IW Best Plants Profile - 1998

TRW Canada LTD. Tillsonburg, Ont. By Tim Stevens "The business is yours if you have the space for it," said the vice president and general manager of TRWs Linkage & Suspension Div. That was in 1996, a time when TRW Tillsonburg was in the midst of a 15-week kaizen blitz sweeping over the plant, dedicated to reducing controllable costs by 40%. A key result of the effort was freeing up floor space, allowing the addition of two new manufacturing cells to accommodate that new business, which generated $35 million annual sales. Capitalizing on opportunities such as these is a trademark of the TRW plant that has a long history of taking what it has and continuously making it better, for instance doubling its workforce and tripling sales since 1991 without expansion of its facilities. Located two hours west of Toronto in Tillsonburg, Ont., TRW manufactures suspension components (upper/lower control arms, stabilizer links, and ball joints) for the Big Three automakers and Nissan Motor Co. Ltd., shipping products around the world. The operation consists of two facilities a drive and a wedge apart, running continuously on three shifts producing 43,000 parts per day in some 20 manufacturing cells operated by 100% self-directed work teams (SDWTs). Todays fortunes at TRW have their roots in a 1991 corporate challenge to become world-class, with SDWTs and lean manufacturing offered as the primary tools. Changes on the manufacturing floor itself were evolutionary. As product life cycles ended and new tooling was required for new products, operation shifted from dedicated, mass production, in-line transfer operations to CNC machining centers -- a process that continued until 1997. "With transfer lines you cannot add incremental volume," a necessity for a unit that has increased sales per employee by 179% during the last five years, says Lawrence (Laurie) Degiorgio, plant manager. As an example, production of an upper control arm was hiked, in 18 months, from 662,000 a year to 937,000 a year without changing floor space, by conversion to two horizontal machining centers. This success was the result of the cellular concept and flexibility of the programmable CNC machines, says Degiorgio. Now redesign of the process will allow TRW to meet current demand for 1.12 million a year, without any capital investment. Taking non-value-added steps out of the process resulted in reduced cycle time at each machine, dropping takt time from 11 to six seconds. Parts are never batched in this new single-part flow, automatic-unload process, reducing work-in-process inventory from 340 to zero, says John Wells, engineering manager. SDWTs also evolved under the lean-manufacturing initiatives, but their impact was realized much more quickly. Within one year TRW was meeting customer requirements in a five-day week compared with the six- to seven-day week previously required. Key to SDWT success was an initiative called total productive maintenance (TPM). Although it began with such simple steps as better attention to equipment cleanliness and lubrication, making equipment reliable freed up team members to attack process improvement. Now the program is a total partnership of manufacturing, engineering, and maintenance to predict failure, reduce downtime, and increase productivity. "Prior to 1992, 90% of all maintenance performed was the result of equipment breakdown; that is, emergency repair," says Degiorgio. "Today that is less than 15%. So we saw TPM as a cornerstone of what we were trying to achieve. Before, we were constantly battling the equipment and didnt have time to tackle issues of improvement." Teams are expected to operate as their own small businesses, responsible for production scheduling, skills certification, daily job assignments, team-member hiring, materials management, and training scheduling. "Theres a certain excitement -- we are much more involved in everyday decisions and feel much more part of a team," says Beth Penner, a member of the stabilizer link team. The heartbeat of the teams is the coordinator-role concept, where one team member has responsibility for one of six key activities that are spread across the team. Coordinators from the various teams meet regularly to spread best practices in their specific responsibilities among the other teams. The six roles: scheduling of people, materials, and shipments; CEP/ELITE, a cost-effectiveness program; quality, including making operations fail-safe; training, tracking individual training needs; TPM; and safety. For instance, the team training coordinator does an annual training-needs analysis for individuals and works with the human-resources department to enroll team members in appropriate learning opportunities. In the SWDT concept, supervisors became team advisers, operating as a link between team and management. Oddly, one of the biggest stumbling blocks to the adaptation of the SDWT concept was management. "One of the toughest things for some of them was to shift from being a boss to a coach," says Degiorgio, "moving from saying, I know whats good for you to How can I help you? Its a major cultural change that never goes away." Several years into the team concept, it stagnated and had to be jump-started with new initiatives. "In 1995 we lost some momentum," says Degiorgio. "Initially there had been lots of training and visibility. We had visitors coming to see how we operated. Then growth slowed a bit, intensity started to wane, and the fire died." To rekindle the flames, "A steering committee was formed to determine what worked and what didnt work in the old program," says Uve Hildebrandt, leader of the stabilizer-link team. "Redundant tasks were taken out and new parameters established for team activities. Then they tightened the criteria and put a carrot out there for us to improve." Results included a three-day team "refueling" program and an annual validation/incentive program to keep activities