IW Best Plants Profile - 2002: Dana Corp. Stockton

One Product, One Customer

TPS, teamwork and kaizen pay off for auto frame plant. Dana Corp., Stockton, Calif.

At a Glance

• Plant size: 110,000 square feet
• Start-up date: 1994
• Special Achievements
  • 2000 National Association of Manufacturers' award for Workforce Excellence.
  • In the latest annual Toyota Production System audit conducted by NUMMI, Dana-Stockton was rated at 4.38 on a 5-point scale.

When Dana Corp. built a 110,000-square-foot plant a couple of miles east of Interstate 5 in California's Central Valley eight years ago, there was never any doubt about its purpose. The only question was, would the experiment work? Could Toyota Motor Corp., which had traditionally built key parts in Japan, successfully outsource a major component to an American supplier? And get dependable just-in-time delivery as well?

Today, eight years and well over a million units later, Dana's Stockton, Calif., plant still produces one product for one customer: frames for the Toyota Tacoma pickup truck assembly line at New United Motor Manufacturing Inc. (NUMMI), the Toyota-General Motors Corp. joint venture in nearby Fremont, Calif.

As each flatbed truckload of Toyota materials -- fresh off a ship from Japan -- rolls up to the plant dock, a flatbed trailer stacked with 48 finished pickup-truck frames awaits its trip.

From the start, the Dana operation broke new ground not only literally, but figuratively as well. Not only was this the first time the global automaker had outsourced a truck frame, one of the most critical components of any vehicle destined for hard use in the field, but the greenfield plant also was one of the earliest to fully embrace Toyota's production-line initiatives in a non-union setting.

If anything, Dana-Stockton's workers' almost passionate commitment to the Toyota Production System (TPS), has been the source of the plant's success over the years in refining and improving operations.

"In the spirit of TPS, Dana-Stockton is looking for ways to kaizen their processes and they are open to new ideas," says Scott Embree, quality control engineer at NUMMI, which has produced one-third of the 10 million vehicles Toyota has built in North America.

Adds Tim Reed, plant manager at Dana-Stockton, "We're part of the Toyota family."

For example, just a pair of kaizen projects last year resulted in the elimination of three operator positions per shift for a combined annual savings of $265,000. In another instance, the plant did away with a metallic key that was affixed to each frame as a model identifier, using instead radio frequency technology so that fixtures along the line can "read" the frame model as it enters the station and adjust accordingly in five seconds.

Managers here observe a key tenet of TPS, which holds that the operators on the production floor know the most about their processes.

"The idea is, if you have a problem, don't just sit in your office and try to figure it out yourself and make your own decision," Reed says. "Go ask the person who works in that area."

Mike Glisan, a maintenance team member, says he and others on the plant floor appreciate that approach. "Nobody really likes change, but it's better if we're coming up with the plan ourselves," Glisan says.

Among the innovative programs the Dana plant came up with is the "temp for hire" program aimed at countering high employee turnover. Work at the plant is often physical, repetitive and noisy. What's more, Stockton, historically an agricultural center for Central Valley growers, lacks a large manufacturing workforce to draw from. Still, turnover is down to 16.9% from 23.5% three years ago.

Teamwork is Paramount

With "temp for hire," a new employee comes on board for a six-month tryout, like a football player trying to make the team. But instead of the coach making the decision on who gets cut, here the worker is evaluated by teammates. Welding skills are important -- each frame has 115 feet of weld -- but teamwork is paramount.

"We're looking for their team-building skills," says team leader Robert Falcon. "Your job is dependent on the person before you, and the person behind you is dependent on you," Falcon adds. "If one person is not performing, that creates a problem for the others on the team."

Of course, permeating everything the plant does is its adherence to TPS.

"We believe TPS is the most advanced production system, and we try to live it," says Reed.

In the latest annual TPS audit conducted by NUMMI staff, Dana-Stockton was rated at 4.38 on a 5-point scale.

Says Nick Leon, another team member: "The idea is, you get the bugs out of something with the first kaizen, and then you keep trying until you get something that really works."

Plant controller Jason Johnson, who has worked at two other Dana plants in the Midwest, says the plant's culture is what sets it apart.

"What's unique about this plant is the amount of ownership the teammates take and the pride they have," observes Johnson. "And here they let people in on the decision-making. I didn't see that as much at other facilities."

The plant's goal is for each worker to turn in three suggestions per month. Contests are held at the end of each month and at year-end.

While at some companies, the suggestion box is a glorified joke, at Dana-Stockton, it's taken seriously.

"At first you think it's corny, but it works," says employee Nick Leon.

Adds co-worker Mike Glisan, "A lot of my work orders in maintenance are generated by responses to suggestions."

