General Motors Corporation
Background
General Motors Corporation (GM) has one of the most wide-spread lean manufacturing initiatives in place in the U.S. GM grew interested in lean manufacturing in the early 1980s, as it examined elements of the Toyota Production System that had been adopted by several Japanese auto manufacturers.
In 1994, GM and Toyota formed a joint venture called the New United Motor Manufacturing Inc. (NUMMI) to pioneer implementation of lean methods at an automotive manufacturing plant in the U.S. Compared to a conventional GM plant, NUMMI was able to cut assembly hours per car from 31 to 19 and assembly defects per 100 cars from 135 to 45. By the early 1990s, the success of NUMMI, among other factors, made it increasingly clear that lean manufacturing offers potent productivity, product quality, and profitability advantages over traditional mass production, batch-and-queue systems. By 1997, the "big three" U.S. auto manufacturers indicated that they intend to implement their own lean systems across all of their manufacturing operations.
Example Lean Projects and Results
Saturn Kanban Implementation
Saturn's Spring Hill, Tennessee automotive manufacturing plant receives more than 95 percent of its parts in reusable containers. Many of these reusable containers also serve as kanban, or signals for when more parts are needed in a particular process area. This "kanban"-type system eliminates tons of packaging wastes each year and reduces the space, cost, and energy needs of managing such wastes.
Saturn has also implemented electronic kanban with some suppliers, enabling the suppliers to deliver components "just-in-time" for assembly. For example, seating systems are delivered to the shop floor in the order in which they will be installed. Saturn also found that improved "first-time" quality and operational improvements linked to lean production systems reduced paint solvent usage by 270 tons between 1995 and 1996.
Fairfax Assembly Paint Booth Cleaning
At GM's Fairfax Assembly Plant, paint booths were originally cleaned every other day (after production) to prevent stray drops or chips of old paint from attaching onto subsequent paint jobs. It was discovered, however, that the automated section of the painting operations really only needed to be cleaned once a week, as long as the cleaning was thorough, and larger holes were cut in the floor grating to allow for thicker paint accumulations. The reduction in cleaning frequency facilitates improvements in the process "up-time" and flow. As an additional benefit, through this and other more efficient cleaning techniques, use of purge solvent decreased by 3/8 of a gallon per vehicle. When combined with reductions achieved by solvent recycling, VOC emissions from purge solvent reduced by 369 tons in the first year following these adjustments.
Application of Lean Methods to Administrative Processing in the Purchasing Group
In addition to applying lean thinking to manufacturing processes, GM has looked at ways to lean its internal administrative processes. For example, GM's purchasing group investigated the company's Request for Quote (RFQ) processes by which supplier products are sought. Because each RFQ has to include a detailed listing of system requirements, RFQ's under the prior paper-based system could be quite large, ranging in size (in total paper "thickness") from 3/4 of an inch to 6 inches thick.
Upon applying a value stream mapping and analysis, GM identified a number of ways in which this process produced an excessive amount of waste. Not only did it require GM to purchase and use a great deal of paper, but also incurred costs and used raw materials associated with printing and packaging, in addition to cost and energy required to deliver each package to each potential supplier.
GM's solution was to transform the RFQ process into an electronic-based system that is not only paperless, but that avoids the additional costs and waste associated with printing, packaging, and shipping each RFQ. Using an internet-based system called Covisint, GM is able to improve procurement efficiency while lowering costs by saving time and eliminating waste. By distributing RFQ's electronically, GM estimates that the company will save at least 2 tons of paper each year.
Lean Enterprise Supply Chain Development
In the early 1990s, GM realized that it was not sufficient to just lean GM's operations, as GM (and the customer) directly bears the costs of supplier waste, inefficiency, delays, and defects. GM assigned a group of engineers to work more closely with its suppliers to reduce costs and to improve product quality and on-time delivery.
This effort has involved over 150 supplier development engineers conducting lean implementation workshops called Purchased Input Concept Optimization with Suppliers (PICOS). As part of PICOS, small teams of GM engineers visit GM suppliers for several days to conduct training on lean methods and to lead a focused kaizen-type rapid improvement event. Follow-up was conducted with the suppliers at 3 and 6 months to determine if productivity improvements had been maintained, and to assist with additional process fine-tuning.
Over time, GM found that having an engineer involved in the PICOS program who is familiar with environmental management provided important benefits for leveraging additional environmental improvement from the PICOS events. By working with suppliers on environmental improvement, GM has also, among many things, been able to
- promote the use of returnable shipping containers in lieu of single-use, disposable ones;
- communicate GM's guidelines for designing for recyclability and broadly disseminating its list of restricted or reportable chemicals; and
- communicate success stories to the supplier community as examples of what can be done.
GM also announced that suppliers will be required to certify the implementation of an EMS in their operations in conformance with ISO 14001. GM is currently developing a broader supply chain initiative, with involvement from EPA and NIST, that some participants hope will become a vehicle to integrate technical assistance on advanced manufacturing techniques and environmental improvement opportunities. Two PICOS events are described below.
Steering Column Shroud PICOS Event
GM conducted a PICOS rapid improvement event with a key supplier to enhance the cost competitiveness and on-time delivery of steering column components. The GM team used value stream mapping and the "five whys" to assess the existing process for steps that cause long lead times and delays. The assessment revealed that the supplier shipped the steering column shrouds (or casings) to an outside vendor for painting prior to final assembly with the steering column, adding significant flow time to the production process.
Using the "five whys" technique, the team asked why the shrouds needed to be painted in the first place. The answer was "because the die (plastic mold) creates flaws that need to be covered." This led the team to a simpler, less wasteful solution – improve the quality of the die, and mold the part using resin of the desired color.
After some research, and capital investment of $400,000, the supplier incorporated an injection molding process for the shrouds into the assembly line, eliminating the need for the time consuming painting step. This project saved the supplier approximately $700,000 per year, while shortening lead times and improving on-time delivery to GM.
This lean project produced environmental benefits, although they were not needed to make the business case for pursuing the project. Elimination of the painting process step
- eliminated 7 tons per year of VOC emissions from the painting process step,
- all hazardous wastes associated with the painting process step (including clean-up rags, overspray sludge, off-spec and expired paints), and
- environmental impacts associated with transporting the shrouds to the painting vendor and back.
Thermoplastic Color Purging PICOS Event
While working with a supplier to reduce lead times and improve quality for the production of a thermoplastic molded component, a GM-facilitated team found additional waste elimination opportunities associated with color changeovers. At this time, the suppliers' operations were running seven days a week to meet customer demand.
The team found that each time the supplier changed resin colors to produce a new batch of parts, as many as 5 to 10 large plastic parts needed to be scrapped. The accumulated scrap typically would fill a 30 yard dumpster every day, resulting in $3,000 to $4,000 per week in disposal costs. In addition, the supplier consumed more resin than necessary, contributing to higher material costs.
By focusing the rapid improvement event on streamlining the die set up and color changeover process, the team was able to reduce the need to run overtime shifts to meet customer demand while eliminating a significant waste stream, as well as the extra resin and processing associated with the scrap.