to get something off the line every 5 minutes, it’s huge,” he said.
The instinct for companies and employees on the line is to power through obstacles on the floor to ensure the assembly keeps moving forward, Werner said. That can often lead to complacency or a chronic dependency on tooling workarounds that add up and drag down the business.
Implementing a dashboard on production lines at Amigo allowed workers to pinpoint problems and define them.
“If someone tells me to go out and fix scrap or fix throughput, I can’t do that because I don’t know what that is,” Werner said. “But if someone comes out and tells me to fix a software integration problem with a printer that’s causing it to delay, OK, now I’ve got something actionable.”
The software also made problems impossible to ignore. The dashboard would track whenever workers delayed or missed a cycle, and operators would enter a reason code for the issue.
“As those data points start to build up, you start to see patterns, and those patterns are the things you want to work on,” Werner said.
Jordan Thieme, the company’s Director of Operations, said the company now produces its goal number of motorized carts per day and is expecting its third production line to be installed by June, with ambitions for a daily increase by 20 – 50%.
“Every time they just walk through our building, they give us some idea and we think, ‘Shoot we should have thought of that,'” Thieme said of the MMTC. “The biggest thing is being able to grow as fast as possible without having to waste a lot of money.”
The growth has tightened Amigo’s grip on the shopping scooter market and allowed it to branch out into other areas. The company’s products are found in every Kroger and H-E-B store in the country and more than half of all Walmarts, Thieme said.
Kroger, whose profit topped $2.2 billion last year on revenue of $148 billion, said it has expanded its fleet of Amigo motorized carts over the past three years.
“The Amigo carts provide all our customers the opportunity to shop our stores the ways they want to every day,” a Kroger spokesperson said in an email. “In addition to these carts in stores, we have also been testing some new technology features with Amigo International and we look forward to our continued collaboration with this Michigan-based business.”
The company is also making industrial motorized carts for customers including pet e-commerce giant Chewy to move orders around warehouses. A couple of years ago, Amigo acquired Wisconsin-based AeroTow, which makes machines that haul small aircraft around runways.
The company’s most recent purchase was Bridgeport Manufacturing, an on-site metal fabrication supplier that had been leasing space from Amigo until its owner retired.
While increasing production, Thieme aims to increase the amount of manufacturing work done locally. All the assembly and roughly 30 percent of manufacturing takes place at the company’s plant, but that’s set to increase with the implementation of laser tube cutting and metal tube bending machines, along with three robotic welders.
About 65 percent of its parts come from Michigan or Midwest suppliers. Every business function, from R&D to marketing and sales, is done at the Bridgeport site.
Amigo enlisted help from the MMTC again at the start of the year to help with vertical integration. The company is planning to use a Michigan Economic Development Corp. technology matching grant worth up to $25,000.
Thieme said he would seek services from the consultant in the future with or without a subsidy. Growing stronger has helped the small manufacturer buck the trend of industry consolidation and private equity takeover — and it has remained family-owned, according to plan.
“We will always be family-owned,” he said.
Article written by Kurt Nagl
Kurt Nagl is a reporter covering manufacturing — particularly the automotive industry’s transition to electrification, the impact on the supply base and what it means for the state — as well as the business of law. Before joining Crain’s Detroit Business, he reported in Iraq and China and for various publications in Michigan.
