2003 IW Best Plants Profile: Chaos to Control at Kautex

Feb. 14, 2005
Higher expectations and a host of process improvements power this fuel-delivery system supplier to world-class status.

Kautex -- A Textron Co., Avilla, Ind.

At a Glance

  • Plant: 75,000 square feet
  • Start-up: 1993
  • Achievements:
    • Current streak of more than 1 million hours without a lost-time injury;
    • TS 16949 international automotive quality certification;
    • ISO 14001 environmental system certification;
    • operator training program judged "Best in Class" in Honda audit;
    • DaimlerChrysler PentaStar Gold Award winner;
    • Indiana Quality Award winner
You used to walk out into the plant, and there would be a sea of scrap fuel tanks. Scrap tanks outside, scrap tanks in trailers, scrap tanks in warehouses. "I had to run the shredder all day long, grinding up scrap tanks, just to keep the aisle-ways open."

That's Greg Fuller, vice president, operations, describing the plant floor scene three years ago at Kautex -- A Textron Co.'s plant in Avilla, Ind., manufacturers of plastic automotive fuel tank systems. The plant was unkempt and dimly lighted, operators were untrained, process equipment was fragile, and daily production was scheduled from a handwritten piece of paper.

"We were a facility out of control," summarizes Chris Baron, controller.

But an influx of new blood with leading-edge automotive manufacturing expertise, adoption of lean one-piece flow, a raft of housekeeping initiatives and serious investment in employee training have turned the tide. Today, just three years later, the plant purrs along at a miniscule in-plant defect rate of 26 ppm, first-pass yield is up a stunning 80%, and sales volume has roughly doubled.

"We started to have some fun as well," says Fuller. "We didn't have fun there for quite a while."

Nestled in a hotbed of automotive suppliers just north of Fort Wayne, some 400 non-union employees at this three-shift facility build more than 1.5 million fuel tank systems per year for JIT delivery to OEM customers including Honda Motor Co., Toyota Motor Corp., Ford Motor Co., General Motors Corp. and DaimlerChrysler AG.

While the large black plastic tanks seem simple, the fuel delivery systems are, in fact, sophisticated, multi-layered vessels designed for physical integrity and gasoline impermeability. They include numerous hoses, clamps and other attachments, as well as an integral fuel pump, all assembled and tested down line from eight separate blow molding operations that create the tanks. The flexibility of plastic allows the tanks to be designed to assume the odd volumes remaining in the rear of the car after engineers have designed the mechanical components. The result is tank shapes that range in appearance from huge Baby Ruth bars to flat tubs to giant saddle bags.

Kautex Werkes GMBH , headquartered in Bonn, Germany, opened the facility in October 1993. In 1997 Textron Automotive acquired Kautex. Although the plant was left to its own devices at first, corporate headquarters eventually began to expect more.

"There was a restructuring of the facility, and we brought in new folks that were more highly skilled in running a plant in an efficient manner," says Russ Fatum, human resources manager. These included operations, engineering and supply-chain experts with experience at companies including Meridian Automotive Corp., Dana Corp., Allied Signal Automotive and United Technologies Automotive.

While many operational improvements quickly followed, one of the biggest challenges was employee attitude.

"We needed to change the perception within the workforce that instead of an out-of-control facility, we could be a world-class facility," remembers Baron.

New plant lighting and air conditioning, a plant clean-up and ingraining 5S principles into the culture, (actually 7Ss in the Kautex-Textron scheme) was the first step. More fundamentally, Baron adds, "we did a lot with training and communication, showing people we were willing to invest in them and be open and honest."

Bulletin boards appeared on the plant floor showing goals and line performance parameters. Quarterly Town Hall meetings revealed the link between the company's financial performance and the plant's manufacturing efficiency. Technical training of plant-floor personnel, virtually non-existent as recently as 2000, received first priority, and a training coordinator was brought on board full time.

Last year benchmarked "Best in Class" by Honda, the facility's training regimen includes an average of 88 hours of annual instruction per employee, with specific Leadership Development Programs available to hourly production team leaders. Process and quality personnel are currently cross-training to better understand each other's function in an 80-hour program.

"Now things are completely different," says Tonia Gradeless, who works on the GM production line. "Not only because of the training, but management has really focused on communication between departments. We know much more about each other's jobs and can work together better to solve problems. Now we are much more of a team instead of working against each other."

