IW Best Plants Profile - 2000

Spotlight Shines on Maquiladora An award-winning border plant has been transformed into a lean role model. By Weld Royal Delphi Rimir, Matamoros, Tamaulipas, Mexico At a glance

  • 99.7% first-pass yield.
  • 100% on-time delivery rate.
  • Customer reject rate on shipped products: 10 ppm, down from 3,000 ppm five years ago.
  • 78.3% reduction in finished-goods inventory in the last five years.
  • 95% reduction in lot size in the last five years.
  • 80% decrease in OSHA-reportable lost workday rate in last five years.
Sitting in the driver's seat of a shiny black Chevy Suburban, Rosalinda Torres waits to cross the southernmost bridge linking Mexico to the U.S. She waves her Mexican travel documents at the border guard so she can leave the poor Matamoros neighborhood, near where she was raised, to have dinner in Brownsville, Tex., the middle-class border town she is adopting. "Sometimes these guards are surprised to learn that I am Mexican," says the daughter of school teachers. Torres manages a maquiladora assembly plant owned by $29 billion Delphi Automotive Systems Corp., Troy, Mich., which was spun off from General Motors Corp. in 1999. Torres' knack for mixing Mexican traditions and American manufacturing methods helped turn the Delphi Rimir maquiladora into a world-class plant. With her success come the trappings of middle-class America. Torres owns a ranch in Brownsville, and her son attends the University of Texas. Despite her Texas real estate holdings, Torres prefers to live in Matamoros, where her Suburban hogs the potholed, chaotic streets. It is outsized only by the old yellow school buses that haul workers to the city's 200-plus maquiladoras. Just seven miles from Brownsville, the Rimir plant makes air bags for sport utility vehicles as well as for luxury and economy cars made by Toyota Motor Corp. and Ford Motor Co. Some 1,314 hourly workers turn out 21,000 air bags daily. In an air-conditioned, well-lit, 350,000-sq-ft factory three shifts of workers operate sewing machines and supervise folding machines. They manage 18 complex devices that cut fabric with a laser beam, and also inspect each other's work. Hardly a gray hair in the bunch, the operadores, as the hourly workers are called, arrive so young that many are not yet married. Intraplant marriages are encouraged, and free family-planning products from the factory's clinic, which is staffed by two doctors providing complimentary health services, are popular. Delphi runs 53 plants in Mexico. They dot the Tex-Mex border. Four operate in Matamoros alone. Employing 75,000, Delphi is the largest private-sector employer in Mexico. The Rimir plant bears notice for several reasons. It serves as a spotlight factory within Delphi for lean manufacturing. Last year Rimir won the Shingo Prize and hosted 300 visitors, most from other Delphi plants, keen to learn Rimir's secrets. When Toyota Motor Manufacturing North America Inc.'s president Teruyuki Minoura toured the plant he was so impressed he praised managers for capturing the essence of the lean production techniques the Japanese automaker prizes. Such praise is note-worthy considering Rimir's past. In 1980 General Motors started the plant to produce bumpers. For more than a decade it churned them out for Cutlasses, Camaros, and other cars sold in the U.S. Too often Rimir's bumpers arrived late and with defects. In its paint shop workers collected parts that needed to be reworked in a place called "wonderland." Torres discovered wonderland when she was asked to manage the paint shop. "There were 15,000 pieces," she exclaims. Torres made a stand. "I started organizing it -- red pieces together, white pieces together. It took about a week to bring the pile down to 3,000 parts," recalls Torres of the task marking the first step in reorganizing the whole factory. In 1992 General Motors wanted to sell Rimir but failed to find a buyer. Managers knew changes were necessary. "We told the workers that we would need a new labor contract or the company would close the plant," explains Jos Alfredo Rangel, former director of human resources, who in September was promoted to run human resources at a larger Delphi plant in Matamoros. Rangel knows the way maquiladoras operate as well as anyone. The youngest of eight children, Rangel grew up listening to his sisters' tales of sexual harassment and other deplorable conditions in foreign-owned factories. Six of his sisters worked as operadores. They pooled their money to send Rangel to college at the Instituto Tecnolgico de Matamoros. He graduated with an engineering degree and took a salaried position at Rimir in 1982. By 1994 he was promoted to human resources director. That's when labor negotiations with the local union, which enjoyed a reputation for playing tough, began. Operadores at Rimir earned high wages for the region. Rangel demanded not only lower pay, but also a longer workweek. In return the factory would buy out employees' contracts in lump sum payments, and the factory would stay open. Most of the hourly workers took the lump sum and quit. Others were told to leave. In 1995 the plant hired 1,500 new operadores to build air bags. Few boasted a high school education. "At first we were looking for people with junior high school, but we lowered our qualifications because there weren't enough candidates," explains Torres. Almost everyone who was hired left in the first year. Turnover hit 140%. Local managers improved retention by creating a safe and supportive work environment. Rangel makes a point of listening to workers' gripes and addressing them promptly. Accidents were reduced by banning forklifts except at the loading dock and