IndustryWeek is launching a new regular column that will look at the dramatic effects continuous improvement initiatives have had on a different IW Best Plant every month, written by key executives at the plants. Mark Newton gets us to a fine start with his insider's look at Autoliv ITO.
Two questions we hope to answer in this article are first, "Has the 2007 IW Best Plant Winner Autoliv ITO team been able to continue and maintain its improvement efforts and thus make a difference in their ability to compete?" Second, "How do automotive suppliers remain competitive in today's down-turned market, especially with another two to three weak years likely to follow?"
Our answer is to be the most cost-competitive supplier delivering the highest value products. It is increasingly clear that in today's global market, companies must foster a culture of continuous improvement if they hope to survive the current economic storms.
When you have a process that works to remove waste while generating continuous improvements, you keep doing it. ITO continues to apply its lean process methodology, APS (Autoliv Production System) principles, to get results. The key is to get everyone on the team involved in applying these lean principles.
As our teams seek to 1) grasp the current situation, 2) truly understand the problem, 3) set clear expectations and then 4) follow-up, they continue to reinforce this pattern which is at the heart of our improvement. Most important is the discipline needed to set high expectations and then implement consistent follow-up to ensure expectations are met. It is critical for companies to establish this type of management system if they hope to stay competitive.
Autoliv North America: IW Best Plants Profile 2007
Setting high expectations and then attaining them creates a culture that perpetuates success. Belief that you can do something opens doors to achieve it. A good example of this was a recent change in thinking at our plant. We needed more capacity due to expanded business. However, adding the necessary capital for six large work cells would require significant capital investment. This was unacceptable. So instead, the task was given to an ITO work team to find a way to increase the capacity on the existing lines by making key improvements to these cells.
For the first two hours, the cross-functional engineering team went in circles, basically saying it couldn't be done. The team leader reiterated, "There is a way, and we will not leave until we figure it out." The next hour was a fruitful one applying APS and other out-of-the-box thinking, resulting in 1.4 lines of increased capacity for less than half the cost of a new line. The hundreds of kaizens that were generated by this team and the involvement of our hourly operators have made this a home run gain.
In another excellent application of APS methods, one of our cross-functional teams found a way to automate a process that had previously not been considered for automation due to the precision and size of the product. The result was a 54% improvement in productivity with payback of less than a year.
Since winning the IW Best Plants award in 2007, our overall plant productivity has improved by 33%. Also, as we pursued the goal of providing the highest value products at a competitive price, we have seen an 11% increase in business. If we had not been improving at the rate we are, the impact of raw material price increases over the last several months would have been overwhelming. Continuous improvement has allowed us to weather the climate and stay competitive. VEVA (Value Engineering/Value Analysis) activities are critical to reduce cost, and our focus on flexibility allows us to adjust resources quickly to respond to changing market conditions. Having a repeatable method for involving our whole team in continuous improvement has allowed us to position ourselves well in our market. As we say at Autoliv ITO, "Today We Secure Our Future Together."
Mark Newton is plant manager of Autoliv North America -- Tremonton Initiator Facility (ITO) in Tremonton, Utah, a winner of the IW Best Plants award in 2007. Among other accomplishments, Autoliv ITO achieved a 75.2% improvement in productivity parts per person over a three-year period, while tripling inventory turns. You can also read Autoliv North America: IW Best Plants Profile 2007.