Event Reports Western Region Unleashing the Power of Kaizen at NUMMI A shining example ofthe continuous improvement process.

John Coltman

AME's workshop at NUMMI (New United gan negotiations to reopen the plant as a Motor Manufacturing Inc.) was eagerly joint venture. Toyota wanted to establish a Event Reports awaited by attendees who had followed press manufacturing presence in North America Unleashing the Power of 40 reports about this novel venture between and gain experience with workers and sup­ Kaizen at NUMMI General Motors and Toyota after GM closed pliers here. GM sought Toyota's efficient Achieving Quality Systems in 43 the Fremont, CA assembly plant in 1982. We production techniques, a source for a com­ a High-Mix Environment at wondered how the Toyota production system petitive domestic subcompact, and a labor Hewlett-Packard, Greeley, CO could be fostered, given abysmal labor rela­ relations model (if this plant could turn around, others could). JIT Fast Track at Stone 45 tions during the GM tenure. Changes at the Construction Equipment, Inc. and plant were described in the book, Koizen, by Three major hurdles had to be over­ Electrochem Industries Masaaki Imai in 1986. The plant recently come, according to Dennis Cuneo, NUMMI's decided to expand production by adding a vice president of corporate planning and Customer-Driven Service: 47 Northern Telecom, Inc., light truck assembly line. legal affairs. First, a 15-month investiga­ Morrisville, NC What we actually saw at NUMMI and tion by the Federal Trade Commission discussed with employees was nothing short (FTC) questioned the antitrust implications Are You Serious About the Basics? 6 of a total transformation of the plant culture of the proposed agreement. The agency fi­ Steelcase Canada Ltd.: 50 and its production system. Ifan atmosphere nally approved the venture, stipulating a 12­ The Transition Continues of mutual trust between the plant manage­ year life, a maximum of 250,000 cars for ment and the labor force was necessary for GM, and an arm's length relationship be­ thiS transition, then Kaizen (continuous tween the stockholders of the two compa­ improvement process) was the engine that nies. drove it. Another challenge was the business ar­ First and Second Beginnings rangement. NUMMI was set up as aseparate When GM opened the Fremont plant in corporation with GM and Toyota sharing 1962, it was a state-of-the-art facility. Im­ equally as stockholders. ports held only five percent of the U.S. auto Perhaps the most difficult task was to market. Twenty years later, imports had negotiate a letter of intent with the UAW captured 50 percent of the Californiamarket (United Auto Workers). When it was final­ and the Japanese manufacturers claimed ized, this letter included commitments that cost and quality advantages. GM-Fremont shattered the old paradigm of labor rela­ was troubled by labor-management wars, tions in the U.S. auto industry. NUMMI re­ poor quality, and low productivity. Daily hired the majority of Fremont workers, rec­ absenteeism ran as high as 25 percent. GM­ ognized the UAW as a bargaining agent, Fremont joined three other California auto paid typical auto industry wages and ben­ plants that closed their doors between 1980­ efits, and offered enhanced job security. [n 82. tum, the union agreed to treat NUMMI as Shortly afterward, GM and Toyota be- distinct from GM and committed to support 40 Target Event Reports

New United Motor Manufacturing Inc. jackets. Wearing them is voluntary, but managers do so as amatter of course. TBJIIIIrIIII't Employee involvement is based on the premise that the people doing the job know it best. All improvement ideas are discussed and agreed upon by the work teams. NUMMI , ' funds team social and sports activities off ,, '' ,, '' the job to improve members' awareness of each other and break down communica­ Mechanics\ " What ,-:, tions barriers. Employees are assigned re­ sponsibilities for such things as document­ ing their work methods and procedures, re­ Human Relafions Values Production System Goals ferred to as "standards." Cornerstones: • High quality Kalztm I'ower • Mutual trust and respect • Lowcost Gary Convis, vice president of manu­ • Teamwork • Safe working conditions factUring and engineering, defines Kaizen • Involvement • Eliminate waste as the "continuous search for improve­ • E~uity • Simplicity ments throughout the company." Everyone • Job security • Flexibility at NUMMI is part of a team, and "all team members seek ways to improve quality, • Develop full potential of team member • Just-In-Time safety, and efficiency." NUMMI Production System The assembly line is organized into Organizational Process • Standardized work work teams of six to eight members. Each • Goals and objectives team has a leader, and groups of four to six • Visual control • Reward system teams have group leaders (supervisors). • Kanban system • Selection/orientation Team members allleam jobs performed by • Jidoka: quality principle • OJT (on-the-job training) other team members. They may rotate from • Sustained cleanliness job to job during the day to minimize fa­ • Trainingand development • Reducingwaste, unevenness, over-building tigue and the monotony of repetitive tasks. • Nemawashi - proce~s to gain consensus • Five why's: Ask "why" until the root cause is Team leaders fill in for absent team mem­ • Ringi-sho: document Which explains details bers, train new team members, help with reached of aprocedure, for which approval of policies difficulties, and organize Kaizen tasks. • Heijunka -evenness (leveling) and expenditures is gained. They're selected by a joint panel of manage­ ment and union representatives and receive FlfJIII81. Mutualtrustandrespect, teamwork, involvement, andequityare cornerstones ofthe NUMMI aslightly higher hourly wage. philosophy. Most groups (of three or four teams) efficient work practices and minimum job habits, and to actively support quality and meet every two weeks for a half-hour after classifications. productivity improvements in return for im­ their normal shift to discuss safety, qUality, Trust anti ValullS proved job security. etc. issues and to solve problems. They're Management and the union recog­ Values are important (see Figure 1fora paid an overtime rate for meeting time. nized that the trust of the work force was a summary of how the company views itselO, Plant employees are trained in the prerequisite for continuous improvement. contributing to continuous improvement as NUMMI six-step problem solVing process. The concept of "line stop" - each worker away of life for every employee. NUMMI took The objective: work standardization for can slow or stop the assembly line for quality an egalitarian approach to benefits and high performance in efficiency, safety, and or productivity-related problems - was policies. Senior management has no special quality. copied from Toyota. Time clocks were elimi­ privileges for parking or lunchrooms, and Every team documents work flow, tool nated. Union leaders went toJapan for three there is only one private office in the entire location, etc. The cycle time for production weeks to evaluate production systems. The pI ant (the president's). As in someJapanese of a car is 60 seconds. All work elements at union agreed to ensure good attendance factories, employees are issued shirts and each station on the line are timed to fit

