Here’s a look at some of the
approaches that DaimlerChrysler is using to provide the means by which to launch
products more rapidly. The fundamental is flexibility. Flexibility not only means
having adaptable equipment but also standardizing on the way things are done.
“No two launches are
alike,” states Gary Henson, executive vice president-Manufacturing, DaimlerChrysler.
So far as he’s concerned, launches are the most challenging part of the business,
one that he believes provides a competitive edge for those companies that are
able to go from product creation to volume production in the shortest period
of time-while, of course, maintaining product quality. “I spend most of
my life preparing to do or doing,” he comments. Launching or producing.
One or the other. (Or nowadays, both simultaneously.)
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So he has a situation where
there are varying conditions-product, processes, geographies-under which launches
are performed. He wants to get into a situation where he can do them quickly,
not only to bring product to market faster so that the sales people have something
to make money on, but also so that Manufacturing saves money by eliminating
the traditional 8- to 12-week shutdown that’s characteristic of the traditional
launch (i.e., (1) there is build out of the previous model; (2) the people are
sent home so a big crew can come in to construct and setup and tryout, and .
. . the new tooling for the new product; (3) the people return to the plant
and a long, slow ramp-up of production begins). What they are working to achieve
is an overlapping set of ramps, with the current product’s line going down and
the new model’s line going up. The ramp up would have a larger angle than that
normally attained (say >45º rather than the traditional <45º).
Capacity utilization is therefore improved. And face it: losing two to three
months of production of a vehicle is extraordinarily costly.
Downtime has another consequence.
Sandy Bouckley, director, Advanced Manufacturing Engineering, Minivan Platform,
points out, “If people stop working for three months, they will require
retraining.” Who wouldn’t get rusty after three months of not doing something?
“So, by minimizing downtime, we are able to keep them focused.” They
will stay focused on their jobs-and on improving product and process quality.
(And it is not like they aren’t active on the training front, either. At the
Windsor Assembly Plant, for example, there are 110,000 hours of training scheduled
for 2000; there are just over 6,100 employees at the facility.)
Working Toward Flex
Henson says that what they
are working on achieving at DCX is flexibility in Manufacturing. If all goes
right with regard to pulling this off and if there are a series of new product
launches occurring as expected during the next three to four years (i.e., through
the 2004 product launches), there is the potential, he projects, of DCX benefiting
on the order of $3-billion. And he’s not just pulling that number out of the
air, either.
Using two examples-Sterling
Heights Assembly Plant (SHAP; Sterling Heights, MI) and Windsor Assembly Plant
(Windsor; Ontario)- there are some rather significant savings. In terms of SHAP,
where they’re now building the Sebring and Stratus sedans and the Sebring convertible,
they’re looking at a $100-million savings as a result of their flexibility initiative.
At Windsor, where they’re building the Dodge Caravan, Chrysler Town and Country,
and Chrysler Voyager-current and 2001 models-they expect to save on the order
of $500-million (not only by reducing downtime to two weeks from 10, but by
having the ability to pilot a third model on line). So when they figure that
this is the type of thing that will be happening at plants throughout the organization,
it becomes fairly evident that $3-billion is an achievable figure.
(A Digression on Systems.
Although much of what they are doing has to do with improvements in terms of
hardware, there is another on-going initiative at DCX that is helping improve
the bottom line: it’s called “Manufacturing Leadership Training.”
MLT is a program wherein the company’s production system-known as the “Joint
Activity Operating Principles”-is conveyed to their personnel. Since 1998,
there have been 55 three-week MLT sessions at 54 facilities around the world.
It is estimated that through improvements in quality and flexibility and minimization
[if not elimination] of waste and excess cost, these MLT events have led to
an average savings of $500,000 each, or $25 million.
(It may be interesting to
note that DCX manufacturing facilities operate with what are known as a set
of “Operating Principles,” which include the core values and beliefs
of how work is to be done, as well as steps down and through the actual processes
needed to attain a suitable human infrastructure, balanced schedules, value-added
activities, and robust processes. Whether these are being realized is determined
by measuring Safety, Quality, Delivery, Cost, and Morale.
(The company formerly known
as Chrysler had its way of doing things. The company formerly known as Mercedes-Benz
has the Mercedes-Benz Production System. So now that the two are one, are the
two companies doing the same things in the same way? No. Although there is a
overarching framework, because of differences in things like conditions and
cultures, both the Operating Principles and the Mercedes-Benz Production System
will continue to be used in the respective facilities.)
More-or Less
Flexibility is not just
about launching new products. Flexibility allows companies to have the wherewithal
to better respond to market desires. For example, not all products being produced
are going to be as successful as the PT Cruiser; at the Toluca Assembly Plant
where the Cruisers are built, the challenge has been to add capacity beyond
what had been initially planned. But what happens when the popularity for a
vehicle doesn’t grow or if it fades over time? What then? Frank Faga, director,
Advanced Manufacturing Engineering, Large Car Platform, observes, “You
have a set plant capacity. But the market doesn’t want that number. So we want
to be able to put in a new model to fill that gap.” In other words, figure
that the plant capacity is 10. The market will buy 6. So the ideal would be
able to bring in a popular model that would add 4. This is one of the capabilities
that they want to achieve through having more flexible facilities. They don’t
want to under-utilize existing bricks and mortar. They want to optimize the
use of what they have. It’s more efficient that way. And the point of flexibility
is gaining efficiency.