up to snuff. Validation is accomplished by a group that evaluates the team in coordinator-role categories. Each role is pictured as a light on a drag-racing start tree posted on a bulletin board at each cell. When a role is validated, the light is colored green, and when all are green, team members are rewarded with, for example, a gift certificate to a weekend at a resort hotel. In fact, rewards have been a key focus at TRW ever since the last employee opinion survey showed employees felt they were not adequately recognized for their achievements. An involvement team was formed to understand the root cause of the problem, which turned out to be lack of personal recognition from team advisers and management. The survey revealed an unusual quandary. "As teams become self-sufficient, the manager/adviser becomes more removed," says Degiorgio. "So the stronger the team, the less recognition they were getting." In addition to the team evaluation/certification rewards, several other programs were initiated, including Recognition Days, when management cooks an outdoor barbecue for employees and teams are formally recognized for their contributions. Another important reward adjustment was the use of commendation letters, presented personally to individual employees by management. "It used to be a personnel file had only warnings and negative comments in it," says Jim Whitehead, HR manager. "A good employees file was basically empty. Now a good file has lots of commendation letters." In addition, TRW has a bonus program potentially worth $1,200 to each employee. The makeup of the payoff is $300 each for meeting a plant return-on-sales goal and a profit-after-tax goal, plus $200 each for three other goals that are selected annually from a group of categories. In 1998 the goals relate to safety, customer satisfaction (ppm defects), and total productive maintenance. Continuous improvement, manufacturing efficiencies, and cost reductions at the plant are driven by the Cost Effectiveness Program, or CEP/ELITE. "Its a vehicle for employees to get involved in making progressive changes to their jobs and improvements for the business," says Whitehead. For instance, last year 2,561 ideas resulted in annual savings of $2.8 million, and the goal for 1998 is $4.1 million saved. "About 80% of ideas submitted are implemented, with some 20% resulting in cost savings, and 80% in intangible benefits." Suggestions that require significant attention and/or capital are addressed under a continuous-process-improvement (CPI) initiative. This structured cost-reduction approach includes problem isolation, baselining performance, identification of problem-solving opportunities, and resolution. To understand cell trends, a baseline tracking system regularly provides each team with all costing and performance data pertaining to its product, including cost per hundred for labor, tooling, maintenance, scrap, and supplies. Any trend deterioration is an alert that could trigger a CPI initiative. Each team is challenged to execute two major CPI projects annually. For instance, a drill-to-size initiative reduced the tooling cost of a boring operation in an upper control arm, resulting in improved cycle time and annual savings of $800,000. Supplier partnerships play a significant role in the statistic that plant manager Degiorgio is most proud of: a 3.21-ppm customer reject rate. "Until three to four years ago, we basically purchased our quality problems and acted as a filter to bring them down from 4,000 to 5,000 ppm . . . to our current rate," he says. To rectify this situation, TRW adopted a corporate uniform-supplier-development manual and formed a supplier-development team whose mission was to generate action plans to improve supplier quality across the board. TRW also gives each supplier a quarterly report card designed to alert the supplier to potential problems. The report card covers four important purchasing factors, weighted 30/30/30/10 for cost/quality/delivery/QF certification. This report card percentage is multiplied times price to give a total cost from the supplier. "It gives us a more objective measure when sourcing new business," says Bill Richardson, director of purchasing and materials management for the Linkage & Suspension Div. Regular supplier workshops help to force improvement activities, as TRW helps suppliers with cost reduction and quality-improvement techniques that have been successful within TRW itself, such as value analysis/value engineering (VAVE). For instance, a critical-component vendor was supplying a part with an unacceptable defect level of 7,500 ppm. Initiated by TRW, a task force of engineering, quality, and purchasing members from both companies met every month for six months to uncover root cause and implement corrective action. Year-to-date ppms are now running at 1,544 ppm, with a target of 1,000 ppm well within reach, says H.E. (Abe) Van Riesen, quality manager. In addition, the suppliers shipping performance has improved from 50% to 60% in 1996 when TRW initiated the activity to 95% today. Overall, supplier ppms have been driven down 80% in the last three years, and 99.7% of purchased materials no longer require inspection.


At A Glance
  • Customer reject rate 3.21 ppm.
  • Total cost of quality as a percent of sales of 0.9%.
  • Total sales per employee up 179% in the last five years.
  • Plant-level return on assets up 192% since 1993.
  • 2,561 ideas in 1997 generated $2.81 million in savings.
  • Supplier ppm rejects slashed 80% since 1995.
  • Scrap as a percent of sales reduced 46% since 1993.
  • 100% of workforce on self-directed work teams.
  • Equipment-breakdown maintenance cut from 90% to 15% of total.
  • 99.7% of purchased materials no longer need inspection.
  • Total inventory trimmed 50% in relation to sales since 1993.
  • Energy consumption slashed 35% per production unit since 1993.
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