Reviving U.S. Manufacturing Including Lessons Learned from Delphi Packard Electric and General Motors
In 1791, Treasury Secretary Alexander Hamilton wrote that "not only the wealth, but the independence and security of a country, appear to be materially connected with the prosperity of manufacturers." Centuries later, U.S. manufacturing jobs continue to be outsourced at an all-too-rapid pace.
Examining the current U.S. manufacturing environment, including the unsustainable trade imbalance, Intelligent Manufacturing: Reviving U.S. Manufacturing Including Lessons Learned from Delphi Packard Electric and General Motors outlines concrete suggestions that can help to stop the outflow of manufacturing jobs and prosperity from our shores.
The book explains why most companies have not reaped the benefits promised from the implementation of the multitude of methodologies that have inundated manufacturers and outlines the steps companies can take to reverse this trend. The author's 30-year background in engineering and manufacturing, in both national and international assignments, puts him in a unique position to supply insights on foreign competition that few are able to provide.
In addition to discussing the tools and concepts with a proven history of success, the book also elaborates on what doesn’t work. It presents an insider’s perspective of what went horribly wrong within Delphi and GM so other manufacturing companies can avoid making the same mistakes.
The book describes how to effectively set up a manufacturing system and accurately measure and control direct labor. It shares easy-to-implement tools that the author developed and implemented with proven track records for improving performance. Such tools include computer programs that can provide a competitive advantage, a proven way to reduce total process cycle time, and a scientific way to establish proper lot sizes.
Instead of presenting a lot of theory, the author provides ideas based on common sense and practical experience. The concepts and tools outlined in the text are simple and straightforward, yet powerful enough to help any conscientious company improve its competitive position.
Table of Contents
What Would You Expect with a Parent Like GM?
Packard Electric Is Born
How Could GM (Packard’s Parents) Make So Many Dumb Decisions?
So, How Are Things Working Out for GM Today?
How Does GM Compete with Toyota and the Vaunted Toyota Production System?
We Have to Do Something, Even if It’s Wrong
Packard Does a Really Smart Thing Next
Where Did the Packard Training Program Originate?
Good News and Bad News about Packard’s Management
A Move to the Warm South
What We Need Are Suppliers
Mexico, Here We Come
Something Had to Change for GM
Packard Goes International in a Big Way
We Are Not Ready for This
We Are in Real Trouble Here
Industrial Engineering (IE) Training Program
The Industrial Engineering Training Program
How Does a Company with So Many Smart People Do So Many Dumb Things?
Automation Can Save Us
That Worked So Well, Let’s Try Something a Little Tougher
That Lead Prep Startup Surely Didn’t Work Out Like We Had Planned
Integrated Production System (IPS) to the Rescue (or Not)
If IPS Didn’t Get It Done, IPS II Surely Would
Remote Lead Prep: Yeah, That’s the Answer!
How about Just Getting Rid of Our Productivity Control System
So Just How Are IDCs Going to Help Us with the 3% Give Back?
How about Let’s Just Get into a New Business
Let’s Sum Things Up
Let’s Get Lean … Not
Just What Is the TPS?
Toyota Production System Rules
Packard Develops the PPS
What We Need Is Vista
Benchmarking: To Do or Not to Do
Kitting Looks Like a Cool Thing to Do
Let’s Do the Team Concept Like Toyota
How about a Nice Quality Circle?
Did QS9000 Implementation Really Help?
Say Zero Defects and Mean It
The Good News Is That We Saved $25 million in Inventory, but …
U-Cells Gain Great Prominence
Somebody Finally Got One-Piece Flow Right … Really?
Proper Manufacturing Organization Is Critical (or You Will Get the Performance You Motivate)
Plant Priority Meetings
Let’s Just Change Reporting Lines to Get Better Support
Warren Got Some Things Right
Understanding Human Nature
So We Transferred Our Manufacturing Successes to Mexico, Right?
What’s the Fix?
Manufacturing Supervision Is Tough
Providing Proper Manufacturing Support
Why Worry about Improved Productivity, Mexican Labor Is Cheap (and Philippine)
Wiring Harness Departmental Organization Basics
Level 1 Operators
Level 2 Operators
Level 3 Operators
Level 4 Operators
Foreman’s Responsibilities and Support Required
Assistant Foremen/Group Leaders
When You Measure Performance, Performance Improves
From Routings to Direct Labor Bibles (DLBs)
Process and Operator Efficiencies
Wouldn’t One Efficiency Number Be Sufficient?
