What is in this article?:
- GM, Ford and Chrysler Strive to Become The Lean Three
- Embraced 'Wholeheartedly'
Among the myriad challenges confronting General Motors, Chrysler and Ford right now is the lingering perception among some consumers that the Detroit Three produce vehicles that lag behind their Japanese rivals in terms of technology, quality and fuel efficiency. While most auto industry observers acknowledge that the Detroit automakers have caught up to their Japanese rivals in recent years, perception often means everything in the public eye -- especially in the crowded North American car market.
You might say that a similar misperception extends to the factory floor. While Toyota is synonymous with lean and continuous improvement -- the Toyota Production System is a household term in the manufacturing world -- a fair number of people probably still believe the Detroit Three are light years behind the Toyotas and Hondas of the world when it comes to factory-floor productivity and efficiency. If Toyota is seen as the paragon of lean manufacturing, GM, Ford and Chrysler -- at least up until recently -- have been viewed as Toyota's overweight, out-of-shape rivals, gasping for breath just trying to climb the stairs to the factory floor.
Auto industry experts say that's not an accurate picture anymore (if it ever was). Well-before the recession precipitated the current upheaval and restructuring of the Detroit automakers, GM, Ford and Chrysler were adopting and implementing lean principles in earnest. They were trumpeting the flexibility of retooled assembly plants. And they were narrowing the productivity gap between themselves and their Japanese rivals.
Data from the consulting firm Oliver Wyman's "Harbour Report," a respected annual analysis of plant-floor performance in the North American auto industry, bears this out. The 2008 "Harbour Report" (the most recent one publicly available) proclaimed that "the Detroit Three automakers in 2007 nearly erased the productivity deficit against their Japanese-based competitors, despite declining production and shrinking market share."
UAW Local 602 employees focus on "building quality in station" as they assemble Buick enclaves in Lansing, Mich. Building quality in station is part of GM's Global Manufacturing System, a series of principles that promote employee involvement and lean manufacturing.
According to the 2008 report, the gap between the most and least productive automakers in terms of total manufacturing labor (a measurement that encompasses assembly, stamping, engine and transmission operations) shrunk to 3.5 labor hours per vehicle (or about $260 per vehicle), down from 10.51 hours (or $790 per vehicle) in 2003.
The 2008 report pointed to numerous plant-floor successes among the Detroit Three in 2007, paced by Chrysler. Chrysler's 7.7% reduction in labor hours per vehicle to 30.37 brought the automaker to dead even with Toyota, making Chrysler and Toyota the leaders in productivity that year. Chrysler's Toledo South assembly facility, which makes the Jeep Wrangler, led all assembly plants in productivity, averaging 13.57 hours per vehicle.
General Motors had much to crow about as well. According to the 2008 report, GM's slight reduction in total labor hours per vehicle to 32.29 marked its 15th straight year of productivity improvement. GM had the most productive transmission plant in North America -- its Toledo, Ohio, facility, which averaged 2.37 labor hours per transmission -- and boasted three of the top 10 assembly plants. Meanwhile, Ford cut its labor hours per vehicle by 3.7%, despite producing 6% fewer vehicles than it did the year before.
Ron Harbour, partner in Oliver Wyman's North American automotive practice, noted in the 2008 report that "Toyota remains the industry benchmark through its renewed commitment to lean production." But he called the Detroit Three's productivity gains "a huge accomplishment."
"Chrysler made substantial progress with the support of suppliers," Harbour said. "GM deserves credit for the growing maturity of its Global Manufacturing System [GM's version of lean] and Ford is demonstrating that focusing on quality will lead to better productivity."