Reference no: EM132648018
When you slip behind the wheel of your Honda or Ford, you aren't sliding onto a seat made by those automakers. Almost certainly, the seats your car or SUV were made by a company in an automaker's supply chain. Globally, the largest supplier of automotive seating is Michigan-based Adient. The company designs seat systems, including the fabric, springs , levers, and control technology, and builds them at 230 facilities around the world.
Despite its number-one position in terms of sales, Adient has struggled since it was spun off from Johnson Controls 2016. In contrast to its competitors, it failed to generate a profit many quarters during that period, despite sales growth. Analysts identified the problem as a failure to operate efficiently enough for the slim profit margins that are typical for makers of auto components. This limits the company's future prospects, because automobile technology is poised for rapid advances in driver-less vehicles, and profits would generate cash to invest in the seating needs for those new kinds of cars. In 2018, the company brought in a new CEO with a strong background in manufacturing. Douglas DelGrosso started his career in engineering and went on to management positions with Lear, Henniges Automotive, and Chassix (a maker of chassis systems). However, even as Adient was seeking the right expertise from its top managers, teams at individual locations were already making strides to improving efficiencies.
A notable example is the Adient factory in Lerma, Mexico. Adient Lerma leads the company in its systems for continuous Improvement. It accomplishes this by assigning all of its employees to high-performance teams. All are required to learn not only a particular job but also the hundreds of manufacturing practices at the plant , principles of quality Improvement , and safety standards. Every team meets weekly, bringing together employees handling different functions, to engage in problem solving, Topics under discussion are related to the facility's performance metrics in eight areas: efficiency, safety , quality, continuous improvement , scrap rates, total productive maintenance , the 5S system for organizing and maintaining workspaces, and empowerment of people (measured by turnover, absenteeism , and job rotation). As teams solve problems, they earn points that determine the size of a bonus for high performance. Many of the teams are self-managed as well as empowered to make Improvement decisions.
The use of teamwork at Adient Lerma has made all the employees familiar with the company's performance objectives. Employees become experts in how to make the facility function better, and they personally care about improvement. In 2017 alone, the teams crafted more than 100 projects that cut costs by $1.38 million. That success positioned the company to win enough new sales and investment to announce a major expansion of the facility.
Meanwhile, the UK city of Sunderland, the focus has been on efficiency through an embrace of the latest in automation and information technology . The so-called Industry 4.0 technologies include robotics , machine vision, and machine learning (an area of artificial intelligence). For example, software can analyze data to direct a robot where to spray steam on newly built seats. At Adient Sunderland, management put together a team of decision makers to expand the use of Industry 4.0 and make the facility a model for the rest the company. The team identified the most significant problem areas, prepared a list of Ideas, prioritized them, and implemented the 12 top-ranked ideas. The team most recently has focused on how to move data analysis from simply understanding past results toward being able to predict what will succeed in the future.
With these wins and Adient's dominance in market share, the company's management sees a profitable future. Executives predict they will benefit from customers' Increasing focus on seating technology that delivers a great passenger experience; pursuing this effort offers potential for Innovation and new products. Innovative products, in turn, give Adient an edge to compete on value, not just price. In addition, the company has been diversifying its mix of customers. For example, it recently entered a partnership arrangement with Boeing to develop and sell seating for aircraft. Those who fly in cramped seating will welcome the thought of Improvements in this product line. For their part, Boeing and Adient expect airlines will welcome the chance to Improve performance a widely criticized area of passenger experience
1. In general, how can group norms help the teams at Adient Lerma achieve continuous Improvement?
2. How does Adient Lerma motivate the members of high-performance teams? What could the facility's managers do to discourage social loafing?
3. Do you think Adient Lerma's approach of putting all employees on empowered teams could also help the Sunderland facility achieve its goal of using Industry 4.0 technologies? Why or why not?