Continuous improvement strategies

Looking at the picture, Osvaldo Pérez stands at the far right, proudly smiling.

He has good reason to be happy.

Pérez is the leader of the Cherokees, a team of nine people at Magna Powertrain Mexico (MPT Mexico) who recently won a national award from the Mexican Association of Team Work (AMTE). It marks the manufacturing and assembly plant’s second consecutive win, and in both years, the company’s team scored the highest in its category.

The success has been meteoric, says Ismael Balderas, MPT’s problem solving coordinator. Since the company implemented its continuous improvement program (CIP) only four years ago, he says the victories have helped changed its culture.

“The contest has been a boost in the continuous improvement effort,” Balderas explains. “The whole team is motivated, and the people want to be a part of the next team who will represent MPT next year.”

Aside from culture changes, the wins have had tangible benefits. Balderas expects the quality of projects to increase by 500% “because everybody knows only the best projects will be distinguished with this opportunity. The number of requisitions for training has increased substantially.”
 

Something different

Before Magna’s CIP, the company faced common inefficiency problems. Initial production quality wasn’t up to standards, requiring rework and inspection; scrap costs were too high; and the company wanted to optimize productivity.

The team at MPT Mexico sought a different way to solve familiar hazards.

“A lot of stories exist about failed continuous improvement programs,” Balderas says. “Unfortunately, those were started enthusiastically with training, certifications, projects, and follow up. However, most of them lose their power up to the point where they’re considered a secondary priority. Or, in a worst case scenario, being cancelled as a consequence of poor results.”

MPT Mexico invoked a three-pillar program – leadership, process and product knowledge, and continuous improvement methodologies knowledge – but with a twist: The program follows an effect-cause philosophy.

“The regular in the industry is to use cause-effect, but we are using the opposite,” Balderas says. “It gives us an easy way to find root causes.”

Leaders are responsible for determining the top five issues in their sector. The problems typically refer to quality, production volume, and cost, but not always. The CIP is broken down into a number of teams, each one with a specific expertise. MPT Mexico employs a smorgasbord of strategies across the manufacturing spectrum, including lean manufacturing, 5S, and Six Sigma.

The key to effective CIP leadership, says Balderas, is a daily review by a senior management team, who check improvement progress and provide support if needed.

“The staff team reviews at least 25 project a day, each project in five minutes,” Balderas says. “The detail of the analysis is then reviewed with an expert in the applied methodology.”

The Cherokee team is responsible for the Shainin Red X method.
 

Shainin Red X

Balderas calls himself the “master” of the Shainin Red X strategy, but it was actually the company’s vice president, Greg Deveson who decided to start it. Deveson has worked for Magna Powertrain for nearly 10 years. Before that, he worked as vice president of General Motors Powertrain Europe. GM has a history of using the Shainin Red X.

At MPT Mexico, the Red X, invented by Dorian Shainin in the late 1940s, is typically used to solve complex problems. It follows three basic principles to solve business and engineering problems in a practical manner. The first is the 80/20 rule, also known as the Pareto principle, which states that most of a company’s problems come from just a few common sources.

The next is fact-based decision making, which requires leaders to base decisions on data. Perez emphatically adds, “Not assumptions, not trial and error…It is like golf, each stroke needs a specific golf club and specific technique to increase the success of possibilities.”

The third principle is the convergent strategy. That means designing tests that split all possible answers in half, meaning half of the possibilities can always be discarded.

Pérez uses a guessing-game hypothetical to explain the difference between convergent thinking and divergent thinking. Say I pick a word out of the dictionary and ask you to guess it. The divergent strategy to finding the word would be to ask questions such as, “Is it a noun?” or “Does it start with the letter A?” Those types of questions don’t narrow your search much. Even if I answer that, yes, it was a noun, you still have thousands of nouns to rummage through.

On the other hand, if you invoked the convergent strategy, you would ask questions such as, “Is the word between letters A and M?” In that case, no matter how I answer, you can still discard 50% of the possibilities. The same strategy can be applied to within a certain letter – asking between page numbers – and then within pages by asking for certain columns, and so on. This idea can also be applied to powertrain operations.

“Shainin Red X has several tools designed to discard 50% of the possible root causes in each test,” Balderas says. “Another important characteristic is the use of BOB (Best of the Best) and WOW (Worst of the Worst) samples that help us to understand the process behavior with statistical confidence.”
 

Key performances indicators

A couple numbers demonstrate just how effective the Red X strategy has been for MPT Mexico. The rate of first-time quality products increased from approximately 89% to more than 97% in just two months. Even more impressive, the company’s overall attainment jumped from 75% to 95% in less than 60 days.

It was on the backs of these types of statistics that MPT Mexico chose the Cherokee team to compete in the AMTE contest in Cancún. Perez and Balderas’ team ended up beating nearly 50 other companies from the aerospace, medical, and automotive industries. For Balderas, it was validation that the three-pillar system works.

“I learned if we keep those three-pillar strong, the CIP will be effective and will work properly as a long term solution,” he says.

Meanwhile, Pérez proudly stands by his team’s efforts. “The Cherokees are always involved during the decision-making process,” the leader says. “I am proud of being a part of this team.”

Magna Powertrain
www.magnapowertrain.com

About the author: Danny English is the associate editor of TMV and can be reached at 330.523.5354 or denglish@gie.net.

LISTEN: Hear a podcast discussing the benefits of Shainin techniques at http://bit.ly/ot2btX.