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Competing Through Speed

One of the difficulties of being a tooling supplier for stamping and assembly operations is that typically, those products are ordered near the end of the development schedule. . .and how often is that end period a whole lot shorter than had been originally planned? One supplier has instituted a lean manufacturing process to address this time crunch: What used to require a week-and-a-half is now being done in 90 minutes. Here's what it did.

What Do Books Have to Do With Tooling?

Guy Potok, president of Norgren Automotive (Mt. Clemens, MI), cites Amazon.com. You order a book and in about four days it is on your doorstep. Potok believes that this type of response is going to be one that people are going to expect from vendors of all sorts of products—including tooling, as in vacuum and gripper components, valves, cylinders, pumps, and other assorted items supplied by Norgren to tier-one automation suppliers (although its products are typically speced by the end customers).

While Potok sees the importance of the Amazon.com model to product delivery, there was one nontrivial problem standing in the way of Norgren's achievement of that kind of response: it was generally taking the supplier some eight weeks to provide products—maybe 12 weeks in some cases.

One of the things that Norgren had done in order to speed its response time was to identify an array of its products that it categorized as "Preferred Products." These are items that the company had determined were the most popular, or the most likely to be ordered by customers. So, as Jim Dixon, vice president of Operations, explains, the strategy was to build up an inventory of these Preferred Products so that when they were ordered, there would be a four-day lead-time. They'd deliver out of inventory.

Inventories, Warehouses & the Unemployment Line
But Potok explains that this approach to rapid delivery just doesn't work any more. When asked why Norgren doesn't simply expand its offerings of Preferred Products and just build a bigger warehouse to accommodate the accumulated product, Potok laughs and responds, "Thanks. And the next time you'll be talking to us is while we're in the unemployment line." Warehouses full of products don't cut it.

VCF vacuum cups
VCF vacuum cups for sheet metal handling.

Neither Potok, Dixon, nor any of the other 430 employees want to be on line at the Michigan Unemployment Agency, yet they want to be positioned to be able to respond to customer demands and provide a broad array of products (Potok points out that some of his competitors are niche players and consequently may be better able to respond as a result of their not having a whole lot of selections in their catalog, compared with the weighty tome that is the Norgren product listing): "We have no intention of being a small company; we have every intention to have the broadest line in the industry. There is no future in shrinking," Potok insists.

Banning Batches; Going with the Flow
So their solution is to work on an initiative called "flow manufacturing," which is Norgren's approach to lean.

Norgren Automotive had been a batch manufacturer. As Dixon explains, it used to be that they would have, say, a lot with 60 pieces. It might have required five minutes at one station on the assembly line. So the operator would spend five hours doing those pieces before passing them along to the next station. Not terribly efficient (though common). According to Dixon, it could take from a day to a week-and-a-half—"and it was usually at the longer end"—for material to be launched into a line and to have finished goods emerge.

"Now it's 90 minutes. Routinely," Dixon states. The Preferred Products still exist. But now they're being built to order, not to stock.

Initiating the System–& Letting the Workers Have Ownership
The program was initiated by conducting three days of classroom training of 32 people, including operators, on site. The training was conducted by representatives from a consulting firm engaged to help them move from batch to lean, Flow Vision (Dillon, CO). There were three areas of implementation: two in assembly and one in machining. Training occurred in March 2000. The first program, on an assembly line for clamp, gripper and cylinder assemblies, started on April 10 and was completed in early June. The following two implementations followed similar timelines, except that the machining implementation required a bit more time, given that much of the equipment is on foundations and wasn't moved into flow lines with the comparative ease of what is essentially bench assembly gear (i.e., the machines stayed put; the flow was created with them in place).

Dixon says that in determining how to best implement the change from batch to one-piece flow on the floor they had some employees working on line layouts and others working on establishing a kanban system for the plant. As a result of the worker involvement, it became their operation, not something imposed on them. Dixon points out that in one area, prior to the flow approach some of the assemblers sat on chairs. The new layout called the chairs into question: "They decided as a group that they had to stand because the chairs would get in the way. If we"—i.e., management—"had said that everyone is going to stand...."

VMAA vacuum pump
VMAA vacuum pump with embedded logic.

According to Dixon, the most troubling part of running in a flow mode is dealing with a legacy MRP system that is batch-oriented. He says that at this point, they are scheduling with an Excel spreadsheet (a new ERP system is planned within the next two years). They are scheduling production on a daily basis. "It used to be that schedules were set and frozen for a week," he notes. Forecasting is still required, especially as there are some long lead-time items supplied to Norgren, such as castings, some of which can require 12 weeks from order to delivery.

The goal at Norgren Automotive is to operate at three times the number of parts per person per day through the elimination of wasted steps and smarter work practices. When I visited, they were at 2.5x.

Robots By the Pound
"When we first launched the system," Potok admits, "I know there was some doubt among the workers. But now they don't want to go back." They may recognize what Potok does: he'd spent a good portion of his career in the industrial robot business, which is the basis for this observation: "I know that there are robots out there with 100 man-years of software operating them, yet they are treated as commodity items—it's almost like they are being bought by the pound." He figures that if that's the case for what are still arguably high-technology products, then if a company that provides clamps, grippers, valves, and the like doesn't want to find itself continually underbid by one competitor or another, then it is going to have to work at product development—which Norgren Automotive is also doing—and is going to have to be a rapid response supplier. The alternative is not one that anyone at the company is interested in entertaining.