IW Best Plants Profile - 1997

88% reduction in in-plant defect rate in last five years.
99.3% reduction in customer reject rate in last five years.
Warranty costs of just 0.36% of sales.
62% reduction in warranty claims (86% reduction for some products).
99.6% on-time delivery rate.
140 WIP turns annually, up from 58 turns.
Order-to-shipment leadtimes cut by 83%.
0.4 lost-workday rate per 100 employees.
56% productivity increase since 1991.
100% customer-retention rate in last five years.
Sales increase of 750% since 1990.

Few things illuminate manufacturing success better than meeting and exceeding customer expectations. When the customer -- a Big Three automaker that holds the bulk of a plant's business -- honors the achievements, success shines even brighter. Last year Cooper Automotive-Wagner Lighting Products in Hampton, Va., was recognized with the 1996 Chrysler Role Model in Continuous Improvement award. That designation heralds -- as does the America's Best Plants award -- the facility's lean-production techniques and the impact those practices have on actual performance. The Hampton facility runs much like an automaker's focus factory -- 225 employees supplying Chrysler Corp. and General Motors Corp. with headlamps and lamp components for new-model vehicles and an assortment of aftermarket products. Its operations expertise covers manufacturing, materials management, research and development, and product design. Production processes include thermoplastic injection molding; vacuum metallizing; manual, semiautomated, and automated assembly operations; leak-testing systems; and a variety of conformance testing operations. Production is staffed by material handlers, monitors (group leaders), mechanics, and machinists, and 66 salaried employees including a plant manager, management staff, and supervisors. Since 1990 sales have increased 750% as the plant has grown from one injection-molding press to 20. The plant pumps out lighting products and components for new-model Dodge Ram, Dodge Dakota, and Jeep Wrangler vehicles (with many reiterations for left and right side headlamps as well as foreign markets) and service parts for Cadillac and Chrysler. Chrysler has done more than recognize the plant's achievements. It awarded contracts for a headlamp redesign and three fog lamps for the 1999 Dodge Ram. Chrysler also has presourced the 2001 Jeep Cherokee headlamp, fog lamp, and headlamp mounting module. The plant will also take on business for the 2000 Chevrolet Monte Carlo taillamp and backup lamp. The results in Hampton weren't always so radiant. The facility was acquired from Valeo Automotive in 1990 by Wagner Lighting, which had principally been serving the auto aftermarket. The purchase brought into the Cooper Industries division a presence in the OEM lamp market, but it also brought a mix of Wagner and Valeo manufacturing systems, a mix of customers and contracts, and a new development and manufacturing team. Until 1994 the mix wasn't entirely working; plant performance was dimmed by lack of vision, and departmental turf wars. "In 1994 we solidified what the purpose of this plant was supposed to be," says Hogan, who took over the reins that year. "Until that time . . . different departments within our organization were competing against each other instead of working together. So we put together a vision [to be the automotive exterior-lighting supplier of choice] and mission of what we are here for, and we made departmental mission statements to determine what the individual departments were here for." The effort, he says, highlighted the distinct differences among departments -- creating a cross-functional appreciation for responsibilities and workloads, while also enlightening staff to common strengths. Plant management then set two distinct goals -- achieving QS 9000 and meeting criteria for the Chrysler Pentastar award -- not so much for what they'd mean if attained, but for how they could unite and change the plant as it progressed toward the targets. (The plant achieved QS 9000 and, according to Mark Hogan, plant manager, metrics are on pace for the Pentastar this year.) At Cooper Automotive, that process, which they term "goals convergence," brought departmental missions in line with plant goals and cascaded easily understood metrics -- such as cost of scrap in dollars per unit and efficiency in units per hour -- through the plant so that everyone had the same focus. "We do a lot with communicating metrics to the people on the floor," says Derek Goodlin, materials manager. "People will not understand what you're trying to do if they cannot see your goals." He compares it to attending a baseball game. "If they didn't keep score, you'd lose interest after the first inning." Hogan insists that with the exception of safety goals and measurements, "You don't make the absolute number the yardstick. It's the process of getting there, measuring how that person or department got there." True. But don't discount Cooper Automotive's yardstick: The plant shipped about 3,700 defective parts per million for the 1994 model year, says Hogan, and will finish the 1997 model year with 20 defective parts per million. Customer rejects have been reduced by 99.3%. "We recognized that we had to understand the root causes and keep whatever defects we had upstream, as far upstream as we could," says James Faulhaber, manager of product engineering. "It's to our benefit, our customers' benefit, to resolve issues where they occur." "We've made some dramatic improvements in quality in this plant -- quality of product, supply, delivery, everything," adds Rick Hower, quality manager. "It's been pretty amazing over the last few years, and it's not an effort where the quality department is responsible for the quality of the product. It's a matter of ownership -- manufacturing, materials, design. Everybody had to do that, and if we didn't we'd probably be the same way we were four years ago." Key to achieving quality improvements, says Hogan, have been thoroughly identifying customer needs, tracking performance measures from the customer's perspective, sharing best practices internally, and using total quality management (TQM) teams and kaizen events. Kaizen events have also been used to change isolated cells to continuous-flow production, reduce changeover times for injection-molding equipment, and redesign resin-distribution systems that feed injection molders. "We've done all our line arrangements and product reconfiguration since 1994 with kaizen teams [consisting primarily of] hourly employees," says Hogan. Initially, Chrysler staff came into the plant and shared their kaizen approach. The automaker then stepped aside, and the plant has gone on to hold more than a dozen kaizen events since. According to Hogan, events are scheduled on a quarterly basis, which is enough to keep momentum going but not so excessive that successes are small and employees become frustrated. "We used to have to assign people to teams," he says. "Now we've got a waiting list." Kaizen events and teaming efforts have delivered the following successes at Cooper Automotive:

