Sony's Huge CD Plant In Indiana Uses Kaizen
To Slash Costs And Boost Production
BY MICHAEL MITCHELL And SCOTT FAIRBANKS
An operation at a plant in Terre Haute, Indiana, that required 13 operators to produce 369 products per man-hour, cut labor needs to only three operators while boosting throughput to 2,715 products per man-hour in just over one year.
The products are compact discs for the Sony video game. The plant is one of the Sony Disc Manufacturing facilities in the United States. The boost in production was made through automation, attrition and attention to the principle of Kaizen, the Japanese word for continuous improvement. Itís a process that involves everyone in the plant, from equipment operators to department managers working together. Success is achieved without layoffs.
Allegiance to the Kaizen principle has allowed the Terre Haute facility, the first CD manufacturing plant in the U.S., which Sony purchased from CBS in 1983, to move from the then unthinkable goal of producing 300,000 CDs per month to todayís capability to turn out 27 million CDs per month. In a crunch, the plant can produce more than 29 million CDs as it did in October 1999.
Kaizen is a team concept that means continuous and incremental improvement at all levels: machine operators, middle manager and even the CEO are part of the process. The Kaizen umbrella covers just-in-time inventory, zero defects, quality circles and suggestion systems. Basically, you take a look at your operations and you eliminate everything thatís wasteful. Waste, known as "muda" in Japanese, is everything that does not add value. Muda is the deadly enemy of value creation. The eight deadly muda are:
If you can drive that kind of waste out of your process and stay vigilant about it, then youíve reached the heart of Kaizen.
Hereís where the art of standardization becomes your friend. You have to rigorously standardize your processes if you are going to rigorously improve them.
Maintaining your best processes and improving them involves two key activities, what we call two-cycle wheels. The first cycle is for maintaining your best processes, which is the day-to-day concern of operators and technicians. The other is the improvement cycle, which is generally the responsibility of the management and engineering staffs.
Management and technical staff have the lead responsibility for improvements in the standardization processes. But they donít act in a vacuum. They spend the majority of their time on the factory floor, measuring compliance with the Kaizen-driven plan, looking at the manufacturing process from the individual perspective of each employee.
With the emphasis on automation, cycle time on the CD lines has been drastically driven down in this process. Gone, for example, are the batch process lines of the late 1980s. The Terre Haute plant makes discs faster than anybody in the world.
It does so with fewer employees. Yet the company has not laid off any workers. The head count has dropped from a high of about 1,500 employees to its current status of just under 1,000 all through attrition. Kaizen improves the morale of employees by removing drudgery from work and developing pride in seeing individual ideas implemented.
Automatic guided vehicles carry supplies and discs from one station to another. Everything is automated from retrieving manufacturing supplies to the manufacturing process itself, even the stacking of packed boxes of discs on a pallet for shipping.
Kaizen and the Video Game Cartoning Line
The improvement to the video game cartoning line typifies the success of the program. The video game system launched by Sony in the mid-1990s has quickly become a staple product for the plant, particularly during the second half of each year. Discs for the game can account for nearly half the CDs made at Terre Haute during the late summer and early fall.
To start the process, a team of 17 ó from the plant director of production operations to seven packaging operators ó was assembled to examine the operation and identify problems. With the operation shut down, the team discussed problems that they identified and added the concerns of team members. The team developed a list of 34 steps in station operation that could be improved, from e-stop location to the labeler.
At its next meeting, the team generated possible solutions for each of the issues. The problems were categorized based on their impact on the operation. Then the list was divided into low cost, quick fixes and engineering improvements. Every suggestion for improvement had to consolidate, automate, eliminate or simplify in order to be considered.
The objective was to make the process more efficient and the job easier for the operators as quickly as possible without investing much money. Within days, low-cost improvements were implemented.
During the process, all the improvements were identified in Kaizen story boards that tell the story of this specific continuous improvement and give credit to the team participants. These Story Boards, with the names of all participants, are displayed near the line and updated periodically.
Here are some of the simple and incremental improvements that were accomplished within weeks and which reduced the number of station operators from 13 to seven, while raising standard throughput from 4,800 to 8,679 and the number of discs per man-hour from 369 to 1,240:
To supplement these physical alterations, there was additional training for the core team and a reorganization for easier access of the technical manuals. Once these changes and improvements were accomplished, the team moved on to identify and accomplish further incremental improvements in the station operation.
Within eight months, engineering and automation improvements that the team identified had been installed by engineering to reduce the number of operators needed at the video game cartoning line to four, while increasing the standard throughput to 9,242 and the discs per man-hour to 2,311.
These productivity improvements were accomplished with semi-automatic master and automatic master cartoning, a new roll stock labeling system, an automated tote handling system and installation of a new semi-automatic line. Even that was not the end. By mid 1999, only three operators were needed to improve discs per-man-hour to 2,715. Implementation of a robotic palletizer increased throughput, eliminated two operators and overcame ergonomic issues involved in the operatorsí need to be constantly bending. Savings: $118,400 annually, with a payoff period of only 26 months.
Ergonomic issues were at the heart of a decision to add a master carton loader that automatically loaded three inner cartons of product into a master carton and placed the carton on a conveyor to be palletized. Savings: one person per line, per shift or $118,400 per year. Payoff period: 14 months.
Two operators were required to load PSX products from totes into PSX cartons. The manual labor and the inherent ergonomic problems were eliminated by the installation of an automatic tote de-stacker. By eliminating the two operators, the unit realized annual savings of $236,800 with a payoff period of 5.1 months.
The Kaizen total involvement approach to improvements follows a set of rules, policies, directives and procedures established by management. The four basic steps in making continual improvement involve: Plan, Do, Check, Act. To maintain the improved states we Standardize, Do, Check Standardization. One of the foundations of plant Kaizen activities means documentation of the best way to do the job.
Any manufacturing operation can benefit from Kaizen as long as there is a commitment from management toward total involvement in basic Kaizen tenets:
Sony Disc Manufacturing has made that commitment and has reaped the rewards, enabling the company to keep up with growing demand for our product while cutting costs.
Michael Mitchell is director of plant engineering and Scott Fairbanks is director of production operations at Sony Disc Manufacturing in Terre Haute, Indiana. They can be reached at 812-462-8100.