Cross cultures for quality: How Terex AWP maintains continual improvement

In my past life I worked as an Editor on a metalworking magazine and often found myself visiting manufacturing facilities. At the time the buzz words were JIT (just in time) and Kanban - which obviously dates me somewhat.

These 'new Japanese' manufacturing philosophies were greeted with enthusiasm but tended to be adopted in a piecemeal way or completely dismissed when manufacturers found they could not be easily imposed on top of their traditional methods. I saw many UK manufacturers become cynical about these methods saying they didn't work with the western psyche.

When I visited Terex AWP earlier in the year I was very interested to discover that the company operated a lean, Kanban based, continual improvement philosophy of manufacture and, to be frank, a little sceptical to how this large US company would make it work.

In reality the policy of continual improvement extends much further than the manufacturing of machines it permeates every part of the business and engages every employee (or team member as Terex AWP calls its staff).

Design could be said to be at the beginning of the product manufacturing cycle and yet as Erik Elzinga, engineering, senior director at Genie explained, "Product development is tied in closely with the general managers and through them the voice of the voice of the customers. We work in a cross-functional team with people from every aspect of the business with the project leader either an experienced engineer or project manager - it depends upon the project."

The multi-functional team incorporates input from most elements of the business, manufacturing, service, spares and so on, as well as input from the customer. Visits to end users also helps Terex AWP gain an understanding of how machines are actually used in the field.

Mr Elzinga describes the six stages of developing a product as: proposal; feasibility study; the major design work; quality and design verification with physical prototypes and field tests; validation and launch readiness determining how many machines will be manufactured, pilot runs and preproduction runs and the final stage, a launch review about a year after the product has been on the market.

"These processes are not entirely sequential," said Mr Elzinga, "there is lots of overlap and a gate review at each stage to ensure the project is on track and to redirect and take corrective action if necessary.

"Each deliverable has written report - the process is structural but can still have entrepreneurial nimbleness."

The basic characteristics of Kanban are a manufacturing system which uses clear visual indicators to manage production, a "pull" system so requirements for machines dictates what is manufactured and continual improvement.

In all the manufacturing plants parts sets are put together before being presented to the assembly lines. Visual indicators make it easy for team members to identify what they are producing, if all the necessary parts are assembled, if there are any quality issues and the progress of work.

In the 10000 sq ft facility in Redmond where the S 60 and S65 stick booms and Z40 and Z45 articulated booms are made, the plant is vertically integrated, that is in two parallel assembly lines, with the facility paint beside it.

Neal Norwick director of operations at the facility describes the simple but effective visual controls: red for the stick booms and green for the articulated. Every associated with the stick booms: parts carriers, tools, progress boards etc is red and similarly everything for the articulated booms is green, so operators can tell immediately what's out of line. Side cells manufacturing electric harnesses, control boxes and so on, service both lines.

Mr Norwick explained, "The heartbeat for the entire plant is assembly," so production of components and subassemblies are all carried out to match the machine being assembled. "Balancing the time for each process sounds complex but it is formulaic."

If there is a process that will upset the "heartbeat" it is pulled off the line, for example options such as a generator or some testing options, but the plan is to try and combine them into the line

At the time of AI's visit the electrical assembIies were carried out on the mezzanine level of the factory but Mr Norwick wanted to get it into the flow

"We build own control boxes," he said, "so we don't have to carry a large inventory. Each box is 100% tested."

"We have pushed quality control," he continued, "so that each subassembly or component hits the line right and he cycle time can be controlled." Specially designed carts goes to the cell with all necessary parts for one assembly.

"The systems allow our team members focus on improving manufacturing processes not on what they are going to build next. This helps makes processes more robust improves quality delivery and safety and helps us reduce manufacturing time."

Feedback comes from internal customers and from the field, a culture of continual improvement means that team members are actively encouraged to suggest adaptation to the process which will improve quality, safety and production efficiency.

During the the downturn Terex AWP has had the opportunity to revamp the inspection areas: improving the quality of light for example.

To nourish the culture of continual improvement daily meetings are held to discus quality, safety and delivery, performance is displayed on large charts on the shop floor. Other tables display the jobs each team member is trained to do and what they are engaged in. "This helps us develop an agile workforce," says Mr Norwick.

At the Redmond production facilities the culture of continual improvement appears ingrained, but perhaps even more impressive is the work that has been done at the Moses Lake plant.

The Superbooms which are machines with working heights of 100 ft and upwards are manufactured at Terex AWP's Moses Lake plant alongside some of the larger telehandlers. The facility is located in a building that was originally home to Boeing's B52 production.

Production at the facility grew rapidly between 2005 and 2008 when, said Glenn Gere director of operations at Moses Lake, "we couldn't build enough machines for demand."

Under the pressure to get machines out of the door he candidly admits that processes, safety, quality and customer care got a bit lost and there was trouble with the plant's safety record.

Three years ago when Tim Ford joined the company as president he was adamant that the Moses Lake facility would not be given any more product lines to manufacture until safety was addressed.

"Since then," said Mr Gere, there has been three years of management and process change. Safety was the first thing to be addressed and we worked hard on and personal responsibility. Now our safety record is below the industry standard, we went from double digits to 0.69 [that is time lost to safety issues]."

Mr Gere has been on two Japanese study missions, "When you focus on ergonomics and safety that automatically leads to good quality and delivery.

"Now safety is under control we are working hard on robust quality systems." Now demonstrating complete confidence in the plant: in January 2010 the telehandler line, which had been manufactured in Michigan was moved up to Moses Lake.

Mr Gere's directive is to continue maturing the product and production around quality. "Checks are as important as build," he said.

At the time of AI's visit, the Moses Lake plant was buzzing, 200 new temporary workers had just been taken on raising the number of employees to 600 and every team member was enjoying a barbeque lunch thanks to two of their number having won an inter-company competition. Looking around the canteen, it would have been easy to assume these were archetypal US engineering workers and yet these people are enthusiastically adopting the principals of Kanban.

Mr Gere and the team at Moses Lake are developing a culture, which advocates pride in work. The company holds bi-weekly meetings and discuses quality scores and where their might be problems. "If, for example, a welder thinks about the next person in the line as the customer and meets his needs, then the end user will benefit at the end of the process," said Mr Gere

"The base line is constant improvement.