IW Best Plants Profile - 1996

Both productivity and quality have improved dramatically to world-class standards since TRW-Chihuahua started manufacturing air bags little more than four years ago. By Tim Stevens At A Glance

  • 1995 return on assets of 58.6%.
  • Sales per employee up 214% in the last four years.
  • Received national "White Flag" award for environmental practices.
  • 60% yield improvement over last four years for driver-side airbags.
  • Cost reduction, excluding purchased materials, of 63% in last four years.
  • 1995 defects of 28 ppm.
  • 2 million driver-side air bags delivered without a defect in 1996.
  • 98% on-time delivery.
  • 1,300 operators trained in total preventive maintenance.
Standing in a protective cage with banners reading " dejando huella," Anai Rivera slowly rises some six feet into the air, elevated by a special forklift. At her side are trays of acrylic paint in blue, red, yellow, pink, and purple. Selecting yellow, she dips her right palm into the paint and then makes a hand print on a canvas hung on the wall dividing the plant floor. Under her print she signs her name with a marker. Lowered slowly to the ground, she is enveloped by cheers, clapping, and congratulations from her peers and supervisors. Her mark joins a collage of some 2,000 prints of employees who have pledged to leave a legacy ( dejando huella) at the TRW Occupant Restraints de Chihuahua SA de CV automotive air-bag plant. Although Rivera's hand print is symbolic, TRW-Chihuahua's commitment to its employees and community are very real. Combined with its engineering skill and unique approach to problem-solving, the plant has emerged as a world-class air-bag manufacturer, operating at 58.6% return on assets in 1995 and providing a $1 to $2 competitive cost advantage per bag. One of 65 maquiladora operations in Chihuahua, TRW opened its doors in May 1992 with an operation that includes fabric cutting and sewing as well as new-product design. And from the start the plant has done things with its own special twist. For instance, though sewing is a key skill required at the plant, TRW management considered experience in the automotive industry rather than textiles when building a workforce to run its configurable work cells. "We wanted people with experience in flexible operations as part of one-piece flow, not those from the textile industry with a built-in paradigm of doing just one thing, then passing it on to the next operation," says plant manager Roberto Gonzalez. In fact, no one in management has any textile background whatsoever. While other U.S. maquiladora operations have at least an American plant manager, TRW-Chihuahua had 100% Mexican management from day one. "We had to demonstrate that Mexican management could handle the rapid launch of many products here at a new plant," says Victor del Palacio, manager of human resources. "It was a matter of pride for us." The pride has paid off. In 1993, its first full year of operations, TRW-Chihuahua delivered 1.88 million bags to TRW air-bag-module assembly plants in Mesa, Ariz., and Cookeville, Tenn. It is on track for 7.5 million bags in 1996, as more than 40 new products have been launched. In 1993 TRW-Chihuahua embraced Stephen Covey's Seven Habits of Highly Effective People and spread the philosophy throughout the entire workforce, making it part and parcel of basic training. "The idea was to see if we could develop a culture that would identify us as TRW-Chihuahua per se," says Gonzalez. Dejando huella is the most visible manifestation of the Covey philosophy, representing the last pledge of his four-cornered oath to live, to learn, to love, to leave a legacy. "We immediately feel part of the company when we put our hand print on the wall," says launch manager Rafael Machuca. "It's your image. It's what people will see and what they are going to think about you. It's like carving your name in a tree." Dejando huella is the platform for launching all important programs where employees will leave a piece of themselves behind, such as quality and cost-reduction initiatives, the ISO 9002 certification received in May, and an ergonomics project starting soon. TRW-Chihuahua returns the employees' commitment with a host of training, benefit, and support programs resulting in one of the lowest turnover rates in the city at 2% per month. For instance, a pay-for-skills program allows workers to increase their wages by 75% in the first 18 months of employment as they train in quality, safety, and the operation and maintenance of up to 15 different workstations. Training occurs on paid overtime in seminars that workers schedule themselves into. "We are paying them for being flexible," says del Palacio. Two meals per day during all three shifts are provided at a cost of one peso (13 U.S. cents) each with both a regular and diet selection available. Those on the diet menu are seen regularly by two doctors (Mexican law requires one) and three nurses on staff. Family members can also avail themselves of TRW-Chihuahua health-care staff. Approximately 70% of the workforce rides to and from work at no cost on 22 bus routes paid for by the company. When a study showed one-third of those leaving the company did so because they could not find child care, TRW-Chihuahua asked for and received a government grant to build and operate its own child-care center. A seven-minute walk from the plant, the facility currently has 27 child-care workers taking care of 96 children, infants to preschoolers. Government grants have already been approved for a kindergarten, and the eventual plan is to have education available to TRW-Chihuahua employees at no charge right through high school. The company also offers aerobics, operates a weekend soccer school for employees' children, and currently supports 90 employees attending English classes. When carpacl tunnel syndrome (CTS) appeared in some workers, TRW-Chihuahua embarked upon perhaps its most unique program: a commercial laundry service on-site, provided free to employees. After a day's sewing and folding, the 80% female workforce would invariably return home to the day's laundry, done by hand. Thus, tendons and muscles in their hands and wrists were not afforded enough time to recover, setting up the repetitive- motion injuries. Now, on their designated day, workers drop off laundry as they enter the plant and pick it up at the end of their shift, washed, dried, and neatly folded. This service, combined with rotation of positions in the work cells, helped to cut the incidence of CTS 60%. Rather than a union, TRW-Chihuahua workers rely on six "communicators," who report to the human-resources manager and operate like ombudsmen, says del Palacio. "They are empowered to negotiate and solve problems right on the line. They also do personal counseling and suggest external contacts for people to help them solve their own problems, such as connecting them with legal help, loans, and