Charlie Szuluk, president of Visteon Automotive Systems, recalls a time when he was the general manager of the Ford Electronics Division. The organization was involved in supplying electronic engine controllers (EECs) for one of the Formula One racing teams. As the electronics engineers became more familiar with how the racing team worked, as they understood the need for efficiency, reliability and, without question, speed, there was a change, Szuluk says, in the layout of the ECM. The layout went from being more or less random to being compact and well organized for troubleshooting. The racing experience translated into engineering excellence.
Today, Visteon is working with Patrick Racing in CART, Panoz Motor Sports in both American and European GT sports car racing, and Stewart Grand Prix in Formula One. "Our racing program helps us develop our engineers, explore new technologies and transfer this knowledge from the racetrack to the road in a way that meets our customer needs," Szuluk states.
|When producing products like this, an integrated powertrain control system, or an axle or anything else, being lean means being faster and more cost-efficient.|
Visteon, which is an enterprise of Ford Motor, provides powertrain control systems, chassis systems, interior systems, exterior systems, climate control systems, electronic systems, and glass systems to industry (and although Ford is certainly its biggest customer, the portfolio of customers is one that's being constantly expanded). It is a company that is working to develop its people—whether they are engineers within the new Global Technology Development Center or people working in its manufacturing facilities—so it can provide the best technology based products to its customers—quickly...
One of the notions of speed that is completely out of the picture at Visteon's manufacturing facilities is one that is all-too-familiar at many operations of many companies: that of expediting things. Sure, it may not be totally driven out of all of the Visteon plants, but the methods and the motivation are in place to make changes quickly.
Expediting, the familiar hurry-up activity, is commonly created as a result of a schedule change made by a customer. That change typically necessitates a change at the supplier company. Because it is unpredicted, it is disruptive to existing schedules. And it necessitates such things as overtime and having to pay extra for faster shipping, which reduce the margins. In addition to which, there are the things that were supposed to have been done during that time that weren't, displaced by the rush, so it causes quakes and shudders long after it is off the loading dock.
One of the issues, notes Steve Delaney, Visteon vice president, Supply & Process Leadership, that was identified with regard to the need for responsiveness is that to the extent that manufacturing cycle times and changeover times can be minimized, the better positioned a supplier can be to accommodate interrupted requirements without the frantic expediting that has historically been required.
Visteon's product offerings are generally made in high-volumes: electronics and axles, for example. (E.g., at the Shingo Award-winning North Penn plant in Landsdale, PA, which produces an array of electronic products, approximately 14,000 EECs are produced on a daily basis.) The firm's sites are not greenfields; they were once right within the Ford Motor Co., and like Ford plants prior to the initiation of the Ford Production System (which itself still has a long way to go in terms of full implementation, but it is underway), they were based on the mass manufacturing model.
Mass manufacturing means batch processing. That means long lead-times. That means the possibility (likelihood?) that if defects are made, they are put into stock, and not discovered until long after plenty more similarly problematic items have been added to inventory. And mass methods mean that people are singularly tasked and not particularly empowered.
So work is being undertaken throughout the Visteon organization to get rid of this way of working, to make a shift from batch processing to one-piece flow, an arrangement in which there aren't X parts in process A and X parts in process B and X parts in process C—etc.—but a transfer batch size of one. What this means is that through rethinking and rearrangement or replacement of equipment, a given part is fully processed within a specific cell or system; it isn't moved to an intermediate holding stage (i.e., into inventory—in-process or otherwise) between operations. Many benefits are derived from this approach.
What "Lean" Means.
Delaney points out, for example, that in the case of using transfer lines or other types of fixed automation, there is really no volume flexibility to speak of. That is, if it takes Y people to staff the line, then whether you're running it at full capacity or at a fraction thereof, it takes Y people to staff the line. There's no change in manning levels as related to production. With a lean approach, the number of people can be added or subtracted as needed to meet the production requirements. (An adjunct to this is that with fixed automation, you buy the capacity needed for the full volume at the start, even though [a] you'll be ramping up toward that volume and [b] there's no guarantee that you'll ever reach that number given market changes.)
Quality is enhanced because one-piece flow means that if a defect is made in one station, it is passed along to another station where it, in all likelihood, will be identified as a defect. The problem can then be resolved before other defective products are manufactured.
A Lean Customer
One of Visteon's partners and customers is Panoz Auto Development (Braselton, GA). Yes, it is the Panoz associated with the motor sports team that runs the cars emblazoned with the Visteon logo. Panoz Auto Development has been building a low-volume roadster called the AIV—for Aluminum Intensive Vehicle—for the past several years, which is going to be joined by a new model in the first quarter of 1999. This new car is called the Esperante. Like its predecessor, this two-door will feature an aluminum body and chassis. But, according to Daniel Panoz, the Esperante has been designed so that it is "a small volume car that can be produced as efficiently in terms of man hours as a mass-market vehicle." Note well that the production volume for the Esperante is projected to be 1,000 when production is fully ramped up—but Panoz says he can foresee how as many as 5,000 per year could be accommodated.
