About now, a small team of engineers and associates from Nissan's Smyrna, Tenn., factory is probably visiting an American supplier. They are not pleasantly taking notes or talking contracts over plastic foam cups of coffee. Rather, they are trying to teach the supplier a better way to operate its factory.
Is this hugely presumptuous?
That is what some U.S. executives might have thought earlier in this decade. Then, U.S. suppliers were wondering out loud - quite loudly, in some cases - why they were not getting more business from the new Japanese auto factories rising across mid-America. The answer they heard: Too many U.S. suppliers simply did not meet the Japanese companies' quality expectations.
'There was a time when the performance of many U.S. suppliers was poor,' says Guy Wilson, vice president of engineering at Nissan Motor Manufacturing Corp. U.S.A. in Smyrna. 'I don't think the emphasis was on quality. But we've certainly seen that change over the past few years.'
The doors did not stay closed to U.S. suppliers. In fact, although some viewed the claim cynically, the transplant automakers said from their beginnings that they wanted to localize as much vehicle content as possible. Localization has steadily increased since the 1980s. Honda's U.S.-made cars now boast domestic content of more than 95 percent. Last year, the international automakers bought some $25 billion in U.S.-made parts and materials, compared with less than $5 billion just 10 years ago. Over the past decade, many U.S. parts firms viewed that growth as their best opportunity to expand business.
But the rapid spending increase did not come at the cost of quality, Wilson makes clear. It came as local suppliers stepped up to the quality plate. And in case after case across the United States, those factory improvements were made with assistance from the Japanese automakers themselves.
BIT BY BIT
Nissan currently sends 30 to 40 teams a year to its supplier plants. They spend a week teaching the component maker a better system for making parts, Wilson says. The directions are typically Japanese: Reduce inventories, clean up the assembly area, root out waste, uncover inefficient procedures and smooth out uneven production rates throughout the plant.
Toyota's U.S. operations also have been active in helping suppliers. Fred Soofer, president of Plastikon Industries Inc., a small injection-molding supplier in Hayward, Calif., became a low-volume interior trim supplier to Toyota's joint venture with General Motors, New United Motor Manufacturing Inc., in 1987. The company had originally been a producer of service parts for GM. But in 1991, Toyota representatives began working with Plastikon to make it more efficient.
'We were a good company,' Soofer says. 'We were just in the old system. We might have three days of inventory sitting around at any time.'
Bit by bit over the course of the next four years, Plastikon began adopting Toyota's method of manufacturing. First, it physically cleaned up the plant. Then it began to identify waste - ranging from unnecessary material waste to the wasted steps of carrying a part from machine to machine. The company adopted a kanban system, in which one station in the manufacturing system signals to the previous step that it is ready for more work.
'In the last three years, I can finally see it all coming together,' Soofer says. 'It's a beautiful thing when it's all working together.'
Plastikon's reward? More Toyota business. The company now additionally supplies Toyota's Canadian and Australian automaking ventures. Later this year, the supplier will build a second plant to handle new business to come.
To expedite the education of American companies, Toyota set up the Toyota Supplier Support Center in Lexington, Ky., in 1992, under the management of Hajime Ohba. Ohba, who studied the vaunted Toyota Production System under the man credited with creating it in the 1950s, travels to U.S. factories, free of charge, offering guidance on how to improve efficiency and reduce product defects.
Since opening the Lexington office, Ohba and his managers have provided free consulting services to 72 U.S. firms. One of them was Charlotte, N.C., Collins & Aikman Corp., a producer of textiles and interior trim parts, ranked by Automotive News as the 24th-largest OEM supplier in North America.
Collins & Aikman also received a boost from Nissan's program. Dan Dobbins, vice president of Collins & Aikman's international business unit, says a team of Nissan personnel spent several days going over the procedures at a Greenville, S.C., factory that produces molded and die-cut carpeting.
'The things you look for are the incremental hits,' Dobbins says. 'They're not too exciting to talk about. They're small bites, saving 10 cents here and 30 cents there, using a little less material on this or maybe loading our labor differently on a certain line. In the end, the Nissan folks have helped us roll up our sleeves and improve what we're doing. It's helped us grow as a company - not just for the Nissan business.'
Dobbins says the effort is ongoing. Collins & Aikman and Nissan conducted another factory program earlier this year.
THE RIGHT MOVES
A similar program at Honda of America Manufacturing Inc. in Ohio has helped 95 U.S. suppliers since it started in February 1990. Called the BP program (for 'best practices'), the effort uses 17 full-time Honda teachers to help companies improve efficiency, reduce waste, ratchet up quality results and train suppliers to elicit more worker participation.
Honda spends up to 13 weeks at a supplier plant, bringing senior management, plant supervisors and assembly workers together on the shop floor to look for inefficiencies and new ideas. According to Rick Mayo, a Honda purchasing manager who oversees the BP program, the efforts have averaged a 47 percent improvement in productivity and more than 30 percent improvements in quality.
One of the first companies Honda helped in 1990 was an air-conditioning hose factory in Batesville, Miss., owned by Parker-Hannifin Corp.
'Parker said all the right things. They had the right vision. They had trained all of their associates, and they knew all the terminology and philosophy,' Mayo recalls. 'But they just didn't know how to apply that to the actual floor.'
The Honda team went into the plant and focused on Parker's production of a part for General Motors - not for Honda. The effort boosted the plant's productivity by 200 percent. Parker is now taking the Honda lessons and spreading them throughout its worldwide organization.
'Our basic vision was to develop world-class North American suppliers,' Mayo says.
RAISING THE BAR
But why bother? Why spend time and money helping other companies improve - especially when those improvements end up benefiting competitor automakers?
'Because if our suppliers are healthier, then they're going to be able to meet our needs and objectives in the future,' Mayo says.
'We don't have a problem helping the entire industry. It just keeps pushing us along,' he reasons. 'It sets new benchmarks for us in the future. If you're making Honda parts and that's the best-running thing in your company and everything else is losing money, eventually that's going to affect us. We would eventually have to look for new suppliers.
'On the other hand, if all of our suppliers get more competitive, then the industry will be more competitive. And that will make us get more competitive. If you don't try to stay on top, you'll end up way down the list.'