Continuous-flow production -- The continuous-flow redesign reduced work-in-process inventory, thus increasing the WIP turn rate from 58 to 140 and overall inventory turn rate from 3.8 to 15.8. Flow manufacturing also enables workers to see problems as they occur, which reduces scrap and rework. The plant also has dropped finished-goods inventory in many products from roughly 15 days to 1.5 days. "Compared to what I know the industry averages are, it's a helluva lot better," says Hogan.
Press changeovers and raw-material distribution -- Injection molds at Cooper have been standardized and common procedures developed. Overall mold setup times have been reduced from an average of 5.25 hours (some higher than 8 hours) to less than an hour. A central distribution system was installed to feed resin to all the injection presses simultaneously, providing better control of material quality and reducing material handling, plant-floor clutter, and resin dust in the plant.
Environmental actions -- In 1996 the Hampton plant was the only supplier to receive the Chrysler Honors Environmental Excellence with Recognition award. A team of product engineering, manufacturing, and quality personnel redesigned a cornering lamp for the Dodge Ram that eliminated use of a basecoat, which in turn did away with a source of hazardous pollutants. The redesign eliminated 12,000 lb of volatile organic compounds per year, reduced scrap costs by $60,000, increased productivity by 10%, and reduced annual landfill costs by $5,000 and solid waste by 15 tons. The lamp redesign was also recognized with a Cooper Environmental Excellence award, as was a plastics recycling initiative this year. A Hampton team developed a proprietary process that removes aluminum reflective coating from plastic parts, which previously had been unrecyclable. The cleaned parts can then be ground and remolded, reducing landfill waste by 139 tons. Hogan says kaizen and the plant-change initiatives have been useful tools for "teaching people what is important about manufacturing and how you gear your manufacturing operations toward what's important to your customer." Given the plant's "captive supplier" relationship to its limited customer base, that's essential. "You can't just go out there and sell more [lamps]. . . . You have to anticipate the market, anticipate the customer." Cooper personnel frequently travel to customer plants and watch how headlamps are installed, looking for product problems or automaker practices that could lead to warranty issues. That knowledge is then taken back to the plant, where it's turned into product and process improvements. As a tier-one auto supplier, any changes that Cooper makes must adhere to customer-validation processes. And because headlamps are regarded as a safety feature, changes must align with Dept. of Transportation standards. These strict improvement parameters led the plant to develop -- in conjunction with Chrysler -- an assembly operation for a new Dodge Dakota headlamp line that is as much a functional manufacturing operation as it is an R&D trial. The highly automated approach uses a palletized conveyor system with radio-frequency product control to collect and store information to a CD-ROM database on leak rates, aim, and dimensional characteristics for each bar-coded headlamp. The poka-yoke line also utilizes customized machine vision that self-corrects the aim of the lamp, reducing the need for that operation at the customer plant. For Cooper, the line both demonstrates and delivers product quality and deliverability improvements that can then be transferred to other processes and products. From July 1996 into September 1997 the Dakota line shipped only one defective product, stresses Hogan. "As we're led to believe from our customer base, this is the most advanced, automated headlight assembly line in the world. The Japanese don't typically do stuff like this, and nobody else in the United States has ever had as aggressive an approach to automation as this project." Quality manager Hower says it's nice to be bringing improvement ideas to customers rather than fielding their concerns. "We'll recognize an issue before our customer will recognize it, already have corrective action in place, and already see the effect of the corrective action even before the customer has had any indication that there has been a problem." Cooper's suppliers also participate in the customer-satisfaction process. For instance, Cooper and ITW Deltar jointly reviewed a Chrysler assembly plant that had been reporting headlamp failures. The suspected cause was a small vent. The vent allows headlamps to breathe, but can also be the source of leaks (the primary defect in headlamps). The vent was a Chrysler-specified part, and ITW Deltar supplied the vents. In between was Cooper. An ITW Deltar/Cooper TQM team came up with a redesign of the vent that eliminated vent-related leak defects at the Chrysler plant. Warranty claims related to the vent dropped to zero, and Chrysler is now incorporating the vent design into other lamp products, even those made by Cooper competitors. "We work very hard understanding expectations, then focusing as a team to meet those expectations," says Faulhaber. "If you don't understand those things, then you're not going to be successful."