Instability? Not A Problem: IW Best Plants Profile - 2004

Shrugging off successive ownership upheavals, a 10-year-old TRW Automotive plant stays the course to excellence.

TRW Automotive Fowlerville Plant, Fowlerville, Mich.

At a Glance

To become a world-class manufacturer, it surely helps to be a greenfield plant. Designed from scratch to build a specific product and accommodate leading-edge production processes and practices, such facilities have a built-in advantage over older competitors. The trick is not to blow that edge.

If any plant were to squander its greenfield birthright, it might have been TRW Automotive Holdings Corp.'s facility in Fowlerville, Mich., a producer of automotive slip-control units, versions of which incorporate anti-lock braking, traction and vehicle-stability systems. In its 10-year history, the plant has faced a potentially daunting disruption: It has had no fewer than six -- six! -- different reporting relationships.

Yet, despite its convoluted parentage, the plant not only has maintained its built-in excellence, it has boosted excellence to a higher level.

Outstanding metrics attest to the facility's continuous improvement. Take inventory. "When we opened," recalls Brian Weber, lean promotion manager, "we carried 15 days of inventory between our machining and assembly operations. Now it's only a half day." Equally impressive, the plant has pared its finished-goods inventory level to a mere 1 to 1.5 days, down from five days in 1994. Because it builds to customers' orders and has the flexibility to respond to order changes, it carries no "safety" stock.

Or take quality. Fowlerville -- as TRW simply calls the plant -- builds more than 10,000 units a day of complex, exacting products that are shipped to 13 General Motors truck-assembly plants. Yet the facility's customer-reject rate last year was a minute 3 ppm, down from 65 ppm in 2000.

Remarkably, despite producing more than 20 million slip-control units throughout its history and despite its lean inventory, Fowlerville has yet to miss an on-time delivery. It's not surprising that GM, which sometimes stations on-site auditors at key supplier facilities to ensure no interruption in the flow of product, doesn't do so at Fowlerville.

Of all its accomplishments, however, the plant is perhaps proudest of its error-free execution of countless launches of new products and mid-year upgrades. The new products just keep coming. This year the facility is introducing a new generation of anti-lock braking systems that are smaller, lighter and more technically advanced besides having enhanced capability and lower design and manufacturing costs.

The units usher in a new era at Fowlerville. Until now, GM has been the facility's lone customer. But next April the plant also will begin shipping to Ford (for its Econoline van) as well as to its first overseas customer, SAIC Chery Automobile Co., Ltd., in Wuhu, China. To accommodate the added business, the plant is installing $17.4 million in new equipment, including a more versatile U-shaped lean-manufacturing cell.

Obviously, Fowlerville is prospering despite its checkered corporate bloodline. At its birth, the facility was considered a part of Kelsey-Hayes Co. (The Kelsey-Hayes brand name still adorns the plant's products and the caps of some veteran employees.) But its official owner was Varity Corp., which had purchased Kelsey-Hayes. Other new parents followed: LucasVarity plc in 1996 (after Varity's merger with Lucas Industries, UK); TRW Inc. in 1999 (after it bought Lucas-Varity); Northrup-Grumman Corp. in 2002 (after its purchase of TRW); and now, after its 2003 spin-off from Northrup-Grumman, TRW Automotive.

How has Fowlerville coped with all this upheaval? Its greenfield heritage helps. The plant was laid out to enable a streamlined product flow, easing inventory control. Quality comes more smoothly, too, thanks to the 14-foot, walled hallway that separates machining and assembly operations to help prevent contamination of final products. Cleanliness is so sacred at the plant, in fact, that a visiting executive once joked that the shop-floor "looks like an intensive care unit."

Besides its greenfield assets, the plant has been fortunate that "ownership changes did not result in local management interruption," observes Ronald Muckley, vice-president of manufacturing at TRW Automotive's North American Braking Systems, Livonia, Mich. "The fundamental business operational objectives were not changed, and the focus remained on the same key performance measures. Management effectively kept ownership issues from being a distraction."

Adds Dawn McCarthy, the plant's operations manager, "There's been a culture of teamwork and employee involvement here since the very beginning." As examples, she cites the plant's rotating Policy & Procedure Panels, which give production-floor associates a voice in plant administration; the Job Enrichment program that helps associates rise to higher positions; and the "Braking Buck" program through which associates can nominate peers for recognition.

Still another reason for Fowlerville's cultural continuity is its cadre of long-term employees. Even though new business has triggered additional hiring in recent years at the 10-year-old facility, employee tenure averages more than seven years.

Not only is the workforce veteran, it's savvy. "This is probably the most multi-tasked plant floor you'll ever see," marvels Andrew Bogdan, a manufacturing associate. "Seventy percent of our people can do 90% of the jobs here,"

To Human Resources Manager Vincent Rugnetta, it isn't surprising that ownership instability hasn't fazed the plant. "Our workforce has matured," he explains. "And the various corporate entities have left people here to run the operation. The new people they've brought in have blended in."

One new person is Plant Manager Bob Holman, who came to Fowlerville in May from another TRW location. He says he immediately recognized that the plant was special. "People here know what to do without being told," he comments. "I didn't inherit a fixer-upper."

Far from needing fixing-up, the plant is a role model for other TRW Automotive facilities, says Muckley. Indeed, he adds, "TRW uses Fowlerville as a flagship operation to demonstrate to customers, investors and outside interested parties examples of TRW's best efforts."

To be sure, it hasn't all been smooth sailing. One manufacturing associate, Jeff Hunter, chuckles over an abortive attempt at the 1994 start-up to install a mechanized material-handling system that was soon overwhelmed by a surge of new business, and abandoned. And managers are quick to admit the difficulty they had in lowering the plant's customer-reject rate to its 3 ppm level. "It was a stubborn metric to achieve," admits McCarthy.

Challenges remain. Some are relatively small, like improving the plant's injury incident rate. And some are big -- notably satisfying its first two non-GM customers, and attracting others.

"There are new demands on us, but the future it will be exciting," reflects McCarthy. She and Holman will be happy, though, if the excitement doesn't include yet another new corporate reporting relationship.

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