In Sync With The Customer Dana plant built for TPS rewarded with more and more business for Toyota's growing truck line.
Tonya Vinas Dana Corp, Owensboro, Ky.
At a Glance
- Plant: 129,080 square feet
- Start-up: 1998
- Received the Toyota Delivery Award in 2000, 2001, 2002;
- frames per hour have increased 96% from 1999 to 2002 while total inventory has been cut in half.
If Dana Corp.'s Owensboro, Ky.-plant had a nickname, it would be "the factory that Toyota built." Not because the 5-year-old plant actually was built by the Japanese automaker. Indeed, it was a group of Americans relying on that most American of values -- gumption -- who planned, built and still run the light-truck frame assembly operation in an industrial park in Northern Kentucky. But the site's current mission is to garner as much business as possible from Toyota North America, and to do so, the plant's team bases the site's culture and operations on techniques and philosophies derived mainly from the Toyota Production System (TPS).
Kaizen. Gemba. Kanban. Jidoka.
A visitor can't walk far in the 129,080-square-foot plant without hearing or seeing a TPS-derived word or practice. "We're lean everywhere," says Marty Welch, lean systems manager for Dana's structural solutions division. Indeed, the managers' business cards have their names in English and Japanese, and a sign-up sheet for a voluntary trip to Japan has more than 70 signatures. Welch was at the dedication ceremony in Japan when Toyota officials gave their blessing to the plant's machinery before shipping it to Owensboro, and he and Jeremy Smith, quality manager, recently compared notes on the seaweed wraps they eat for breakfast on visits to Toyota headquarters. Back in the U.S.A., 69 miles from Owensboro, Toyota employs 5,000 at a truck plant in Princeton, Ind., the ultimate destination for the average 800 frames Dana Owensboro produces each day. The relationship with Toyota has been a blessing for the plant, providing an increasing amount of work as Toyota's truck business grows in the United States even as domestic automakers continue to lay off workers and reduce production. The plant's 222 production workers build frames for Toyota's Tundra and Sequoia trucks. Toyota has awarded the plant an increasing amount of business, including some production that previously was done in Japan. In all, the plant produces 14 models for two unique platforms on one assembly line. This makes the plant flexible and productive, yet extremely lean. Despite the fact that the plant has always run on lean principles and has always been profitable, it still reduced costs by $1.8 million in 2002 and has reduced its in-plant defect rate by 29% during the past three years. Finished-goods inventory dropped 29.6% during the same period, and raw materials inventory fell 65%. "It all leads up to the highest quality and lowest costs for our customer," Smith says. And meeting those requirements is an ongoing requirement to keep and grow the Toyota business. This feat is accomplished with a sequencing system based on Internet FTP communication with Toyota. Orders are received hourly from Princeton and then uploaded into a "production instruction system" at the start of the assembly line. All component cells electronically receive the information, which allows them to produce the proper parts to match the correct model as a frame moves through the production line. The information appears on an electronic board at each cell, listing specifications such as 4-x-4 or 4-x-2, V-6 engine or V-8 engine, automatic or manual, etc. Information on the just-finished frame, the one currently on the line, and the next two coming is displayed. Building exactly to Toyota's orders means the plant runs lot sizes as small as one or as large as five. All of the hardware and software for the system was built in-house, and the information that flows through it is the gasoline that keeps the plant humming. On the very rare occasion that the plant completely loses that connection to Toyota, as it did during a severe electrical storm this summer, the operation stops. As a consequence, much attention is paid to keeping that information flowing. "We're on our third system now," Welch says. "The first two systems weren't robust enough to meet our production needs. And we've got a cluster system, so that if one [server] shuts down, we can switch over to the other system. We also put another server on top of it that just pulls data from those two machines. And then we have a manual system as well. If everything shuts down, we print sheets and go. It's all through Web-based information that different people have access to." Error-proofing occurs throughout the line with a final check using a custom-made machine that scans key parts of the frame in a couple of seconds to check that the exact type of frame has been assembled to match the sequence. If a specification is off, the machine will not apply a model number and serial number, and a supervisor must restart the machine. The plant's start-up team modified the fixture, which originally was to solely apply the numbers, after visiting Dana's Stockton, Calif., plant, which also builds frames for Toyota, and learning that this was an area in need of improvement. Stockton has since copied Owensboro's fixture. Additionally, 250 dimensions of four randomly selected frames are checked per shift, and each cell's processes include checking the work of prior stations. "What you want to do is pull the defect out upstream instead of waiting until it gets here [down the line], and we've added all that non-value to it and can't sell the part," Welch says. When asked how important quality is to a customer like Toyota, Smith said, "It's Job No. 1," while Welch said, "It goes straight to the top." In addition to quality improvements, the plant has reduced total inventory by 56.5% during the past three years and carries an average of one shift of raw materials and one day's worth of finished goods. All of the plant's suppliers deliver just-in-time, and a system of kanban cards and scheduled "bus routes" (cart deliveries every 15 minutes) keep supplies flowing to the floor. While on a route, a driver both drops off supplies and gathers information from the kanban cards for the next go-round. Additionally, each of the 15 suppliers has been assigned a color, which helps in material handling. The plant floor's reliance on visual information continues on the shipping dock, where an average of 32 shipments of 25 frames each leave every day. Each time a frame rolls off the assembly line in Princeton, a light ignites on a trigger board of 25 lights on Owensboro's dock. A driver knows as soon as the 25 lights are on, it's time to reset it and leave with his loaded truck. This system keeps a minimal amount of finished goods at Owensboro and a minimal amount of frames at Princeton. Meanwhile, as another truck starts on Princeton's line, another frame begins its journey on Owensboro's line."As they build one, we build one," Welch says.
Web-Exclusive Best Practices
Benchmarking contact: Kevin Ohneck, plant manager,
Flexible Labor At Their Fingertips
A pool of potential employees who has already gone through three weeks of training (safety, welding, team building, TPS) always exists. If workers are out due to illness or military duty or are on a kaizen event, the plant can easily pull in new employees to start on a second round of training and then join the floor. After fill-in duty, those employees are then assigned other duties in the plant. This works out because the plant is always in need of workers, according to managers. Ironically, Dana Owensboro recently lost a number of employers to the Princeton, Ind., Toyota Motor Corp. plant when it expanded. Toyota is the plant's single customer.
Adding Smart Automation
The plant continues to squeeze out time and improve safety by adding automation when it makes sense. Often, these changes result from a kaizen event. In one area, manual hoists had been used to transfer frames from one fixture to another. The hoists presented a safety problem and sometimes caused a bottleneck. During the plant's two-week July shut-down this summer, equipment to automate the transfer of the frames was installed. This improved safety and made for a smoother, more predictable movement of the frames. In another area, robotic welding replaced manual welding and reduced time and space constraints, consolidating a two-station, two-person operation into a one-station, one-person cell.
There are two areas of the plant where employees can post tips on blue sheets of paper. Managers also carry the blank blue sheets, which also show up in conference rooms should anyone have a good idea during a meeting. The tips are collected each day and assigned to a person to manage. The assigned manager and status of the tips are posted. Monthly rewards are given out for the best tips. Additionally, employees are surveyed in a company-wide formal program and participate in two informal feedback sessions a year at the plant. The company-wide survey measures the plant culture, and how team members feel about the plant environment and its leadership. The results are shared with the entire plant, and any items that score below plant average or industry averages are addressed and then specifically reviewed during the next survey to ensure improvement.