And in one important regard,
flexible facilities are only one small aspect of what they are working on at
DCX. Certainly, the fact that they are now using such things as skillet conveyors
that provide the adjustability wherein there is the ability to accommodate various
vehicles and a low-maintenance conveyor system that’s used in Germany (“Gummiband”-yes,
an industrial-strength rubber band, in effect) that lends itself to reconfiguration
are important. As is providing for “white space”-areas where additional
stations can be added in the future as requirements change. Anticipation is
important.
Sequence Matters.
But one of the key things
that they’ve done is to settle on a standardized build process. The ramifications
of this would be hard to overstate, so far as the DCX Manufacturing people are
concerned. What this means is that although cars, trucks and minivans will all
look different, there is a common approach when it comes to putting parts to-gether.
If there are parts A, B, C, D, then there is an agreement that all platforms
will se-quence those parts in the same manner, whether that’s A, B, C, D or
D, C, B, A or some other permutation. Because they are settling on that, this
makes developing the processes more straightforward. This provides not only
the ability to standardize on equipment, but it helps with regard to learning
from what has been done elsewhere (e.g., “We’ve had trouble with the B-C;
this is an area you should be concerned with on the next program.”).
“The challenge,”
explains Frank J. Ewasyshyn, senior vice president of Advanced Manufacturing
Engineering and General Manager of Minivan Operations, “is how do we get
our heads around doing things faster?” Ewasyshyn points out that a key
to faster acceleration in launch is that there is a team effort among designers,
engineers and manufacturing personnel: even the company that is vaunted for
its platform teams must stay focused on working cross functionally. (And it
should be noted that with regard to design, which the Chrysler products have
been widely lauded for during the past few years, Ewasyshyn insists, “We”-by
which he means Manufacturing-“cannot limit the Design Office,” as
they work toward faster launches and flexibility, implying that some other auto
manufacturers that are known for their launch speed and efficiency are not putting
out vehicles with as advanced designs as those of DCX: not only are the designs
from those other, unnamed companies more pedestrian, they are easier to build.)
Cost Considerations
Although they are focused
on speed, and although their pockets are a whole lot deeper than they were when
the former Chrysler Corp. was climbing out of a financial abyss, there is still
a sensitivity with regard to spending: “We don’t want to throw everything
away in five years,” Ewasyshyn says. Flexibility means reusability.
In order to get fast while
achieving flexibility, it is likely that there is a bigger investment up front
so that the benefits will be realized for a longer period of time. Bouckley
explains that a flexible plant may cost 150% of what a traditional plant (i.e.,
one with a required shutdown for model change) would cost. But with the flexibility
comes a vehicle loss avoidance of 100%. When the vehicle in question is a hot-selling
model, loss avoidance is financially critical. Then, five years after that initial
investment, when it is time to do a new model, the required manufacturing investment
would be 50% of what it would otherwise be, and the loss avoidance capability
is even greater.
Bouckley says that DCX Manufacturing
people are now recognizing and acting on two realities that have traditionally
been the concerns of other people within the organization:
1.Consumers are increasingly
interested in niche vehicles, not endless quantities of what the people up and
down the street are driving
2.
When plants supplying popular products go down for several weeks to change to
a successor product from the successful one, the profits of the corporation
takes a hit due to the lack of availability of the product.
“We have to look at
the business in a new way,” Bouckley states, then adds, “DaimlerChrysler
sent me to get an MBA; I think they want me to look at the bigger picture.”
The Sterling Heights Assembly
Plant is now making the 2001 Sebring family lineup; it wasn’t necessary to add
a line for the convertible; clever engineering resulting in flexibility provided
the means by which it could be accommodated.
The “Gummiband” conveyor
system was something that North American DCX manufacturing people discovered while
visiting plants in Germany. It is said to be far more efficient than conventional
devices, especially as maintenance requirements are comparatively minimal.
Although DCX has long been
acknowledged for its so-called “Digital Pipeline,” its use of Catia
CAx for both product and process design, Frank Ewasyshyn, senior vice president
of Advanced Manufacturing Engineering and general manager of Minivan Operations,
points out that because “digital modeling is an estimate,” there is
a focus on obtaining feedback from equipment operating in factories. This actual
operating data is then used so that, as he puts it, “Model creation is closer
to reality.” To the extent that that is so, then the more likely it is that
launches can be made more rapidly, as what is designed-product and equipment-goes
together and operates as anticipated. Shown here are pre-production operations
at Windsor Assembly of the RS, or model year 2001 minivan. They’ve been building
minivans in Windsor since 1983.
By Gary S. Vasilash, Editor-In-Chief, Automotive Manufacturing & Production
