Assembly Plant of the Year: STIHL Stays a Cut Above the Competition
Flexible assembly lines and vertical integration thrive in Virginia Beach.
What do lumberjacks, landscapers and homeowners have in common? They all rely on chain saws, trimmers and leaf blowers produced by STIHL Group. The family-owned company prides itself on quality products and loyal customers. It also believes strongly in vertically integrated manufacturing and flexible assembly lines.
STIHL is a privately held company based in Waiblingen, Germany. It operates state-of-the-art assembly plants in Austria, Brazil, China, Germany, Switzerland and the United States.
The later operation is based in Virginia Beach, VA, on a 150-acre campus. STIHL Inc. produces more than 275 model variations of handheld outdoor power equipment for sale in the U.S. and around the world. Products range from gas-powered chain saws that can fell a large tree with a few quick cuts to hedge trimmers for weekend yard chores.
STIHL’s Virginia Beach facility is the recipient of the 2014 Assembly Plant of the Year award sponsored by ASSEMBLY magazine. The world-class plant was chosen for the 11th annual award because of the way that it ensures on-time delivery of high-quality products through the innovative use of automation, people and flexible production processes.
“Our plant was founded on the principle ‘in the market, for the market,’” says Christian Koestler, vice president of operations. “A majority of STIHL powerheads are built in the United States from domestic and foreign parts and components, and we are proud of it. This is a true testimony of the can-do attitude of our local work force and the commitment of our staff to effectively compete in global markets.”
That insourcing pride is reflected in STIHL’s “Built in America” print ad campaign, which touts its manufacturing prowess and features photos of real assemblers. The company also recently posted a video on YouTube showing one of its chain saws “singing” the national anthem inside a test cell at the Virginia Beach plant.
According to Irwin Broh Research, STIHL produces the No. 1 selling brand of chain saws in the world and the top-selling brand of gasoline-powered handheld outdoor power equipment in the United States. However, unlike its competitors, the company does not sell its products online or at big-box home improvement retailers. It only sells chain saws, cut-off machines, pole pruners, edgers, sprayers and other tools through a network of dealers.
The products are sold by more than 8,500 independent dealerships throughout the United States, generating annual sales of more than $1 billion. And, those dealers don’t ship products. Instead, customers have to go into a shop to receive face-to-face service, training and parts support.
“STIHL continually demonstrates its world-leading competence with innovations designed to improve functionality, ease of product use, environmental protection, and health and safety at work,” says Lorraine Wagner, director of manufacturing. “Our products are synonymous with quality, and all employees strive to ensure that STIHL remains No. 1, both internally and with our customers.
“This is achieved through the dedication of our self-directed work teams, visual management, and quality procedures and systems,” adds Wagner. “In addition to quality, our on-time delivery is world-class, with an average of 99 percent for power tools and chain saws.”
Another thing that makes STIHL Inc. unique is its vertically integrated factory. “Unlike many other companies, we have not reduced the level of in-house production to transfer costs to outside suppliers,” says Koestler. “The opposite is true.”
The company manufactures important parts in-house to guarantee quality and meet delivery deadlines. It makes its own engines and major components, including crankshafts, manifolds and pistons. In fact, the Virginia Beach plant exports machined components to its sister plants in other parts of the world.
STIHL also operates a large plastic injection-molding operation that produces more than 100 million plastic parts a year, such as covers, fuel tanks, handles, shrouds and triggers. Vibration and infrared welding equipment is used to assemble motor housings and other plastic components.
“Outside of the automotive industry, we are one of the largest technical molders in the United States,” claims Koestler. “Being vertically integrated allows us to more readily respond to market demand fluctuations brought on by unforeseen events, such an active storm season.”
In addition to in-house machining and molding operations, STIHL produces associated accessories, such as the guide bars used in chain saws and the nylon line used in trimmers. The company’s 60,000-square-foot guide bar plant is the most advanced facility of its type in the world. All stamping, welding, riveting, painting and packaging processes are fully automated from start to finish.
STIHL’s vertically integrated philosophy carries over to in-house machine building and systems integration. The company has a long, proud history of designing and building its own production equipment. For example, engineers in Virginia Beach recently developed several vision inspection systems using off-the-shelf cameras and sensors.
“Advantages of in-house machine building and systems integration include reduced cost, internal knowledge base, standardization and reduced machine production launch time,” says Steve Gidaro, engineering manager. “Time is reduced, as external resources need to learn and understand our processes, products and assembly requirements before they can even start the conceptual design work.
