IW Best Plants Profile - 1997

Feb. 14, 2005
By Glenn Hasek At A Glance Kaizen events scheduled weekly. Number of changeovers increased from 230 in 1989 to 505 in 1996. First-pass yield of 99.5% on finished products in 1996. Reduced in-plant defect rate on major components by 80% from 1994 ...
ByGlenn HasekAt A Glance
  • Kaizen events scheduled weekly.
  • Number of changeovers increased from 230 in 1989 to 505 in 1996.
  • First-pass yield of 99.5% on finished products in 1996.
  • Reduced in-plant defect rate on major components by 80% from 1994 to 1996.
  • Scrap and rework costs reduced by 26% since 1995.
  • Forward-days inventory reduced from 13.9 days in 1990 to 10.1 in 1997.
  • No layoffs since 1989.
  • Annual labor turnover of 1%.
  • Benchmarking studies conducted during last three years: 46.
  • Since 1989, number of employees per supervisor reduced by 50% to 25:1.
  • Annual inventory turns: 20.
  • Reduction in total inventory since 1992: 20%.
  • Product-development cycle time reduced by 27% in last five years.
  • More than 1.5 million labor-hours without a lost-time accident.
By producing 16.4 million shocks and struts each year, Tenneco Automotive certainly is removing the rock and roll caused by rocky roads. More important, thanks to its emphasis on continuous improvement, the plant has become a model of manufacturing for its best practices in the areas of technology, teamwork, education, customer satisfaction, safety, and environmental protection. Located in the rolling hills of Arkansas, about 90 miles northwest of Memphis, the Paragould facility began production in May 1970. It currently employs 792 persons, of whom 63 are salaried workers. The average number of years of service at the plant is 15.5. Not one employee has been laid off since 1989, says plant manager Paul Hill, and the plant's current annual labor turnover rate is only 1%. Facilities manager Clif Ritter cites several reasons employees tend to stay at the plant. "They're happy," he says. "They like their jobs. They like where they work. They like the people they work with. With the team concept, employees are allowed to speak their own minds and try out their own ideas." Tenneco Automotive's strong workforce and the teams they create have driven the improvements at the plant. "If there is pain and opportunity, we put a team on it," says Hill, who has worked at the facility since it opened. The plant's teams include: best method; process improvement; environmental, health, and safety; kaizen; emergency response; preventive maintenance audit; new-product-introduction system; people eliminating problems; and cost-reduction teams. As part of Tenneco Automotive's benchmarking efforts, assessment teams visit plants and obtain information through questionnaires and written reports. Using the results of the reports, best-method teams made up of plant personnel and suppliers then create action steps that employees will be able to implement. In the last three years, Tenneco Automotive has conducted 46 benchmarking studies. While 29.4% of the production workforce participate in self-directed work teams, 85.7% participate in empowered work teams. Self-directed teams schedule their own meetings, identify issues, make decisions, take action based on information they collect, document follow-up, and train team members. One area of the plant that has a self-directed work team is the strut line. There, employees rotate work positions every two hours. Jim Diggs, business-center manager for assembly/packaging, says there is just one salaried person -- a strut coordinator -- in the strut area. That person does the purchasing, engineering work, and overtime scheduling. Tenneco Automotive's empowered work teams require input from management on issues such as production scheduling, scrap reporting, vacation scheduling, human resources, and training. The main difference between the plant's empowered work teams and self-directed teams is that empowered teams do not have the level of training that the self-directed teams have. Results of team efforts at the plant have been been impressive. Between 1992 and 1996, manufacturing cycle time on shocks was reduced from 36 hours to 24 hours. During the same period, the in-plant defect rate on finished products was reduced by 75%, from 20,000 parts per million to 5,000. Cost of quality as a percent of sales was reduced from 8% to 5% between 1992 and 1996, and productivity has improved from 94 shocks per employee in 1990 to 105 this year. Through teamwork, the Paragould facility has achieved more than $18 million in cost reductions. Tenneco Automotive's team efforts have come a long way since their introduction in 1980. "In the early days we struggled a little," Hill says. It was during that time that the plant began offering literacy classes to employees, in part to help ease the plant's transition to statistical process control (SPC). The classes evolved into a General Equivalency Degree program. During one year, the facility graduated 78 employees. "One woman got her diploma at age 62," says Harold Diggs, personnel manager. Tenneco Automotive currently pays 100% for all courses taken and encourages employees to complete their degrees. To improve teamwork at Tenneco Automotive, the plant formed three business centers: assembly/packaging, support, and powder metal. Each business center comprises production, engineering, and maintenance, all of which report to a business-center manager. This organizational move was made to allow for a common direction among all employees and to foster a team environment. By scheduling kaizen events on a weekly basis, the plant has taken giant steps toward improving operations and processes. One recent series of two kaizen events yielded particularly significant results. The events focused on the process of assembling air-strut dirt shields. The objective of the project was to reduce leadtime, work-in-process, and travel distance, and improve efficiency. Eight team members, including a packaging-supplier representative, participated. "The kaizen teams fix the problem," Hill