IW Best Plants Profile - 1999

Feb. 14, 2005
A Perfect Union A cooperative relationship with labor powered Delphi's transition to lean manufacturing. By Tim Stevens Biceps bulge, bulldozers drone, sweat glistens. There is a gnashing of teeth, a bending of pipes, and the scraping of metal on ...
A Perfect Union A cooperative relationship with labor powered Delphi's transition to lean manufacturing. ByTim Stevens Biceps bulge, bulldozers drone, sweat glistens. There is a gnashing of teeth, a bending of pipes, and the scraping of metal on concrete as a huge six-station machining center is removed from the plant floor. With almost as much structure below ground as above, extraction of the behemoth is like prying an abscessed molar from the mouth of an industry giant. Remove another 200-plus pieces of equipment, relocate 500 others, and you have some idea of the rebirth taking place at Delphi Saginaw Steering Systems (DSSS). Some 75,000 sq ft of floor space has been gained in its transition from an operation based on cumbersome 100-person assembly lines to multiple, compact manufacturing cells. Add a heavy dose of material-flow management and, voila, a 43.9% increase in parts per person per day and a 58% reduction in in-plant defects over the last five years. The improvement numbers that flow from the industrial engineering process speak for themselves. However, it has been the soft side -- in particular, the cooperative relationship between union and plant management -- that has allowed the potential of the hard-side engineering to be realized. At this plant of some 1,800 workers cranking out 25,000 steering columns per day, the makeover on the floor has required extensive redeployment, redefinition, and training on new jobs, changes that the union accepted because workers were given the opportunity to participate in all initiatives from the get-go. Characterized by open, honest communication, win/win solutions to challenges, and the acceptance of responsibility by workers for their own jobs, this cooperative relationship should keep the plant a force in the global marketplace for years to come. "I think the union showed a lot of foresight in accepting these changes," says Steve Constable, plant manager at the Saginaw, Mich., facility. "They realized we need to do these things to be competitive. We made sure the union understood what we were doing, we got them involved on the ground floor, and they were right there when we implemented changes. They never fought us or resisted what we were doing, which is a great benefit." Seeds of success at DSSS were sown as early as 1993, when the company introduced its Quality Network Manufacturing System (QNMS). Under the QNMS contract, the union accepted significant work redefinition with 120 job classifications reduced to five and the role of union team leaders expanded to include coordination responsibilities. From a situation of individuals working within narrow job specifications, employees were challenged to learn a whole range of jobs, to perform in empowered teams, and to become more engaged in the business. They responded. "When I first came here I worked on a line of 120 people and didn't know how the jobs went together or even what happened at the other end of the line," says Sally Netkowski, hourly coordinator for the power-tilt-telescope assembly line. "Now I know every job on my line, so I know how to build a complete steering column. Quality is moving up because people are aware of what's on the column and how our actions affect what's happening down the line." Early on there was a lot of resistance to the new team model, recalls John Norton, UAW shop committeeman, but that has changed as well. "Today we see it as an excellent system. You can run a machine, operate on the assembly line, or sweep the floor without interfering with someone else's work content. And there is pay for knowledge. Under the QNMS agreement I'm not locked in. It gives me the opportunity to use my mind and expand on my abilities and not be limited by a seniority type of issue." In 1995 the plant got its first taste of cellular manufacturing. Steering columns were transitioning to a modular design that simplified production and allowed easier customization to meet specific end-user needs. A number of large batch operations, utilizing huge pieces of equipment, were shifted to smaller cellular units. In 1996 Delphi corporate introduced a Toyota Production System type of manufacturing strategy. Then in August 1997 the plant was challenged by division management to become "wall-to-wall lean" by the year 2000 and serve as a role model plant for Delphi manufacturing worldwide. Embracing the challenge, plant management and union leadership -- the Quality Council -- met for two days off-site to craft a plan. Union representatives participated as monitors of the local and national agreements, jointly strategized with management on how to organize for lean, and helped craft a redeployment plan for displaced jobs. "Together we took the lid off the plant and looked inside to identify strengths and weaknesses," says Constable. From this self-evaluation, 10 "lean teams" were created to address opportunities for improvement and exploit pockets of strength in product, operational, and soft-side areas. Each team was balanced with salary, union, and engineering representatives and chartered to meet goals established by the council. In all-company meetings in January 1998, the Quality Council announced its "wall-to-wall lean" vision, complete with a target floor diagram of four subplants operating in cellular units, with several support functions. One strategy in the organization's lean-manufacturing effort was removal of more batch operations and the outsourcing of inefficient low-volume or noncore processes. Knowing union leadership was not keen on initiatives that could jeopardize jobs, plant management committed to win/win solutions, to no employment