{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

3aShifting gears as PDF - Shifting Gears I Some...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Shifting Gears I Some Manufacturers Drop Efforts to Adopt Japanese Techniques They Hit Snags With Ideas Such as Quality Circles. Justin-Time Deliveries Molding People and Machines By AMAL KL’MAR NAJ Staff Reporter of THE WALL SWEET JOURNAL Some American manufacturers are dis- carding billions of dollars of investment they made in the 19803 to adopt Japanese manufacturing ideas. They haven‘t decided that the Japanese systems don't work. Rather. they realize that some of those systems. however useful in lifting productivity in Japan. haven‘t achieved much in their own plants. Federal—Mogul Corp.. deciding that its automation had gone too far, has re- moved much of the fancy equipment at an auto‘parts plant. and General Motors Corp. is now relying more heavily on “people power." Whirlpool Corp. has ~ soured on Japanesestyle “quality circles" as a means of tapping employee ideas. and General Electric Co. and Coming Inc. have turned to other ways of tapping employee ideas. Losing favor at some companies is the Japanese “just-in-time" system of minimizing inventory by having suppliers deliver parts only as needed. ”We‘re relearning manufacturing." says John F. Welch nu: GE’s chairman. Admission of Failure Not all U.S. companies have floundered , in imitating the Japanese methods, of course. Chrysler Corp, for instance. attri~ . butes its recent success partly to copying .3 Honda Motor Co.‘s approach to product i t " development. But these companies are in the minor ity. The current effort to redesign signifi; cant areas of the manufacturing landscape reflects a stunning admission of failure. Nearly 10 years after rushing to copy the i'Jaoanese, many American companies have failed to duplicate. let alone surpass. their efficiency. The Americans were ham: pered by cultural differences and. they acknowledge. by misapplication of what they saw in Japanese plants. .Although what they learned from Japan improved quality and productivity in some areas. it “hasn't made them really compet itive.“ says Ranganath Nayak. who heads the world-wide. operations'management practice at Arthur D. Little Inc., a consult- ing firm. "Companies have been obsessed with one fad idea or another at the cost of their overall focus." he adds. The upshot: Paltry gains in relation to the $800 billion in capital investment and $150 billion in worker training-that he estimates Ameri- can manufacturers spent in the past dec ade to implement Japanese ideas. , Surveying 500 manufacturers lastyear. Little found that most of them ”simply aren't improving fast enough in relation to the competition." Adds Michael Der» touzos. a manufacturing'expert at Massa- chusetts institute of Technology: “l have talked to some 100 firms. Except for a. handful. they‘re flailing away." Overboard on Automation One reason is that American companies went overboard in copying Japanese auto- mation, Federal-Mogul. for instance, mlS‘ takenly surmised that the Japanese got a major cost advantage from computers. robots and other automated equipment... Burdened with labor costs significantly higher than those in Japan and facing mounting pressure from auto makers to cut parts prices. the company revamped its Lancaster. Pa. auto-parts plant in 1987 with statebf‘the-art automationeand with ideas imported from Japan. But before long. Federal-Mogul found , that although the plant turned out parts much faster than before. it couldn't shift gears quickly. To switch from making a small clutch bearing to a larger one. for instance. required a slew of changes, rang- ing from readjusting parts “feeding" sys~ terns to realigning the mechanisms that hold parts in place while they're being machined. Moreover. the complex ma: chinery required extensive maintenance. As a result. the automation not only failed to lower costs but also created a serious problem: in an automotive market marked by increasing proliferation of new models. the plant couldn’t respond quickly to customer’needs. "We lacked flexibil- ity." says Fred Musone. the president of the chassis group. About a year ago. Federal—Mogul re~ vamped the plant again. Out went the robots. most production~line computers. the overhead conveyer belts that carried semifinished parts along the production line. and “automated guided vehicles." These were trolleys that. guided by signals from underground wires. hauled parts from one workstation to another. Now, when a production line is switched from assembling. say. a washer ring for a steering column of a car to that of a pickup. workers simply wheel away sections of the assembly line and replace them with those geared for the next prod uct. The parts the workers need are kept in bins within easy reach. The plant. which assembles 1,300 differ- ent parts. now produces three times as many different varieties as before in the same amount of time. And because it can switch from one part to another quickly, it produces only what its customers need right then. It makes batches of only 250 to 500 parts at a time; previously. it made batches of 5.000 to 10.000 and stocked parts Please Tori; to Page A12, Colurfm I WALL c-rrerseT 3-01,.