Continuous improvement, quality efforts make Aeroquip-Inoac a market leader. By Glenn Hasek Aeroquip-Inoac Co., Automotive/Exterior Trim, Livingston, Tenn. At a glance
- No lost-time accidents in last four years.
- Warranty costs as percentage of sales: 0.2%.
- Plant-level profitability increased 234% in last five years.
- Won Aeroquip Quality Plus Award in 1995, 1997, 1999.
Walking along the interior perimeter of the Aeroquip-Inoac Co. (AIC) plant in Livingston, Tenn., one cannot help but notice the many posters lining the walls. Animated characters, photos of plant managers -- sometimes doctored for comic relief -- complement detailed accounts of employee accomplishments. Just as humorous as the artwork are two of the team names: the Grime Grabbers and the Jig and Little Nutty team. While the posters may prompt a smile from a visitor, what they demonstrate are the achievements of a closely knit group of employees dedicated to continuous improvement. Using employee suggestions, kaizen events, benchmarking visits, and numerous quality initiatives, Aeroquip-Inoac's Livingston facility has built a reputation for delivering high-quality products using just-in-time methods. A joint-venture owned by Cleveland-based Eaton Corp. (51%) and Nagoya, Japan-based Inoac Corp. (49%), AIC also has exterior-trim facilities in Atlanta and Fremont, Ohio. The Livingston plant manufactures rear-deck spoilers and body side moldings for automobiles made by companies such as General Motors Corp., Ford Motor Co., Toyota Motor Corp., and Honda Motor Co. Ltd. Built in 1987, the plant more than doubled in size in 1997 to 108,000 sq ft. Since the expansion the workforce has grown from 70 employees to 187. With an empowered workforce trained in kaizen techniques and backed by a management team that encourages and rewards innovation, the plant has made significant gains in process and quality improvements. "More than 90% of our people are involved in two or more improvement activities," says Gary Tapocsi, plant manager. In 1999 employees generated an average of 8.5 suggestions each. Lonna Strong, quality manager, says a management team reviews each suggestion that is submitted. Employees earn points for their suggestions and top point leaders can earn gift certificates, a day off with pay, or even a weekend in Gatlinburg, Tenn. The employee suggestion program and continuous-improvement work teams generated $741,761 in cost savings last year. Two areas in the plant that have benefited from team suggestions include the spoiler sanding and painting cells. The spoilers are sanded both manually and by robots. By rearranging the cell and using a new type of sander and grade of sandpaper, the team reduced walking distance by 46%, manual sanding steps per part from 10 to four, and increased the number of pieces sanded by robots per hour from eight to 12.5. Projected dollar savings include a decrease in projected labor costs of $408,000 per year. The Jig and Little Nutty team increased productivity significantly by making numerous changes in the spoiler painting process. "We went from two to three spoilers on a jig," says Tapocsi. That team will represent the Livingston plant in Eaton Aeroquip's Award for Team Excellence program. An average of three kaizen events are held each month. "Ninety-eight percent of the employees like to participate in kaizen events," says Tapocsi. "They appreciate having people act on their ideas." Kaizen activities have generated significant improvements, especially in work cells. In some cases, floor space was reduced by 50%, scrap by 76%, walking distance by 80%, and throughput increased by 185%. "We're lean manufacturing here," says Sue Eldridge, a fabricator on the plant floor. "We want to work smarter and harder." To get feedback from customers, Aeroquip teams schedule visits as often as once a month. Customers also participate in kaizen events. Helping to ensure customer satisfaction are the Customer Focus Team and the Customer Awards & Recognition Team. Both drive programs such as customer surveys, customer visits, reviews of customer ratings, the pursuit of customer awards, and certifications such as QS 9000. Because of these practices, AIC's share of the rear-deck-spoiler market is now 60%. Inventory control is tight at the plant. "We build what each customer needs for the next day," says Gary Laycock, focused business manager. Just-in-time/continuous-flow methods have helped AIC not only reduce inventory but also quickly identify and remove defects from the system and reduce wasted movement and transportation of parts. This has allowed the plant to grow with a minimal amount of capital investment. AIC's inventory strategy is in line with the Eaton production system that encourages inventory reduction, says Tapocsi. One byproduct of the Livingston plant's efforts in inventory control is an almost perfect on-time delivery rate of 99.997%. AIC has not always been so efficient. Prior to 1992 the plant operated in a quality-control environment in which quality technicians inspected product manufactured by production personnel. Most of the responsibility for quality remained within the quality department. A transition to a quality assurance (QA) operation resulted in a major change in how the plant viewed quality. In the QA environment -- one that supports defect prevention rather than defect detection -- quality became the responsibility of