General Motors with Lean Manufacturing

General Motors with Lean Manufacturing An Introduction of GM Global Manufacturing System Operations Management Team Project Contributed by We Make A+ (sort by number): ??? – 2009 050 444 ??? – 2010 049 712 ??? – 2010 054 149 ??? – 2010 059 605 ??? – 9125 620 120 Division of Business Administration, Hanyang Univ. ERICA Ansan, December 2012 Contents Part 1. Overview of General Motors2 1. 1 Why General Motors? 2 1. 2 Introduction of General Motors3 1. 3 Basic Information3 1. 4 History of GM4 1. 5 GM’s family4 Part 2. Introduction of Lean Manufacturing4 2. 1 Definition5 2. 2 Lean and TPS5 2. 3 Theme: Efficiency6

Part 3. GM’s Global Manufacturing System6 3. 1 Application of Lean Manufacturing6 3. 2 In-Progress Control and Verification7 3. 3 Process Failure and Effect Analysis11 3. 4 Quality Feedback/Feedforward11 3. 5 Quality System Management13 Part 4. Comments14 4. 1 Achievements beyond Efficiency14 4. 2 A Too-Lean GM? 15 Bibliography16 Part 1. Overview of General Motors 1. 1 Why General Motors? First automotive industry has started in 1885 since Karl Benz and Daimler develop gasoline engine cars. The early automotive industry was expensive ,slow and didn’t escape from the design of the wagon type.

But The introduction of Henry Ford’s conveyor belt is way as to be able to mass-produced, it became the beginning of popularization. U. S. automotive company seek to enter into the world in Europe ,since 1920’s and by combining U. S.. ‘s car production technology and Europe’s brand value, Europe emerged as the largest market in the world. At the European economy will recover in 1950, U. S. has grown enough to occupy 80% in world market and Europe built a new product differentiation and diversification strategy in order to correspond to U. S. At this point should be noted that Japan’s inroad into world market.

Because of Korean war, Japan laid the foundation of growth and The 1960’s, global automotive market is growing, Japan participate in global automotive market. Especially, Japan made new Labor-management relations by new industrial organization and distinctive production manner, and spreading Toyota production system and JIT approach to become more competitive, They were formed 3 polarized system to dominate the world market with U. S. and Europe. After that, Before and after the 1980’s, Asian countries, including countries such as Mexico and Brazil participated in global automotive market as a weapon low-income and small car. In 1990’s, U.

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S. lead global automotive market increasing core competencies by innovation to reengineering, benchmarking, restructuring, and downsizing, etc, competing with Japan. In the late 1990s, Automotive market undergo great confusion due to oversupply and changing consumer needs, and Multinational automotive companies’ M;A is greatly increasing, and a small number of large companies lead global automotive market. In the flow of the automotive industry, after establishment in 1908, GM lay the foundation focusing on to raise the size merging Buick, Cadillac, including 25 companies and maintain first in sales between 1933 to 2008.

Also, in domestic, GM is known for a lot of familiar brands such as Chevrolet. Because GM overcome several financial crisis and still exist the center of the world’s automotive industry companies, we choose GM automotive industry companies, we choose GM 1. 2 Introduction of General Motors General Motors Company commonly known as GM (General Motors Corporation before 2009), is an American multinational automotive corporation headquartered in Detroit, Michigan, and the world’s largest auto maker, by vehicle unit sales, in 2011, employing 202,000 people and doing business in some 157 countries.

General Motors produces cars and trucks in 31 countries, and sells and services these vehicles through the following four regional segments, which are GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO), and GM South America (GMSA), through which development, production, marketing and sales are organised in their respective world regions, plus as fifth segment GM Financial. 1. 3 Basic Information Industry – Automotive Founded – September 16, 1908 Founder(s) – William C. Durant Headquarters – Renaissance Center, Detroit, Michigan, the US Number of locations – 156 facilities on six continents

Area served – Worldwide Product – Automobiles, Financial Service 1. 4 History of GM 1908| Founded by William. C. Durant| 1910-1929| The rise of the automobile captured imaginations and sparked invention. | 1930-1959| GM’s commitment to innovation lent optimism during tumultuous world events. | 1960-1979| GM offered forward-thinking answers to an increasingly eco-conscious world. | 1980-1999| The close of the 20th century brought tremendous global growth for GM| 2000-2008| Trying economic times saw GM embracing an enduring passion for innovation. Today| We are passionate about designing, building and selling the world’s best vehicles. This vision unites us as a team and is the hallmark of our customer-driven culture. | 1. 5 GM’s family Part 2. Introduction of Lean Manufacturing 2. 1 Definition What is lean manufacturing(lean)? Lean manufacturing, lean enterprise, or lean production, often simply, “Lean,” is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination.