The Warren Bottom Line
So, What Did We Do in Mexico?
I Finally Got a Chance to Do It Right in South Korea
How Much Could the Mexican Operations Have Saved?
When You Measure Performance
Packard Productivity Nose Dives
Are We Really Controlling Productivity in Our Plants?
Direct Labor Bibles (DLBs)
Efficiencies from a Budget Routing
Plant Productivity Information Available Based on Labor Estimates (Budget DLBs) only
Plant Productivity Information Available with an Automated Productivity System Based on Production DLBs
Terms and Definitions Used with the Computerized Productivity System
Simple DLB Example
Final Assembly of a Widget
Preplanning: The Perfect Tool to Accomplish Toyota’s Rule #1
What Is the Common Industry Practice?
But, Is It Worth It?
Packard Evolves, but Not for the Better
The Critical Four M Relationship
Wiring Harness Preplanning
The Computer Is a Moron
A Rare Opportunity
Controlling Absenteeism, Turnover, and Overtime Is a Must
Material Availability Is Critical
How to Drive Down Total Process Cycle Time (TPCT) without Wasting a Lot of Time (and Money)
Critical Value Streams
Packard "Attacks" the TPCT for Engineering Change Implementation
Key Activity Control Is Born
Others Benefit from the System
This System/Concept Will Work Anywhere
The Bottom Line
What Size Should the Cycle Quantity (Lot Size) Be?
Portugal Will Show the Way
Cost Bucket One
Cost Bucket Two
Some People Don’t Want to Be Confused with Facts
Free Rein in South Korea
Determining Optimum Cut Quantity (or Optimum Process Quantity)
Optimum Cut Quantity Subsystem
Optimum Cutter Loading and Sequencing Subsystem (OCLASS)
Wrap-Up: How about "Intelligent Manufacturing" for Real Change in Which We Can Believe"
About R. Bick Lesser:
Even though I did a lot of writing during my 30-plus years as an employee of Packard Electric (now known as Delphi Packard Electric, part of the Delphi Automotive group that spun off from General Motors (GM) in 1999), especially for an engineer, I had never thought seriously of trying to write a book until fairly recently. This great country is changing rapidly and, unfortunately,
not for the better in most cases.
I have a loving wife, five very responsible children, and 20 very special grandchildren, and my greatest fear is that they (especially my grandchildren and possibly even my children) will not have the same opportunities in coming years in this country as people my age have enjoyed. We are watching the free market system, which was established by our founders, being dismantled right before our eyes.
We are seeing irresponsibility rewarded while responsibility is punished. We are seeing multitudes of people, some of whom are in very responsible positions of power, claim that the Constitution is no longer a valid document, that it must be updated for the times. We are seeing countless demonstrations by people who have been blessed like no other people on the face of the Earth, but apparently have a disdain for this country and all for which it stands, or at least used to stand for.
I have very strong political views and I could go on and on regarding my concerns about the issues facing this country, but I realize that there are many great Americans who share my views and are in a better position than I am to sway opinion and affect public policy. However, I do have a background that does, I believe, enable me to provide some benefit to the country, especially in these very perilous economic times.
In an attempt to establish my credentials, I will start by saying that I grew up in a sleepy little East Texas town, spending my summers in the watermelon and hay fields earning a buck an hour. I did well in school, especially in math and the sciences, and excelled in sports. Upon graduation, I was offered football scholarships by several major universities. I ultimately decided to attend SMU in Dallas, because it was close to home and, more importantly, it had just started an Industrial Engineering program, which was of great interest to me.
Once on campus, I became overwhelmed and almost made the decision to go into business school instead. It seems that football players had not faired too well in engineering school over the years (well, to be fair, my dad was quite persuasive in helping me make the decision to stay in engineering). It turned out to be a good decision. I did pretty well on the ball field and I did quite well in school. I ended up making the Dean’s list regularly and graduated with honors with a Bachelor’s of Science in industrial engineering.
After interviewing with a number of companies after graduation. I decided to cast my lot with Packard Electric, which was a division of General Motors, located in Warren, Ohio. I was quite impressed with its massive operation. It was part of a very successful company (GM), it had a very strong Industrial Engineering Department, and it was located only about one hour from my parents’ new family home, following my father’s recent transfer.
I will be talking a lot more about Packard and GM later in the book, but for now let me state that Packard, in 1971, was a very strong manufacturing and engineering organization. I was fortunate to start in the Industrial Engineering Department as an industrial engineer and preplanner, and then spend the next several years in manufacturing and engineering supervision.
