GROWTH is good. But sometimes companies outgrow their original efficiency.
That is what happened at the Morgan Corporation van body plant in Janesville, Wisconsin. In response to increased demand over the years, the company added a building here, a warehouse there. After decades of building a lot of van bodies, Morgan also had a lot of buildings.
Campuses with multiple buildings may work well for educating college students, but it's generally an inefficient way to build a truck body. After crunching some numbers, management back in the Morgantown, Pennsylvania, home office began considering radical changes to the Janesville operation — including starting over with a blank sheet of paper somewhere else.
The van body market in the Midwest is important to Morgan, and management wanted to be as competitive as possible with a manufacturing plant to serve the region. Other locations offered geographic advantages. Some appeared to be less expensive to acquire and operate.
But in the thinking of Morgan management, these advantages could not offset one major reason for remaining in Janesville — the folks who work there. At a time when companies continue to face shortages of qualified employees, it became clear that this is one area where Morgan did not want to start from scratch.
“The best thing about this plant is its employees,” says Mark Stuebe, director of operations at the Janesville facility. “Our employees have a strong work ethic. Morgan has had a good relationship with our employees for many years — we are a nonunion shop in a union town — and our company has worked hard to provide a good work environment. We decided to build a new plant here because we are committed to staying in Janesville.”
After deciding to remain in Janesville, Morgan committed capital to make the plant more efficient.
The most substantial decision was to move production under one roof. Morgan added one more building to its Janesville site, but this one (120,000 square feet) is large enough to bring van body production under one big roof.
Centralizing production in one building has provided several advantages — not the least of which is a substantial reduction in material handling. The new building has given Morgan's Janesville operation:
72% more manufacturing space.
A 90% increase in capacity.
A 12% improvement in on-time delivery.
A 15% reduction in order cycle time.
A significant improvement in quality. The cost of rework as a percentage of sales is now down 55.2%.
Less easily quantified advantages to the centralized manufacturing include one material supply location that provides better control of supplies. And by moving into one plant, management has better control of the workforce and improved accountability compared with its previous system of multiple production buildings.
Despite the advantages of the new plant, Morgan did not abandon the buildings it already had in Janesville. When the company opened the new plant for production in September 2000, it triggered a chain reaction in the other buildings on campus, giving some of them new roles and enabling the company to leave leased buildings that it occupied elsewhere in Janesville.
With the completion of the new plant, Morgan has 164,000 square feet in Janesville. What had been the company's main assembly plant is now set up to produce what Morgan calls its “consumer vans.” These typically are large orders for rental trucks from companies such as Ryder and Penske. Morgan now has the capability of filling these special orders without appreciably affecting its day-to-day production.
The new building (Plant C) is one of six “plants” that Morgan operates and the only one geared for complete van body production. The others, significantly smaller buildings, include:
Plant A — the former van body plant now being used to produce consumer vans. The company previously built these orders in a leased building located off premises in Janesville.
Plant B — home of fabrication and special finish work.
Plant D — a place for applying decals. Decals previously had to be installed in a leased facility off premises.
Plant E — where platform bodies are manufactured.
Morgan has seen its efficiency increase substantially since the plant opened last September.
“We have moved 90% of our production into the new plant,” Stuebe says.
With its manufacturing operations centralized, the company almost by definition has made huge improvements in its material handling. But Morgan was not content simply to move its operations closer together. The company also implemented some changes in production designed to improve ergonomics and product quality.
Traditionally, Morgan has tried new things at its Morgantown plant. Those that prove particularly effective then get adapted by the company's outlying plants. However, some of the changes that have been implemented at the new Janesville plant are improvements that may be used companywide — including back at headquarters.
“Morgan has teams that move from plant to plant looking at every process we perform,” says Craig Fisher, vice-president. “It's part of our process to constantly improve everything we do.”
“A lot of what we are doing here we will take to the other plants,” says Kevin Tracy, materials manager. “We are challenging ourselves to develop better ways of doing our jobs.”
The improvements include a number of ways to make the process of manufacturing van bodies more ergonomic. For example, rollers in the floor assembly area replace cranes as a means of moving these assemblies through the production process. One worker can roll the assembly to the next station using just one hand, Stuebe says.