One of the first areas of attack on operational efficiency was machine uptime, which got a huge boost with the newly instituted training programs. Operational equipment efficiency (OEE) percentages, running in the 60s in 2000, are in the high 80s today with machine uptime at 94%. Thanks in part to a dedicated mold set-up team, changeovers have been cut from days to six hours or less. As uptime and efficiency improved, Kautex-Textron awarded the facility more business, doubling over the past three years to $200 million.

Batch manufacturing and sketchy scheduling had led to high inventories and poor quality. "We were scheduling the plant off a clip board," says Ron Lanning, operations manager. "We'd pull down EDI releases from customers and say, OK, what do we need to ship tomorrow? Then we'd go out to the floor and say 'make me this, this and this.' It was like going to the grocery store hungry and throwing everything into the shopping cart, rather than creating a checklist of what I need for a dinner party of four."

That changed quickly with correct implementation of an already in-place MRP II system to create a master schedule for all to operate from. "We were able to generate a true production schedule rather than work off a ship schedule. We built the schedule against customer releases based on cycle times, lead times and component availability and used that to drive the whole plant," Lanning recalls.

Finished goods inventory is now down to one day. With the new blood also came one-piece flow, which has now supplanted batch operations. The eight individual lines are riddled with mistake proofing devices, and quality at each down-line assembly and test station is managed by a network of linked programmable logic controllers (PLCs). These read operational-parameter data at each station through deflashing, cooling, cutting and hot-plate welding, and performance testing. Only if station parameters are correct will the system allow the tank to progress to the next operation.

These process changes are the key contributors to the exceptional increase in first-pass yield, and a 30% reduction in manufacturing cycle time in three years.

Yet as impressive as these numbers are, those that perhaps best speak to this plant's journey to world-class status reflect the attitude and morale of the employees themselves. Only one hundred employees and family attended the plant's company picnic in 2001. Although staff levels have held roughly the same over the last three years, in 2002, 400 people participated.

Earlier this year, at the company's 2003 fete, they cooked for 600. And ran out of food!

Web-Exclusive Best Practices
Federal Apprenticeship Certificate Program

Improving technical knowledge and skills at the plant-floor level is a major priority at Kautex-A Textron Co. Avilla Operations and one that has paid great dividends in terms of product quality and machine uptime.

Last year, Kautex-Textron took plant training regimens to a new level, establishing a program that grants a federal apprenticeship certificate upon completion. The company now has four employees enrolled in the program, two in electrical and two in general maintenance disciplines. Kautex Textron petitioned the U.S. Dept. of Labor to host the program, providing a complete plan for training and required classes, and helped establish the on-the-job curriculum.

Eight thousand on-the-job hours are required, broken into 500-hour segments including hydraulics, pneumatics and trouble-shooting processes. Credits are earned by shadowing skilled tradesmen in the plant. As enrollees become more proficient, they are given incremental chances to work on equipment.

Attendance at formal classes is also obligatory. To fulfill that part of the requirement, Kautex-Textron partnered with local Ivey Technical College, where classes are attended during off hours. The cost of the classes is supported by a training grant the company received from the state of Indiana, drawing on federal monies.

To qualify for the program, employees submit their qualifications and a letter of desire to the human-resources manager. Acceptance is based on interviews, including one with a panel with skilled tradesmen, and checks on disciplinary actions, attendance and overall performance records.

"The apprenticeship program is basically equivalent to an associate's degree, and will provide significant advancement opportunity within the company," says Russ Fatum, human-resources manager.

Down-To-Earth Communications

Employee communications presented an opportunity for significant improvement at Kautex-A Textron Co.'s Avilla Operations as the plant took strides to become a world-class facility. So Kautex-Textron did it right. Application of visual factory techniques landed bulletin boards onto the plant floor to track performance parameters. Quarterly town hall meetings personally communicate the state of the plant. It is here that Kautex-Textron takes a unique approach.

"The key to understanding the link between operational and financial performance is to keep it simple and present information in a manner that relates to the employee," says Chris Baron, controller.

When presenting information on expenses, for instance, management relates facility expenses to household expenses and cash flow as it relates to the flow of money in and out of the employee's checkbook.

"On return of sales, we don't report just '10% return on sales,' but say that for every dollar we ship, we return 10% of that to the company," says Baron.

Kautex Textron management asks every employee to keep alert to ways to save money, just as he or she might at home. "If you see water running, you'd turn it off at home. Think how much the same action might save for the company," says Baron.

"As much as anything, we try to highlight the little things and introduce those into the culture. Then we can build on that to help explain how the employee's actions can not only drive quality and lean manufacturing, but the financial side itself."

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!