Industrial engineering was the center of the wheel at Packard, with spokes touching virtually all of the other functional areas within the company, i.e., manufacturing, application engineering, process engineering, plant engineering, quality assurance, quality control, material control, safety, maintenance, construction, and even finance and human resources management (HRM). Packard’s application (or product) engineers designed all of the wiring harnesses for all GM vehicles, and industrial engineering was responsible for designing, developing, installing, and debugging the manufacturing systems for each of these products, in coordination with all of the other functional areas.
The Manufacturing Department is where one witnesses the culmination of all efforts in any manufacturing operation, and it is without question the most important of all departments within a manufacturing company. A manufacturing company can get by with some weaknesses in various functional areas, but if it has significant weaknesses in manufacturing, it will not be successful long term. I often related to others at Packard that I learned more about the wiring harness business and about relating to and managing people in the year and a half that I spent as a first-line manufacturing supervisor (foreman) than I learned in any other five-year period of my career.
After seven years in Warren, Ohio, I was named as one of the members of the Team of Ten, to be transferred to El Paso to start up a new plant in Juarez, Mexico (in 1978). We were initially told the idea was to start one plant of about 1000 employees, train Mexican counterparts, and then return to Warren. That was about 26 plants, 50,000 Mexican employees, and several hundred U.S. employees ago.
For a period of six years, I had industrial and methods engineering responsibility for three different plants as well as for the Mexican Supplier Program, to include developing and implementing training programs for industrial and methods engineers, developing and implementing a training program for production operators, developing forward plans, designing and installing a Methods Lab, starting up new business, leading efforts to identify and resolve plant problems, and a host of other functions.
I was next given the opportunity to manage all engineering activities in our newly acquired facilities in Portugal, which became part of Packard’s European Operations. After two and a half very exciting and productive years in Portugal, I was asked to be the joint representative director for a new joint venture to be created in South Korea. This was a tremendous experience.
We were able to start up a new facility of 500 people, with very little outside support, in a manner that exceeded Packard’s expectations on timeliness, productivity, quality, and profitability. After four years in South Korea, we returned to the United States in 1990. Over the next decade, I had a variety of interesting management assignments in Laredo, Texas; Foley, Alabama; and then back in El Paso, Texas. However, like our country, Packard had been changing dramatically over the prior three decades, and not for the better in most cases.
In 2001, after spending over 30 years with Packard, I finally grasped the reality that Packard was no longer the fine manufacturing company I had known in the early years. In fact, it was not even close, and likely would never be again because most of the people who had helped make it an outstanding manufacturer were no longer around. This was a bitter pill to swallow, knowing that Packard was at one time a shining star in what was to become the Delphi Automotive group.
During 2001, things began to look very bleak for Delphi Packard as well as for the entire Delphi Automotive Corporation. In an effort to reduce burden, Delphi offered significant incentives to highly paid salaried employees who would volunteer for early retirements. Due to my lack of political correctness (political correctness being an important factor in getting ahead at Packard), I knew I was never going to reach the highest levels of the company, so my ability to impact dramatic change on this ailing company was limited. I decided to take the opportunity to get out while the getting was good. Since then, things have gone steadily downhill for Delphi, and they filed for Chapter 11 bankruptcy in October of 2005. Delphi Corporation finally emerged from Chapter 11 the second half of 2009, almost four years after entering bankruptcy, but unless Delphi dramatically changes in the way they do business (which is highly unlikely), I wouldn’t invest too heavily in this company if I were you.
After leaving Delphi Packard, I consulted for another large manufacturing company for several years before deciding to go into semiretirement a few years ago. The last few years have been a lot of fun, but I feel that there are things that I need to share while they are still fresh in my mind, for the benefit of any company that will objectively consider what is being offered.
My purpose in writing this book is to help other companies learn from Packard’s and GM’s mistakes—not only the mistakes of commission, but also the mistakes of omission. It is sad that some of the great concepts and systems that Packard had in place at one time were discarded instead of using renewed focus, and, in some cases, new technology, to enhance them. And, it is a shame that Packard lost the ability to differentiate between fluff and substance, even when it was offered to them on a silver platter. Hopefully, some of you reading this book will be able to do just that.
I also will be sharing several valuable concepts and tools that I developed during my working career of over three decades that I believe can help any conscientious company improve its competitive position and become a better company.