Old Dog Teaches Industry New Tricks

KOSAI, Japan - Suzuki Motor Co. Ltd.'s Kosai assembly plant, one of the world's most efficient despite its 30-year-old structure, plans to become even more efficient this year.

Plant Manager Shunichi Wakuda predicts that productivity (i.e., annual output per employee) will grow to 135-140 vehicles this year, up more than 5% from last year's record 129 units. Such an increase, extrapolating from a 1999 productivity survey by the London-based Economist Intelligence Unit, could move the plant into the world's top spot.

As it was, Kosai came in a close No.3 behind Hyundai Motor Co. Ltd.'s Changwon and Mitsubishi Motors Corp.'s Mizushima plants, ranked No.1 and 2 in the survey. But it was well ahead of the next grouping, which included Nissan Motor Co. Ltd.'s Kyushu and Honda Motor Co. Ltd.'s Suzuka and Sayama plants.

It also is worth noting that 14 of the top 20 plants were in Japan. If you include "transplant" plants, 18 were Japanese. The only two plants that were not Japanese on the EIU list were Hyundai's Changwon, Korea, plant (No.1) and Ford's Atlanta, GA, plant (No.20).

At current production levels of 46,000 units per month, the Kosai plant, which serves as home for the popular Wagon R miniwagon, employs 4,255 in manufacturing, inspection and administration. Nearly 80% are directly involved in production of cars and key components including engines, manual transmissions, instrument panels and bumpers.

(Not included in the 4,255 total are 380 who work in a small knockdown factory near the main assembly plant where KD sets and assorted assembly parts are packed into containers for overseas shipment to 26 plants in 20 countries including India, Canada, Hungary, China, Indonesia and Pakistan.)

Meanwhile, Kosai's fiscal 2000 production plan calls for raising output to 556,000 units, 1.5% above last year's high mark of 548,000 which, Mr. Wakuda explains, was achieved with nearly 25% overtime.

In fact, the Suzuki executive estimates that by raising overtime 5% from current levels, or close to eight hours per month, capacity could reach 580,000. At present, plant workers put in 9.5 hours per day, or 1.5 hours of overtime on top of their 8-hour shift, plus one Saturday shift each month.

The Kosai plant, Suzuki's main domestic assembly plant, accounts for nearly 65% of domestic output and nearly 35% of the automaker's worldwide total. Built on a 272-acre (110-ha) site on the outskirts of Kosai, a small industrial city in Shizuoka Prefecture, the plant, with 3.7 million-sq.-ft. (344,000-sq.-m) of floor space, is essentially two plants in one.

The No.1 facility makes the Wagon R, Wagon R+, Kei, AZ Wagon and Laputa, the latter two Mazda versions of the 0.66L Wagon R and Kei. Driven by the enduring popularity of the Wagon R, output inched upward to 347,681 units last year. The No.2 plant, which produces the Suzuki Cultus, Alto and Swift, along with the Mazda Carol - a slightly rounder version of the Alto hatchback - turned out 201,238 units.

(The 0.66L Carry truck and Every van are produced at the automaker's Iwata plant, also in Shizuoka Prefecture, along with the Escudo and Jimny sport/utility vehicles.)

Analysts say the No.2 plant is being considered as the Asia production site for the YGM1, a concept wagon developed by GM's Holden Ltd., which debuted at the Tokyo Motor Show last October. In fact, Mr. Wakuda maintains that if the decision were to be made on the basis of "best cost" and "best quality," Kosai would be chosen ahead of Chongqing Changan Suzuki Automobile Co. Ltd., P.T. Indomobil Suzuki International and Thai Suzuki Motor Co., other operations in China, Indonesia and Thailand, respectively, which are reportedly under consideration.

Chief among the reasons: More than 90% of YGM1 parts will be shared with the 1.3L Swift, the YGM1's base model, which currently is produced at the No.2 Kosai plant. Mr. Wakuda notes, however, that once a decision is made it will still take close to a year to tool up for the new model.

PLANT HIGHLIGHTS The Kosai plant engages in all major steps of vehicle production from stamping and injection molding to welding, painting, assembly and inspection.

However, Mr. Wakuda claims that the facility possesses no unique process or technology other than efficient systems to manage production flows. And there it excels.

He further attributes the plant's high productivity to Suzuki's small, lightweight vehicle lineup. Fewer assembly parts translate into a simpler, faster operation, he says, and "takt time" - a measure of line speed - in the No.1 assembly plant is a super-quick 48 seconds. Mr. Wakuda explains that "takt time" essentially is the time spent at each station on each process as the car moves by conveyor through the final assembly shop.

The Wagon R, Kei, AZ Wagon and Laputa are all minis. None of Kosai's products is powered by an engine larger than 1.6L.

Meanwhile, in both the No.1 and No.2 final assembly shops, automation is minimal and is estimated at less than 5%. Only one process in the No.1 shop (spare tire installation) is fully automated; just three in the No.2 shop (spare tire, windshield and rear window installation) employ robots.