“This knowledge is inherent within our process engineering department, as we are in constant interaction with our assembly workforce, production lines and products,” Gidaro points out.
STIHL traces its roots to the mid-1920s. That’s when a young mechanical engineer named Andreas Stihl developed a portable power saw while working at a sawmill in Germany. In 1926, Stihl built an electric-powered, handheld chain saw. He established a small factory in Stuttgart and soon began assembling a line of gasoline-powered chain saws.
In 1952, STIHL unveiled the world’s first one-man chain saw, which revolutionized the industry. Another key breakthrough was the first successful gearless chain saw. The robust, well-engineered products were soon in widespread demand throughout the world.
During the 1950s, STIHL developed other types of outdoor power equipment, such as augers, in addition to a line of small, lightweight farm tractors, which was discontinued in 1963.
STIHL engineers also developed innovations such as anti-vibration systems, automatic chain oiling, centrifugal clutches, electronic ignition systems and dual-spring starting mechanisms.
The Virginia Beach plant was established in 1974 to produce a single line of chain saws. Its close proximity to Norfolk, home of one of the largest ports in the United States, played a strategic role in the company’s success.
The campus has expanded several times over the last four decades to support new product launches and boost production capacity. It currently encompasses more than 2 million square feet of manufacturing, warehouse and office space, employing more than 1,700 people.
During the past four decades, more than 50 million units have been produced at the high-mix, high-volume operation. Several million products are assembled annually in Virginia Beach.
Seven chain saw assembly lines produce more than 35 different models, while 15 power tool assembly lines build more than 100 models. And, because STIHL annually unveils many new products, the assembly lines must constantly remain flexible.
That enables the company to meet demand that fluctuates by season. For instance, trimmers are in higher demand during spring and summer months. Demand for chain saws usually increases during hurricane season.
“Typically, the peak manufacturing demand for a product line is in the off-season for when that item would be used,” says Wagner. “This ensures that the product is on the dealer shelves right when the customer would be looking to purchase that item. For example, blowers are peaking in the plant over the summer to ensure that they are in the market when the leaves start falling.
“Due to the seasonal variation of the products, we have assembly line crews that are cross-trained on a variety of lines,” Wagner points out. “The lines themselves are set up to cover every product variation with minimal changeovers. Assembly crews, at short notice, can increase capacity, which helps to combat any market volatility—a big driver of this is obviously the weather.”
Assemblers produce a wide variety of chain saws and gas-powered, handheld outdoor power tools. And, they assemble a complete line of equipment for both homeowners and professional users. Engines are built in many different sizes, ranging from 1.7 to 8.5 hp.
Chain saws assembled in the Virginia Beach plant range from the MS 170, a 9-pound tool for occasional backyard use, to the MS 362, a professional machine that’s designed for felling and bucking larger-diameter trees. It weighs 13 pounds and can accommodate guide bars up to 25 inches long.
Assemblers also build hundreds of different types of handheld blowers, trimmers and other products. Variants include engine displacements, driveshafts, filter systems, fuel tanks, mufflers, cutting heads and attachments.
Trimmers for homeowners, such as the FS 40 C-E, are lightweight, powerful and easy to use. On the other hand, professional trimmers, such as the FS 310, feature special components for handling heavy-duty tasks, such as bike-handle grips and interchangeable cutting heads.
“One of our trimmer lines has more than over 500 variations, runs three shifts and incorporates advanced engine technology,” says Wagner. “Most products have two-cycle engines, whereas this one has a hybrid four-cycle/two-cycle engine, which has lower exhaust emissions than traditional two-cycle engines. The line has one of the fastest rates in the plant, despite significantly more changeovers than any other assembly line.”
The 4-MIX engine combines the advantages of a two-stroke and a four-stroke. The engine boasts plenty of power and high torque, as well as lower emissions, compared to a traditional two-stroke engine.
Some gas-powered chain saws and trimmers also use a microprocessor-controlled engine that adjusts to compensate for changes in operating conditions. STIHL M-Tronic is an innovative engine management feature that constantly adjusts the fuel-air mixture, allowing optimal efficiency and eliminating manual carburetor adjustments.
Products destined for domestic use vs. export also add to the high-mix quotient of the assembly lines in Virginia Beach. In fact, the 2014 Assembly Plant of the Year exports more than 45 percent of its output to more than 90 countries. As a result, products carry warning labels and instruction manuals in multiple languages, ranging from Chinese to Russian. That adds an extra layer of complexity to the assembly process.
