IW Best Plants Profile - 2003

Practices Make Perfect An infusion of new manufacturing techniques, plus a new product and new management bring new life -- and profit -- to a once-struggling plant. By William H. Miller Kautex -- A Textron Co., Lavonia, Ga. At a Glance

  • Plant: 163,400 square feet
  • Start-up: 1994
  • Achievements:
    • TS 16949 automotive industry quality certification;
    • Textron Inc. Continuous Improvement Award for Health and Safety Performance, 2002;
    • DaimlerChrysler Gold Award for 2002;
    • cut customer rejects 99% over three years;
    • reduced scrap and rework costs 47% over three years;
    • slashed raw material inventory 86% over three years.
Had you visited Textron Inc.'s Kautex Textron Lavonia Operations plant in Lavonia, Ga., three years ago, and then returned today, you might not recognize the place. First, you'd notice the building has a spiffy new front and entrance, part of a just-completed expansion that created more office space and a spacious employee break room. But that's nothing compared with what you'd see at the back of the site. There, abutting the plant's original manufacturing floor -- where lean production cells crank out windshield-washer systems for DaimlerChrysler, General Motors Corp., Mercedes Benz and Mitsubishi -- is another new addition. At 82,000 square feet, it's twice the size of the old manufacturing area. Next, you'd be startled by what you don't see: the immense, separate warehouse that once housed the plant's inventory. The building has been razed, a victim of supplier JIT and a host of other efficiencies that have slashed the plant's average days of raw-material inventory by an eye-popping 86%. As for that manufac-turing-floor expansion, you'd be struck by the fact that it's largely empty! Tucked away in one corner, occupying only a portion of the gleaming vastness, is a single production line that has begun supplying plastic fuel tanks -- the plant's newest product -- to Mercedes. A second fuel-tank line for Mercedes, due to start up in December, will fill more of the big room; a third line, for Honda, is slated to launch next April. The rest of the space? It's for further business plant managers are cocksure will come. But all these physical changes -- and the openly expressed confidence of more growth -- are just outward manifestations of less visible, dramatic changes that have taken place inside the facility. The plant's management refers to the three-year overhaul as "a transformation." But "that's an understatement," protests Dave Cataldi, executive vice president of operations for Kautex North America, Troy, Mich., a unit of German-based Kautex -- a Textron Co. "Three years ago the plant had terribly high inventory; it was dark and dreary; and its people weren't motivated." Things were so bad, he says, that DaimlerChrysler, then the plant's lone major customer, was threatening to seek another supplier for windshield-washer systems, the facility's only product. The plant was falling short of sales goals. Profit was skimpy. Now, says Cataldi, "every single facet of the plant has turned around." Employees sensed the trouble three years ago, which is one reason the plant struggled with embarrassingly high turnover and absenteeism. "I was worried we wouldn't be here long," admits Ron Chapman, an hourly production associate. "I thought about looking for another job. But now it's 100% better here. Things have flip-flopped." Customers also attest to the flip-flop. Don Michie, supplier quality specialist at DaimlerChrysler's Auburn Hills, Mich., headquarters, points out that over the last three years, the defect rate on products shipped to his company from Lavonia has plunged from 400 ppm to a mere 16 ppm. Moreover, he says, "the plant now has two very capable black belts. Few of my suppliers can match that. It is heavily into kaizen workshops, and many other things. It's made marked improvement." Proof of the improvement lies in three quality measures: Since 2000 the plant's overall defect rate has plunged 63%, its customer reject rate 99% and its scrap and rework costs 47%. Although the transformation largely dates from 2000, its roots can be traced to summer 1999, when the plant's surprisingly small engineering staff developed a patented process, called RItec (short for reservoir integration technology), that combines the washer reservoir, overflow container, fan shroud and other fluid-management components into a single, blow-molded part. Textron's McCord Winn subsidiary, to which the plant then reported, saw a golden opportunity: extend the technology to fuel tanks, and thus give the struggling Lavonia operation a new product and a chance to reverse its fortunes. To make it happen, in April 2000 the plant was assigned a new boss, vice president of operations John Buckley. He quickly brought in a new management team, and the transformation was underway. Helping it along was Textron's decision a few months later to integrate the plant into Kautex, a subsidiary that already was producing fuel tanks and was noted for its blow-molding expertise. The new management "is what made the difference here," says Tonya Morrison, a production associate. "It is responsible for a whole new attitude. Everybody is involved now." Such involvement is exactly what Buckley, who in April was promoted to the senior vice president of operational excellence job at Kautex North America, set out to create when he came to Lavonia. "My first step was to get people on board," he