TRW OSS Mexican Operations: IW Best Plants Profile 2005

TRW OSS Mexican Operations, Reynosa, Tamaulipas, Mexico

Employees: 2,882 (two plants), union

Total square footage: Reynosa, 175,000; Del Norte, 147,000

Primary product: seatbelt retractors, buckles and height adjusters

Start-up: Reynosa, 1980; Del Norte, 1990

Achievements: First-pass yield is 99.5%, and on-time delivery rate to customers is 99.8% -- based on the date the customer requested.

Driving down the Libramiento freeway on the outskirts of Reynosa, Mexico, Mark Adams, TRW's Mexican Operations quality manager, points out a red pickup truck that is carrying several men in its bed. The men are standing up, while the driver cruises down the road at the posted speed limit: 60km/hour.

"This is why we started our Buckle Up campaign, to curb that kind of stupidity," the Detroit native states.

The Buckle Up community outreach program sends plant management and employees to local elementary schools to educate children on the importance of using seatbelts.

The effort has had positive results. In addition to parents writing in or calling TRW to say that their children insist that they wear their seatbelts, deaths due to motor vehicle accidents have decreased. According to the local police, the fatality rate related to car accidents in Reynosa between 2003 and 2004 fell 50%.

It is a triumph for the two plants that make up the Mexican Operations: Reynosa and Del Norte. The sister plants, which are about 12 miles apart, work in tandem to stress safety -- not only on the roads but also on the plant floor.

Indeed, the Reynosa plant, which according to TRW is the largest dedicated seatbelt factory in the world, boasts zero lost-time accidents over a 37-month period. That's more than 13,200,000 consecutive hours. The Del Norte plant has seen similar success with 24 months logged without a lost-time accident.

To achieve such a stellar safety record, the plants use a behavior-based program called JOP (Job Observation Process). Plant managers train associates -- they call them associates rather than employees to instill a sense of ownership in the plant -- to effectively observe their peers on the job. The trained observers then use a checklist to identify at-risk behaviors or conditions that violate the safety culture at the plants. The success of the program lies in the dialogue between observer and observed.

While the JOP program accounts for much of the success in safety, the plants' safety manager, Ronney Lovelace, a former U.S. Army captain affectionately known as the Safety Police at both plants, provides the discipline to keep the program at its best.

A slight man with an athletic build and an eye for violations, Lovelace lets nothing slide. He also is the first to tell you that the incredible safety records are not smoke and mirrors.

"There is no way you could turn a [blind] eye on safety issues," Lovelace says. "The JOP is an anonymous program -- there are no names and no punishment. So people view it as a positive [initiative]."

Both plants have been awarded the Mexico Social Security Safety Award in 2000, 2001, 2002 and 2004.

While safety is the No. 1 priority at TRW's Mexican Operations, the plants also enforce a culture of quality and change.

Much like JOP, the plants have implemented a QOP (Quality Observation Process), which sends trained observers to the assembly line to detect at-risk behaviors that could affect the quality of products. The plants also incorporate the Toyota Production System, 5S, total productive maintenance and Six Sigma to ensure quality and eliminate waste. The results: Internal scrap has been reduced to .14% (cost of percentage of sales) and equipment downtime is less than 1%. Additionally, in 2004 both plants independently recorded a customer reject rate on shipped parts of only 5 ppm. As of August, the customer reject rate for 2005 also was in the single-digit ppms. The numbers are doubly impressive when noting that TRW MexOps ship 1 million seatbelt components per week.

Much of the plants' workforce lives within the industrial parks that house TRW's Reynosa and Del Norte plants. Subdivisions, or colonias, are situated to make it easy for workers to get to their jobs. But in some instances, bussing is required. TRW subsidizes the transportation, allowing workers to ride the bus for a few pesos.

The plants also subsidize or pay for further education of their workforce. For example, while the plants are about 95% Spanish-speaking, Luis Aguilar and Claudia Barrome, both associates at the Reynosa plant, are learning English at the plant's expense.

The plants also are going to offer free childcare.

According to Peno, who is easily picked out of the crowd of Mexican workers due to his height and mop of white hair, offering daycare gives TRW an advantage.

"Many of these workers have seven or eight years of experience, but nobody to take care of their kids," Peno says. "We don't want to lose that kind of experience. Nobody does what we do [in terms of offering family incentives.]"

Both plants also feature an on-site doctor and nurse to address work-related issues as well as routine maladies. Additionally, TRW recently built medical centers within the colonias. Workers and their families can visit the medical centers for routine checkups, flu shots and eye exams, all at deeply discounted prices.

Adams adds that many of the surrounding manufacturers benchmark their efforts. Companies such as Black & Decker, Maytag and Delphi have all inquired about TRW's programs.

What is the payoff for addressing workers' personal needs? For starters, the plants' turnover rate is only 2.2%. Also, the attention breeds a truly engaged workforce that strives to continuously improve manufacturing processes.

"This gives us a competitive advantage against China," says Luis Aguilar, the Reynosa associate who is learning English. "We will be the first seatbelt supplier to do this."

"Our associates are very resourceful," says Adams. "They are very eager to please."

Indeed, Jonas Antonio Carrizales, who works in the web puller station -- which takes seatbelt straps and makes sure that they are the proper length and strength -- at the Reynosa plant, proudly illustrates his improvement idea-merging two operations into one -- which reduced WIP and increased production from 150 pieces to 180 pieces per hour, all while eliminating one person from the process, who was moved to another assembly line. For his idea, plant management awarded Carrizales a Premio de Excellencia Award, which includes a framed certificate, movie passes, an embroidered denim shirt, $500 pesos (US$50) and an awards ceremony with special a meal.

Similarly at the Del Norte plant, Daniel Olaya, a quality inspector, and Guadalupe Sanchez, an operator, excitedly speak of the improvements their plant has made. In fact, they have to be reminded by the interpreter to slow down so he can explain their accomplishments.

Indeed, una buena relacin de trabajo mejor la productividad y serguridad de las fbricas (a good working relationship improved the productivity and safety of the factories).