Working from the perspective of the customer who consumes a product or service, “value” is defined as any action or process that a customer would be willing to pay for. Essentially, lean is centered on preserving value with less work. Lean manufacturing is a management philosophy derived mostly from the Toyota Production System (TPS) (hence the term Toyotism is also prevalent) and identified as “Lean” only in the 1990s. TPS is renowned for its focus on reduction of the original Toyota seven wastes to improve overall customer value, but there are varying perspectives on how this is best achieved.

The steady growth of Toyota, from a small company to the world’s largest automaker, has focused attention on how it has achieved this success. 2. 2 Lean and TPS Lean is a management philosophy developed from the Toyota Production System (TPS) and identified as Lean in the 1990s. The Toyota Production System (TPS) is an integrated socio-technical system, developed by Toyota, that comprises its management philosophy and practices. The TPS organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers. The system is a major precursor of the more generic “lean manufacturing. Taiichi Ohno, Shigeo Shingo and Eiji Toyoda developed the system between 1948 and 1975. Originally called “just-in-time production,” it builds on the approach created by the founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno. The principles underlying the TPS are embodied in The Toyota Way. TPS focuses on reduction of the original Toyota seven wastes to improve overall customer value. But there are varying perspectives on how this is best achieved. 2. 3 Theme: Efficiency Lean manufacturing is a variation on the theme of efficiency based on optimizing flow.

It is a present-day instance of the recurring theme in human history toward increasing efficiency, decreasing waste, and using empirical methods to decide what matters, rather than uncritically accepting pre-existing ideas. As such, it is a chapter in the larger narrative that also includes such ideas as the folk wisdom of thrift, time and motion study, Taylorism, the Efficiency Movement, and Fordism. Lean manufacturing is often seen as a more refined version of earlier efficiency efforts, building upon the work of earlier leaders such as Taylor or Ford, and learning from their mistakes.

Part 3. GM’s Global Manufacturing System 3. 1 Application of Lean Manufacturing To be more competitive in the global automotive industry, General Motors is concentrated on some key priorities; get common; think lean and run fast; compete on a global basis; grow the business and most importantly-focus on the product. GM Manufacturing is dedicated to lean and common as demonstrated by a single, global manufacturing approach – a strategy that is changing the way it designs its products, lays out plants, selects equipment and design each assembly plant operator’s job.

The GM Global Manufacturing System-or GMS-is an important building block of an integrated strategy to develop products that excite customers in markets around the world. 3. 2 In-Progress Control and Verification In-Process Control & Verification includes the intent and purpose of the BIQ motto: “Satisfy your customer; do not accept, build or ship a defect! Solve problems through team work. ” Quality expectations are achieved in each process to ensure defects are not passed on to downstream process. Well, it raises a question, how to achieve customer satisfaction?

General Motors has three paths for solving this problem. In the first place, prevention avoids defects or non-standards occurring. Secondly, Detection—identify when defects or non-standards have occurred. At last, use containment to assure defects or non-standards are not passed on. I will introduce these three methods in the following minutes. The benefits of In-Process Control & Verification consist of three aspects: * To external customers (people buying our vehicle), it protects customers from sub-standard vehicle quality; it assures customer satisfaction. To internal customers (downstream operation), it prevents major repair and rework by detecting a non-conformity early in the process; it prevents the flow of defects from department to department and station to station. * To internal customers (from suppliers), it protects Team Members from non-compliant parts from suppliers through advanced quality planning and prompt containment during spills. Prevention To understand the prevention, let me show you a comparison at first. As you can see in the picture, Using the Lean approach, we control the process by prevention.

It results in less rework and repair, and higher first time quality. By contrast, the traditional approach is trying to control the product, which is less efficient and more passive, with more rework and repair, and lower first time quality. Process Equipment Capability Reviews means periodic checks are conducted to identify trends or shifts in capability over periods of time. It includes four steps: 1) Identify process equipment with high risk/impact 2) Conduct initial capability confirmation 3) Conduct regular scheduled reviews to confirm capability 4) Implement corrective action as required Detection

The second method is detection. Detection has two purposes. Purpose 1: To make non-standard conditions in the manufacturing process visible – identify when defects or non-standard have occurred. Purpose 2: This supports the “Do Not Accept” element of the quality motto: * Inspection process that confirms quality as soon as possible following manufacture * Measures the output of the manufacturing process * Alerts organization to out of standard conditions * Supports containment and provides input into continuous improvement Quality Check System Update: Internal/external ‘Customers’ are monitored for feedback.

Where there is an indication of defect flow-out through the Verification process, a systematic analysis will be conducted; typically for: 1) Items currently not included in the quality check list/control plan For example, update check list based on prioritization and risk analysis. 2) Current check items not found during the check process For example, improve standardized work or re-train team members. The quality check system must be established in consideration of the ‘Supplier-Customer’ relationship. Inspection frequencies must be established by each ‘supplier’ that prevents shipping defects to downstream ‘customers’.

