Earlier this year, at the 21st annual Shingo Prize conference awards ceremony, Autoliv Americas’ airbag module facility in Ogden, UT, was awarded The Shingo Prize for Operational Excellence. This was the second Shingo Prize won by the Autoliv Ogden Airbag Assembly (AOA) plant.
The Shingo Prize is named in honor of the great Japanese manufacturing engineer Shigeo Shingo, co-inventor of the Toyota Production System (in other words, lean manufacturing). It’s considered the Nobel Prize of the manufacturing world.
Winning the Shingo once indicates a commitment to manufacturing excellence, and is the culmination of a facility-wide effort. Winning it twice—AOA won its first Shingo in 2003—demonstrates success in sustaining a lean culture over time.
Autoliv Inc. is a Fortune 500 company headquartered in Stockholm, Sweden. The Autoliv group develops, markets, and manufactures integrated vehicle safety systems including airbags, seatbelts, electronics, anti-whiplash systems, and steering wheels. The airbag module facility in Ogden includes buildings encompassing 437,689 ft2 (40,678 m2) on 50 acres (20 hectares) of land. These buildings include a 350,000 ft2 (32,500 m2) Main Production Facility, a 45,000 ft2 (4200 m2) Low-Volume Production building, a 12,000 ft2 (1100 m2) Painting Facility, a 12,000 ft2 Molding Operations building, and an 8800 ft2 (830 m2) Facilities Maintenance shop. With a workforce of more than 1000, the facility includes over 82 manufacturing lines and 14 presses. In addition to injection molding, painting, and press work being done on-site, ultrasonic welding, assembly, crimping, and bag folding are also on the bill of work. Other airbag components produced at the facility include the airbag cover, plate/housing, and horn guide/connector. A sister plant in Brigham City, UT, produces inflator products for AOA, and is also a Shingo Prize winner.
Lean manufacturing at the Ogden facility is supported by the Autoliv Production System (APS). Under its purview, each team member is given the opportunity to learn and use lean tools during monthly training on various APS topics. Each month’s training is transmitted through all levels of the organization. A gemba (place of work) activity is carried out, and every team member is certified to the monthly topic by plant leadership.
“Lean or APS is our method of operating our business,” says Scott Saxton, continuous improvement manager, Autoliv Ogden Assembly Facility. “Without APS it would be difficult to know where we would be as a company. There’s a lot of misunderstanding of lean in general. Many think that all you’re doing is cutting back on employees or resources. In reality, lean allows engaging all employees to work together to improve our processes and systems, so we can improve all aspects of our business.
“We avoid letting people go as we make improvement. If we reduce head count, it will kill our employees’ willingness to engage in kaizen. At good lean companies, lean is more than a few concepts, tools, and initiatives. We have an entire culture of kaizen that drives improvement on a daily basis.”
Every leader at AOA is a coach and teacher. Successful creation of a lean culture is based on the idea that managers must dedicate time to teach employees to improve their skills and abilities. Every manager is expected to train and lead employees in the philosophies of the APS.
The Autonomous Manufacturing Organization (AMO) at the Module Facility is made up of cross-functional teams to support the manufacturing floor. Traditional departmental silos have been removed by aligning cross-functional support with manufacturing. Teams are physically located together, and have the same goals and expectations.
Team members apply their APS know-how in improvement workshops. Plant leadership identifies improvement needs in specific parts of the plant, and teams conduct workshops to carry out that improvement. Every month, an APS training topic is provided to everyone in the plant.
In addition, as part of the APS, Autoliv tries to transmit its lean manufacturing culture to suppliers by providing facility tours, and by sharing key APS concepts with local companies and suppliers. Success in establishing a lean culture at Autoliv caused the company to establish a lean consulting group, which outside companies can hire to guide them in trying to understand and apply the principles of lean manufacturing.
