Young lions roar: A.O. Smith Barrie team practices cutting-edge management

BARRIE, ONT. - A.O. Smith Corp.'s module manufacturing plant is on the cutting edge of the industry's modularization trend, supplying front- and rear-axle and engine-cradle modules just-in-time to Chrysler Corp.'s Bramalea, Ont., LH assembly facility. But that's not the only aspect of this 44,000-sq.-ft. (4,080-sq.-m) plant that pushes the tradition envelope.

From the minute you hear the rock and roll music blaring on the plant floor you know you're not in a typical automotive supplier facility. Other innovations include worker job assignments that change every hour, to prevent tedium, and identical uniform shirts for all employees - hourly and salaried - so you can't tell the difference between the plant manager and the janitor.

The innovation at Barrie is largely due to the age of its management team, which ranges from 25 to 31. More amazing, perhaps, are the methods the team employs to continuously improve the quality of the 2,000 modules shipped in 14 batches each day.

The plant opened in May 1992 and two years later tallied an incoming defect rate of 100,000 parts per million. Outgoing defects were at the 140 PPM level. Suppliers have trimmed incoming defects to 20,000 PPM and the A.O. Smith plant's output defect rate has fallen to a slim 40 PPM.

"A bad lot of fasteners can swell these numbers dramatically," says Robert W. Abernethy, 30, Barrie's systems and administration manager, who credits the extensive use of bar coding and an aggressive supplier-development program for the improving quality statistics.

Bar-coded incoming parts help A.O. Smith make sure it's getting the correct parts it needs at a particular time. Even the plant's forklifts are equipped with computer terminals so operators can respond more quickly to changes in the assembly process. Bar coding also helps the plant keep track of modules as they are being assembled and can dramatically reduce the number of vehicles recalled if a group of failed modules can be traced back to a specific day, time, worker error or defective component.

In addition to monitoring incoming parts, the plant has identified its 10 worst suppliers and is working with them in a "non-confrontational" way to improve quality. "Quite often (supplier management is) unaware of the scale of the problem," states Mr. Abernethy, who adds that once a supplier is made aware of a problem, it usually can be fixed relatively quickly.

On the shop floor Barrie uses several systems to ensure delivery of quality modules to Chrysler at Bramalea: station locks, error-proofing sensors and data line displays.

Computer-controlled station locks grab a module in a work station and will not release it until all operations have been performed correctly. Pressure sensors in certain work stations tell a worker if integrated components contain all of their parts. Data line displays walk operators through each step of the assembly process at hand. (Some need this help because they rotate positions so often.) If part of the operation has been done improperly, the screen points it out to the worker. And many of the work stations are set up in such a way that parts cannot be assembled incorrectly.

Surprisingly, all of these quality-assurance gadgets cost the plant just $250,000 when it was being equipped in 1992. Mr. Abernethy says each device was an "off-the-shelf" purchase and therefore not too expensive.

Despite the quality devices, the plant had a rough time in the early going. It was the last supplier sourced for the module and the new plant's workforce, currently between the ages of 25 and 28, was inexperienced. "You can't buy experience," says Plant Manager Neil Clarke, also 30.

He and his team have made it as easy as possible to learn the ropes of module manufacturing with their democratic approach to management. "Tnere's no such thing as an arbitrary decision allowed," says the young plant manager. "We get instantaneous feedback if we make a decision that affects their worklife without consulting them."

This approach to management, as well as the modern music playing on the plant floor, goes a long way toward making employees more productive, says Mr. Abernethy.

Armed with a rare inside knowledge of the plant's balance sheet, Barrie's 71 employees are encouraged to participate in the company's continuous-improvement program. "They have all the financials,so when they have a suggestion, they can figure out the benefits of it right away," explains Mr. Abernethy.

Workers are divided into eight teams and meet regularly to discuss plant problems and formulate solutions. Thus far, 330 suggestions have been generated; 225 target internal matters and 75 are for Chrysler's consideration. One of the most successful internal suggestions was to automate axle module transfer from final assembly to the toe-set machine, replacing a somewhat awkward crane operation.

A yet-to-be-implemented suggestion for Chrysler to modify the crates on which axle modules are shipped from

m Barrie to Bramalea is an example of the thoughtful ideas generated by the teams. The current crates each carry seven units. The A.O. Smith crate would handle 13, utilizing dead space on delivery trucks and saving the automaker $250,000 in transportation costs. "It's still on the table for '98," says Mr. Abernethy.

Another example of employee involvement and initiative at Barrie is the garage outside the plant that was built by a half-dozen workers. The garage houses an upside-down LH body in white (actually, it's green) where suggestions on how to improve the modules can be tested. Each team gets one hour every two weeks to work on continuous-improvement projects either in the garage or the team room located above the plant floor. It is equipped with computers, bulletin boards, manuals and other tools to assist in the effort.

"This is truly a non-traditional plant," says Mr. Clarke. "In fact, we're stretching the envelope." The management team admits that being an outpost of the Milwaukee, WI-based A.O. Smith allows them to "get away" with more avant garde practices. In a small, remote operation like Barrie, a person can join the company as a temporary assembler and rise to production materials manager in less than a year, which actually occurred. "That just doesn't happen in a standard environment," states Mr. Clarke. "We wear these shirts for more than PR," explains Mr. Abernethy. "We're trying to see things from the point of view of the people who wear these shirts."