in the inventory room. Today, employees are organized in small natural work groups comprised of operadores, group leaders, which are senior operadores, and engineers. To learn the way the plant operates, new recruits sit through 40 hours of classroom training before joining a production line. Then they spend four to five weeks in a training cell. Still, the factory struggles with labor turnover. It's hard to retain hourly employees at Rimir and other maquiladoras because opportunities abound. Unemployment hovers around 2% in Matamoros. For Mexicans able to cross the border, construction jobs in Texas pay at least $8 an hour. Rangel refuses to let good people go without a fight. When a worker neglects to show, he travels to the small cinder block homes clustered in Matamoros where many operadores live. Mexican law requires a company to wait four days before firing someone who fails to report for duty. "Sometimes we find they missed days because they were caring for a sick relative and were scared to come back, so we ask them to return," he explains. Such approaches have helped lower the turnover among operadores to 29% in 1999. The company insists that at $1.47 an hour -- about double Mexico's minimum wage -- it fairly compensates low-skill employees. Managers point out that wages of operadores surpass those of local police officers or truck drivers. On top of salary employees earn bonuses and paid vacations. Rent in the area runs $30 to $40 a month, and for operadores with the most seniority the company offers a no-interest loan for a down payment on a house.
Web Exclusive Best Practices
Delphi Rimir, maker of automotive airbags. By
Weld Royal Benchmarking Contact: Rosalinda Torres, plant manager, [email protected], 956/548-2201. Lean Manufacturing Delphi Rimir has thoroughly embraced lean manufacturing. Some examples:
  • Reduction of cycle time through micro-movement analysis. Each floor worker's actions were reviewed, and every motion optimized. If a worker spent even an extra second looking for a tool, the tool was put in an obvious place so he could easily find it. A manufacturing sensei, or master, helped Rimir improve cycle time by collaborating with the operadores (as the local hourly workers are known), asking them to time their every move and encouraging them to come up with the most efficient motions to accomplish the task.
  • Managers and operadores carefully studied machine uptime and realized that because of large inventory between stations, and machine variability, plant machines weren't being run at optimal levels. Thanks to the studies, adjustments were made and uptime improved.
  • A heijunka box ensures level scheduling and production output.
  • Production is monitored every 15 minutes. When an operadore falls behind, managers become involved, helping to prevent overtime at the end of the day. The lean initiative has produced some impressive results. Chief among them, the facility has boasted a customer return rate of less than 10 ppm since 1997. Safety Rosalinda Torres, plant manager, insists on being "fanatical about safety." The black wristband she sports is not a fashion statement, but a safety statement. Exposed jewelry is prohibited from the plant floor and the band covers her bracelet. Other rules such as mandatory protective eyewear in work areas are strictly enforced. Once a month near misses and other safety issues are reviewed. The effort pays off. From 1996 to 1999 employees worked 9.5 million hours without a lost workday due to an accident. Community Involvement When human resources director Jose Alfredo Rangel saw the condition of one of the schools attended by the children of operadores, he quickly took action. "There were exposed electrical wires hanging from the ceiling; the walls were not finished," he recalls. Rangel organized the donation of used factory equipment including computers and electric lights, telephones, and furniture. Then he pulled together a group of employees from Rimir to repair the dangerous wires, to build classrooms, and upgrade bathrooms. When the volunteers were finished they moved to another school to offer similar donations and construction work. "If our employees are worried about their children's schools, they won't be doing a very good job for us," Rangel concludes. Work Teams Natural work groups form the core of Rimir's organization. Employees are organized by similar functions and by proximity. The goals of the work groups include increasing employee ownership over the work process, training workers to perform all tasks in their geographic area, and encouraging the elimination of waste. In this relatively low-skill environment, substantial training is what makes these natural work groups particularly effective. Since 1997 Rimir has averaged 80 hours of training per employee. Classes cover error proofing, lean manufacturing practices, and human relations. Improvement Suggestions At Rimir operadores are encouraged to offer suggestions, but the plant does not reward good ideas alone. Instead it prizes implemented ideas. Every Wednesday afternoon all managers go to the line to inspect improvements made thanks to employee suggestions. Individuals and natural work groups responsible for the changes are rewarded with shirts or food coupons. Environment When it became clear to managers at the Delphi Rimir plant that the local Matamoros government would not install an adequate wastewater treatment plant, Rimir built its own. This helped to limit the stench that accompanies poorly treated wastewater. The plant now recycles 70% of water it uses. It expects to receive the ISO 14000 certification later this year.
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