STIHL chain saw and power tool assembly lines are separated by a kanban supermarket. The recently installed area contains key components used on both lines.
“The supermarket now allows for material to be readily accessible at the point of use, thus taking it from a ‘push’ to a ‘pull’ system,” says Wagner. “The supermarket inventory levels are completely transparent, as opposed to being in the raw materials warehouse, where stock levels cannot be accurately visualized.
“By having the next process go to the preceding process to retrieve the necessary parts when they are needed and in the amount needed, it has been possible to improve efficiencies,” explains Wagner.
Workstations are designed to place material ergonomically close to the operator to eliminate wasted motion. And, they are also set up to minimize the number of component changes for material handlers. For example, front-loading material bins help to eliminate over extension and excessive refilling. That results in faster reload time and easier identification of the bin being reloaded.
Palletized conveyors move products down the assembly lines to operators who use state-of-the-art screwdrivers. “We deploy electric transducerized fastening tools on a case-by-case basis,” says Gidaro. “As the cost for this tooling is expensive, each application is evaluated to make sure we apply this technology where it makes sense.”
Gidaro and his engineering colleagues consider fastener joint type and joint complexity. “Transducerized tools typically provide a more controlled fastener installation, reduced installation speed, complex control capability and, when used with our smart-arm technology, highly accurate error proofing,” says Gidaro.
STIHL uses DC-electric tools mounted to positioning arms that can install fasteners at numerous torque values in various joints. This technology eliminates the need for multiple tools and the risk of using the wrong tool on the wrong joint.
Engineers developed their own smart-arm system for fastener installation for several reasons. “We found off-the-shelf systems to be expensive,” says Gidaro. “In most cases, they required a lot of programming and would need to be rehomed periodically or after a power-off event. They also did not have the accuracy we needed.”
The use of a smart arm in combination with an electric screwdriver allows assemblers to use one tool to install many fasteners at different installation torques vs. using multiple air or electric tools.
“We eliminate the possibility of the wrong installation torque for any given fastener, as only the appropriate fastening parameters are used for a given fastener location via the smart arm,” explains Gidaro. “Assembly speed is improved.
Error proofing is also addressed, since the correct fastening technique is applied to each fastener, and the possibility of using the wrong tool for the wrong fastener is eliminated. “Assembly sequences can be controlled, which is particularly helpful with operator training,” says Gidaro.
After products are assembled, they are individually tested and inspected for various quality and emissions standards, then placed on overhead conveyors for transport to packaging lines. Products are manually placed in boxes, but articulated robots are used to palletize cartons. Each machine can handle multiple product lines and box configurations.
Lean manufacturing permeates throughout the entire Virginia Beach complex. An aggressive continuous improvement process drives innovative thinking across all departments. Targeted projects can be initiated by any level within the organization, from kaizens to full value-stream mapping.
Using a wide variety of lean methodologies, STIHL tracks metrics that identify and help to eliminate waste. For instance, a 5S+1 program encourages cross-functional teams to regularly perform audits.
“These performance metrics are posted every month in each manufacturing area with clear goals and indications of specific improvement activities needed,” says Wagner. “Auditors have been trained in the discipline of 5S, but their role also encompasses safety and ergonomic issues.”
The manufacturing areas follow 32 inspection elements to cover each “S” on the 5S+1 audit form. Each element is graded on a one-to-five scale and is designed to evaluate the working environment. A grade five, which equates to 100 percent, indicates best practices are being implemented and further improvements cannot be attained. This year, the target score for all areas is 95 percent.
5S+1 brainstorming sessions take place each month. The schedule and goals are posted on the area communication board along with the assigned facilitators.
“The goal from a brainstorming session is to implement one improvement within 48 hours,” explains Wagner. “All actions have posted due dates, and the results are communicated upon completion.”
Continuous improvement methodologies are also used throughout the factory to develop cost-saving initiatives. For instance, a shop floor monitoring system allows real-time analysis of key performance indicators to assist in targeting appropriate areas for improvement initiatives. Engineers and assemblers work together to remove cost from all operations using kaizen events.
One recent project focused on product testing. STIHL has 137 test cells where every product coming off the assembly lines is run for several minutes.
A pilot assembly line was chosen, and the project successfully drove a cost reduction of $210,000 on that line alone, which allowed three of 14 test cells to be removed. “The future cost avoidance of now requiring fewer test cells per assembly line will be approximately $1 million per line,” says Wagner.