Key to the low man hours and the ability to flex production volume—as well as the ability to modify the basic architecture of the car, making it longer or shorter, wider or narrower—is the implementation of aluminum extrusions for the chassis. Panoz likens the large-bore extrusions, which are supplied by Reynolds Metals, to Lego blocks or Tinkertoys. Pieces are joined by nodes that serve as transition points. So side rails, say, could be shortened and simply fitted into place as needed. The extrusions are adhesively bonded with an aerospace adhesive, then mechanically fastened with a bolt. "It is a strong, simple way to build a platform," states Panoz.
Characteristic of the simplicity is the way the fixturing for assembly is taken into account in the design of the extrusions. There are vertically oriented holes located in the nodes so that the can be fitted in the right location on the pins on the fixture plate. It is fundamentally a fool-proof way of putting things together the right way.
Commenting on the use of extrusions, Panoz says that the overall tooling costs are much less than those associated with the conventional practice of stamping out pieces and then welding them together.
Tooling costs are also said to be lower (through it is useful to keep in mind that the volumes are a fraction of those of a typical car) for the body panels. The process used for these panels is something, Panoz says, that's been used in aerospace for some 30 years: superplastic forming (SPF). "People think that when you say `aerospace' you can't afford it," Panoz says. "But you have to look in all the right places to find technology you can use."
Fundamentally, SPF involves forming the aluminum alloy supplied by Alumax with male and female tools (steel or aluminum). The "superplastic" part is based on the fact that the material is heated to about 900oF, at which point it has the consistency of taffy, which facilitates the formability. With just seven tools, all of the panels for the vehicle are produced.
Panoz says of the product development process used for the Esperante: "Every vendor participated in the design." The reason: "It saves tons of time and money." So although the Esperante may be something of a craft-car, as compared to typical production vehicle, not only is it produced with production-style methods, but also with production parts and components from companies including Visteon.
"Lean" means leveraging resources for creating superior products.
Built in to this lean methodology are the means by which changeovers can be performed in comparatively short order. Transfer-type equipment is superlative when it comes to efficiently producing a multitude of a given thing (or two), but rapid-response changeover is not something that's in its repertoire. That can be a hindrance in this era of short product life cycles—to say nothing of being a fundamental behind the difficulties of dealing with changing customer demand (which leads back to the issue of expediting).
In traditional high-volume operations, Delaney notes, the people working on the lines tend to be dedicated to doing one thing. But in the lean manufacturing environment, where changes aren't exceptional but the rule, where full operations are performed in comparatively compact areas (which means the minimization of costly plant floor real estate through lean), the people are empowered and entrusted to do more activities, which is certainly a more-fulfilling way to spend one's time on the job.
It's the Economy.
It's essential to understand that none of this is being done throughout the Visteon manufacturing organization—which is, it should be understood, rather extensive, with 81 plants: 32 joint ventures and 49 wholly owned facilities located throughout the world—because it is currently considered a trendy or au courtant thing to do. Although Visteon is certainly a supply company headed by people who have an eye on the future more than on the past ("Because that's the way we do it around here," is probably an explanation that would cause the status quo-maintaining speaker finding him- or herself looking for someplace other than Visteon as a place to work), they are methodical in their approach. There is a codified set of "Lean Design Rules"; there are "Lean Assessment Tools" for benchmarking; all manufacturing engineers have been trained in lean methods; the Visteon Production System is undergoing rollout in all of the company's plants. Step by step it goes: but briskly.
The reason why Visteon is driving with the speed of a race driver toward lean is the same reason why the driver wants to be the first to the checkered flag: the purse is bigger.
Said another way: single-piece flow increases cash flow. Things are always moving. Lead-times are short and predictable. Short changeover times mean disruptions don't occur. Inventory costs are decreased. Floor space requirements (for both inventory and for process needs) are reduced. People can be assigned to work where they can add the most value.
Because the facilities where lean is being implemented at Visteon were historically mass/batch, the efficiencies of lean result in the opening up of additional floor space, which provides the opportunity to bring in more work without needing to add bricks and mortar. All of this can have a positive effect on cashflow.
It should be pointed out that Visteon's approach to lean implementation isn't one where all of the practices of the past that have continued into the present aren't being dismantled en masse. After all, it has customers to serve right now. So a gradual transition (and gradual is not a code word for "Ah, don't worry about it, when it happens it happens") is underway, replacing the fixed conveyors and large automated storage and retrieval systems and transfer lines and the like with lean equipment and methods. As new products and processes are brought into the plants (more than 30 in 1998), the approach will be one-piece flow oriented.
The drivers for Visteon to go lean that Delaney enumerates are the same for any supplier that is working in growing both its capabilities and its business:
1. Technology advances require responsive production systems
2. An expanding customer base requires flexibility
3. Customer demand has shifted to low-volume niche products.
The goal at Visteon is to exceed customer expectations in quality, cost and time to delivery. Having to hurry up willy-nilly, rushing and expediting is not the way to do it. Lean is a fast and efficient means by which the business drivers can be met and the goals exceeded.