issue: November 2007 APPLIANCE European Edition
Smart Manufacturing in Poland
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by Paul Roggema, Europe correspondent
Usually, there is not much overlap between the world of big business and the self-help sector. But the designers of the Electrolux Manufacturing System (EMS) seem to have been inspired by engineers, controllers, and psychologists.
Two robots apply the kit for the door sealing in the dishwasher tub line.
Deep in southwest Poland, not far from the Czech border and roughly halfway between Warsaw and Prague, the little village of Zarów houses the new dishwasher plant of Electrolux. The special industrial zone houses a dozen other new factory halls. The Electrolux facility, which opened at the end of 2005, is one of the appliance maker’s four new plants in Poland and operates under EMS, the company’s standard for all of its manufacturing sites.
The plant manufactures entry-level and core-level dishwashers. Premium products, such as most models of the AEG brand, are manufactured in Solaro, Italy. According to plant manager Krzysztof Spiehs, the factory is planned to expand to 1 million appliances yearly. “We started with 200,000 last year,” he explains. “This year we will have 600,000. This is done with 600 staff.”
Spiehs says one of the reasons Electrolux decided to build four plants in Poland is to save on labor costs, as well as lower-cost components. “The eager workforce is a great advantage,” he explains. “Specific for this city is the cooperative local government; we have a very good partnership. This was a region with an industrial tradition—in Communist times, there was chemical industry here.”
Operating under EMS
One of the more interesting aspects of the Zarów plant is that it is based on Electrolux’s new corporate manufacturing standard, EMS.
“EMS is our way to operational excellence. It consists of a balance between plant efficiency, customer performance, and quality,” Horst Winkler, PhD, senior vice president operations Europe (major appliances) of Electrolux, explains. “And it is not only done through worldwide standardization in our plants, but through a change in company culture. We want to closely work with our people on the shop floor and bring together all available experience. This is much more bottom-up than before. We encourage workers to participate, and we prepare them with a one-week master class.”
Winkler says the company used to have engineers design a product and production line, including the manufacturing details. EMS, however, now organizes the input from the shop floor. “Common problems are discussed, and many solutions from the shop floor are implemented. This also helps prevent overengineering,” he says.
“But it is not only management listening to workers,” Winkler continues. “They also are more involved in efficiency and quality issues than before. It turns out that many workers love to achieve better targets.”
According to Winkler, the quality of the company’s manufacturing is already high, which means further improvements require a lot of fine-tuning and the close cooperation of workers and production engineers. “As far as we know, the only [other] company that did the same worldwide standardization is Toyota,” Winkler says.
Standardization also means closer cooperation between plants. “They exchange a lot of knowledge, and we can easily do extensive benchmarking,” Winkler says. “The first objective—plant efficiency—is not new. An important aspect of the second objective—customer performance—is timing. The market is changing faster than before, and we want to follow orders as quickly as possible.”
As a result, the company reduced its minimum batch size and changeover time. “Dishwashers are often bought because the old dishwasher is broken, so fast delivery is highly important,” Winkler says. “Where normal batch size is 100 to 160, we can go as low as 20. Small batches are needed for small countries, special made-to-order services, and orders to supply our own warehouses. The trend is clearly towards differentiation—in looks, stainless steel versus white, electronics, and colors. Trends are changing faster than before. We even have seasonal products. Therefore, we need to combine a wider product range with faster delivery, while maintaining top quality.”
As part of the new system, the company uses workstation microengineering, which asks the question: Does the operator have all the tools and components to do a proper job? Detailed descriptions at each workstation also help instruct new workers. “All information is written and instruction is easy,” Spiehs says. This includes instructions for quality checks, he says.
In fact, quality is one of the key improvements Electrolux has seen under EMS. “In the past, German factories were known for quality. But now each factory uses the same standards, and there is no difference anymore,” Spiehs says. “Each factory has input in EMS. We do cherry-picking from ideas all around the world, and we say, ‘Steal with pride from your colleagues.’”
Spiehs does believe the best way to optimize is still to send people personally to visit other factories. “You cannot do everything by PowerPoint alone,” he notes. “I see my colleagues from the United States and Asia Pacific three to four times a year, and we have developed a strong communication.”
A complex stretch-and-tilt lifting movement was changed by EMS into this simple 90° lift for the subassembly of a base part.
A Symbol of Change
The EMS logo depicts three circles: on the top is Cultural Change; on the bottom right is Stability; and on bottom left is Process Improvement. Factory manager Krzysztof Spiehs says the Cultural Change circle is very important to a long-standing company like Electrolux. “Many of our plants have been operating for more than 20 or 25 years,” he says. “It can be difficult to convince people that they have to change, that products and processes have to be improved. We acknowledge that change can only be achieved if all parties work together. When workers are given responsibilities and when their input and experience are used, they will see that we can improve a lot. Of course, management sets broader targets, but the people are given the chance to develop in a nonhierarchical environment.”
According to Spiehs, there are several steps that workers go through to facilitate the changes that need to be made under the new system. “First, there is all kinds of training, and workers can select their own subjects, and later choose their own projects,” he says. “Of course, management does the final selection, but first we let people come up with their own ideas. In the chart, teamwork is on top, and that is no coincidence. The workers are on the shop floor eight hours a day, and management cannot design all the improvements. We trust our people and listen to their ideas.”
Spiehs admits that there is a lot of stagnation in an excommunist country like Poland. “Many older workers want to change; however, not all of them. We do have strategies to convince larger groups to innovate, such as focusing on the opinion leaders,” he explains. The company has also found that the younger generation of workers tends to be flexible.
