IW Best Plants Profile - 2003

Running Like A Charm Injection molding company integrates automated and manual processes. ByPatricia Panchak Delphi Corp. -- Delphi Connection Systems' Precision Molding Center, Cortland, Ohio At a Glance

• Plant: 160,000 square feet
• Start-up: 1999
• Achievements:
  • Awarded the 2000 Global Excellence Award, Delphi Packard Electric's most prestigious internal award;
  • Awarded the 2002 Shingo Prize for Excellence in Manufacturing.

Chances are, you'll not find a factory that operates quite like the Delphi Corp. -- Delphi Connection Systems' Cortland Precision Molding Center, Cortland, Ohio, manufacturer of injection molded plastic components for electrical connection systems. Sure, you'll find many familiar manufacturing best practices in use throughout the plant, but management refuses to follow a particular philosophy to the letter. "We didn't read a book and apply it blindly," quips Plant Manager John Stefanko. Instead, he says, the plant design team set an objective of being the low-cost, highest-quality producer, then renovated a facility and created a production system that would help achieve it. The result is a carefully calibrated system that integrates the best of several manufacturing strategies and management practices, including those governing inventory, production and employment. Inventory management practices, for example, feature a unique combination of traditional build-to-inventory and just-in-time approaches. In employee practices, managers rarely implement the empowered work teams found in many high-performance plants. In production, plant managers employ cost-effective automation alongside smart manual processes. "It's unconventional in some ways," admits Stefanko. "But if you study and understand the business, it makes sense." Impressive metrics demonstrate that the approach works: In four years the plant catapulted from what was said to be the poorest performing plant within Delphi to one of the best company wide. Some metrics plant management is most proud of include: achieving a zero defect rate for outside customers since the plant startup and a 3 ppm defect rate for internal customers to date in 2003; improving changeover times from two hours 18 minutes to 27 minutes; and executing zero blocked cavities since plant start up. (An injection molding operation uses tools, the molds, into which liquefied material is injected, then allowed to harden to make the parts. Each tool has several cavities enabling it to produce more than one identical part per injection. It is common practice to block a cavity when it begins to produce poor quality parts, to keep production running with the mold producing one-fewer part per injection. A Zero-Blocked Cavity policy prohibits this practice, instead forcing production personnel to maintain the tool so that it always produces quality parts from all the cavities.) The plant also boasts a first-pass-yield rate of 99.61%, an on-time delivery rate of 99.98% (based on date customer requested) and a machine availability rate of 97.85%. Other metrics, though, have lean practitioners doing double takes. The plant carries what many lean proponents think is too much inventory for a plant that draws stock from a supplier warehouse and ships to a distribution center. Further, a look at the plant's production curve shows that it overproduces half the year and under produces the other half when it uses inventory to fill orders. Lean manufacturing adherents view building to inventory as costly waste to be eliminated or "smoothed out." But Stefanko disagrees: "From a unit-cost standpoint, [strategically building to inventory] minimizes cost over the year. To design a plant to follow the curve, it costs more." However, he adds that reducing inventory remains a top priority at the plant and notes that they've steadily reduced inventory since plant start-up. That only 5% of employees serve on empowered work teams at the plant catches some production experts off guard. "We do not have a formal team process," says Stefanko. He adds that plant managers employ a system of formal and informal communication with employees that they say facilitates the two-way communication between labor and management, as well as teamwork among plant personnel that would otherwise be coordinated by formal teams. Where more traditional, cross-functional team strategy did pay off for the plant, Stefanko notes, is in the design of the facility and its work processes. (See below for more on the plant's employment practices.) Likewise, those who favor complete automation might look askance where automation is notably absent from the plant. In the shipping room, for example, the design team opted to maintain a manual system, after calculating that the cost of automation wouldn't payoff. What convinces skeptics of the plant's world-class status, though, is the custom-built network that gives operators, managers, suppliers and customers real-time production data, ensures quality standards are being met, and orchestrates the seamless integration of manual and automated processes throughout the plant. Among the steps information technology and automated equipment handles with little human assistance are setting machine schedules, mistake-proofing production and transporting most of the materials and finished goods throughout the plant. Humans intervene to set up machines, complete quality checks and perform maintenance, among other things, with the assistance of automation. Says Stefanko, "Everything here talks with each other. It all fits together." The integration of automated and manual processes has helped the plant churn out 1.75 million parts on each of two 12-hour shifts each day with very few production employees. During each shift, a single scheduler sets the pace of the factory with the help of a custom-designed computer program that has automated the routine scheduling decisions. The scheduler electronically transmits work assignments to each machine, providing instructions regarding which tool and material to use, as well as how many of each part to make. A "golden recipe," a set of machine settings needed to make each part, is downloaded to the machine as well. Two mold-setters changeover all the machines, using the data sent from the scheduler as well as color-coded and quick-connect devices, which speed the transition. A mere eight machine operators each run identical sets of 15 molding machines, with the help of a PC, a hand-held scanner and each machine's human-machine interface. Three quality operators assist them, conducting dimensional and attribute checks at each machine's start-up and twice each shift. Automated-guided vehicles, acting on infrared signals sent from the operator and traveling along a grid of 4,000 magnets embedded in the floor, pick up full containers from the machines and ferry them to the appropriate place in the shipping department; they also pick up empty containers from shipping and deliver them to the machines for filling. Throughout