says. "The other teams give you a list of problems to fix." Before the kaizen events, the production process involved 38 steps. Afterward, the process was reduced to 10 steps. The process also originally involved a travel distance of 4,800 ft, 288 sq ft of floor space, a leadtime of 18.2 days, 16 forklift moves, and eight dumps into batch tubs. After the kaizen events, those factors were reduced to 80 ft of travel distance, 20 sq ft of floor space, a leadtime of 0.2 days, two forklift moves, and just one dump step. Suppliers and vendors are often included in kaizen events. "What we're trying to do is get inside eyes and outside eyes in on the process," says Bill McGinn, kaizen-event coordinator. "If there's a better way to do something, we want to do it." Environmentally, Tenneco consistently has worked to reduce or eliminate waste. Between 1988 and 1992, as part of the Environmental Protection Agency's 33/50 program, the plant converted from a solvent-based paint process to a water-based system. By 1992 the release and transfer of chromium, lead, methyl ethyl ketone, and xylene were eliminated. Other achievements include the reduction of volatile organic compound air emissions from 104 tons per year to 28 tons per year and the reduction of solid waste from 6 million pounds per year to 2 million pounds. "Every department is doing something for the minimization of waste," says Ritter. Among the awards Tenneco Automotive has received for its environment-related efforts are the Paragould Industrial Award for 100% wastewater compliance, and Vice President Al Gore's National Performance Review Award. Such success has required the cooperation of suppliers. In one instance, the plant worked in teams with packaging suppliers to ensure ride-control facilities would meet corporate waste minimization and recycling standards. That effort resulted in savings of more than $67,000 per year. In areas such as the environment and safety, Tenneco Automotive relies on careful recordkeeping and charting to measure progress. As of mid-August, the facility had put together a record of more than 1.5 million labor-hours, or 368 days, without a lost-time accident. For its safety achievements, the plant has won the Occupational Safety & Health Administration's Voluntary Protection Program Star Award, as well as numerous awards from the Arkansas Dept. of Labor. "Years ago, the mind-set was productivity," says Mark Lawrence, safety coordinator. "Now, safety is at the top. We talk about it every morning." Maintaining a superior relationship with its customers has been critical to Tenneco Automotive's success. Using what it calls its Customer Delight Index, which is based on surveys conducted with original-equipment manufacturers and aftermarket business sectors, the plant measures customer-satisfaction levels. Some of the specific areas measured include product quality, responsiveness to calls, accuracy of deliveries, product image, product improvement, and component-parts availability. It also is a standard practice at the plant for employees to visit customers to assess their needs, not only at the corporate level, but also at automotive repair shops. "Our goal is to win every award available from our customer," Hill says. To create a more efficient supplier base, Tenneco has encouraged suppliers to locate their businesses in Paragould. Three companies already have done so -- two of them are located adjacent to the plant. While working to reduce the distance that parts must be shipped, Tenneco also is working to trim the number of its suppliers. Three years ago, 100 suppliers accounted for 80% of the dollar volume of purchased material. Now only 60 suppliers account for that amount. "Our main emphasis is to get long-term commitment from our suppliers," says Jack Hamilton, product-planning material-control manager. "Our goal also is to keep on reducing the number of suppliers to one supplier for one part." The use of technology also has streamlined processes. A computerized SPC system at workstations throughout the plant lessens the burden of manual charting, while providing real-time feedback to the operators and the system's coordinator. As part of the plant's Employee Video Information System, television monitors are positioned around the facility to keep employees up to date on in-house happenings and community events, as well as the company's daily stock performance. Computer-integrated-manufacturing applications at the plant include extensive use of vision systems, metal fabrication and powder metal presses, welders, robots, automated assembly lines, finished-goods stackers and wrappers, and chrome platers. Tenneco Automotive's SAP R/3 system integrates every plant process from order entry through collection of receivables. It links all plants within Tenneco Inc., Tenneco Automotive's parent company, and is estimated to save $200 million throughout the company each year. "It's given us the ability to see everything online, instead of digging for paperwork," says Lisa Mitchell, plant controller. "The tools that we have had to put in place have made us more proactive than reactive." Becoming involved in the community of Paragould also has been an important objective for Tenneco Automotive. Employees participate in numerous fundraising activities, including the Greene County Community Fund. The fund, which received $50,000 from the plant last year, supports 10 local and state organizations that focus on youth, the elderly, and physically challenged adults. The plant also offers college internship programs, community awareness tours, and high school partnership activities. Students from regional schools and colleges frequently tour to observe job-training skills and manufacturing technology. Looking ahead toward the next five years, Jim Diggs says he would like to see Tenneco Automotive remain the leader in the ride-control group and in the Paragould community. Lisa Mitchell puts it this way: "We want to be the manufacturer of choice as well as the employer of choice."

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