reflects. One of his immediate morale-building moves was to switch the 24-hour, seven-day weekly production schedule to 24 hours and five days, eliminating the fourth shift. "The No. 1 complaint we heard from employees was having to rotate shifts," says Brad Overstreet, the plant's operations manager. "We corrected that." In other motivational steps, Buckley and his management team created: employee committees that help shape safety and other plant policies; an employee recognition program governed by the activities panel; and plant-wide "town meetings" with Brian Hatter, who replaced Buckley as operations vice president. Most importantly, the plant beefed up pay; employees get financial rewards for each hour they hit production targets. After greater people involvement, Buckley says the "second piece" of his transformation strategy was "to clean the plant up. It was a mess. Our warehouse, for example, was as big as the plant." A whirlwind of initiatives followed. Many of them are built around Textron's Six Sigma program, which incorporates visual-factory management, value-stream mapping, total productive maintenance, and kanban material pull systems. A 30% increase in the number of blow-mold workcells using robotics or automation has enabled the plant to cope with pricing pressure and reduce direct labor. The facility is a star within Kautex North America. One of the firm's most profitable performers, the plant "is a growth engine -- a key to our future," says Cataldi. For his part, Buckley estimates that within 18 months, the plant will need to hire between 50 and 75 employees. All this is music to the ears of Gary Fesperman, city manager of Lavonia, a leafy town of 1,900 near the South Carolina border. "I wish we had 20 more plants like it," he says of the facility. Three years ago, you wouldn't have heard comments like these. But at least, driving into the plant, you'd have recognized it. You might not now.
Web-Exclusive Best Practices
By William H. Miller Benchmarking contact: Brad Overstreet, operations manager, Brad.overstreet@kautex.textron.com, 706/356-3215 'STRIVE' Workshops Of all the initiatives Kautex -- A Textron Co., Lavonia Operations has taken to increase employee involvement, none is more important than its STRIVE (for Six Sigma Teams Realizing Improvements Virtually Everywhere) program launched last December. In its main feature, hourly and salaried employees alike annually spend at least 40 hours attending workshops to absorb the basic principles of lean manufacturing. Included is what the plant calls a "deep dive" into its "8 Wastes" (correction, overproduction, motion, material movement, waiting, inventory, processing and talent) and its pervasive visual-factory management system. Participants also, according to the plant, learn "how to best calculate takt time based on customer demand and, in turn, how to properly collect and interpret time-motion data, document standardized work and achieve labor balance within their own work cells." The intensive, multiday workshops are led twice monthly by operations vice president Brian Hatter and the plant's two black belts. STRIVE also is becoming an umbrella for all plant activities. Two cross-functional kaizen events for example, were conducted this year under the STRIVE banner to solve problems leading up to next April's startup of a new fuel-tank production line for Honda Motor Co. Moreover, signs and posters throughout the plant, as well as written communications, carry the STRIVE logo. 'Compass' Recognition Program The program is called "Compass," explains operations vice president Brian Hatter, because "it's aimed at pointing us in the right direction." Unveiled last year, it is Kautex--A Textron Co., Lavonia Operations' main tool for recognizing employees who have "achieved something out of the norm" in helping the plant exceed goals in production, safety and scrap. Employees themselves govern the program through the plant's activities committee, whose 14 volunteer members represent each shift and department. The panel sets the program's rules, under which employees receive rewards in the form of tokens that can be used to purchase gifts -- ranging from clothing, restaurant meals and prepaid gasoline cards to DVD players and television sets from local businesses. The more tokens an employee is awarded, the bigger the gift. (The most popular gift so far: gift certificates from the local Wal-Mart.) Employees can be nominated by peers for recognition, but also receive tokens for signing up for STRIVE workshops and other volunteer plant programs. The 'Swap-Shop' Program When the Kautex-A Textron Co., Lavonia Operations was floundering three years ago, one of its biggest morale problems, say veteran employees, was the perceived line separating management and production personnel. To help overcome that, the plant last year launched a "swap-shop" program. Under it, on a particular day each year every salaried worker spends an hour on the production line (with an hourly employee hovering close by to make sure quality doesn't suffer). In turn, hourly employees can volunteer to spend four hours shadowing an office worker. So far, more than 100 have participated. The exchange has given office personnel "a better understanding of the products and processes on the production line," reports operations manager Brad Overstreet. And hourly employees get a feel for the work of the paper pushers in the front of the building.
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