Advanced Handling Systems, a logistics equipment subsidiary of Morgan Corporation, supplied much of the equipment that smoothes material flow at the Janesville plant. The subsidiary specializes in retractable roller assemblies that can be used in van body applications. The rollers remain below the floor surface and then rise above the surface of the floor when the cargo needs to be moved in or out of the truck. The same principle is being applied to move truck body subassemblies in Janesville.
Morgan also invested in lift assemblies that enable assembly workers to do their jobs at convenient work heights. These include lift tables at the roof station so that bodies of different heights can be held at the same position for roof assembly.
Mix and Match
The Janesville plant is designed to produce either dry vans or refrigerated, and either aluminum or FRP.
The reefer line isn't quite ready. When it is, the plant will have two lines for dry-freight production and one for insulated vans. Each of the two dry-freight lines will be capable of producing either aluminum or FRP bodies. The single refrigerated van line will be dedicated to that product.
“We are excited about what we are going to do on the reefer line,” Stuebe says. “Our standard practice is to shore up the inside walls before we foam. But we will have a way to foam our vans without using all the bracing that we do now. The new way will give us smooth sides with much less time needed to prepare for foaming.”
If those who work at the Janesville plant have the sense that they are going in circles, they have a reason — sidewall production has a circular flow. Completed sidewalls end the process close to the rivet press where the process begins — with the application of tape to hold rivets in place as the rivet press secures the roof sheet to the sidewall. As the sidewall assembly comes back the other way, it has the liner installed, along with any logistics track the customer requires.
Installing the liners while the sidewalls are still in their assembly fixtures has reduced sidewall assembly time by almost an hour per body, according to Morgan.
“We used to install the liners after the sides were assembled,” Stuebe says. “Doing it ahead of time has resulted in a 17% improvement in efficiency.”
When the sidewalls have made the circuit, they also are near the completed floor assembly that has made its way from the other end of the plant. Another set of lifts makes it ergonomically easier to fasten sidewalls, nose, and floor.
An overhead conveyor system that moves rear door frames through an automated cleaning process is another productivity enhancer.
“We used to sand and prep the door frames, but we wouldn't paint them until the body was assembled,” Stuebe says. “But prepainting the rear door frame really saves us time. Plus, we can bake the finish — we don't have to let it air dry.”
Door frames leave the assembly jigs and travel the automated prep line. The line moves the assembly through a series of stations:
- Acid wash
- Water rinse
- Sealer rinse
- Hand dry.
While the line is automated, production elsewhere in the plant is equally regimented. Even chassis go through an assembly line that has four stations: liftgate prep and fabrication of chassis; liftgate installation and final wiring; paint prep; and finish painting.
“We have to move a truck every 20 minutes,” Stuebe says. “To do that, we have to define what is done at each place on the line, and we have to work as an integrated unit.”
Which brings us back to the reason Morgan stayed in Janesville — its team.
Management looks back over the improvements the plant has provided, and it sees a big payoff in ergonomics — which in turn have triggered gains elsewhere. For example, Morgan figures indicate that since moving into the new facility:
Overall productivity has increased 24%.
Direct labor efficiency is up 25.4%.
Indirect labor has been slashed 56%.
Inventory turns have increased 15.7%.
But perhaps the most significant change comes in the health and safety of those employees who Morgan stayed in Janesville for.
“So many ergonomic improvements have been built into this plant,” says Steve Olexa, Morgan's regional human resource manager. “Our working conditions are better — the plant is cleaner and brighter, and our employees tell us they are not as tired at the end of the day. We are seeing this reflected in our absentee rate — down 43.5% — and in our safety numbers.”
With almost half of 2001 gone, the plant had zero lost-time accidents.
“Our employees enjoy having our customers and distributors visit the plant,” Stuebe says. “We encourage visitors to interact with them — it's educational for all of us.
“A good example is the customer who wanted special shelves. One of our guys was familiar with the customer and knew exactly what he wanted — and sketched it out for the customer to confirm. With employees like these, it was easy to see why we needed to keep the plant right here in Janesville.”