TECUMSEH, Ontario -- Dakkota Systems' instrument panel factory is joined at the hip to Chrysler's Windsor minivan assembly plant.
"Every time Windsor goes on break, we go on break," says Dan Hillock, Dakkota's director of operations. "Every time they have lunch, we have lunch. And every time they go home early, we go home early."
So as Chrysler works to wring costs out of its entire manufacturing operations, it's only natural for the company to examine its key suppliers. And the Dakkota plant here is the first guinea pig in a major experiment.
The automaker wants Dakkota and other key suppliers to adopt its World Class Manufacturing System, a productivity tool appropriated from Fiat (which appropriated it from the Japanese) that promotes kaizen, or the concept of continuous improvement.
Chrysler's vendors want to increase productivity and quality, benefits that Toyota Motor Corp. -- the industry's leading practitioner of kaizen -- has enjoyed for decades.
The work is unglamorous. But if just a few steps can be eliminated from the intricate manufacturing ballet at Dakkota, the savings will add up.
With Chrysler's help, Hillock's team about a year ago began a close inspection of Dakkota's U-shaped assembly line where nearly 1,500 instrument panels are assembled each day for Chrysler minivans.
The biggest waste was caused by "non-value-added work" -- that is, employees shuffling back and forth to retrieve parts. This wasted activity cost an estimated $1.1 million per year.
Hillock said that wasn't a big surprise. "We saw it, but we didn't have the tools to address it," he said.
Next, the team used video cameras to record the movements of each worker. They looked for assembly activities that required employees to lift their hands above their shoulders, or turn away more than 90 degrees from the line, or walk away from the line to retrieve a part.
Hillock's team proceeded to eliminate unnecessary motions, one by one. In some cases the solution was simple. For example, a basket of parts was attached to each instrument panel on the conveyor so workers could install components without turning away from the line.
After numerous changes, Dakkota reduced employees' wasted motion by 1,200 miles a year, about the same distance as a hike from Tecumseh to Orlando.
Another example: Dakkota asked a supplier to pack 30 glove boxes into a shipping bin instead of 15. Filling up the empty space allowed Dakkota to reduce the number of inbound and outbound trailer loads, saving Chrysler $191,000 a year.
Surrounded in his Tecumseh office by sports memorabilia, such as photos of hockey great Gordie Howe, souvenir baseballs, pucks, and a football autographed by Eli Manning, Hillock described the training process that has taken much of the past year.
"We were chasing them," Hillock said of Dakkota's campaign early last year to work with Windsor Assembly. "They came out and evaluated us to see if we were worthy."
Hillock acknowledged that he had another advantage. Before joining Dakkota, he spent 39 years working for Chrysler, a career that included a four-year stint running Windsor Assembly.
Now that Dakkota has launched its program, Windsor Assembly is preparing to work with Magna International Inc., which supplies seats, and Flex-N-Gate Corp., which supplies front-end fascia modules.
Other Chrysler assembly plants also have begun inviting suppliers to participate in the efficiency program, said Mike Hall, Chrysler's director of supplier quality. "As our plants get better at this, it's natural to start working with our suppliers," he said.
Chrysler's campaign to train its suppliers would merely allow the automaker to catch up to its international rivals. Fiat's World Class Manufacturing borrows heavily from the famed Toyota Production System.
Improvement takes time. Toyota has been teaching the fundamentals of its production system to suppliers for decades. The Toyota Supplier Support Center, now located in Erlanger, Ky., first opened in 1992.
But Chrysler's assembly plants have improved their productivity markedly since 2009, when the company adopted World Class Manufacturing, said Ron Harbour, a managing partner for Oliver Wyman, a global consulting firm.
"In North America, Chrysler might not be the best yet, but their rate of improvement has been very fast," said Harbour, who conducts annual productivity surveys of assembly plants. "They've had incredible improvement in their plants."