Within the Cultural Change circle, the company focuses on working in teams, development and involvement, and leadership. In addition to internal teamwork, the concept of working in teams also means being in touch with other factories. “The purpose of course is that we can help each other,” Spiehs tells APPLIANCE. “If a factory has problems, the other factories see if they’ve had the same problem. Before, we did not have this close contact with other plants.”
Within the second circle, Stability, there are three main focuses—visual factory, safety, and waste elimination. Visual factory refers to information being presented visually. “How do we perform in absolute terms and in comparison with other factories?” Spiehs explains. “All the data are displayed in easy-to-understand graphs on different detail levels. There is also a special intranet terminal called E-Gate, where everyone can see all key performance indicators.”
The intranet also has a news section and an idea section. Production indicators are refreshed each week. Distribution has a longer time frame, up to four months. “The usual green, yellow, and red indicators are shown,” Spiehs says.
Another aspect of visual factory is posting clear standard work instructions at each workstation. These instructions are based on input from the group leaders, the engineers, and the operators. Issues such as efficiency, quality, material flow, and maintenance are addressed and are standard for all Electrolux plants. “Of course, not all our factories are identical, but we standardize as far as we reasonably can, with the proper timing,” Spiehs adds.
Other visual elements include clear markings on the floor and color-coding throughout the plant. According to Spiehs, workers on the shop floor wear color-coded clothing: operators wear blue; technicians wear red; team leaders wear orange; logistics wears yellow; and quality control wears green.
Spiehs says the safety and waste elimination aspects of Stability circle really need no further explanation: “We work smarter, not just harder,” he says.
The third circle of EMS is Process Improvement. Elements detailed in this circle include demand flow, quality, productive maintenance, and continuous improvement. Demand flow points to the pull system: Deliver your product in the variety the market requires, in a timely manner, and with the right quality.
“Regarding quality, we have all the usual quality measurements and figures, so an Italian factory will have the same quality as a German one. We compare so much that all our factories tend to be the same,” Spiehs explains. “The quality reports have monthly performance indicators and have the usual green, yellow and red indicators. Shown are columns for costs, production, materials, logistics, quality, and the service call rate (SCR).”
Spiehs says he finds it particularly interesting to study SCR. “The graph shows the percentage of calls when a part actually was replaced. Many calls are made because people do not read the manual. There have been cases where the program unit worked fine, but the user still wanted to replace it.”
Small racks hold the water hoses next to the assembly line. As part of an EMS improvement, the hoses are now stored in these new tangle-free racks instead of loose in a box, where they can get tangled and caused backups.
Does the System Work?
So what kind of improvements has Electrolux seen as a result of this new system? Spiehs says an important improvement has been equal cycle time for all workstations. “We found that in some factories, workers had buffers of about five items to allow short breaks and compensate for interruptions. But analysis showed that this system itself causes a lot of interruptions along the production line,” he says. “Eliminating the buffers and the causes of the interruptions allows a continuous flow, and thus, significant production improvement.”
And contrary to what one might expect, Spiehs says workers prefer this instead of the old system. “They hate waiting and like to work uninterrupted,” he explains. “When we did this change in an Italian factory, the workers supported the new system. Speaking of cultural change, the unions were at first against the system, and the old system was even agreed upon in the labor contracts. Then we did a three-month pilot with a test line in the plant and showed the advantages. The workers then convinced their unions to agree on the new system.”
Robert Kaszuba, PhD, Electrolux EMS change agent, notes a few other improvements: “For assembly of similar small parts, there are containers with a lid. When the part is not needed, one can close the lid so no parts are mixed up.”
Also, to hold the water hoses during assembly, a small rack is temporarily attached to the dishwasher. Previously, Kaszuba says this rack was stored in a large box, which caused the racks to get tangled up. “Now there is a simple rack, almost homemade, where the racks are stored and easily can be taken for next use,” he says.
Another EMS improvement was subassembling some of the components along the assembly line instead of at a separate location. “You can control how many parts must be made and prevent overstocking,” Kaszuba says.
The improvements don’t stop there. “In the station where a part of the base is attached, the operator used to make a complex tilt-turn-stretch type of movement,” Kaszuba explains. “We added a work surface, and now it only does one easy basic movement. For heaters, there was a rack with six rows, causing a lot of unneeded heaters [to be] on hold. Now there are only two rows.
“Next, the side panels used to be transported in containers with 18 sets of side panels. Now the panels are closer together and each container holds 38 sets, causing less transport movements,” he
The Next Step
While EMS may be worldwide, Spiehs says there are still unique aspects to working in Poland. “The dishwashing market in Poland itself is quite undeveloped.” he says. “Only 3.5% market penetration, so there are a lot of opportunities here. For the moment, most of our production is for export.”
Future goals for the Zarów plant include increasing production to 1 million units annually and a factory extension. “For us here in Zarów, EMS is considered a journey, and we know that we are still at the beginning of this journey,” says Spiehs. “A huge ramp-up which we are facing this year—from 200,000 in 2006 to 600,000 products in 2007—still must be stabilized. We have a lot of new improvement ideas, especially in internal logistic flow changeover time, which is a key issue for us right now.”
Electrolux as a whole has completed what Spiehs refers to as “phase one” of the EMS integration by bringing all Electrolux plants under EMS. “Now we are in the phase where the suppliers are brought into the system,” he says. “They will share the system regarding delivery, quality, and costs. We also do more publicity to the outside world. We waited until now because we wanted to be sure that we achieved the results. And we are really proud of what we’ve done.”