Japan-Based OEM with USA Assembly
Improve overall labor hours/car productivity 30%+ at auto assembly plant.
CHALLENGE
Japanese automotive OEM faced a crisis situation of high costs and negative profitability, despite having a modern transplanted assembly plant in the USA. We led a team tasked with deconstructing the USA operations costs and using forensic analysis to determine key drivers and opportunities for improving operational performance and reducing costs.
The client’s plant had the lowest labor productivity in North America for its class of vehicles, and within 6 months had reached the menian productivity level.
SOLUTION
Analyze assembly plant historic cost performance and operational performance to determine sources of low productivity and recommend solutions. Benchmarked the plant against other USA automotive assembly operations using Harbour Reports. Analyzed plant cost data and operations performance data to determine key buckets of cost and unfavorable trends and ratios. Used on-site interviews and production observation to verify causes of operations driven costs.
Plant was severely overstaffed for the level of production, based on reliable benchmark data for USA auto assembly plants
Absence of assembly line quality control was driving 300 extra heads (30% of the total reduction) in final line rework
Ineffective line balancing of the assembly work stations was driving another 400 extra heads along the vehicle assembly line
Excess managerial staffing and delayering was driving another 300 extra heads at the site
Total reduced workforce was 1000, out of the beginning total of 4000.
Changes implemented in less than 1 year with improved quality and highest profitability ever achieved
Plant reached top quartile in benchmark productivity reports
The key change was rebalancing the assembly line work using standard work activity analysis and enforcing process discipline.
Within six months, the quality build rate had improved from less than 20% to more than 60%, and the gains were sustainable with the client reaching BIC rate of 85%.