41 Fall 1991 Event Reports

The Six Steps for Solving a Problem Kaizen Team's enthusiastic presentation was Jidoka, or the "Quality Principle," is one of the highlights of the workshop. another feature of the production system. production halts whenever a defective part Problem Solving NUMMI's problem solVing methodology is produced. Higher quality may be achieved is an elaboration of the Deming wheel with by fitting machinery with devices that detect its four elements of plan, do, check, and act. defects and automatically shut down equip­ Figure 2 summarizes the problem solving ment or by authorizing assembly line work­ cycle. ers to shut down the line if they observe a Employees are encouraged not to be quality problem. Jidoka places enormous contentwith the status quo. Problems should emphasis on eliminating the causes of prob­ be viewed positively, as opportunities for im­ lems. provement. Areas needing improvement are CompBtItlVfJ eunlll'8 called "Kaizen points." As employees think of NUMMI employees know they are com­ Building Our Future Together problems in terms of the difference between a peting with world-class companies, and standard and the actual situation, they are they are committed to continuous improve­ Figure 2. Problem solving at NUMMI follows a urged to quantify the differences in the form ment. Their job security depends on equal or modified version of the Deming circle. of a problem statement (current situation) higher improvements, compared to the and a goal statement (how much of the gap competition. Peer pressure keeps everyone within approximately 55-58 seconds. Teams will be closed). contributing new ideas. us~ stopwatches on time changes developed Employees receive training in the use of Some observers believe that the system through Kaizen activities. NUMMI is proud checksheets, cause and effect diagrams, relies on "management by stress" - emo­ that there are no industrial engineers. graphs, Pareto charts, control charts, histo­ tionally (if not physically) taxing. NUMMI Organization in small teams and job grams, scatter diagrams, and force field management is convinced that tension from rotation reinforce each other to facilitate analysis. They also learn how to generate, the drive to improve results in the most Kaizen. Convis explained that job rotation evaluate, and implement problem solutions. creative solutions. They recognize that it is a reduces the traditional sense of job owner­ Implementation is particularly important. It human tendency to resist change, and that ship and helps to facilitate changes. There is includes documenting the new standard and the drive for change may cause managers to incentive for team members to share knowl­ training others so that the gain is perma­ revert to non-participatory behavior modes. edge of the best way to do a particular job if nent. Downstream customers are consulted if Management and the union have made each one has many jobs. they may be affected by a change (a process great progress in developing mutual trust NUMMI has a suggestion system simi­ called "Nemawashi" inJapan). reqUired to deal with these situations in a lar to those in many Japanese companies. non-confrontational manner. The entire While the u.s. national average for compa­ I'toIIIIctJon System NUMMI employee group appears to have nies with suggestion systems is 10-15 per­ NUMMI set out to model itself after the acqUired pride in themselves and in the cent participation, 2900 out of 3100 em­ Toyota production system. In addition to quality of their products. ployees participated last year. More than their focus on teamwork, Kaizen, and stan­ 9000 suggestions were generated during dardization, they've made progress with JIT John Coltman is manuf(J{;turing operations man­ 1990. When a suggestion is implemented, and quality improvements. Production and ager at Oregon Cutting Systems, Blount 1m., Port­ the responsible employee receives a gift cer­ vendor deliveries are controlled by Kanban. land, OR and via!president ofAME', W..-Jern Regkm tificate with a point value. Each point is The stamping presses for car body panels can board ofdirectors. equal to one dollar. Most implemented sug­ be set up quickly. Various models move down the assembly line in seemingly random se­ © 1991 AME gestions are signed off by group leaders. For Infonnation on reprints, contact: During the past three years, $200,000 was quence. Association for ManufactUring Excellence paid out in the form of gift certificates. One of their biggest challenges is quali­ 380 West Palatine Road NUMMI recently began experimenting fying suppliers who can meet quality and Wheeling, Illinois 60090 with a new type of Kaizen team to speed delivery standards. This on-going task in­ 7081520-3282 improvement. It includes technical trades­ cludes sourcing an increasing percentage of e people and senior employees from the as­ components in North America rather than sembly line. This group helps work teams Japan. Suppliers ofseats, for example, deliver with particularly difficult problems (espe­ several times daily; on-hand inventory is cially automation or robotic assists). The measured in hours.

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