Change For The Better: IW Best Plants Profile - 2004

Feb. 14, 2005
Kentucky plant compiles incremental improvements into industry-leading performance.

Dana Corp., Perfect Circle Products, Franklin Steel Products Plant, Franklin, Ky.

At a Glance

  • Total square feet: 41,000
  • Start-up: 1987
  • Achievements: The Dana plant is ISO 14001 and ISO/TS 16949 registered, has run nearly 1 million man hours without a lost-time injury, and earned the 2001 Commonwealth of Kentucky Quality Award.
  • Benchmarking Contact: Wayne Powell, 270/598-4419, [email protected]

The Dana Corp., Perfect Circle Products, Franklin Steel Products plant seems rather ordinary. On the outside, a modest 41,000-square-foot facility sets beside a two-lane road. Inside, thousands of stainless-steel oil ring expanders -- a product that only an auto mechanic would recognize -- are manufactured by the hour. Some equipment in the plant is more than 50 years old, and one product line is based on designs from the 1950s. A small workforce of 44 production and management personnel simply go about their work, efficiently making unit by unit.

But with each unit, each day, each week, this plant just north of the Kentucky/Tennessee border gets a little bit better. And after 17 years, all those incremental improvements have led to some extraordinary performance in customer satisfaction, quality and safety.

"We're really trying to create a culture, an environment here in Franklin, that represents change," says Tim Parys, plant manager. Life may appear slow and easy in the Kentucky hamlet, but there is no complacency in the plant as it tackles improvement initiative after initiative. The plant has received both ISO 14001 (September 2002) and ISO/TS 16949 (December 2003) certifications, follows a corporate business philosophy based on the Malcolm Baldrige criteria, is staffed with Six Sigma green belts and black belts, and recently embarked on a lean-manufacturing journey.

The Dana Franklin plant manufactures as many as 3,500 different part numbers for three unique styles of automotive original equipment manufacturers (OEMs) as well as aftermarket products, with about 1,200 part numbers alone for its ES-80 line. And despite the high-volume, high-mix environment that churned out approximately 54 million oil ring expanders in 2003 (60 million projected for 2004), Dana has been able to maintain an average 99% on-time delivery rate to its customers since 2001 -- not an easy feat when the OEMs are automakers General Motors, Ford and DaimlerChrysler. And note, GM and Ford require product on the scheduled day -- not a day late or a day early. (The plant also leases floor space to Allied Ring Corp., a joint venture of Dana and Riken Corp. of Japan, which supplies Japanese transplant automakers in the U.S.)

The majority of production activities at Franklin take place at workstations, typically staffed by one production technician working one and sometimes two machines. About nine miles of stainless steel flat wire comes off a spool and is either rolled or stamped; formed into a circle; cut; dropped onto a sleeve, and either sent for special coatings (nitrating or electropolish) or packed and shipped. (The expander fits between two Dana "rails" (rings), and the three form a complete oil ring and work to control oil consumption in an engine.) The production machines, though ancient by model year, produce state-of-the-art product thanks to ongoing technology customizations.

"We've sort of adopted the Japanese philosophy in that the worst that the equipment ever runs is the day that you put it on the floor," says Parys. "We continue to improve the technology so much from year to year, and have a lot of new things planned to continue to upgrade the technology." He adds that Dana operators have been receptive to the regularly changing equipment and processes: "Every year our standards go up on those operations as we make these little nuances and improvements, and people accept that and keep on going."

This year, still more improvements started coming to the plant as it began adopting lean manufacturing. That began with application of basic lean tools, such as 5S principles and kaizen training, says Terry Zabel, lean manufacturing manager, and has been assisted by a corporate Dana program called "Educate the Educator."

Kaizens at Franklin are typically four-day events in which team members, selected from the entire workforce, focus on eliminating of wasteful materials, activity and processes. Kaizens to date have been focused on set-up reductions and customer-satisfaction criteria -- even though for the first six months of 2004 customer complaints were zero per million products and the customer reject rate similarly was zero parts per million). That's all the more extraordinary, given that "customers now consider a complaint not just a quality issue where a part is out of specification," says Geoff Oehmler, manufacturing engineer/quality manager. A wrong label is a complaint just like a bad product. "They all basically receive the same weight."

Given the thousands of part numbers that run through Franklin, Parys says, "Set-up is a big issue for us [particularly for aftermarket products]. We want to try to drive our average lot sizes down, and we need to get better at set-ups. We've made some nice improvements." One set-up kaizen for the SS-50 product line has already reduced set-up time by nearly half and involved moving all tooling to the shopfloor for easier access by operators, performing time studies, and videotaping changeover techniques of various operators.

During one routine set-up, production technician Ronnie Steenbergen carefully arranges the next work-order and the required materials and tools while one of his machines completes a run of product. He's convinced the kaizens work, talks about how more improvements can be squeezed from the "old machines," and clearly sums up any set-up process: "It's best to know what you're going to do before you get to it."

In addition to lean projects, there are usually two or three active Six Sigma initiatives underway in the plant, with programs planned out months in advance. One current program is to improve the tension of oil ring expanders. William Gross, manufacturing engineer, is spearheading another program to improve gear life through application of new gear coatings and base materials-improvements that should directly impact customer satisfaction. (While the plant's products are principally for U.S.-based automakers, it produces experimental models and samples for engines around the world, often providing technical assistance to other Dana locations that land the product launch.)

Gross started out in Franklin as a machine operator, and, like many employees, has benefited from training at Franklin as well as courses through Dana University. Each Franklin employee receives approximately 60 hours of education and training per year, which improves their capability to contribute improvements. Through the first six months of 2004, the all-salary workforce (which on average has been at Franklin for about 10 years, with annual labor turnover of less than 1%), suggested 2.2 improvement ideas per month. Eighty-five percent of the ideas were implemented.

"We encourage them to submit ideas on how to improve their operation and how to improve the plant," notes Parys. "They have pretty much free rein as to what they put on idea cards. They can choose to implement ideas themselves, through their supervisor or team, or if it's outside their control the ideas are assigned." Financial incentives encourage idea development (goals for two ideas per month and for self-implemented ideas). On the plant floor, employees can track their improvement ideas, see if an idea has been accepted and follow the progress of an initiative when it's in someone else's hands.

Using shop-floor computers, each employee also reports their production for the day, which is then calculated as efficiency (number of pieces produced per hour worked) as well as effectiveness (pieces per hour worked with downtime factored in). Doing so keeps them aware of their progress toward personal goals and their performance relative to other operators. The system is updated weekly, but Dana Franklin is moving to a software system that will accommodate real-time information. It also plans to incorporate an automated feedback system into the production flow that will capture much of the data live, enabling operators to focus on other issues and continue to improve and enhance product. Like improvements of the past 17 years, they won't come all at once, but it's certain they'll keep coming.

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