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Magee Rieter Automotive Systems: IW Best Plants Profile 2006

Magee Rieter Automotive Systems: IW Best Plants Profile 2006

Culture Of Cooperation: Management and unionized labor work together remarkably well to continuously improve performance and better serve customers.

Magee Rieter Automotive Systems, Bloomsburg, Pa.

Employees: 586 (460 union)

Total square footage: 1.3 million

Primary products: auto carpeting

Start-up: 1889

Achievements: IW 2005 Best Plants Finalist; General Motors Supplier of the Year for 14 consecutive years; 100% customer retention rate; 100% customer on-time delivery rate; ISO 14001 certified.

As torrents of rain pounded the east-central Pennsylvania town of Bloomsburg on June 27, Fishing Creek and the Susquehanna River became one and, eight hours earlier than expected, began to claim the production floors of Magee Rieter Automotive Systems, a car carpeting manufacturer that is the 12,375-person community's third-largest employer.

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However, as rare and severe as the flood was -- some production areas had 18 inches of muddy water on their floors -- shipments from the 1.3-million-square-foot facility, parts of which date back to 1889, were on time. Within 16 hours following the flood, carpet-shaping and fitting robots had been cleaned and reprogrammed, ready for production. That amazed a lot of people, including a disaster-recovery official from Ford Motor Co., one of Bloomsburg's four automotive OEM (original equipment manufacturer) customers. Other customers are General Motors Corp., DaimlerChrysler and Nissan.

Less amazed, but justifiably proud of their achievement, were Bloomsburg's 586 employees. Union and non-union, production and management, hourly and salaried, they routinely pull together to continuously improve performance and better serve customers, and the results are remarkable. In 2005, first-pass yield was 99.6%. The customer reject rate was a very low 2.25 parts per million. Customer on-time delivery was 100%.

The facility has retained all its customers during the past three years. It has increased sales by 10% during the past three years, and boosted profitability by 33% in a self-described "very demanding and price-sensitive industry."

The continuous improvement toolbox at Bloomsburg contains the stuff of modern manufacturing: a lean manufacturing philosophy, the focused-factory concept, cellular manufacturing, JIT, kanban signals, kaizen events, value-stream mapping, 5S and Six Sigma.

Thelma Morris inspects, sets the slitters and enters carpet roll identification data.
What sets the facility apart from other manufacturing plants is how the tools are used. At the facility, which includes a carpet-making plant and a carpet blank-conversion plant, empowered, cross-functional production teams really do work with management and engineering to establish and track metrics, identify opportunities, solve problems and implement improvements. During 2005, for example, documented cost savings stemming from specific improvement programs and projects totaled just over $8 million, with employee suggestions accounting for $4.1 million of annual cost savings.

Nevertheless, an impressive measure of the facility's culture of cooperation is what doesn't happen. Very few differences between management and labor reach the grievance stage. They're resolved amicably before then, agree management and the facility's union local president. "There's no sense, at the end of the day, of being PO'd with each other. You got to work things out, and we do," says David Schaffer, who's in his sixth year as president of UNITE- HERE Local 1700. The current union contract, which runs until April 2009, bars strikes and provides for (unused so far) binding arbitration.

The facility's annual labor turnover rate is a low 1.9%. Local 1700 president Schaffer, for example, has been at the facility 27 years.

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Suggestions That Work

During 2005, employee suggestions accounted for $4.1 million of annual cost savings at Magee Rieter Automotive Systems, a car carpeting producer in the east-central Pennsylvania town of Bloomsburg. Production employees -- and there are 586 of them at the Bloomsburg facility -- receive a $25 gift certificate when a suggestion they make is implemented. An employee also receives 10% of the first-year savings. And at the end of the year, five $250 awards are made to the top suggestions by category.

"To say that our suggestion system is one of the things that makes us different, makes us better, is true," acknowledges Timothy J. Mullen, manager of the Bloomsburg operations that convert carpet blanks into customer-ordered products. "But it's the integration with all of our other systems that really makes the difference."

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"At Magee Rieter, the emphasis on quality and continuous improvement is apparent at all levels," the company claims. "Our team members work together with management and engineering to establish roadmaps for quality improvement. Our culture encourages problem identification, root-cause analysis and irreversible corrective action," explains Bloomsburg's management. The tools of modern manufacturing -- from a lean manufacturing philosophy to 5S and Six Sigma -- are employed at Bloomsburg. And empowered, cross-functional teams set metrics, solve problems and implement improvements.

"When common shared values are in place, there is a clear vision, direction has been set, goals have been established, and people are accountable for what they do, even small, ordinary companies like ours can achieve extraordinary success," states Magee Rieter Automotive Systems.

Dedicated To Customers, Quality

Magee Rieter Automotive Systems, a self-described small company in an industry dominated by giants, says it has survived and thrived in a difficult marketplace for more than 100 years because of its "relentless dedication to the customer."

Quality engineers from the Bloomsburg, Pa., maker of car carpeting make monthly visits to the auto assembly plants of General Motors Corp., Ford Motor Co. the Chrysler division of Daimler-Chrysler, Nissan, Toyota and Cami, a joint venture of GM and Suzuki. Magee Rieter sales managers stay in contact with the people who purchase its products, usually on a daily basis. In addition, Magee Rieter receives monthly report cards from all its key customers, rating quality, delivery and customer service. This information is reviewed in monthly Quality Operating System meetings and is shared with Magee Rieter employees and key suppliers.

Production employees -- there are 460 at Bloomsburg -- sometimes join Magee Rieter quality engineers in visits to customer plants so that they have a sense of ownership and accountability for the parts they manufacture. They gain a better understanding of how the product they work on is included in the finished vehicle and they learn first-hand if there are any customer issues or concerns. "On more than one occasion" a visit has produced a continuous improvement idea, says Magee Rieter.

More Than A Label

At Magee Rieter Automotive Systems a label is more than a label. It's a critical element in ensuring customer satisfaction. A process it dubs "on-demand labeling" allows the automotive carpet producer to build in a series of quality checks "so that when we label a product we are not just slapping a label on a piece of carpet; we're verifying that it's the right carpet," explains Timothy J. Mullen, plant manager for conversion operations in Bloomsburg, the part of the facility that turns carpet blanks into specifically ordered products.

In practice, on-demand labeling enables machine operators to label a product as it is manufactured. Information on the label is cross-checked with the information used by the machines to produce the material, and inconsistencies are identified before the material is labeled so they can immediately be corrected. Each label has a unique serial number, which permits traceability at the piece level. "Traceability ensures accountability," says Magee Rieter. "Having the ability to assign a serial number to each production piece allows our manufacturing team to know the date and time a part was produced and by whom -- as well as information related to where a particular piece of material has been and who has been handling it." If, for example, a machine failure occurs and causes a defect in the carpet material, the labeling system makes it easier to identify and "quarantine" it and all other material produced by the machine until the problem is fixed.

On-demand labeling helps assure that the right customer is getting the right product and that the product is accurate in quantity and content. "Prior to on-demand labeling, we would bulk print labels, and as a result we would occasionally misidentify a component," acknowledges Magee Rieter. "With all of the possible color, trim and style options for a vehicle carpet, it is not difficult to do -- and we do not want any miscues at our customers' assembly lines."

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