Continental Teves Morganton: "Where Rhetoric is Meeting Reality"

You've heard the talk before-and maybe even said it: "High quality." "Low cost." Here's how they're walking the talk in a Continental Teves Braking Systems Plant in North Carolina.

Dennis White's objective for the Continental Teves Braking Systems plant that he manages in Morganton, NC, is simply stated. . .but not necessarily easily achieved: "To be the highest quality, lowest cost producer of electronic braking systems in the world." White, a 22-veteran of the automotive components business (he is a mechanical engineer and metallurgist by education) has been with Continental Teves for seven years and has been at Morganton for 3.5 years.


Mk. 20 ABS system
Quality is paramount in the production of the Mk. 20 ABS system produced at the Continental Teves Morganton plant.

The Morganton plant was purpose-built for brake assembly in 1992; initial production, explains Charles W. Russell, manufacturing manager, who's been at the plant since the start, began in January 1993. Since November 1997, the Morganton plant has been a focused factory, with its operations dedicated to the assembly of the Mk. 20 ABS device—both solenoid valve and hydraulic system assembly. (This is a compact unit, measuring 16 x 10 x 10 cm and weighing 2.7 kg. Because it supplies systems to DaimlerChrysler, Ford [with these first two accounting for about 75% of the business], Nissan, Honda, Toyota, and Mitsubishi, there is an array of variants of the Mk. 20: the assemblies may look the same, but there are more than 80 different types that can be produced, with such things as different motors, different valves, different pistons, different control units.) The 720 people in the plant are responsible for producing some three million of these brake systems per year.

Plant managers everywhere roll out with objectives like White's. But there is significant substance backing up his rhetoric.



People Making a Difference
One interesting aspect of the operation is the seeming acceptance of kaizen to the point that it is simply part of what they do. They've been operating with what they call "Kaizen Improvement Teams"—KIT Teams—from the start. The approach they take is to identify a specific area where improvement is required, then pick people to staff the team. They don't necessarily operate a team for an extended period of time. It lasts until the problem is solved. But sometimes there is a need for a team to keep going because benefits continue to be gained. For example, they have a team tasked to scrap reduction; it has been organized and operating for more than a year.

When the team was established, the objective was to reduce scrap by 10%. But now the amount of scrap reduction realized through the efforts of the team—which consists of technicians, operators, supervisors, and engineers, and which meets on a weekly basis—is greater than 50%. And that translates into some serious money. In 1998, the cost per unit related to scrap was $1.35. In 1999 it was $0.75 per unit. The goal for 2000 is $0.69 per unit.

White says that one of the problems that was identified with regard to scrap generation was that workers would sometimes drop the aluminum valve blocks, and given the safety-critical nature of the product, once dropped, the part is scrap. "If you drop it, you don't know what you've done to it," White says.

White notes, "The typical management approach to this problem would be to tell the people, ‘Stop dropping parts!'" However, he goes on to explain that while that directive might point to the desired state, it doesn't exactly get to the reason why said parts are being dropped: It's not like the people are deliberately dropping them.


There are six key elements of the philosophy that plant manager Dennis White is driving through the plant: customer-driven improvements; value-added activities; employee involvement; just-in-time; total productive maintenance; visual management.

By analyzing the situation (e.g., where the parts were being dropped more frequently), the team members found that a main cause of dropping was, simply, that the parts can be slippery. So one solution was to provide cloth gloves for assemblers who handle the blocks. Simple and effective. They found that by setting up visual charting in the work areas where there was frequent dropping, the awareness of the problem led to a decrease in the frequency. Again, simple and effective.

One thing to realize about all of this discussion about scrap: The first time yield at the plant is greater than 99.9%.

What is perhaps a more astonishing improvement is that the people in the plant figured out that although there were eight solenoid valve assembly lines in the plant, that was one too many in order to meet production requirements. They wanted to eliminate one line.

White says, "When the people came to us, most of us in management were skeptical—at best." After all, some clever engineers had determined the capacity of the plant, and they specified eight lines.

He explains that the design capacity for the lines were on the order of 4,000 to 4,500 units per line per shift. But by doing such things as focusing on throughput and gate stations, and by making modifications to the equipment, the people on the plant floor concluded that they could produce 6,000 to 7,000 per line per shift. Sure enough, White admits, they were right—and he doesn't understate the amount of persuasion that was necessary for management to be convinced of the possibility of eliminating the line. The line was shipped back to a plant in Europe. "And we still don't have all of the valve capacity turned on."

Train & Talk
A key factor to what is being achieved at the plant: Training. Plenty of the people who work at the plant come from the furniture and textile industries that are common to the North Carolina area. They don't have automotive component or system experience. People may want their furniture to be without defects, but they absolutely want their braking system to be reliable. Which means that training in the ways and means of production (from simple hydraulics to SPC) was essential. Russell points out that before a new hire is permitted to work on the plant floor, there is two weeks of training: one at a community college; one in the factory itself.


Training is on going, as required. For example, if there is a particular issue, it may be that training is performed in the 30 minutes of overlap between the shifts.

One of the issues that some managers face is that when people in plants get good, there may be a tendency for them to become...well, somewhat lax. The enthusiasm with which programs start tends not to be sustained over the long run...and so things become status quo—which may not be bad, but which isn't continuous improvement.

So how does it keep getting better at Morganton? One important means is through regular communications, whether this takes the form of monthly meetings during which everyone is informed about such things as financial performance, daily team meetings, and through the extensive use of visual management tools throughout the factory, including what resembles a scoreboard that is updated every 30 seconds, providing information on how the lines in the plant are doing (overall equipment effectiveness—a factor based on rejects and downtime related to maintenance, materials and changeover—is a key metric keenly monitored and widely displayed, whether on the scoreboard, plant-based whiteboards, or on a PC in Russell's office).

While walking through the plant, White comments, "You ask how we keep people energized? One thing is that we rotate people's positions on the line every hour." White points out that there are plenty of benefits that derive from that. For one thing, there is a physical advantage: there is a decreased possibility of repeti-tive stress injuries from doing the same thing hour after hour, day after day.

But there is another advantage: White points out that the lines are highly automated, high-volume production lines, not U-shaped cells—there isn't the possibility for much interaction between people who work on the lines while they are working. So by having the people shift from position to position, there is the opportunity for them, when on breaks or during lunch, to talk about things that they have discovered while working at the various stations: there is a shared experience, what White calls "a common thread."

What to Focus On
How are they improving productivity in the plant? Adding equipment is not the first choice. White says that a way they've improved is to focus on three aspects of the operations:

  1. Gate stations. They're examining bottlenecks. They're checking out what other plants (such as European Continental Teves facilities) are doing.
  2. Downtime. What are the causes? Maintenance? Planning? Changeover?
  3. Rejects. Once again, the issue is the cause: what is it—a supplier problem, in-process problem, what? Plenty of time is spent communicating with the operators who, by simply working with the components on a daily basis, have a tremendous sense of emerging problems, which means things can be handled before rejects are produced.

White, speaking of getting out more product without compromising quality and without adding capital equipment, emphasizes: "Everyone in this plant is involved in this activity—including me. This is whether it is someone in a lab or at the reception desk. We should all be driving the overall output in the plant."

The pay at Morganton is competitive. The benefits that management has are the same as those of the plant floor personnel. And—which is not a trivial thing in that part of the world—the plant is air conditioned. People like to work there. People want to continue to work there. Given the competitive nature of the auto industry, being the best isn't really an option for those who like to remain working at places like the Continental Teves plant in Morganton.

"People want to make an impact. They want to contribute to something positive," White says. And a key part of his job is letting them make it happen.