Ergonomics also plays a key role at the 2014 Assembly Plant of the Year. “Werealize that our workforce will get older over the coming decades,” Wagner points out. “With this in mind, we have embarked on an exercise to understand and work though each assembly line to take ergonomic issues into consideration.”
A recent kaizen event addressed the way in which parts are unloaded from a container into bins on the assembly line. In the past, operators had to reach into the bins, which caused ergonomic issues and waste.
By incorporating the original pack style on an adjacent station, this step can be eliminated altogether. The benefits gained are an elimination of repacking and better part presentation for the operator, and the elimination of an entire material staging area. “This, combined with a reduction of 30 minutes of actual material handling time, made for a simple, but highly effective improvement idea,” says Wagner.
STIHL uses visual management techniques not only for initiatives such as 5S+1, but also for displaying real time key performance indicators to the hourly workforce. Assembly lines are connected to real-time display boards that keep accurate counts of production performance during each shift.
The andon boards display real-time production rates, in addition to other key metrics, such as safety, takt time and quality rating for specific assembly lines. The display systems can be accessed remotely anywhere there is a Web connection.
“Ultimately, we are sharing all relevant information to all line employees and supervisors so that they can take a more active role in self-management,” says Wagner. “We can also see trends and cycles through a standard shift and determine any correlations with each hour. For example, we can determine if fatigue plays a factor during a shift cycle.”
Monthly data summary and performance is captured and presented during off line departmental meetings. “That assists in the identification of areas of waste, which, in turn, drives employee-led kaizen programs to eliminate waste,” says Wagner. “In addition, historical data can be exported to a number of different formats, such as Excel.”
STIHL is an industry leader when it comes to using automation to reduce cost, improve quality and increase value to its customers. By investing in robotics, the company has boosted productivity and increased throughput on its assembly lines.
The International Federation of Robotics has a standard for the number of robots per 2,000 employees. In the United States, the number is 27; in Germany, it’s 52; and in Japan, it’s 68.
In 2009, the number of robots per 2,000 employees at STIHL Inc. was 74, and in 2012, it was 112. By the end of this year, that number will grow to 141.
World-class automation helps ensure that STIHL maintains its status as No. 1 in the industry. However, the company does not invest in automation to replace humans.
“STIHL employees embrace automation, and no regular employee here has ever been let go due to automation,” claims Koestler. “Our plant is a ‘playground’ for people fascinated with technology.
“Automation not only provides immediate benefits to manufacturing competitiveness, but can also deliver long-term benefits to the workforce, as well,” notes Koestler. “When we install a robot, employees are retrained for other, often more highly skilled, positions in the plant.”
“We only consider using robots if the potential project has a return on investment that’s under 2.5 years,” adds Gidaro. “We have a mixture of robots within this facility, as we select the most appropriate robot for any given application. The majority of machines we use are typically six-axis robots and tabletop Cartesian systems.”
STIHL is currently implementing collaborative robots that will work side by side with humans. Because of an integrated safety mode, the six-axis robotic arms are able to collaborate directly with people without any guards.
“The collaborative robots are deployed throughout the plant at workstations where there is optimal interaction of robot and human,” says Wagner. “The robots are being used where there is potential for repetitive stress, reach and ergonomic issues.”
For instance, in one application, a robot and operator are working together to assemble a motor short block that’s used in a handheld blower.
Most automation projects have focused on areas that have been prone to ergonomic issues and concerns, such as fuel cap assembly, clutch assembly and fan housing assembly.
Fuel cap assembly, for example, was previously a semiautomated process that required one operator to run the equipment 100 percent of the time. With the addition of a fully automated assembly cell, a material handler is now only used to load raw product and remove finished product from the machine.
“The use of this type of automation has helped to reduce product cost and keep us competitive with lower cost countries,” says Gidaro. “We are now able to use one material handler for four automated cells. Previously, we would have had at least one person per station.”
Another automation project at STIHL recently focused on a workstation where plastic shrouds are pad printed. By investing in a pair of mini robots, production was reduced from three shifts to one shift.
Gidaro and his colleagues have also implemented numerous machine vision projects to address quality and error proofing. “Due to the various countries and even different states within the U.S. that we ship our products to, there are a lot of warning and compliance label requirements that go onto our finished products,” he explains. “This has driven the need to ensure we have the correct labels on each of our products.”
To improve productivity, STIHL engineers installed semi- and fully-automated vision inspection stations to verify labels. “We use vision systems to not only check that a label is in place, but that it’s the correct label,” says Gidaro. “This helps free the operators up to perform their main assembly tasks.”
