General
Motors’ Down Under subsidiary Holden faces a tough decision as it prepares
for three-shift production, writes Mike Duffy.
The car maker is close to capacity from the current two shifts, but the daily
build rate of 570 vehicles does not satisfy demand from domestic and export
markets.
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Cars produced in overtime or during additional weekend shifts are proving
expensive and executive management are concerned about worker fatigue.
The answer is simple: a third shift and a rework of production to get the numbers
to match strict quality requirements.
The implementation of a night shift, however, is far from simple. To meet a
September go-live date for round-the-clock production, Holden must re-train
its entire workforce of 4,280 assembly workers plus 300 to 400 new workers.
That would be challenging enough in a normal month but September is the month
the car maker starts production of the new two door Monaro Coupe.
Then there is the far-reaching problem of getting a multitude of suppliers
across Australia and overseas to adjust to new JIT (just-in-time) schedules.
And so the board will have a difficult call when it meets in two weeks’ time:
bite the bullet now or struggle to deliver product – and still have the same
problems next March, the next optimum window to introduce a third shift.
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Strategic
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A detailed feasibility study on the move, which initially would boost production
by around 10,000 vehicles a year, is all but complete.
Executive director, manufacturing operations Albert Lidauer will present to
fellow board members the results of the study with his recommendations and options.
“The move to a third shift would involve at least five days of production
interruptions which would amount to the loss of about 2,800 vehicles,”
he said.
“This is something we would not want to digest at this point of the year.
“But if the board decides in favour of a September start-up of a third
shift, then we would have to stand the loss of production.”
Production planning calls for daily output from the Elizabeth, South Australia,
plant to grow to 600 vehicles later this year, then to 630 units by early next
year.
A third shift would give Holden the required production immediately the night
shift is fully operational.
Holden produced 133,000 cars at Elizabeth last year and will eclipse that record
by 4,000 this year.
The target for 2002 is 140,000 growing to 180,000 by 2005.
Lidauer said a third shift would give the two assembly lines a capacity boost
of 10,000 units for an investment of around $A27 million ($US14 million).
Holden’s target of 180,000 cars by 2005 would require an investment of
$400 million, already earmarked by GM, to be spent on additional plant, particularly
in the plastics and paint sections and other bottleneck areas.
Holden is determined to meet ambitious sales growth targets at home and overseas.
The car maker’s inability to satisfy rising demand for its products –
particularly from the Middle East – could be the determining factor when
the board meets to decide the timing for three shift working.
Mike Duffy is motoring editor of The Advertiser and Sunday Mail, Adelaide,
South Australia.
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