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Manufacturing Processes for 2000 and Beyond
When Taco set out to improve the way it manufactures its products nine years ago, the company had specific goals in mind including:
- Grow the business through better on-time performance to customers
- Continue to improve quality
- Introduce new products
- Improve manufacturing processes and costs
"We've always been successful at shipping good product out of the factory," says President John H. White Jr. "What we had to improve was in-process quality. We had to reduce end-of-the-line rejects."
It's no coincidence the re-engineering on the factory floor started about the same time Taco introduced its operation centers management structure, which was discussed in the previous story. Like the management change, the manufacturing improvements have occurred at a deliberate pace.
"It's been nine years, and to us it's been slow because we knew what needed to get done back then," says White. "Your first inclination is to just implement everything in a week. However, you can't do it that way because you have to change the entire company culture."
Part of the culture change, White notes, is the belief that alterations in the manufacturing processes and technology are never complete. but continually improving. An indication of their success is the fact that Taco is doing more than twice the business today from two manufacturing facilities than it was nine years ago using three plants.
Productive Processes
The most visible innovation on the factory floor is the shift away from assembly-line production to manufacturing cells. Assembly lines 30 to 50 ft. long largely have been replaced with more compact areas dedicated to making one type of product from start to finish.
"The problem with assembly-line-technology was if a customer needed a special order today, it took us a week to get it processed because we had work in process at every station on the line," White explains. "Everything had this huge change over time associated with it, and we could never react to a customer on demand."
"Today, in our cellular approach, we can react to almost anything. We can produce five different style pumps with three different colors every day."
White adds, "Our major accomplishment was to cut down the work in process to almost nothing. On an assembly line for our residential circulators, we used to have anywhere from 500 to 2,000 pieces in process on each line all the time. It would take eight working days to get a circulator through here; now it's a matter of hours."
Benefits gained from having less work in process include a reduction of inventory needed on hand to manufacture product and a subsequent decline in scrap. Both have resulted in significant cost savings for Taco.
Another key change was eliminating piecework pay incentives for employees on the assembly lines. While such incentives reward individuals, they are counter-productive to the teamwork concept of people working together in a manufacturing cell.
"If an operator is paid for how many widgets he produces, he could make eight million widgets," White notes. "But if you only sell two million widgets, then the other six million widgets don't do anything for you. All you do is pay the operator a bonus for product you don't need."
"And, it gives him an incentive not to be as quality conscious as he possibly could be. People like to know that their part in the process has a significant impact on high service levels. Therefore, producing to order means everyone's current production has a home."
High Tech Taco
Millions of dollars in new machinery and other high-tech equipment have accompanied the change in manufacturing processes at Taco. The money has been invested, White says, to make the operation centers more efficient and the employees more productive and responsible.
"Our goal always has been to grow the company as big as we could while trying not to add people," White says. "We do not want to cut the people we have, so we try to innovate in a way that we could grow, keep our workers, retain them and move them into areas that are more value-added. What we want to eliminate are non-value-added activities."
An example of a non-value-added activity would be making excess widgets on an assembly line, White adds. Working in a manufacturing cell reduces non-value-added costs.
Still, some employees can't help but get a little worried when they see change, be it high-tech machinery or new floor layouts, going on around them.
"The transition from the assembly lines to the cells has been done gradually, using employee empowerment," White says. "Every layout or change has been reviewed by the employee in that cell. All of the input was taken into account prior to moving anything. So, we now have workers who feel they are really part of something. They are well aware that nothing will be done without their full involvement and ultimate satisfaction. This is a company commitment."
Computerization on the shop floor is another visible change from a few years ago. Computers are used not only in the controls of machinery and testing of product but also in measurements and record keeping.
We're fully integrated on the shop floor with computer-aided manufacturing statistical process control," White says. "It's all computerized. People just push a button to take a measurement, and they get a week's printouts to advise them of trends as they occur."
ISO 9001
The precise measurements and record-keeping are essential to another Taco goal, and that is ISO 9000 registration for its plants in Cranston, R.I., and Fall River, Mass. The phrase ISO 9000 encompasses the internationally recognized set of quality management standards that emphasize the careful documentation of a company's processes, training and procedures.
Taco hopes to have its facilities registered to standard ISO 9001 by the end of this year. ISO 9001 covers a manufacturer's processes for product inspection, testing, production, design, development and service.
Achieving ISO 9001 registration, or accomplishing other goals listed at the top of this story, will not allow Taco to veer from its path of continuous improvement, White says.
"Our on-time shipments are way up, and our response on customer returns has improved," he notes. "But I think customers will continue to see improved quality levels and on-time performance as well as a host of new products. We have some very exciting innovations still ahead."
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