production, each step is error-proofed, monitored and recorded electronically. In the raw material room, for example, bar code verification ensures the right color of material is put into each bin. At the production site, the mold setter verifies that the correct machine, tool and material combination are in place by scanning barcodes on each. Also, as each machine runs, it is constantly verifying that the quality parameters are met. The system, "virtually eliminates operational error," says Dave Hatalsky, quality general supervisor. "If things are not right, things come to a halt." Web-Exclusive Best PracticesByPatricia Panchak Benchmarking contact: Ken Ellsworth, plant manager, [email protected], 330/373-5643 On Benchmarking Though the Delphi Cortland Precision Molding Center implements an "unconventional" mix of manufacturing best practice strategies, managers follow a fairly conventional system of benchmarking, with one exception: If a best practice doesn't contribute to their goal of becoming the low-cost, highest-quality producer, they won't implement it. For example, though they benchmarked highly automated shipping departments, they opted for a manual system because the cost was too high compared to the pay off. Like most other high-performing plants, however, Delphi benchmarks against a wide variety of other plant operations, including other Delphi plants in the U.S. and Europe, and molding plants that serve industries other than the automotive industry. Much of the benchmarking contributes to change in practices at the plant. "Our most important benchmarking is done when we compare like facilities for quality, machine utilization and down time," plant management notes in their Best Plants application. "We don't focus on any one metric but use the overall comparisons to judge ourselves." This information is then discussed in management review meetings and used to help set plant direction. Other best practices though are adopted nearly wholesale. Says Plant Manager John Stefanko, "A lot of the things we did here we pretty shamelessly copied from other folks." He notes that the automated guided vehicle system is nearly identical to the one at a plant they benchmarked in Germany. Individual, Not Team, Empowerment Rather than implementing empowered work teams like those found in other high-performing plants, Delphi Packard Systems Cortland Molding Plant relies on empowered individuals to drive its continuous improvement efforts. They contend that their process of formal and informal communications between labor and management, and among plant personnel serves the same purpose as self-directed or empowered work teams at other plants. "We do not have a formal team process," says incoming Plant Manager Ken Ellsworth. "But on an informal basis, we have more team spirit than any one I know of." Instead, plant personnel from management through the production operators say there's an involvement by all the employees that derives from efforts to meet the plant's common goal of producing low-cost, high-quality products. It is nurtured by plant management that gets along well with the labor force. Indeed, the group shares stories of times when employees pulled together in spontaneously formed teams to meet unusual demands. Plant Manager John Stefanko tells of the time when the plant was asked to take over production of a polypropylene product from another plant. Traditionally setting up machines would take days, he said. "Our plant started at 8 a.m. and had it running in four hours -- and it involved substantial changes to the machine and set up." Cathy George, senior financial analyst, relates another story about the time another Delphi employee filled in for her to oversee the plant's annual physical inventory. "It went so smoothly it took two hours where at other plants it would take eight, nine, 10 hours of preparation work," she said. "The auditors couldn't believe the level of cooperation and cleanliness of the facility." Plant personnel throughout the organization speak proudly of the fact that employees at other Delphi plants envy their Cortland peers. "This plant is full of 30-year employees and they're here by choice," says Norm Ashley, union sub-chairman. "The last employee that came here had 27 years experience." Consistent communication keeps all plant personnel focused on the common goal. Every morning the plant holds a production meeting that all plant personnel can attend and at which no topic is off-limits. The meeting and its "open forum" have helped the plant "go from fire fighting to long-term problem solving." Also, each week, the plant manager holds a staff meeting of direct reports (including supervisors of manufacturing, engineering, production control, quality, finance and IT) where they discuss divisional issues, plant process changes and the like. Each month every production employee meets with his or her supervisor to review individual performance, including housekeeping, absenteeism, quality metrics, etc. At that time, the employee is informed of product-attribute changes, and the two discuss plant policy changes. Finally each quarter the plant manager meets with all employees to discuss the plant's overall metrics and business conditions. "Everyone understands how the plant works," says Ellsworth. "And everyone just truly cares." Computerized Maintenance Management Preventative maintenance (PM) on production tools is monitored and tracked on a Tool Traveler system that assures that all tools are cleaned and maintenance is completed based on actual production cycles. Each tool is bar-coded. Once a tool has completed its production run, it is returned to the tool area with a "last shot" bag carrying the last four parts molded by the tool. Having parts travel with the tool that made them gives toolmakers the opportunity to look at the part during routine maintenance to determine if the mold is beginning to show wear. Also, the computer network, which stores a file for every tool, keeps track of the number of cycles for which a tool has been used since the last preventative maintenance and prevents the tool from being used past its PM cycle. The scheduling system checks the file before assigning it to a machine to produce parts and will not assign a tool that is beyond its PM cycle. "Our ability to track tool performance and maintenance has enabled us to achieve a 10 RRPPM [reject and returned parts per million] level [in 2002]," asserts plant management in their Best Plants application. "We have also reduced the number of tools pulled each day, from three occurrences per day a year ago to once per day today. [Together] these systems help to maintain high quality, high schedule reliability, and result in a high customer satisfaction level." The PM system also tracks each molding machine based on calendar days, and schedules them for quarterly, semi-annual and annual maintenance. "I want the quality [of the part] to be the same in the last year as it was in the first year," says Stefanko.