Delphi: Parts Maker Helps Suppliers Shape Up

Delphi Corp. is taking lean beyond its four walls and out to its suppliers. The $28 billion-a-year auto-parts supplier has 47 employees on loan at nearly 70 suppliers to help transform those factories' production facilities into lean operations.

David Nelson, Delphi's VP of global purchasing, began the program in January 2003 to give Delphi an edge on material pricing and delivery schedules. "This type of collaboration with suppliers and lean-manufacturing processes drives profitability," Nelson says.

Carlisle Engineered Products Inc., a supplier of rubber and plastic products primarily to automakers, became one of Delphi's first suppliers to reengineer its communication, production, and material-flow processes. In February 2003, Delphi helped the supplier identify waste in its factory operations, such as extra inventory on shelves and unnecessary steps in manufacturing processes. Delphi also helped map out all its manufacturing processes; cycle times and inventory between production stages were examined carefully, and financial data and cost analysis were reviewed.

Carlisle Engineered Products is only a fifth of the way through the project. "We're not finished analyzing our processes, but the amount of waste we have identified so far is ungodly," says Bruce Wandyez, VP of manufacturing. "When you look at a process in great detail, there's an upsetting amount of inefficiencies."

The company, which makes plastic radiator pieces primarily for Delphi, was the first Carlisle Engineered Products site to get a lean makeover. The facility used to employ what's called a "one-piece flow" manufacturing line, where two processes are joined in an effort to create efficiencies, but this actually added time. Delphi recommended separating the two processes to eliminate the seconds wasted and reducing the manpower required for the job.

Delphi also helped Carlisle Engineered Products implement an automated parts-replenishment system to simplify scheduling and reduce on-hand inventory. That has improved inventory-replenishment cycles by 20%, up from 25 turns annually in the last year.

The company will migrate more than 10 other facilities to lean methodologies, which Wandyez says could take 10 years. But this will give Carlisle Engineered Products time to establish the significant cultural changes that lean manufacturing requires, he says. Then the company can extend the principles beyond its four walls. "We would like to extend this methodology to our suppliers," Wandyez says. "But we're in the early stages and need to develop a higher level of expertise before we'd be comfortable approaching our suppliers."

Illustration by Dave Plunkert

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