This is a requirement for safety & compliance items, key characteristics and for issues that will significantly impact the next process or customer. During a repair, the risk for a discrepancy to occur is increased – many aspects of the repair operation are non-standard. So the Independent Repair Confirmation is very necessary. Many aspects of the repair operation are non-standard: Any documented repair must be verified by Repair Confirmation (both on- and off-line) * Repair Confirmation must be conducted independently (e. g. by Quality). Standardized work (non-cyclic) should be used for the confirmation process – quality standards must be available. * Appropriate training and knowledge of standards must be developed to conduct or confirm repairs. * Repair confirmation should be as close to the repair process as possible. * Repair confirmation can be conducted by man or machine. Workers can use Andon(A Kind of Signboard) to Stop The Process: Work Station Team has the ability to stop the line and complete standardized work in station if there are some problems in the product line.

If the Team Member has a quality issue within their standardized work they activate the Andon system to: * Initiate a call for help through station light, Andon board, and melody * Empower the Team Member to stop line & organization responds to provide support * Stop at FPS (Fixed Position Stop) to contain and complete the repair * Where Andon is not available the principles still apply Alarm and Escalation Process: When a defect is detected, feedback to the appropriate team or individual will be given by using a communication system. The alarm is raised by using audio/visual signals (e. . Andon). The alarm process directs the support functions to: * ‘Go and See’ the problem * Apply containment to prevent further flow of defects * Initiate problem solving Containment Containment: the purpose of it is the achievement of customer expectations relies on a method to contain defects within the manufacturing process, and implement corrections to protect the next/downstream customer. This also supports the “Do Not Ship” element of the quality motto: * Vehicle delivery to the customer * Powertrain and MFD plants to vehicle assembly * External supplier to the manufacturing plant Internal departments (e. g. between body, paint and GA) * Between work stations within a department Summary of In-Process Control and Verification Standardized work is performed in every process and includes the required quality checks. Process control activities are implemented on equipment to control variation on a daily basis and maintain capability over a period of time. Detection confirms the manufacturing process and ensures both internal (Production Team Members) and External Customers (people who buy our products) are receiving products that meet or exceed the quality standards.

A process is in place to contain defects within the manufacturing process and implement permanent corrective actions that are verified as being effective. 3. 3 Process Failure and Effect Analysis Purpose of this procedure: Investigation, documentation and if necessary reduction of the risk potential (Risk Priority Number-RPN) for all production processes. RISK PRIORITY NUMBER S x O x D = RPN * S = Severity * O = Occurrence * D = Detection * RPN = Risk Priority Number* * 1 = Lowest1000 = Highest There are some questions to answer for the Process Failure and Effect Analysis: Potential failure mode:What things have gone wrong?

What things could go wrong? Effects of failure:What does a failure mean to the next operation, the assy plant, the final customer? Potential Cause of failure: Root cause what has gone wrong in the past Brainstorm what could cause failures? Current controls: What do we do today to prevent the defect from occurring and getting to our customer? Recommended actions: If current controls are not 100% effective, what actions should be taken? 3. 4 Quality Feedback/Feedforward Definition: The communication of quality expectations and results between customers and suppliers through standardized communication pathways.

Purpose: To ensure that information on quality reaches those who need it. Feed Information Forward: Internal and external suppliers communicate known/potential problems and/or problem solving status to their customers in a timely manner. This provides the customer with sufficient lead time to react to upcoming changes and take appropriate measures. Feed Information Back: Internal and external customers communicate known/potential problems and/or problem solving resolution to their suppliers in a timely manner. This provides the supplier with sufficient lead time to react to customer issues and take appropriate measures.

Build and quality status of each vehicle is communicated to downstream processes. Summary of Quality Feedback/Feedforward Feedback/Feedforward promotes the communication of quality expectations and results between customers and suppliers through: * Clearly defining customer/supplier communication requirements •Defining timing, content, and format of information •Establishing metrics and the subsequent management process •Effective implementation of the Feedback/Feedforward communication tools •Problem identification, input into the plant problem solving process and countermeasure follow up . 5 Quality System Management Who is responsible for Quality? Team work is absolutely essential to deliver world-class quality. Everyone! Quality is a shared responsibility Quality Function Resource Allocation: Manufacturing and quality resources are allocated to support the quality system and interface with engineering. Each area requires sufficient resources to properly focus on supporting production and driving continuous improvement through P-D-C-A. Resource allocation needs to consider the quality and production components that are required to support the team member.