loss, and to bringing in new business. Last year, when outsourcing of a 16,500-sq-ft paint booth caused the loss of seven jobs, DSSS insourced production of a column-critical gear-shift mechanism with a 15-job content. The new shifter cell was designed with ergonomic operation in mind, providing work for those in the plant with physical limitations. Net savings of $1 million was realized by the maneuver, and union workers got the opportunity to do some valuable work while on the mend. "We had people in the plant with restrictions and had difficulty putting them on productive jobs in other areas," says Constable. "We used this as a rehabilitation cell, making it very ergonomically friendly to anyone with problems like carpel-tunnel syndrome. So we found value-added work for these individuals and made them feel better about coming to work in the morning." One of the strengths identified in the "lid-off" view of the facility was the 200 active natural work teams that grew out of the QNMS contract in 1993. To maintain this momentum and make sure employees were part of the change process, one of the 10 lean teams was devoted to soft-side issues to ease the transition. Counted in the accomplishments of this team are a waste-elimination training program, an ever-expanding notebook of tools for handling plant-floor issues, an evaluation system to guide teams to the highest level of four steps of maturity, and communication tools including the Lean Team Report, a monthly newsletter of lean-team progress and activities. "[Our soft-side] UAW reps sit at lean-team monthly meetings to assure that things like health/safety, communications, and training are attended to," says Bonnie Howard, joint activities/quality network coordinator and soft-side lean-team spokesperson. "It helps the teams remember they are working with a group of people and the soft-side issues need to receive attention as well." In 1997 plant management implemented an initiative to drive accomplishment of business goals down to the hourly team level and coupled one of its reward/recognition programs to it. Delphi corporate goals are broken down to divisional, then plant, then to DSSS department and team levels, where appropriate. "We wanted every person in the plant to understand what their role was in order to meet overall plant objectives," says Constable. At the team level, goals are built around health and safety, quality, uptime, workplace organization, and suggestions. Progress against goals is posted on the cell's team board in the form of red, yellow, or green dots. The team rates itself monthly relative to the goals, and if four of five goals are green (one of which must be the quality goal), the team is awarded $4.50 per person. These funds are collected and applied to team celebrations. Since the program was initiated, suggestions are up 60% and implemented suggestions up 120%. Those who suggest actions that are implemented receive a percentage of annual savings. Another valuable worker-reward program is implemented as part of the activities of five joint subcouncils. The subcouncils operate at department level, reporting to the highest level of joint plant authority, the Quality Council. People and teams are recommended to the subcouncil for special recognition for actions either inside the plant or for community service. Gift certificates are sent to the home of honored employees, with 20 to 30 awards made weekly. "This has been an excellent way to tell people on the floor, 'You are doing the right thing -- keep up the good work,'" says Jim Gezack, in-plant UAW quality-network rep. Another active group, the Employee Involvement Committee, organizes events and activities to build employee moral, involvement, and enthusiasm. These have included a $1,000 prize for the best team board, sponsorship of a health-and-safety-awareness week with presentations from safety-product vendors and the local police on drinking and driving, and a tailgate party for the annual University of Michigan-Michigan State University football game. Problems on the plant floor are addressed via "top 10" issue boards, an avenue for dealing with situations within a department. A core team first decides if the issue is significant enough to warrant "top 10" status. If so, it goes on the board to be reviewed by a team of engineering, management, and union representatives in weekly "board walks" throughout the plant. If issues cannot be resolved during the walk, they become mandatory agenda items at subcouncil meetings and can even progress ultimately to the Quality Council. As the transition to empowered teams has proceeded, the issues on the "top 10" boards have transitioned from creature comforts to business issues. The latter include rearrangement of equipment to improve material flow, satisfying the customer, health and safety problems, and staying competitive, says Pete Steyer, in-plant UAW quality-network rep. "It was a big deal to get people to go from the traditional way of thinking that I only come in here to run X amount of parts, leave me alone, and I will go home at my time," he adds. "Now we sit in team meetings, figure out our own problems, and try to deal with them. I feel I can control my destiny more. People are listening to my issues. Things are done in a better way, which all boils down to job secu-rity. If we are doing the right things, we'll stay competitive, the doors will stay open, and I'll get a paycheck." At A Glance
  • 95% of plant workforce working on empowered natural work teams
  • Ergonomic stressors reduced on 450 jobs in last five years
  • Reduction in lost workday cases in the last five years -- 75%
  • Reduction in rework over the last five years -- 75%
  • Error-proofing initiatives yielded 1,156 items in last five years
  • Total product cycle time cut 59% over last two years
  • Work-in-process inventory slashed 40% in last two years

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