Assembly Excellence: Plant of the Year 2006
At first glance, business jets, heavy-duty trucks, industrial motor controls and contract electronics don't appear to share too much in common. However, all of those products are assembled in outstanding plants. In fact, the facilities were finalists in the 2006 Assembly Plant of the Year competition sponsored by ASSEMBLY magazine.
There was a strong field of candidates for the third annual award. That made it difficult for the team of judges, which included ASSEMBLY's editorial staff, to narrow down the list to five finalists.
All of the assembly plants were worthy of consideration, but at the end of the evaluation process one stood out from the others: the Lear Seating Plant in Montgomery, AL. The facility was selected as Assembly Plant of the Year because of the way it has successfully applied new technology, such as DC electric tools and radio frequency identification, to build car seats just a few hours before they are installed in Hyundai vehicles.
However, the other finalists are also quite impressive. Here's a brief look at what makes each of these world-class plants stand out.
Gulfstream Long Beach
Demand for personal business jets is booming. According to the General Aviation Manufacturers Association (Washington, DC), shipments during the first half of this year were 28 percent higher than in 2005, and that growth is expected to continue at least through next year.
One of the most popular manufacturers is Gulfstream Aerospace Corp. (Savannah, GA). Its Long Beach, CA, plant paints aircraft exteriors and installs interior furnishings in G550 and G500 business jets.
The large-cabin, ultra-long-range jets can accommodate up to 19 passengers and whisk them comfortably from the United States to destinations in Asia, Europe and South America. Both aircraft can reach speeds up to Mach 0.885 and cruise as high as 51,000 feet. However, the G550 can fly up to 7,500 miles vs. 6,750 miles for the G500.
Gulfstream, a division of General Dynamics Co. (Falls Church, VA), employees 700 people in the Long Beach facility. They install seats, lavatories, galleys, closets, storage bins, lighting, audiovisual systems and other features that make the spacious interiors appeal to customers. A wide variety of seating and cabin layout configurations are available.
The plant has applied lean Six Sigma principles to reduce production costs, improve quality and shorten time to market. According to Barry Russell, plant manager, all employees are involved in the lean initiatives.
By applying lean concepts, the plant has improved aircraft assembly time by 42 percent during the past 2 years. Over the same time period, internal defects have been reduced by 60 percent, while profit margin has improved by 24 percent.
The facility is both ISO 14001 and OHSAS 18001 compliant. The ISO 14001 standard is earned by companies that are in compliance with international environmental regulatory standards, and demonstrate an established and uniform approach to managing their environmental policies and procedures.
OHSAS 18001 is a specification that improves on occupational health and safety management systems designed to make the workplace safer. The Gulfstream Long Beach plant boasts a worker injury rate that is 85 percent below industry standards.
The plant has also invested in flexible manufacturing processes to meet customer requirements and speed time to market. Russell says 3D modeling has improved assembly efficiency, while new computer systems are boosting productivity on the plant floor. "Advanced epoxy technologies have reduced span time, cost and variability," adds Russell.
Class 8 trucks are the backbone of the U.S. economy. They pull a wide variety of 40-foot trailers along highways from coast to coast. Many of those big rigs are assembled by more than 1,400 people in Nashville, TN, at a state-of-the-art plant operated by Peterbilt Motors Co. (Denton, TX).
The plant combines technology and lean manufacturing principles to produce durable products that are the envy of the trucking industry. Peterbilt Nashville's quality approach has allowed it to increase build rates by 24 percent and improve the quality of the trucks it produces.
The facility uses a product quality index (PQI) that serves as an auditing procedure and metric. Inspections are performed daily on a sample of completed vehicles that have been declared deliverable.
"The approach is designed to measure quality from the customer's perspective," says Larry Vessels, plant manager. In 2005, he claims the PQI was reduced by 21 percent, while truck hours were reduced by 6 percent.
The PQI program audits a random sample of vehicles from top-to-bottom and end-to-end. "This score provides a funnel to target defects, initiate immediate corrective action, and drive preventive actions in place to eliminate defects," explains Vessels. "It has been instrumental in providing feedback to the assembly process, as well as ensuring that continuous improvement remains active." The system provides real-time data for the facility's cross-functional teams.
Peterbilt Nashville uses an electronic database that allows the plant to record large amounts of vehicle quality information. "This information includes operator confirmation for performing the tasks required at each assembly station," says Vessels. "Should any discrepancy arise, it will be documented and stored electronically for correction and retention. These discrepancies can be retrieved and analyzed to show past trends and predict future occurrences."
Since its launch, the system has dramatically changed data usage throughout the plant. "Items that previously were difficult to track are now closely scrutinized to ensure that the end product is being built efficiently," explains Vessels. "This new system has given us a superior tool to aid in the commitment to continuously improve performance and achieve a defect-free product."
To meet the challenges of receiving and distributing more than 12,000 active part numbers from more than 300 suppliers, and to support the material demands for custom-built trucks, the plant uses a one-touch material handling strategy. "The core of this strategy is to move material from the dock to the point of use in one move," says Vessels.
The system delivers parts and components to the assembly line efficiently by eliminating the waste associated with excess handling. Waste-proofing the process involved eliminating more than 2,000 storage locations in the warehouse and more than 400 racks on the shop floor.