Lean at AOA addresses all of the activities required to run the module facility. The module facility team strives to provide data based on external and internal customer requirements. Internal customers are mostly concerned with lean reporting metrics. Operational performance indicators (OPI) reporting charts include employee safety, employee suggestions, supplier PPM, labor minutes per unit (LMPU), customer PPM, supplier on-time performance, customer on-time delivery, Autoliv Product Development System (APDS) scores, and inventory turns. All Autoliv OPIs are standard for the entire global business, with some variance for Tech Centers and other special groups as necessary. AOA posts these OPIs monthly for all employees on the group’s communications center.
Besides the monthly meetings, information flow has a daily component. The module facility has a standard startup process that begins each day with meetings that provide a flow of information across the plant, enabling team members to react quickly to any abnormalities.
Much of the lean effort is straightforward in concept. Visual information systems are widespread, and are intended to create a self-directing, self-explaining, and self-improving visual workplace.
Production Performance Analysis Boards (PPAB) are another tool used in the Autoliv visual workplace. These boards track how well each production line is doing. Managers can follow performance as production takes place, and react to problems. The boards also serve as a communication tool to tell the following shifts how things are going. Each production area also has its own Autonomous Management Group Production Supervisor and Staff (AMG) board.
In the production area, Preventative Maintenance Process Boards allow workers to track and followup machine preventive maintenance work. The PM boards allow Autoliv to discriminate between normal and abnormal at a glance. Technicians and managers can look at launch status, completion, cancelled, or past-due status for PM.
Implementation of a standard work process for all levels of management has been very important to the establishment of a lean culture. This standard work process ensures that management follows up on the processes that have been adopted in the plant to meet objectives. Standard work by leaders requires each manager to accept the reality of what’s happening in his or her area, and gather all facts necessary to make appropriate decisions.
“Lean initiatives are really not what make companies successful in a culture of continuous improvement. Often management implements initiatives that have little impact on the employees and business. Without empowering employees to make improvement, your success is limited,” Saxton explains. “For managers, it really comes down to what’s important for the business; good prioritization, and working as a management team to accomplish the desired outcome. If direction is clear for goals and objectives and each level of the organization is empowered, great improvement will happen. This ensures that the teams drive success without a lot of time invested by management using traditional methods.”
Another area of lean effort is devoted to leadership development. This work is done locally and globally. There’s an annual succession-planning process that identifies people who have demonstrated leadership ability and have achieved significant results. A series of intense training days held by the company is called AMT (Team Leader) Development Boot Camp. During these sessions, trainees learn the tools they will employ as new team leaders to run and manage a production line.
To create, communicate, and follow up on strategies, objectives, and goals throughout the plant, AOA uses a Policy Deployment technique. Unlike conventional strategic planning methods, the Policy Deployment method is patterned on the hoshin kanri approach developed at Toyota. This focuses and aligns the organization on a few vital breakthrough improvements. The objectives and means to achieve the objectives are cascaded through the entire organization using a series of linked matrices. Self-correcting, the process encourages organizational learning and continuous improvement of the planning process.
Successful deployment of plant objectives and goals requires effective communication and management followup to sustain a lean culture of continuous improvement (kaizen). Objectives and goals are aligned with each Autonomous Manufacturing Center (AMC) team through a Policy Deployment Tracker. Each manager of an AMC reviews the actions needed to meet objectives and, working together, the AMC team identifies projects necessary to achieving their defined objectives. In addition, the team defines targets for each manufacturing cell based on plant goals. The status of each cell is communicated through a visual system, and the Autonomous Manufacturing Group (AMG) identifies opportunities for improvement for each cell. Kaizen ideas from all production associates are reviewed and implemented based on the needs of the worksite to meet objectives and drive results.
Another key to this approach is the lean principle of yokoten—Japanese for horizontal deployment—meaning copying improvement ideas from other lines and departments, and applying them to your own area of the company.
AOA’s emphasis on employee training is an interesting aspect of the group’s operations. Autoliv believes that training employees on their first day on the job is very important. When someone begins working at the module facility, they are given a new-hire orientation that includes information on safety procedures, the machines they’ll be using, and the processes involved in their work. In addition, the new employee receives information on benefits and company policies and procedures. Autoliv Production System training is the most comprehensive formal training given to all employees. It consists of in-class instruction, application, and assignments in the different subject areas. It’s developed and taught by managers, supervisors, and subject-matter experts.