Development of an organization for quality incorporates the “Planning”, “Doing” and “Checking” functions into their structure. Summary of Quality System Management Quality System Management provides the supporting structure and framework for the implementation of the quality system and ongoing improvement to the quality of our products through: * Establishment and implementation of a strategic quality plan for the organization * Allocation of manufacturing and quality resources to support the quality plan * Development of an rganization for quality that incorporates the “Planning”, “Doing” and “Checking” functions into their structure * Identification of requirements for documentation, procedures, practices and assessments * Integration of both quality and manufacturing BPD’s at all levels of the organization Part 4. Comments 4. 1 Achievements beyond Efficiency The GMS is generating positive results. By using GMS, General Motors achieved efficiency in many aspects. And GMS is a system built around people.

The system stresses the value of teamwork, and is based on an underlying philosophy that everyone, in every position, adds value. In an empowered environment, everyone’s experience and insights are valued. Manufacturing performance is improved through the consistent adoption of five principals-people involvement, standardization, built in quality, short lead time and continuous improvement. The principals are interrelated and implemented as a complete system. When implemented, the GMS principals maximize performance in the areas of people systems, safety, quality, customer responsiveness and cost.

Products, plants and processes are designed to allow GM’s people to use their skills and abilities as efficiently as possible. GM is the industry benchmark in safety, a goal achieved through a strong partnership between GM and its unions. GM’s workers realize a healthy, injury-free environment. The team concept is a critical part of managing quality by making each team responsible for managing quality in their area. Team members receive extensive training in identifying and solving problems. GM’s manufacturing strategy maximizes customer responsiveness, by responding fast to customer and market trends.

GM’s manufacturing system concentrates on cost savings by eliminating all forms of waste that detract from our ability to be competitive. 4. 2 A Too-Lean GM? It wasn’t that long ago that General Motors was producing too many vehicles. Now the giant automaker can’t produce enough for some area dealers, who said they are finding it difficult to keep enough inventory of some new car and truck models to satisfy demand. And they’re probably losing some sales because of it “I definitely believe it’s restricted” our sales, Scott Hatchett, managing partner of Scholfield Buick GMC, said Monday.

GM’s efforts to emerge from bankruptcy a leaner company mean the inventory Hatchett and other dealers have access to has been much thinner, especially for certain models such as GMC Terrain as well as the Buick Enclave and LaCrosse. “We literally get down to where we have one or two of those vehicles in stock,” he said. Jill Hattan said her dealership, Don Hattan Chevrolet in Park City, has had a difficult time keeping in stock the Chevy Equinox and Camaro. “It’s just trickling in on top of a small inventory,” she said. “We are definitely missing some sales. Hattan said her dealership is trying to alleviate the lack of inventory from Chevrolet by tapping other dealers’ inventory. “We actually try to purchase several at a time just for stock but when everyone’s short, that’s not easy to do either,” she said. GM spokesman Tom Henderson said his company is “dramatically different” now than before it entered a brief bankruptcy in June 2009. It’s axed brands such as Saturn and Pontiac, closed plants and received $50 billion in aid from the federal government. Before GM’s bankruptcy “we typically ran with very high inventories,” Henderson said.

As a leaner company, its production has been sharply trimmed. Now the company is attempting to find the sweet spot between production and demand. “It’s a really delicate balancing act,” Henderson said. Henderson said he couldn’t disclose production rates going forward. But he did point to efforts by the company to ramp up production on the GMC Terrain and Chevy Equinox. It has taken an unused portion of its plant in Ontario, Canada, to create capacity for the manufacture of 60,000 to 80,000 more vehicles. Those two midsize SUVs are hot sellers for GM.

GM said earlier this month that through the first six months of 2010, sales of the Equinox and Terrain were up nearly 193 percent from the same period last year. Henderson said the company is listening to its dealers such as Hatchett and Hattan. “We take their input seriously,” Henderson said, adding that dealers should see this fall the results of GM’s increased production efforts at its Canadian plant. As for additional production increases, “We’ll judge based on business conditions what to do going forward. ” Bibliography * [http://www. gm. com] * Womack, James P. ; Daniel T. Jones, and Daniel Roos.

The Machine That Changed the World,1990. * Bailey, David (24 January 2008). “Automotive News calls Toyota world No. 1 car maker”. Reuters. com. Reuters. Retrieved 19 April 2008. * [http://en. wikipedia. org/wiki/Lean_manufacturing#cite_note-Reuters-3] * [http://en. wikipedia. org/wiki/Toyota_Production_System] * Strategos-International. Toyota Production System and Lean Manufacturing. * [http://www. autointell-news. com/News-2003/January-2003/January-2003-1/January-03-03-p6. htm], GM’s Global Manufacturing System – A System To Build Great Cars and Trucks. * Jerry Siebenmark, A Too-Lean GM? , 2010.

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