Ever since 1985, when Honda of America Manufacturing Inc. changed to a new-generation Accord at Marys-ville, Ohio, without losing a single day of production, the industry has been on alert.
The speed and ease of switching from an old model to volume production of a new one have become key factors in industry competition in this country. The quest now is to adopt changeover procedures that result in fewer lost units of production and less cost.
A fast, flawless model change-over 'is a demonstration of being able to respond to almost anything you're going to encounter in an assembly operation,' says John Paul MacDuffie, associate professor of management at the Wharton School of Business of the University of Pennsylvania. MacDuffie has been studying the international auto industry for more than a decade.
Rolling model changeovers can demonstrate that a work force is well trained and adaptable to learning new skills while still performing old ones. They are also telltale signs of how well an automaker is integrating technology, and how effectively it is 'working with suppliers so you don't end up with a logistical nightmare when the changeover takes place,' MacDuffie says.
David Thursfield, vice president of vehicle operations for Ford Motor Co., agrees: 'It's a discipline thing. If you can do it with 'zero launch loss' and the same quality level, you know you're achieving great control of new processes and new parts.'
NO TIME TO LOSE
In addition to testing the plant's overall organization, a model changeover puts two other significant factors on the line:
Increasingly, it is a crucial element in reducing a new model's time-to-market. That becomes more important as manufacturers attempt to reduce product cycles.
And during periods of strong model demand, squeezing every unit possible out of available capacity translates directly into higher revenues and profits.
'No one can afford to lose cars at changeover anymore,' says Pat Mur-phy, manufacturing-resource leader at Saturn Corp. Murphy was formerly directly in charge of Saturn's model changeover at the company's Spring Hill, Tenn., factory.
The growing importance of smooth changeovers is reflected in Honda of America's introduction of the 1998 Accord last fall at Marysville. The Ohio plant is the principal source for Accords in North America. And last year, Accord sales were strong even as plant associates prepared to launch the new version. As it did in 1985, Marysville was able to switch over to the new version without shutting down the line for a single day.
Ford's Thursfield and other executives of U.S.-based companies are working toward similar capabilities now. New practices to accomplish the task include:
Reducing the amount of tooling that must be ripped out of the plant and replaced for a model change. Automakers are learning that significant styling changes can be made without rendering the production equipment obsolete.
Starting earlier to practice building prototypes of a new model. That helps identify problems before the crucial launch date, when retailers are waiting for the new product.
Identifying improvements in the manufacturing design of the product to make assembly easier when the time comes to ramp-up production.
'You're going to see some very competitive launch schemes in the next three years by the Big 3,' promises James Harbour, chairman of auto manufacturing consultancy Harbour & Associates of Troy, Mich.
But at the moment, the experts still handicap the transplants ahead of the Big 3 overall.
Nissan Motor Manufacturing Corp. U.S.A. last year rolled out two new models at its Smyrna, Tenn., plant: a redesigned Altima sedan and a pickup truck. Each project resulted in only a little more than one week of lost production, reports Guy Wilson, vice president of engineering.
The goal for Toyota Motor Manufacturing, Kentucky Inc.'s relatively routine Camry changeover this year is to reduce the gap between full-production modes.
In 1997, it took 38 days to go from full production of one vehicle to full production of the next.
This year, Toyota wants to do it in 30.
Saturn Corp. is currently the trailblazer in changeover methodology for General Motors.
In 1996, when Saturns were still hot sellers, the company had to make its most significant changeover to date while keeping production levels as close to peak levels as possible.
To accomplish it, Saturn began sending new prototypes down the assembly lines months ahead of the launch date to allow workers to get accustomed to assembly differences and parts changes.
Typically, GM would use less than two dozen such prototypes to prepare the assembly teams.
For Saturn's changeover, Mur-phy and her associates used 500.
Instead of bunching the practice cars together during a couple of prebuild exercises, Saturn built several new-model cars every other week for months.
'Our mission in life,' recalls Murphy, 'became to thoroughly understand the car and how to work together so that we could correct all the problems in the next validation build two weeks later.'
The method allowed Saturn to go from peak production of the old model to peak production of the new one with a relatively modest dip of 10,000 cars. For a factory building 1,100 units a day, the changeover meant a cumulative nine-day down time.
Last year, when Saturn introduced another series of changes, the plant changed over without losing any production units. Other GM plants have been studying the Saturn technique.
'GM has done a pretty notable job of addressing changeover,' Harbour says. Any full-sized assembly plant that takes 30 days to achieve a model change is looking at downtime worth 25,000 to 40,000 cars.
Last fall, GM's Oldsmobile Intrigue plant in Fairfax, Kan., completed a new-model transition in only about 35 days and lost only 7,500 vehicles, compared with a traditional loss figure of about 35,000.
Currently, GM is moving its full-sized pickup through a changeover against a backdrop of the same kind of high demand that faced Honda. Months before launch, GM Truck Group was using replicated assembly lines at its new Truck Validation Center in Pontiac, Mich., to troubleshoot manufacturing glitches before they show up in actual assembly.
It is a complex changeover, involving different models at multiple GM factories. But Guy Briggs, former vice president of manufacturing at Saturn, and now Truck Group general manager, says the advance planning is already paying off. The effort has identified about 2,000 process improvements that make the trucks easier to assemble before the actual changeovers take place.
UP THE SCALE
Ford is also moving up the complexity scale on smooth changeovers. Last spring, Ford launched its Lincoln Navigator luxury sport-utility without sacrificing any production of the Ford Expeditions that are assembled on the same lines in the Wayne, Mich., plant, Thursfield says. There are about 400 part differences between the two.
Thursfield believes Ford could soon achieve a no-loss change that involves as many as 1,000 different parts.
'Gradually, as we're learning and putting in place the disciplines to do these zero - or minimum - launch losses, we're climbing the complexity scale,' Thursfield says. At the same time, the company is reducing the number of defects in the new models over the old ones they're replacing, according to its reports from J.D. Power and Associates consumer surveys. That doubles the automaker's challenge in making changeover improvements.
'In the past two years, we've consistently launched new vehicles with quality that is better than that in the outgoing vehicles,' he says. 'That's a new benchmark in the industry.'