IW Best Plants Profile - 1995

By William H. Miller At A Glance

  • Produces 5,000-plus variations of plated stampings, machined parts, welded-brazed assemblies, and electrical components for other GE plants. Has more than 100 manufacturing processes.
  • Is a 100% "make to order" business, offering products -- with as little as one-day's notice -- in various lot sizes, materials, and even "one-shot" jobs.
  • All employees involved in self-directed work teams.
  • Productivity up 115% over five years.
  • Yields on stampings and machined parts are 99.99%.
  • Scrap/rework reduced 68%.
  • Customer rejects down 35%.
  • Cycle time cut 90%.
  • Water consumption down 30% and air emissions down 85% over three years.
  • Workers' compensation costs down from $1 million to $25,000 over five years. More than three years since last lost-time accident.
If you walk the factory floor at General Electric Co.'s Electrical Distribution & Control Div. (ED&C) plant in Auburn, Maine, looking for Mona Dunn, you might have trouble finding her. A cell operator, she normally works at the station that produces lug-kit assemblies (a component of circuit breakers), one of an astounding 5,000-plus variations of plated stampings, machined parts, welded/brazed assemblies, and electrical components the facility supplies to 50 sister plants in the division. But you could just as easily find Dunn, a 25- year veteran at the plant, at a different cell -- one that produces, say, circuit-breaker stab assemblies. Or maybe she'll be in the electroplating area, or, for that matter, anywhere else on the plant's 124,000-sq-ft floor, which features more than 100 separate manufacturing processes. "I move to a different job at least once a day, and sometimes three or more times," she says. "I'll go wherever I'm needed -- to any area of the plant that needs help." But she's no different from most of the plant's 283 employees. Cross-trained to perform any job in the facility, they use computer terminals located throughout the plant floor -- part of a home-grown computer system called ON-TRAC -- to learn the priority and status of each order in real time, as well as workload, material availability, and quality requirements. Armed with this information, employees make their own decisions about where to work at any given time. There are no supervisors on the floor. This boundaryless environment, employee versatility, and empowerment represent manufacturing flexibility at its maximum. "The main thing is to get the work out," says Dunn, reflecting an employee mindset that has enabled GE-Auburn to offer customers a remarkable degree of customized service. The facility, a 100% make-to-order business, is known as "the Burger King of ED&C." Its customers can "have it their way" -- in a dazzling variety of lot sizes, tolerances, or materials. Special "one-shot" orders aren't unusual. Neither is overnight delivery. GE-Auburn's extraordinary flexibility and customer responsiveness, however, aren't the only features that make it one of America's Best Plants. The plant can point to an array of enviable accomplishments. For example, it has achieved a sparkling 116% improvement in productivity over the last five years. (Shipments have grown from $36 million to $48 million, while the number of employees has dropped from 472.) Scrap and rework have been reduced 68% during the span; customer rejects, 35%; cycle time, 90%; order leadtimes, 40% to 50%; and cost per unit, 27.5%. Inventory turns have improved 182%, from 10.77 to 28.95. And despite the 5,000 variations of its customized stampings and machined parts, first-pass yield is a near-perfect 99.995%. Nothing gives GE-Auburn more pride, though, than its accomplishments in the area of environmental health and safety (EH&S). So sterling have its achievements been that it has won two prized awards: In June it collected one of the new Governor's Pollution Prevention Awards from the state of Maine, and last year it earned ED&C's Golden Chair Award honoring the division facility with the best EH&S record. The environmental record speaks for itself. During the last three years, the plant has cut its water consumption by 30% and its air emissions by 85%, as well as dramatically slashing or eliminating its use of chemicals. Its safety performance is equally glittering. Workers' compensation costs have plummeted from $1 million to $25,000 and its OSHA-recorded accident rate has dropped 50% over the last five years. By Sept. 1, the facility had logged 1,108 consecutive days without a lost-time accident. "You don't have a good health and safety record by accident," stresses Anne Paradis, environmental-health-and-safety engineer, who gives much of the credit to a hard-working safety team of five hourly and three management employees and a rotating team of 11 "safety observers." Moreover, she points out, the plant has invested heavily in safety training. It even provided ergonomics training in 1991 -- before it was fashionable. Twice a day, on signal from the plant's public-address system, all employees take time out for several minutes to perform stretching exercises. Although GE-Auburn opened in 1967, its success dates largely from a review of job classifications and qualifications undertaken in 1988. The effort led to a two-year consolidation and eventual reorganization into 61 self-directed work teams, both product and process-oriented, that now cover 100% of production employees. Several functions -- supervision, dispatching, inspection, and clerical staff -- were eliminated; their roles and accountability were taken over by the teams. The plant has only 10 salaried employees, compared with about 25 in 1988. A voluntary "peer review" panel of three hourly and two salaried employees, chosen randomly, resolves disputes and grievances at the nonunion facility. Not surprisingly, the transition to the plant's new way of operating wasn't easy. It took five years for employees -- who now are called "associates" -- to fully accept their new empowerment, asserts plant manager Keith Schafer. "At first they were reluctant to move around to different areas of the plant. They had a 'home' in the areas in which they'd been working. They felt comfortable there. But now they move to where the work is. It has become routine for them." Adds Tom Nezwek, sourcing/service manager who has been at the plant for 10 years: "We've had a tremendous culture change. Our associates used to perform an activity as instructed, and repetitively. There was little flexibility. That's all changed. Now they not only have much greater flexibility, but also enormous job growth." Schafer, in fact, rhapsodizes over the role employees have played in the plant's metamorphosis. "The key to our success is our people," he intones, repeating words that have become a managerial cliché. But in Schafer's case they're obviously heartfelt. So committed are GE-Auburn's employees to getting the work out, he says, that they often make sacrifices -- for example, canceling vacations or moving from the first shift to the third shift for a few days or weeks -- "if it means satisfying a customer." The dedication of the plant's employees, who average 15 years of service and are mostly of French-Canadian descent, isn't surprising. Many formerly worked in Maine textile mills or shoe factories that have gone out of business. "They understand that if we're not cost-effective and don't provide superior service, we're not going to stick around either," says Schafer. Although the plant is a "captive" GE facility, its customers are free to take their business elsewhere. Indeed, before 1988 some customers were going outside GE to buy lug connectors, one of the plant's main products. Overall, GE Auburn counts its number of competitors in the thousands. But empowered employees alone don't explain the plant's success. Another vital factor, indicates Schafer, is management's emphasis on team measurements. "Our measures help drive behavior," he says. "It's not enough simply to tell people they're 'empowered' and to go out and do what they think best. You have to have them grounded and focused. You have to provide them information so they can make effective business decisions." Just as GE Auburn's employee empowerment stems from the 1988 reorganization, so do other aspects of the plant's turnaround. Parallel decisions were made then, for example, to implement the ON-TRAC computer system, to adopt kanban systems (which now control 75% of the plant's output), and to use an "infinite load" scheduling approach that maximizes throughput of highest-priority needs. The latter replaced a "finite" approach that, as Nezwek explains, "presumed predictable performance levels, fixed process, available material, and adequate personnel." Now, he says, the plant "continuously reschedules itself" and has the ability "to pull out all the stops" to meet rush orders or changes in ship dates.
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