A few years ago, we weren't very good,' confesses Mark Hogan, manager of Wagner Lighting Products in Hampton, Va., which produces auto lights for Chrysler Corp.
Like other automotive executives across America, Hogan now looks back on his former life with the disdain of a born-again religious convert.
In the early 1990s, his Hampton plant was reporting 3,700 defective parts per 1 million produced. 'We were going about things the wrong way,' Hogan admits.
Last month, Hogan says he was horrified to discover the plant's second defect since June 1996.
'We've started doing a lot of things right,' he says. 'We're becoming known for our quality.'
Over the past decade, that concept called quality has been a new religion sweeping over U.S. automotive manufacturers. There are a dozen reasons. Not the least of them is the fact that the Big 3 have implemented fierce performance guidelines that threaten underperformers with lost business.
But few of the quality converts today would deny that it took the coming of Japanese and German transplant automakers to the United States to shock the industry into getting its house in order. Even for plants like Wagner Lighting, which doesn't rely on transplant business, the key tools for improvement came from the Japanese awareness.
For Wagner, a division of Cooper Automotive, the change began when Chrysler introduced it to a new practice called 'kaizen events.' Visiting Chrysler managers taught Wagner to organize teams of employees to spend a week at a time searching for production problems and solutions. Last month, a kaizen event focused on debugging a new factory line that will produce Dodge Ram headlights.
'All of the other Cooper divisions are now coming in to learn the kaizen process,' Hogan says.
Chrysler itself developed the kaizen event concept using an independent consulting firm, TBM Consulting Group Inc. of Durham, N.C. TBM was, in turn, founded in 1986 by a group of former Toyota executives. TBM began helping Chrysler overhaul its own factory operating practices in 1993, and also to work with Chrysler's suppliers. The consultants are also working with about 90 of Ford Motor Co.'s suppliers, says Bill Schwartz, the firm's vice president of business development. It also recently began working with two of General Motors' Delphi plants.
'I get 50 to 60 phone calls a month from companies who want to do these things,' Schwartz says. 'The kaizen concept is still spreading.'
Schwartz normally assures clients that embracing kaizen practices will net them a 15 percent gain in worker productivity, a one-third reduction in plant inventory and an improvement of up to 40 percent in plant space utilization.
THE ROOTS OF CHANGE
The list of U.S. automotive companies that have chalked up monumental performance turnarounds over the past few years is long, and getting longer. And chances are, somewhere in their stories is some trace of exposure to Japanese or European manufacturing philosophy.
Back in 1983, GM was faced with declining productivity at its powertrain plant in Tonawanda, N.Y. Production slipped from 4,000 engines a day to 2,500. But after the plant embraced new Japanese-influenced employee-involvement programs, productivity doubled.
One key factor: Like Japanese manufacturers, GM has resisted any layoffs at the plant, even during production downturns, over the past 14 years. Workers are confident that their efficiency-improving efforts won't ease them out of a job.
A Siemens Automotive Division fuel injector plant in Newport News, Va., was losing $30 million a year in the 1980s and close to losing major contracts over quality issues. With a new emphasis on continual improvement, worker training and team problem-solving, the plant has doubled productivity and cut defects from 59 bad parts per million to three per million.
At Ford Motor Co., the Sharon-ville, Ohio, transmission plant was scheduled to close in 1986. But workers there adopted a team-management approach, similar to the organization of a Honda factory, which focused on improving worker skills and solving problems around the factory. By the mid-1990s, the plant had posted a 53 percent improvement in quality and a 40 percent improvement in safety.
Ford has been closely benchmarking the Japanese auto industry since the 1980s. ' 'Ford quality' was an oxymoron then,' says Sandy Munro, a Troy, Mich., manufacturing consultant and onetime Ford engineer who traveled to Japan on behalf of the carmaker looking for answers. 'We were really at the bottom of the heap.'
Munro, a powertrain engineer who later designed the assembly line for the Taurus V-6 engine, recalls U.S. engineers touring Japanese plants in those days, asking the same questions over and over. 'Everyone wanted to know what the technology was. They all wanted to learn the design and replicate it in America. It was much more complicated.'
Munro realized that it was the culture of the factory activity, not the machinery, that was giving Japan's carmakers the edge in quality and efficiency. 'It was the way they teamed up to get rid of a problem,' he says. 'There was no adversarial relationship between people. They wanted to fix things.'
Munro became particularly interested in the Japanese concept of poka-yoke, the practice of installing mechanical fixes onto existing factory lines to keep problems from recurring. 'They were focused on the process of manufacturing, not changing the design,' Munro says. 'Their assumption was that variation should be eliminated.'
J.D. Power and Associates believes that U.S. quality is quantifiably better these days. When the Agoura Hills, Calif., automotive research firm began counting defects in cars in 1988, the industry-average car showed 166 quality defects per 100 units. Last year, Power pegged the industry average at just 81 defects per 100 vehicles: nearly a 50 percent decline in defects, industrywide.
As a testament to the widespread gains across the industry, Power last year recognized Ford's Taurus/Sable plant in Atlanta as one of the two highest-quality auto factories in the world. It tied with Honda of America Manufacturing Inc.'s Accord plant in Marysville, Ohio.
A NEW FORD
Ford Atlanta remade itself in the 1980s by reorganizing its employees into quality teams. No longer did workers and managers square off into rigid, typically adversarial roles, as Munro recalls of the old Ford Motor Co. Managers and engineers instead worked closely with line assemblers to solve problems. Assemblers were empowered to identify defect-causing problems on their own, and then to devise their own solutions through their quality circles.
As the 1990s dawned, the plant had doubled its efficiency from about 50 cars a year per worker to 100. The long waiting line of end-of-the-line car repairs had dwindled.
The new attitude is now well ingrained at General Motors, too. 'The lessons are out there now,' says Tom LaSorda, vice president of North American quality, reliability and competitive operations. His marching orders are to take the efficiency and product quality approaches that have been fermenting in North America over the past 15 years and put them into use in GM plants.
'Whatever the culture is of the plant you're in, quality and efficiency comes down to the people,' says LaSorda, who once managed CAMI Automotive Inc., GM's Canadian venture with Suzuki Motor Co. 'To change and improve, you have to provide the training and the help for them to make the change. Once you do that, it spreads like a forest fire through the plant.'