People Before Machines
When it comes to implementing automation, STIHL maintains a policy of transparency. Engineers are up-front about communicating the benefits of automation to employees. Whenever a new workcell is installed, a large sign explains key metrics, such as return-on-investment yield, amortization and cycle time improvements.
“Our philosophy with the signage at automation cells is to help connect with our workforce and visitors,” says Gidaro. “We feel it’s important for our associates to understand the investments we are making and why we are making them. The information helps to show the projects we put in are of value and not just for show. So, information about cycle time, cost and ROI are clearly communicated.”
“Our greatest strength lies in our employees,” adds Koestler. “Development and retention of employees is a key element in our drive for competitive advantage and sustained profitability and growth.” An employee development plan is deployed at all levels of the organization via numerous communication channels, such as employee focus groups and kaizen teams.
“We simply could not have sustained our growth over the last 19 years without all of our people,” claims Koestler. “Our extensive and mostly in-house driven training programs allow our associates to learn the skills needed to be successful in today’s manufacturing arena. Whether it be advanced leadership, lean manufacturing principles or Six Sigma techniques, it is vital that we provide a platform for people to learn, develop and grow.”
IdeaPlus is one of the employee-driven initiatives created at STIHL. “As part of the continuous improvement initiative, we encourage all employees to identify and remove waste in any form, identify the root cause of problems, and develop and propose specific solutions,” says Wagner.
“The goal is to work together as a team to participate in company change, and continuously be involved in making STIHL a better company to work for and grow with,” explains Wagner. “By soliciting suggestions from employees, the company is more prepared to react to changes and take advantage of opportunities.”
Bulletin boards, kiosks, electronic signs, e-mails and text messages are used to inform employees of topics ranging from policy and procedure changes to mobile weather alerts.
Employee learning and development is integral to the culture at STIHL and is conducted on a periodic basis starting with a multiple-day orientation where all policies, procedures and practices are addressed. Additionally, audits are conducted on a periodic basis to ensure policies are followed across the company.
“All-team meetings” are held on a quarterly basis with all salaried and hourly employees to update them on the latest company information—both local and global—including marketing and financial information. To ensure that there is a conduit for feedback regarding topics such as policies and procedures, monthly roundtable meetings enable employees to speak directly with executives.
“STIHL also actively encourages an open-door policy to foster employee engagement,” says Wagner. “And, monthly meetings are held in each department to discuss key performance indicators.”
Every summer, all employees across each shift attend a two-hour summit conducted by executives and key managers. The latest business information and future growth projections are presented to ensure that everyone understands where the company is headed.
About the Award
The Assembly Plant of the Year award was initiated in 2004 to showcase world-class production facilities in America, and the people, products and processes that make them successful. All manufacturers that assemble products in the United States are invited to nominate their plants.
The Assembly Plant of the Year award is sponsored by ASSEMBLY Magazine. The goal of the award is to identify a state-of-the-art facility that has applied world-class processes to reduce production costs, increase productivity, shorten time to market or improve product quality.
All nominees for the 2014 Assembly Plant of the Year award were evaluated by ASSEMBLY’s editorial staff, based on criteria such as:
•Have assembly processes been improved through the use of new technology?
•Has the plant improved its performance by making more effective use of existing technology?
•Has the plant taken steps to reduce production costs?
•Have new or improved assembly processes resulted in increased productivity?
•Has the plant used assembly improvements to reduce time to market?
•Has the plant boosted bottom-line profits and competitive advantage?
•Did operators play a role in the successful implementation of new assembly strategies?
•Has a product been effectively designed for efficient assembly?
•Has the plant attempted to protect the environment and conserve natural resources?
As winner of the 11th annual Assembly Plant of the Year competition, STIHL Inc., Virginia Beach, VA, received an engraved crystal award and a commemorative banner.
Previous recipients of the Assembly Plant of the Year award were Northrop Grumman Corp. (Palmdale, CA); Ford Motor Co. (Wayne, MI); Philips Respironics (New Kensington, PA); Eaton Corp. (Lincoln, IL); Batesville Casket Co. (Manchester, TN); IBM Corp. (Poughkeepsie, NY); Schneider Electric/Square D (Lexington, KY); Lear Corp. (Montgomery, AL); Xerox Corp. (Webster, NY); and Kenworth Truck Co. (Renton, WA).
Click here for the 2015 Assembly Plant of the Year award nomination form (deadline is April 30, 2015).