The Mercedes production system

The Mercedes production system

Chris Booms

Mercedes-Benz has capitalized on its opportunity to start from scratch at its new facility near Tuscaloosa, Alabama. Mercedes has adopted a unique production system to produce its first SUV in a new plant, its first in the U.S. The M-Class features a 215-hp V-6 mated to a 5-speed automatic transmission and a traction control system which utilizes the vehicle’s ABS to brake spinning wheels and transfer power to those with more traction. A V-8 will be an option next year. The four door, body on frame vehicle will compete with highly optioned Ford Explorers and Jeep Grand Cherokees.

While the production system represents a new approach to automotive manufacturing, the people involved in developing it are not. Andreas Renschler, president and CEO of Mercedes- Benz U.S. International Inc. (MBUSI), has drawn automotive talent from every car manufacturer in the U.S. Bill Taylor, vice president of operations, brings experience from Toyota, where he was vice president of manufacturing at the Cambridge, Ontario, plant and Ford Motor, where he held management positions. Bob Birch, vice president-purchasing and logistics, worked for General Motors, followed by Nissan in Smyrna, Tennessee, before joining MBUSI.

Management views the plant as something innovative, a result of the combined experiences of the team members from various backgrounds. Mention the word “transplant” and you will be quickly informed that the word does not apply to the Vance, Alabama, facility since the parent company’s manufacturing methods and personnel are not the basis of the new production system.

Equipped with experienced personnel, MBUSI set to work creating a production system to fit Mercedes-Benz needs. Team members explain that building consensus among people with diverse backgrounds created difficulties, but was key to developing an effective production system. They stress that the Mercedes-Benz production system does not have to be the same as the often- benchmarked Toyota production system, but it must be as good. The constraints influencing their unique situation, such as the relatively small scale of production, necessitated a fresh approach to the problem.

MBUSI has developed a lean manufacturing process tailored to its specific needs. Standard lean manufacturing processes such as cleanliness and safety, visual management, pull system, standard methods and procedures, and continuous improvement are employed. However, a low-inventory pull system presented a unique challenge due to the great distance between the assembly plant and suppliers. Therefore, MBUSI worked with suppliers in the I-75 corridor to coordinate shipments of small batches from multiple suppliers in the same truck. This enabled MBUSI to meet its goal of a maximum of one day of inventory on site while gaining efficiency in terms of freight costs.

MBUSI relies heavily on modular construction in the new vehicle. ZF Industries supplies complete axle assemblies with differentials, side shafts, steering system, track rods, control arms and brakes already attached. Delphi Packard Electric assembles the vehicle’s cockpit from 150 parts produced by 35 suppliers; it receives orders 169 minutes prior to installation at the plant and ships the modules in sequence to the assembly site.

Modular construction helped MBUSI achieve several goals. First, delegating responsibility for the construction of modules to suppliers reduced assembly complexity for MBUSI.

Because MBUSI anticipates only 60,000 to 70,000 units of production, producing components might have been unattractive to many suppliers due to scale concerns. However, the larger dollar amount associated with managing module production attracted suppliers. It also helped to concentrate the $300 million in annual purchases among fewer suppliers: direct suppliers to MBUSI number only 65 as compared to over 500 suppliers for some competitors’ vehicles. Bob Birch attributes improved quality and reduced costs to the reduction of the number of suppliers.

At the heart of the MBUSI production system are its people: “This is a people business and people build cars,” says Taylor. The hourly workforce of 650 was selected from 40,000 applicants. Approximately 165 workers were trained on the line at the Mercedes-Benz plant in Sindelfingen, Germany, some staying as long as six months.

The training plan is a four-step process. First, workers must master basic skills; next, they are trained on the job with assistance; then they work on the job without assistance, and finally, they are expected to be able to train others once they have mastered a process. Each work station has a standardized, documented process. Team members are responsible for activities such as building work fixtures, which helps involve them in the continuous improvement of the work process and utilizes their expertise.

Automation was minimized in order to foster worker development. For example, the body shop is 27% automated as compared to a 95% automation rate at many plants. Manual welding enables workers to develop a better understanding of the process. Dimensions are monitored by a perception laser measuring system and sampled in a CMM measuring room, ensuring quality and providing feedback to workers.

In early April, the facility was producing 22 cars per day and expected to achieve 100 cars per day by midsummer 1997 and full line speed of 270 cars per day by early 1998.

Quality is prioritized and is made more tangible by focusing on the internal customer, each worker views the next person on the line as his or her customer. Patience in the ramp up to full speed indicates that the MBUSI team is serious about quality being their first objective.

The plant is configured with the production system in mind. Offices are centrally located to foster communication and a team approach. “This type of plant layout keeps everyone focused on our primary company purpose – to build Mercedes-Benz automobiles,” explains Taylor.

With only half of the projected 60,000-70,000 in annual production slated for the U.S. market, Mercedes-Benz is taking quite a conservative approach. This level of sales would represent only 1.6% of calendar year 1996 U.S. SUV sales or 4% of calendar year 1996 sales of the M-Class’s stated competitors: Ford Explorer, deep Grand Cherokee, Land Rover Discovery, Nissan Pathfinder and Toyota 4Runner.

Mercedes-Benz has encountered many new challenges at its Alabama production site. From innovative supplier relationships and adaptations of lean manufacturing to training a new workforce to build its first SUV, Mercedes has embraced change. The production team believes that this new production system will enable them to do something that is not new to Mercedes-Benz: produce a quality vehicle that is highly valued by its customers.

COPYRIGHT 1997 Gardner Publications, Inc.

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