- MH 7, i442. l Shifting Gears: Some American Manufacturers Drop ? Ill-Starred Efforts to Adopt Japanese Techniques Continued From First Page in anticipation of orders. “Very clearly. we made some poor decisions. One of them was that high-tech was the answer," Mr. Musone says. Fed- eralvMogul has had to write off the cost of . such mistakes, whose magnitude he indi- cates only by shaking his head. Now. the very sight of a computer on the factory floor agitates Mr. Musone as he walks through the plant to show off its "simplicity.“ He pauses at a monitor dis‘ playing data about the parts being pro- duced and their delivery schedules. “1 don‘t like this a bit." he says. pointing at the computer. "But on this one. I have had to succumb to the plant manager." The ‘Quality Circles' Also going out of style in the U.S. are “quality circles." in which workers drum up ideas to tweak the production process to improve quality. Kevin Cooney, a Whirl- pool division vice president, recalls how. a decade or so ago, he was enamored of the idea that “the suggestions from workers were driving quality in Japan." ' So the company, like many in the U.S., formed small groups of employees in vari- ous areas of manufacturing and solicited their ideas. It also trained them to apply quality-control techniques. It taught them how to conduct meetings and solve prob- lems. It emphasized the importance of working as a team. “in many cases. it was the first time we sat down with em- ployees," Mr. Cooney says. , Now, the company has abandoned qual' ity circles. Mr. Cooney says the meetings weren't sufficiently focused, and the workers didn’t understand the objective. They ended up discussing a lot of "tangen- tial" issues. including “the color of paint in , the restroom," Mr. Cooney says. “Quality circles didn’t drive quality." ' instead, Whirlpool instituted “gain- sharing" plans, under which employees participate in savings resulting from qual- ity improvements. “We found employees were happier when they were making real contribution,” Mr. Cooney says. in contrast to Whirlpool, GE found the Japanese system too rigid and narrow for freewheeling American workers. In qual- ity circles. workers discuss defined topics in dozens of different areas, often isolated from each other, and they get so much direction from the top that their contribu‘ tions are seldom substantial. “Japanese companies are very hierarchical: we aren‘t. American workers don't stand up and salute.“ says Gary Rogers, who headed GE’s home-appliance division in Louisville. Ky, when. in 1990, it became one of the first GE businesses to replace quality circles with “Work—Out." Under Work-Out. workers and man. agers periodically meet in a town hall—type atmosphere designed to encourage workers to offer radically new ideas. In- stead of a dozen workers in a specific group suggesting a dozen ways to tweak the same process — which often generate only mar- ginal improvements ~ workers propose ideas that may require significant changes and investment. Managers respond to workers’ suggestions on the spot. “We have been ending up saying ‘yes’ to 90% of their ideas," says Mr. Rogers, who now heads GE’s plastics unit. Some cost-cutting suggestions GE Appliances accepted: It decided to build wire racks for refrigerators in-house rather than buying them. and it redesigned a work area for faster assembly of dishwasher doors. Work-Out also differs from quality cir- cles by offering individual recognition. The names of workers who contribute useful ideas are displayed on notice 2mm: in some cases. workers are re- better than us in manufacturing," says Norman Garrlty. an executive vice presi- dent. But. he says, it found that heavy automation sapped employee motivation. Studying how to avoid that problem. Robert Hoover, Corning's plant manager in Blacksburg. says that in 1987 he came upon a Procter & Gamble Co. liquid-deter- gent plant in Lima. Ohio. He was im- pressed. “The P&G plant is virtually run by workers,” he says. Corning adopted similar procedures: It let any of the 200 workers sign a purchase order, up to 5500, without authorization; eliminated time clocks; created only one job classification. with one manager for 60 employees; and trained each employee to handle as many as 15 different jobs.