In recent months the plant was able to tighten its already minimal inventory of finished frames by changing from a fax-per-day order from NUMMI to tell it what to build, to an almost hourly electronic data interchange (EDI) order.

"Now we know exactly what they want, when they want it," says Gary Duke, a team leader.

Perhaps most impressive at Dana-Stockton is the way the material flows into, through, and out of the plant like clockwork. The plant's parts-delivery kanban was the basis for its being recognized with the 2000 National Association of Manufacturers award for Workforce Excellence. A single team member operating a small tow vehicle replenishes parts throughout the plant using a card system and half a dozen routes. The operation is simple, yet smooth, the only occasional slowdowns or glitches occurring when NUMMI holds up on placing the next EDI-based order for frames due to some slowdown of its own, or else the frame plant suffers a breakdown of one of its robotic welders.

Reed admits that many of the plant's robots are getting old. To guard against such failures, the maintenance team members have begun a methodical, piece-by-piece, unit-by-unit rebuilding.

Dana-Stockton also excels in close collaboration with the customer. Workers from the frame manufacturer are constantly on-site at NUMMI, monitoring shipment arrivals, checking inventory and talking to workers on the line.

Lest you imagine being a captive supplier to an OEM that is your only customer is a breeze, just remember that the flip side of doing a stellar job for Toyota is facing the hot breath of competition: the ever-present threat of losing the business to a competitor or to Toyota itself. In the next year, Toyota will redesign the Tacoma for the 2005 model year. Although Dana-Stockton fully expects to get the business, in manufacturing there are few givens.

"We're working hard to get that business," Reed says. He says Dana has sent one of its frame engineers to Japan to work hand in glove with the designers of the revised pickup. Judging from Dana-Stockton's full embrace of TPS, kaizen and teamwork, and the plant's unrelenting adherence to working closely with the customer, the Dana-Stockton facility will be turning out Toyota truck frames for years to come.

A Close Customer Connection

When Tim Reed, plant manager at Dana Corp's Stockton, Calif., frame plant, came to California last spring from a Dana plant in Fort Wayne, Ind., he quickly learned what it means to be a supplier to Toyota. Dana's "e-Coat" electro-deposition painting line was down, and maintenance staff were stumped as to the cause.

A stoppage for a short time isn't critical, because between Dana-Stockton and NUMMI, the two plants still have about 600 finished frames in inventory, not quite a day's output.

"After we'd been down an hour and a half, we called NUMMI and told them we had a problem. They said to call back in half an hour. We did. After two-and-a-half hours, we still weren't up. They said they were rounding up some of their own maintenance people and would send them over to help us out."

As it turned out, Dana's own maintenance staff found the problem -- a blown fuse -- and got the e-Coat line up and running on its own.

"We called NUMMI, and their people were in the car, ready to go," Reed recalls. "In my experience, other automakers wouldn't have done that -- they'd have expected you to do it yourself. But we're part of the Toyota family. And it works both ways. When they have a problem, we'll jump through hoops to try to help them out."

Embracing Kaizen

Last year Dana Corp.'s Stockton, Calif., automotive frame plant completed half a dozen kaizen projects for a total projected yearly savings of $291,000.

A major improvement was the plant's keyless system for selecting any of the dozen different model frames for which to weld brackets, engine or transmission supports, etc. In the past, model changeovers were detected by plant fixtures and operators observing a metallic "key" attached to each frame that served as a model identifier. When there was a changeover, the next frame had a different kind of key attached.

With the new process, there are no metal keys. Instead, the plant uses RF technology, allowing equipment along the line to detect the change and adjust in five seconds.

In another kaizen, the plant's quality staff noticed that some robots over time would weld ever so slightly off the desired seam. After continually trying to "retrain" the robots to weld the seams properly, workers decided they'd be better off figuring out the cause of the problem. Instead of a single reason, they found a host of causes that contributed to the off-seam welds, including the fixture that held the parts together and other worn-out parts in the production machinery. Fixing these problems yielded "a big increase in productivity," Reed says. The plant's output this year has jumped to 39.2 frames an hour from 37 frames an hour in 2001.

Shifting to Pure Make-to-Order

The plant's shift from a fax-based daily order from NUMMI to an order every 90 minutes via EDI has enabled Dana-Stockton to further pare its finished-goods inventory, while achieving a true pull-based manufacturing operation. Before EDI was implemented last November, NUMMI provided its frame supplier with a six-week production forecast, as well as the daily faxes.

The problem was, as Reed explains, "there were continuous spikes." The varying mix of different models of frames also worked havoc on Dana-Stockton's inventory. Using EDI, Dana-Stockton workers know exactly which model frames to make and are able to ship them according to NUMMI's build sequence. "EDI has had a significant impact," says plant manager Reed.