This low level of automation requires greater deployment of human labor which Suzuki has dealt with by turning to part-time/seasonal and full-time "contract" workers (as opposed to full-time "permanent" employees). Of the plant's work force, 53% are classed as permanent employees, and 35% are under contract for periods ranging from one to three years, while the remaining 12% are part-timers.

To the extent that labor historically has been a "fixed" cost in Japan, this greater reliance on part-time and contract workers minimizes Suzuki's exposure to demand fluctuations. It also gives the company greater flexibility to produce a variety of models on the same line, with minimal facility investment, as humans can perform more tasks than robots and machines.

To realize its fiscal 2000 productivity and production targets, Mr. Wakuda says the company must further raise machinery uptime while optimally deploying the plant's labor force.

STAMPING Raising efficiency of stamping equipment is a top priority. In the No.1 stamping shop, management plans to increase output of the 4,000-ton press to 510 pieces per hour, up from the present 470. The company hopes to achieve this by March 2001.

Suzuki also aims to boost output of the 3,500- and 2,000-ton presses to 540 pieces and 650 pieces respectively, from 500 and 570 today. The target set for the shop's blanking line is 2,000 pieces per hour, 11% over current levels. At present, machinery uptime is 65%.

On a monthly basis, Suzuki consumes 6,000 tons of steel coil (or 300 tons per day) for production of 670,000 stamped pieces. Coil suppliers are Kawasaki Steel Corp., Nippon Steel Corp., NKK Corp. and Sumitomo Metal Industries, Ltd.

Mr. Wakuda declines comment on whether the company plans to reduce the number of suppliers.

QUICK DIE CHANGES/FASTER RAMP-UP On average, stamping lots in the No.1 shop average between 1,000 and 1,500; in the No.2 shop, the average lot size is 500 to 1,000. Die changes take eight to 15 minutes, and dies are changed five to seven times per day.

For model changes (none are scheduled this year), management hopes to shorten the ramp-up period from four weeks to three. However, Mr. Wakuda says Suzuki will not attempt toreach Toyota Motor Corp.'s and Honda's two-week benchmark.

Within the past 18 months, Kosai has introduced new or fully revamped models - the Wagon R, Alto and Kei, all minis based on the same platform, in October 1998; the slightly larger Wagon R+, in May 1999, and the all-new Swift, in February 2000.

COMPONENTS/INSTRUMENT PANEL An estimated 70% of components in value terms are purchased from outside suppliers. Main components produced in-house, in addition to body stampings, are instrument panels, bumpers, engines and manual transmissions.

On the side of the line in the final assembly shops, components are replenished on average every two hours; the longest interval is four hours, Mr. Wakuda says.

A special instrument panel subline was set up 18 months ago when the Wagon R underwent a model change. The line, which employs some 20 workers per shift, has around 25 stations for assembly of the complete instrument panel module, including the gear shifter. The same line is in place in the No.2 plant.

The plant's injection molding shop makes 50,000 dashboard panels per month (600,000 per year) and 54,000 front and rear bumper sets (650,000 annually).

The shop operates 24 hours per day, five days a week and twice on Saturday each month. From 3:40 a.m. to 7:00 a.m., it operates without staff.

ENGINE/TRANSMISSION Monthly, the plant manufactures 31,000 engines including 21,000 "F" series units (0.658L displacement) and 10,000 "G" series units (1.3L, 1.5L and 1.6L).

Suzuki's F series engines are made with cast iron blocks and aluminum cylinder heads. They are produced for the Wagon R, Alto and Kei. The G series lineup, also with iron blocks and aluminum heads, are for export. None of output is shipped to Suzuki's Iwata plant.

The Kosai plant outsources "K" series and "M" series engines from the company's Sagara plant. Both engine types, unlike the F and G series, feature aluminum blocks with aluminum cylinder heads. The K series have displacements of 0.658L and 0.996L; they power the Wagon R, Kei, Alto and Wagon R+.

An estimated 50% of engines used in Kosai vehicle production are manufactured at Kosai. The remainder is trucked in from Sagara. Daily, 10 truckloads are delivered to the No.1 plant and four to the No.2 plant.

Monthly, Kosai purchases 36,000 automatic transmissions from Nissan affiliate JATCO TransTechnology Ltd. and 5,800 from Aisin Seiki Co. Ltd. of the Toyota group. Meanwhile, the company produces 15,000 manual units for small cars and 6,500 for minis. Of in-house production, 80% of small-car transmissions and 85% of minicar units are for Kosai.

Approximately 60% of the transmissions used in production are automatic; 40% are manual.

INSPECTION In the inspection area, headlamps are adjusted and carbon monoxide is checked automatically.

An estimated 20% of cars are pulled off the line for repairs or modifications - for instance, sports bumpers for special editions. Repair time varies from five to 10 minutes for small problems such as washing off smudges on floor mats; paint repairs generally take around 30 minutes.

Suzuki hopes to lower the ratio of cars pulled off the line to 10% in fiscal 2000/01.