all employees. Laycock says the change occurred when Ray Barnhart, now focused business manager, was hired. "He wanted to see ownership turned over to the people on the floor," says Laycock. "There was some resistance. It probably was nine to 12 months before the approach was accepted." That first step toward creating a culture of ownership paid dividends a few years later when formal team-based activities were introduced. While other plants in the Livingston area have closed and moved production to Mexico, AIC has not had a layoff since 1994. The plant's current annual labor turnover rate is only 1.6%. "We've been noted in the community as a good place to work," says Tapocsi. "A good percentage of employees leave other companies to work here." New employees are told that overtime will be required as part of their normal work schedule. That way, if productivity improves, overtime is reduced or employees are moved into other work cells where additional help is needed. Management at AIC emphasizes that it is employee empowerment and commitment to continuous improvement that is the primary driver of the company's success. AIC's Quality Philosophy and Values, established in 1994, encourages that behavior daily. Today, working together to solve problems has become an integral part of the plant's culture. Web Exclusive Best Practices Aeroquip Co., maker of automotive spoilers and body side moldings. By Glenn Hasek
Benchmarking contact: Lonna Strong, AIC--Quality Manager, firstname.lastname@example.org
, 931/823-7381. Environment
Eaton Corp., the majority owner of AIC's Livingston plant, has mandated that all of its facilities be certified to the ISO 14001 standard. Gary Tapocsi, plant manager, says the automotive/exterior trim division had its preliminary assessment conducted in March. The registration audit is scheduled for this month. AIC has made significant progress in reducing waste. All waste PVC from extrusion processes is sent out for recycling. The molding compound used in the blow-mold process for the spoilers is reground and metered back into the product. Cardboard and wooden pallets also are recycled. Community
Located in the small community of Livingston since 1987, AIC gives back to its community in a big way. While the plant has been offering an increasing number of employment opportunities, it also offers plant tours to students and an adopt-a-school program. "We support local sports teams, Special Olympics, United Way, and a Christmas toy drive," says Tapocsi. As part of Family First, a welfare-to-work program, the plant has hired four people. AIC's commitment to the community is highlighted in its values statement. "We as people make up the community in which we live," it states. "As a plant, we are committed to being involved in making our community the best." Safety
AIC's stellar safety record is no accident. Safety is an issue discussed in orientation and employees are continually reminded of it. "The safety story starts from the top," says Gary Laycock, focused business manager. "We also have a safety team. What they do is review the plant floor. Every shift has a member on that team that does audits. It's a consciousness on the floor. We look at it daily." Employees are rewarded quarterly with such items as T-shirts and mugs. The plant also is pursuing Tennessee's Volunteer Star status, a program that requires a state-level OSHA inspection. Training
Opportunities for training, advancement, and profit sharing are just a few of the reasons employees stay at AIC. Offering employees the chance to suggest improvements and participate in kaizen events also is a draw. During the plant's December 1997 expansion the workforce more than doubled in size from 70 to 185 employees. Plant manager Tapocsi spent 1.5 hr in one-to-one orientation with each of those new employees. The company's Level Up program offers employees the opportunity to obtain wage increases and promotions after reaching goals such as participating in customer and supplier visits, or demonstrating leadership ability. Recognition
Striving to be the best is not unusual at AIC In 1997, before it was acquired by Eaton Corp., the company's Americas Industrial Div. facility in New Haven, Ind., also was selected as one of America's Best Plants. In 1999 the Eaton Corp. Aeroquip Global Hose Div. in Mountain Home, Ark., was named a Best Plant. The Livingston plant's honors include: the Aeroquip Quality Plus award in 1995, 1997, and 1999; the Tennessee Quality Commitment Award in 1996; the Tennessee Quality Achievement Award in 1998; and Tennessee's Small Employer of the Year Award in 1998. In August Eaton was selected as one of IndustryWeek
's 100 Best-Managed Companies for the first time. Certified Quality
AIC has implemented myriad quality programs to guarantee satisfied customers. In addition to its pending ISO 14001 certification, the Livingston plant has achieved ISO 9000 and QS 9000 certification. Additional efforts to ensure quality include benchmarking visits, an employee suggestion system, and implementation of lean-manufacturing fundamentals. To prepare for application to Tennessee's Voluntary Protection Program, Tapocsi says his staff visited a plant in Oak Ridge, Tenn., that already had earned the OSHA program's Star designation. Plant managers and employees also visit with customers on a quarterly or monthly basis to handle any quality concerns, says Tapocsi.