Inventory Busters Just-in-time practices help Textron Automotive make productivity breakthroughs. ByPeter StrozniakTextron Automotive Trim Div., Port Huron Operations, Port Huron, Mich.At a glance
In 2000, employees posted 1 million hours worked without a lost-time injury. Manufacturing cycle time has been slashed by 70%. Standard order-to-shipment leadtime is two hours with a customer reject rate of only 23 ppm on shipped products. DaimlerChrysler Lean Role Model Supplier Award for 2000. Textron Inc.'s Mistake-Proofing Award and Continuous Improvement Award for Safety. The Textron Automotive Trim Div. plant in Port Huron, Mich., is located in an old and bustling industrial city that sits at the confluence of the St. Clair River and Lake Huron, where inventor Thomas Edison grew up. Unlike its historic surroundings, the Textron plant is only 10 years old, but already it has earned nearly a dozen quality and safety awards. "We sometimes joke about all the awards we've won," Dianne E. Kokkinos, the plant's vice president of operations, says with genuine humility. "We don't want to get carried away. You can't assume that because you're good today, you're going to be good tomorrow. You have to be constantly looking at the next challenge, and what process will take you to a different level than where you are today." The 140,000-sq-ft factory employs 400 workers who manufacture lower and upper interior door panels and other inside trim products such as arm rests for DaimlerChrysler cars including the Dodge Intrepid, Dodge Dakota, and Chrysler Concorde, as well as Chrysler's minivan lines. Some of the plant's early awards were the result of incremental improvements. But the management team knew there was something missing that was holding back the plant from making a major productivity breakthrough. "We were already fairly good, but we wanted to get better," recalls Kokkinos, who in 1994 became the first woman vice president in the history of Textron Inc., the plant's corporate parent. The plant launched its lean-manufacturing journey nearly three years ago. Although the plant was making strides, it had one nagging problem -- inventory. There was too much work-in-process inventory. There was too much finished-goods inventory. The surplus created production bottlenecks and hogged floor space. When visitors came to tour the plant, employees would make a mad dash to clean up their workplaces. What's more, the excess inventory forced Port Huron to lease space in another facility to make back side panels for the Chrysler minivans. "We knew that we needed to get better at what we did. And the only way to do that is to remove your obstacles,'' says Debbie Skrinner, Port Huron's materials manager. "Now what were our obstacles? Inventory. We used every bit of floor space. We would have six to 10 hours of finished-goods inventory easily, which really made it difficult to operate and function." But those large inventory days became numbered when a consultant the plant hired to assist in its lean-manufacturing initiative mentioned one word -- heijunka. Part of the Toyota Production System, heijunka is a method of leveling production that helps make just-in-time production possible. Toyota describes heijunka as averaging both the volume and sequence of different model types on a mixed-model production line. The Port Huron plant's high-volume/high-mix manufacturing process requires 134 door panels and 37 additional interior components, with nine different color combinations and 12 different fabric materials. "When I first saw the heijunka system presented to us, it was like a light bulb turned on," Skrinner remembers. "It was the piece we were missing. Heijunka paces production to the customer's needs and it paces all of the processes upstream. It just made perfect sense. And what was even more exciting was that our employees felt the benefits." The plant's heijunka system is triggered when EDI orders are received from DaimlerChrysler plants in Ontario, Michigan, Missouri, and Austria. Heijunka cards are filled out with specifications such as the number of door panels, models, colors, and fabrics. The cards, prioritized by shipment times, are placed in the top slots of a customized heijunka box to signal the production start. Based on the specifications on the heijunka cards, a set of kanban cards is delivered to the injection molding presses where door panels are produced. The kanban system coordinates the tool changes that are required on the injection molding presses. The kanban system also allows the paint area to pull door panels where they are painted based on specifications from the heijunka cards. From painting, the door panels go to the assembly area, where employees, after reading the heijunka cards, know exactly what components each door panel needs. Once the door panels are assembled and packaged for shipment, the heijunka cards are placed back at the bottom of the box to signal that the orders are complete. The heijunka system created the quantum leap in production that the management team was looking for. WIP plummeted by more than 60%, and average finished-goods inventory dropped to two hours from six to 10 hours. This inventory reduction freed more than 10,000 sq ft of floor space, which allowed Textron to move in its Chrysler minivan back side panel production line. But the heijunka system would be useless without the support of other key lean-manufacturing practices such as quick-changeover times and reduced lot sizes. Over the last five years, lot sizes have been cut by 88% with a current average lot size of 13. And just in the last year mold-change time has been slashed by 50%. The current mold-change time is 21 minutes. The goal is to improve changeover time to 15 minutes, which is expected to be accomplished by the end of this year. The plant's lean-manufacturing success has enabled it to go after new business. Recently, the management team landed a major contract with General Motors Corp. that will double its output. The factory is scheduled to begin manufacturing interior trim products for GM in 2003. "If we hadn't embarked on this lean journey, we would have had to open another plant of this size to accommodate the GM contract." says Kokkinos. "Now we're seeing possibilities that we never would have been able to see before." To help people see the possibilities, management uses a value-stream map that provides a detailed diagram of the plant layout. Different from the typical illustration of the plant layout, this one is drawn with magic markers on a big white board on wheels. "The value-stream map we feel is very dynamic, very fluid, and there