ArvinMeritor: A Lean Culture - InformationWeek

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4/16/2004
01:29 PM
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ArvinMeritor: A Lean Culture

Lean isn't just for the factory floor. Some companies, such as ArvinMeritor Inc., a $7.8 billion-a-year auto-parts supplier, are pushing lean into other parts of their business.

"All of our lean initiatives have started in the production areas," says Brian Cavagnini, director of continuous improvement for the commercial-vehicle systems group at ArvinMeritor. "But we have, in the past year or so, really tried to focus on applying those techniques to our support sites."

The lean concept calls for all employees to participate in a continuous review and improvement process. At ArvinMeritor, each division (engineering, human resources, purchasing, etc.) has daily meetings to discuss issues, concerns, as well as the work completed the previous day and what must be done that day. Each division also has a 4-by-8-foot display board listing quality and other measurements and goals. There's also a formal employee suggestion system, as well as a formula for measuring and scoring team performance against best-in-class scores. The measurements cover 20 different key business functions, from safety to workplace organization to project management. The object is to improve overall scores 10 points every year. "If they are doing that, then they are continuously improving," Cavagnini says.

ArvinMeritor's lean initiatives started more than three years ago, when Arvin Industries Inc. and Meritor Automotive Inc. merged. Automakers were pressuring auto suppliers to cut costs, and the company decided lean manufacturing was the best way to respond to those demands.

In 2000, the company hired Kaufman Global, a consulting firm that specialized in Six Sigma and lean implementations, to help it implement lean tools and practices and change the culture at its Asheville, N.C., plant. Kaufman Global spent 40 weeks working with ArvinMeritor, and today, the auto supplier is extending its lean initiative across all 21 of its plants. It's also implementing Oracle 11i across its sites so it will have one integrated IT platform.

Already there are improvements. Delivery times have improved 10% to 15%, sales per employee have increased 30%, and customer complaints relative to the number of parts shipped have dropped 80%. Cycle times have improved, too; the Asheville plant has doubled inventory turns within two years, and the company's goal of doubling inventory turns across the board within five years is on target.

Much of ArvinMeritor's success with lean can be attributed to leadership. Some site managers who weren't fulfilling the lean mandate were replaced, Cavagnini says. Each site has a full-time continuous-improvement leader who reports to the plant manager, and these leaders are required to attend 13-week training programs. Every plant manager has had to go through this training and has had to serve as a continuous-improvement leader. Says Cavagnini: "Everyone needs to be committed to this process."

Illustration by Dave Plunkert

Return to the story: Never Too Lean

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