other health providers. This gives the workers the idea that they do not need a third party to deal with their problems." At times when family pressures force a worker to resign from the company, it can be an emotional experience. "A lot of people leave crying," says del Palacio. Overall management of the production operation is facilitated by the TRW-Chihuahua Quality Operating System (QOS). Adopted from Ford Motor Co. and prevalent in TRW sister plants, the QOS tracks 24 key financial and manufacturing measurables, including profit, cash flow, scrap, inventory factors, and on-time delivery. Each QOS indicator has a champion whose responsibility is to "see that we meet the index objective for the year and coordinate any action items required if the indicator has an adverse trend," says plant manager Gonzalez. "QOS is also our method of reporting performance to corporate." Though the QOS is produced in English, key-indicator information is translated into Spanish, posted, and reviewed with individual cells at monthly meetings, which also include reports on major project status. Extending QOS onto the shop floor, each of the some 40 cells and several cutting stations has its own board, posting data on production, downtime, scrap, absenteeism, and housekeeping. Weekly production bonuses of up to 20% of normal pay are gained if a cell meets quality and productivity goals, with 80% of the workforce earning the awards in 1995. The best cell of the month flies a giant banner proclaiming " somos los mejores" (we are the best), and cell members are rewarded with a cookout or restaurant meal plus souvenir mugs or T-shirts. When the plant first opened in 1992, defects were running at 500,000 ppm (50 rejected out of 100 shipped), but dropped rapidly to 10,000 ppm in 1993 and 28 ppm in 1995. "A big part of that improvement is due to our mistake-proofing," says Gonzalez. Each workstation in a cell is evaluated via process-failure-mode-effect analysis to identify potential operator mistakes and material problems that lead to rejected parts. A team of engineers 100% dedicated to mistake-proofing works with operators to customize the machine, "to guarantee that the operator will never make the same mistake again," says Gonzalez. For instance, adding locating pins helps position fabric, and color sensors determine if the material is facing right-side up. Violate a safeguard and the machine will not operate. While some standard mistake-proofing can be built into sewing machines by the manufacturer, TRW-Chihuahua does its own customization, saving US$6,000 per machine and keeping its designs proprietary. "We don't want to share how we mistake-proof sewing machines with the machine builders, because we could lose our competitive advantage," says quality manager Ben Terrazas. In 1996 through August, that advantage was demonstrated by 2 million driver-side air bags delivered to TRW-Mesa with zero rejected! As defects have gone down, cost savings have gone up, thanks to value analysis/value engineering initiatives that showcase the engineering expertise at the facility. "Through workshops, we teach our people a method to identify potential projects that can be transferred into cost reductions for the plant," says Gonzalez. "Projects that are accepted come under the management of two engineers in charge of the value-analysis program, who review progress weekly." In 1995 TRW realized savings of US$5.7 million from value-analysis programs in areas of material utilization and design and process changes, with US$6.5 million savings targeted for 1996. One of the key value-analysis programs involves material optimization and has resulted in savings of at least US$53,000 per week, according to Terrazas. Before sewing the various bag configurations, individual panels are cut from large sheets of nylon fabric. For most bag designs this is accomplished by a laser cutting device that once cut patterns in only two stacked sheets of fabric at a time. Joint development with the laser-cutter manufacturer jacked the output up to 30 sheets per cut via a customized laser of increased strength. A computer-aided design (CAD) program written at TRW-Chihuahua also optimizes the cutout pattern to maximize the number of panels cut from any one sheet, thereby minimizing waste. A direct link between the CAD tool and the cutting machine allows the cutting operation to run without scheduling in just-in-time fashion. Color-coded carts from individual cells are parked directly across from the laser-cutting operator, identifying the bag components required. The CAD model for a bag is retrieved on the PC screen and input into the cutting machine, which first stacks the 30 sheets of fabric roughly 6 ft by 8 ft in size, depending on the bag, then directs the laser-cutting operation automatically. The result is not unlike a sheet of cookie dough cut in various shapes with the least possible waste. In fact, waste at the plant was cut from 2.92% in 1994 to 1.2% in 1995. In stacking the fabric prior to laser cutting, a sheet of paper is automatically inserted between each nylon fabric sheet to stop the laser from melting the nylon at the cutting edge and welding all the sheets together. In typical TRW-Chihuahua style, this waste paper is donated to a charitable organization that raises funds by recycling. Some of these revenues help support a TRW-Chihuahua program that provides jobs and inexpensive wheelchairs to the community. A charity for the disabled asked for donations to buy wheelchairs, costing 12,000 pesos each (US$1,600). Yet a team of TRW-Chihuahua engineers suggested the vehicle could be built for less than 2,000 pesos and created a design that included donated nylon fabric for the seats and chair backs. Soon the charity will have a two-shift operation of 50 people building wheelchairs at a cost of 1,200 pesos each. "We provided them with the design, equipment, and training, so they can build chairs and improve their way of life in the community," says project engineer Carlos Murillo. "We are not just donating wheelchairs, but a whole technology." In another recycling demonstration project, TRW-Chihuahua sponsored construction of an inexpensive one-bedroom house using pallets as part of the structure and recycled paper in the building mix. The dwelling was raffled off to a TRW-Chihuahua employee in August. In 1997 TRW-Chihuahua will have yet another opportunity to demonstrate its design-and-launch skills as the plant begins production of not only the bag, but also the total air-bag module, including igniter and inflater for side-impact bags. "More than inexpensive labor, TRW awarded us the business because we are good engineers and good manufacturers -- we are qualified people," says engineering manager Carlos Escobedo. "They have a lot of confidence in us because in these four years we have not failed any launch." Don't bet against them on this one either.
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