is no sacred cow," says Emad Fahim, Port Huron's engineering manager. "The map itself is drawn with magic marker because we want to make sure that it is never perceived as gospel. It seems once something is in printed format, people become very reluctant to change. When something changes, or if someone comes up with an idea to make a production improvement, we aren't reluctant to change the map." Port Huron managers say the value-stream map is valuable because it shows the flow of information from the customer to every production step in the plant, how it works and how it is processed. The map details how many employees work at each operation, as well as the average inventory numbers, manufacturing cycle times and machinery uptime. During kaizan events, the value-stream map helps teams identify and eliminate waste. When management first started using the value-stream map it showed there were several different scheduling points throughout the plant. The map helped management eliminate those separate scheduling points and organize scheduling more efficiently through the plant's production control center. Web-Exclusive Best Practices By Peter Strozniak Benchmarking contact: Dianne E. Kokkinos, [email protected], 810-989-3908. Employees Learn the Lines All of the plant employees involved in self-directed natural work teams have multiskill certifications and are cross-trained. Nine-year Textron employee Dave DeLong, has worked at all of the plant's operations. DeLong says he enjoys learning how to do the different jobs because it provides him with a better understanding about the entire manufacturing process. "It shows us how the whole process starts, how the products are made all the way through the final process," DeLong says. "It helps us get a better knowledge of what is going on, what problems may occur or not occur. It also helps make our work here a lot more interesting because it's not so repetitious." On production lines, employees rotate job functions every two hours. "It keeps everybody from getting too stressed from doing one job all day long," remarks Holly Sass, a three-year Textron employee who works on the front-door assembly line. "Rotating jobs does prevent your hands and wrists from getting sore because any one of these jobs, if you do them enough, can bother your hands." Working Lean with Suppliers Textron Port Huron managers believe that teamwork is the most important supplier partnership strategy. The plant shares all of its lean-manufacturing knowledge with its 33 suppliers to improve performance. Lean-manufacturing workshops are held at suppliers' sites. More than half of the suppliers have participated in lean-manufacturing seminars but some are further along than others. "When they get better, we get better," says Debbie Skrinner, materials manager. "There's going to come a point where we're no longer able to get better within these four walls and we're going to need our suppliers' participation to get to that next step." All of the plant's key suppliers provide just-in-time delivery and have been formally certified. The average leadtime on class-A (high-cost) purchased materials has been reduced by 60% over the last five years. A Lesson in Maintenance The plant's total productive maintenance system includes what is called a 1-point TPM lesson. Attached to each machine is a laminated card that describes a daily maintenance procedure. The instructions also include a color photo. "We wanted to make everything simple and very easy to understand," says Jim Thorpe, manufacturing manager. "Even if you weren't instructed at all on how to maintain the machine, anyone could do the daily maintenance." The instructions explain step-by-step how to perform the daily maintenance, and the accompanying photo shows what to look for. The photo is important, for example, because some machines have several gauges, and a photo shows employees what gauge needs to be read. The plant's average machine availability rate is 96%, and only 4% of the plant's maintenance work is reactive. E-business Links with Customers and Suppliers The plant's IT system features e-business applications with links to both customers and suppliers. When the plant receives customer orders via EDI, they are checked for accuracy and then plugged into the plant's MRP system, which determines what components are required for the manufacturing process. Those requirements are transmitted via EDI to suppliers. When components are delivered they are scanned to record part numbers, quantities, and batch serial numbers -- which starts the lot-tracking trail. Components are delivered to product lines via wireless handheld scanners carried by forklift operators. Before any shipping-container labels are printed, the parts are double checked against the EDI customer releases to verify that the correct components are being packaged. Finished goods are scanned when they are loaded onto trucks. This scanned load data is electronically transferred back to the MRP system where the customer is sent an advance shipping notice via EDI. Payment also is electronically transmitted for all goods sold. Addressing Labor Turnover Issues Five years ago the plant had an employee turnover rate of 48%. Today that has been cut in half to 24%. Labor turnover remains a big problem throughout the region. Based on a survey of Port Huron-based manufacturers, the average labor turnover rate is about 30% to 40%, says Textron human-resources manager Harry Burge. Record low unemployment and plants in the Detroit area offering higher wages and benefits are contributing factors. Another problem, however, is that some employees lack a strong work ethic. Textron estimates 80% of its turnover is due to terminations because of poor attendance. The turnover problem told management that it needed to do a better job on employee selection. The interviewing process has become more comprehensive with more evaluations for skills and attitudes about work. Representatives from manufacturing also are involved in selecting employees. But Port Huron managers also are mindful that more of today's employees are demanding flexible schedules to balance their work and personal lives. To address this challenge, the management team has decided to hire more part-time and temporary employees. Recent newspaper and Internet postings for part-time employees at an hourly rate of $12 attracted 250 applications. "As soon as the word got out we were doing this people started showing up at the door," says James Thorpe, Textron's manufacturing manager. "We're doing this to get to a different level of the workforce. We think we'll get a better fit."