Peterbilt Nashville also uses a variety of state-of-the-art production tools to improve efficiency. For instance, during the past 2 years, the plant has implemented two robotic paint systems that have reduced waste, cut costs, increased productivity and reduced labor. As a result, paint application warranty costs have been slashed by 45 percent.
Other major capital investments include DC electric tools that enhance error proofing and torque monitoring, and a new flat-top conveyor for engine trim that improves ergonomics and provides line-side access to parts.
Schneider Electric Smyrna
Switch gear and industrial motor controls aren't glamorous. But, without them, assembly lines, telecommunications systems and transportation networks around the world would come to a grinding halt. The Schneider Electric plant in Smyrna, TN, assembles medium-voltage products that are metal-clad and metal-enclosed.
The facility and its 425 employees have undergone a metamorphosis during the past 2 years. It is now one of Schneider Electric's best-performing plants out of more than 30 manufacturing facilities in North America. On-time delivery rates averaged less than 70 percent range prior to 2004, but the plant exceeded 90 percent by the end of that year. In 2005, on-time delivery reached 99.5 percent. This year, the Smyrna facility is at 100 percent on-time deliveries to its customers.
The plant's safety record has also improved dramatically, reducing worker compensation costs by more than 50 percent since 2004. Wiring errors have decreased by 39 percent, and hardware complaints have dropped by 80 percent. The plant has become more customer-focused by adopting the Six Sigma methodology.
The Smyrna plant prides itself on an engineered-to-order philosophy, and has made great strides to improve output and productivity on its assembly lines. "Production workers are highly flexible and move easily among tasks," says Richard Sly, plant manager. "This has allowed us to reduce normal cycle times when it is critical to meet a customer's deadline."
When a customer requests a rush order, Sly says the plant's first response is to "say yes." To achieve quick response and improve time to market, every manufacturing step has been dissected. Employees have successfully squeezed time out of the production process, without hindering overall plant performance. As a result of the "say yes" initiative, Schneider Electric Smyrna was able to improve sales of its core products by 11 percent in 2005. The plant is on track to repeat that achievement this year.
To address ergonomic concerns while reducing assembly time, numerous changes have been made to manufacturing processes. For instance, motor control board kits are made to order and delivered to the plant floor. Sly says that simple move greatly reduced production time.
Floor elevators have been installed at individual assembly workstations so that bulky switchgear units, which can measure up to 7 feet high, can be lowered into the floor to allow easier access. Operators now install a large bus bar at waist level, rather than carrying the component up a ladder. These improvements improved the plant's medical incident rate by 38 percent between 2004 and 2005.
Contract electronics manufacturing is an extremely competitive industry. However, by making changes to its production processes and focusing on automation, SMC Inc. (Lexington, KY) has been able to reduce its assembly costs and pass these savings on to its customers. In fact, the company has been able to win business away from contract manufacturers in Asia and Mexico.
To stay competitive, the company implemented a lean manufacturing strategy. "This allows us to eliminate areas of waste, improve our production process, fine-tune our capabilities and keep pace with changing customer demands," says Greg Howard, plant manager. "Through lean manufacturing, we are able to reduce cost and pass these savings on to our customers."
SMC employees 217 people and specializes in circuit board assembly and box builds. The ISO 9001:2000 certified plant boasts a first pass yield that exceeds 98.5 percent and a warranty return yield of 99.8 percent.
Like other electronics manufacturers, SMC was recently forced to adopt lead-free manufacturing processes. During the last 2 years, the company has purchased more than $500,000 in new circuit board assembly equipment. In accordance with IPC standard A610, Rev. D., SMC has also made significant investments in training operators to handle new manufacturing processes and materials.
The layout of the plant has been redesigned for better material flow. As a result, flow was reduced by 50 percent and backup problems have been eliminated.
"This has reduced production time and material movement," says Howard. "Additionally, we have added pictures to all of the operator's instructions. This has improved the quality of our product, reduced training times and increased throughput.
"We have also worked to improve the efficiency of our assembly lines by changing some of our production processes," adds Howard. For instance, by converting through-hole assembly from a batch process to an in-line process, SMC Lexington balanced the production line and boosted efficiency by 50 percent.
Howard and his employees created a 3-year technology roadmap that aligns production equipment with customer needs. "For example, we have purchased high-speed chip shooters that have increased production capabilities, improved quality and reduced product costs," says Howard. "In the area of process control, we have added an X-ray machine to inspect BGA solder joints, which has helped improve the quality of our product. For added capability and quality, we added the coating process directly into the production line so that we could be more consistent with our quality."
SMC annually maintains a 98 percent inventory accuracy. In fact, the company has averaged less than $400 in inventory adjustments during the past 2 years. "Because we are able to maintain such accuracy, we do not have to shut down at anytime to do an inventory count," claims Howard, "nor do we have to tear down setups causing delays in delivery to customers."
In addition, SMC recently conducted a companywide analysis of scrap. A team identified the root causes of scrap in the surface-mount assembly process, and discovered how problems with feeding and indexing were causing components to be mounted incorrectly.
"We have been able to pinpoint areas where we have seen a lot of scrap and are putting into place systems to help reduce the amount of scrap in the production process," explains Howard.