‘ The company decided to maintain sim- ilar levels of employee involvement when selecting manufacturing technology. "There were places we could have robo- tized, but we decided against it,” Mr. Hoover says, "because we wanted humans ‘ to give us the critical feedbacks.” The extrusion process for ceramics, for instance, employs just enough computers and sensors to display crucial information. Then the workers. rather than another set of computers and sensors. decide whether to intervene and change the kiln tempera ture or speed of flow. “The human mind is such a wondrous thing that we want to tap that,” Mr. Hoover says. “Even in boring and repetitive jobs, we have moved away from automation because humans adapt and robots don't." The plant has increased its productivity about 25% annually since its refurbishing. and it was profitable in the first year, Mr. Garrity says. its integration of people and technology has made it something of a showcase; so many American, Japanese and European companies want to look it over that it conducts a regular once-a- month tour—and even charges a fee. GM. too. is turning on the “people power." In the early 19805. the No. 1 auto maker became the most striking example of American manufacturers’ pursuit of technology. GM liked to show off its efforts at a Cadillac plant built in Hamtramck, Mich.. in 1985. But now. a lot of the plant‘sautomation is gone. People haven’t simply replaced ma« chines. Workers call suppliers if a part is defective and even suggest improve- ments. In addition. designated employees seek feedback from customers who have bought the cars. When William Howey, an assembly-line worker who also coordinates quality‘improvement efforts, called some Cadillac buyers. he learned that the car’s doors didn't swing open effortlessly. Then. the workers decided. right on the factory floor. to change the angle of the latch system. If a major design change is re- quired, the engineers are called in. “Our hourly employees are now em- powered to use their minds,” 3 GM spokes‘ woman says. Just-in-TimeProblems The urgency of responding to customer needs is raising doubts about rigid pursuit of another Japanese concept: just-intime delivery of parts. This system. known as kanban in Japanese. works well in Japan. where suppliers tend to be clustered around their major customers. In the U.S., despite the greater distances. many com- panies have been relying on frequent. prompt deliveries from suppliers. But GE Appliances found that low inventories of some parts—it gets 475 parts from 75 suppliers - prevented it from re- sponding to customer demands quickly. So it recently increased by 24% its inventory _ of parts with long delivery times. The . » ~ ' . , i" ‘r' ' . 7 . 3. s change helps it respond now to customer orders in 3.6 weeks, down from 18 weeks in 1990. “We are getting the factory closer to the customer." says Richard Burke. the unit’s vice president of manufacturing. The benefits of a faster order-to-deliv- ery cycle more than offset the cost of stocking part5. John Cassidy, director of research at United Technologies Corp, says many companies are learning that “the primary motive in just-in-time isn‘t reducing inventory.“ The Japanese de. vised it. he says. “to expose the weak points on the manufacturing line." With out the buffer. he explains. workers have to keep production defect-free. “We misplaced the goal," says Mr. Cassidy. who spent a year studying manu- facturing in Japan. ”in order to eliminate inventory. we focused our efforts on mate- rialshandling. We forced the supplier to take extraordinary measures to solve our inventory problem. rather than looking at our manufacturing process.” James Harbour. a manufacturing spe- cialist at a consulting firm bearing his name, says American companies have to think of manufacturing in broader terms. They must. for instance, design and engi- neer products and manufacturing pro— cesses with quality in mind. ”The Ameri- cans adopted quality circles without up- front engineering and thought it would generate massive improvement in quality and productivity. They were living in a dream land,“ he says. The irony is that many of the Japanese concepts, such as kanban, originated dec- ades ago in the U.S. Rising from the ashes of World War it, the Japanese then copied them extensively. “The Japanese were very creative in the application of the things they learned here,” says Larry Spiegel, director of lean manufacturing at GM’s Cadillac division. “We brought back what we saw in Japan and tried to execute them mechanically." ...
View Full Document

{[ snackBarMessage ]}

Page1 / 3

3aShifting gears as PDF - Shifting Gears I Some...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online