What is the greatest challenge Autoliv faces in trying to sustain a lean culture at AOA? “Remaining steadfast in the pursuit of waste elimination,” says Saxton. “When you have success in lean, you can become complacent in driving continuous improvement. It takes consistent dedication from management to drive the right results and behaviors. Management must keep reinforcing and, more importantly, teaching the importance of lean principles, and how to use the tools effectively to drive improvement. Unfortunately, we read about good companies that were doing well in their lean progression that lost their way. Whatever the cause, they did not consistently reinforce what made them successful.”
According to managers at the facility, kaizen (continuous improvement) is the engine behind AOA’s success. Information about plant financials, goals, and direction, as well as customer and supplier feedback, is shared with the entire plant. A great deal of effort is put forth to ensure that data and information are visual and understandable. Employees know how Autoliv is doing on the cell, department, plant, and company levels, and employees respond to this openness.
Kaizen is performed by teams. Kaizen teams consist of a workcell or a functioning support group. Working in teams encourages those teams to implement kaizens for their particular areas. In 2008, AOA implemented more than 60 kaizen ideas per employee. There is a core kaizen team for the plant that oversees the kaizen program and establishes guidelines to verify fairness and standardization. The kaizen process aims to continuously improve workpiece processes, and kaizen is a tool used to drive improvements throughout the module facility. Reductions achieved by kaizen include LMPU (calculated by dividing the total number of direct labor minutes worked during a specific period by the number of airbag modules produced during that period. Direct labor minutes include Autoliv and contract-labor minutes combined. Labor minutes include production time, startup time, inspection time, downtime, cleanup time, training, etc., and labor minutes also include material handling and conveyance time.
Employees are recognized for their ideas on the Employee Communication Wall, in action plans, and in action-plan wrap-ups. AOA is pursuing a goal of 100% participation by employees in the kaizen suggestion program.
A key component of kaizen at Autoliv is the APS toolbox. It helps AOA make problems visual, and therefore makes it easier to identify and eliminate waste through kaizen. Autoliv also uses Units Produced per Person and LMPU to measure improvements in labor productivity and the impact of kaizen.
Production at AOA is run to takt time to prevent overproduction. (Takt time is the pace at which the customer is buying a particular product or service. Takt time is the total net daily operating time divided by the total daily customer demand. Takt time is not how long it takes to perform a task. Takt time cannot be reduced or increased except by changes in production demand or available time to work.) Units produced per person is determined by including all headcount in the module facility—production workers, support, and administrative personnel. The calculation is the total number of modules produced during a given time period divided by the total number of employees, direct and indirect. This calculation is a good indicator of total labor efficiency for the plant, however, the production cells only use LMPU calculation for direct workers who work on the cell. The reason is to quickly identify abnormal conditions in order to drive Kaizen.
Other key metrics for measuring improvement include units produced per overhead personnel. As waste is eliminated and the skills and abilities of team members are developed, the number of support personnel required is reduced. Also, team members can share workload responsibilities through cross-training and development.
At the module facility, scrap-per-unit cost has decreased by 59% since 2004. AOA’s jidoka scrap rack stops the line when it reaches a scrap limit at which a review is required. Jidoka—stop and notify when an abnormality is found—is encouraged and recognized. Jidoka is considered one of the plant’s greatest successes. All Jidokas are displayed on the APS wall. Engineering, and the management team, conduct a daily review of all scrapped parts.
Says Saxton: “In the beginning, [Autoliv’s] Ogden and Brigham City facilities were on their own as we applied the teachings of our teacher from Toyota. Today we have Global and Regional APS support that are a resource to help all facilities with APS understanding and application. The Ogden and Brigham City facilities have had the longest time to practice and implement a culture of continuous improvement, so in a sense we’ve been able to help new facilities along the path of lean. Management has to reinforce that it’s good to apply best practice, and eliminate the mentality that ‘if it’s not created here we are not interested.'”
This article was first published in the November 2009 edition of Manufacturing Engineering magazine.
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