Surprise! GM Productivity Soars - Brief Article

Automotive Industries, June, 2000 by Ron Harbour

After several years of hard but quiet work, GM arguably is the leanest manufacturer of the former U.S. Big Three.

What's the big story? I get asked that question a lot this time of year. "It" is The Harbour Report, Harbour and Associates' annual comprehensive analysis of automotive manufacturing.

The Harbour Report measures assembly, stamping and powertrain performance -- plant by plant -- for automakers in North America. (A sister report is also published that covers OEMs in Europe.) This year's report, which covers automaker performance in 1999, is hot off the presses. And since its publication June 15, I've been fielding questions from manufacturers, media, and just about anyone else with ties to the automotive industry.

What's the most important information in this year's report? It includes:

* Ford had the mast productive car (Atlanta) and truck (Twin Cities) assembly plants in North America in 1999. However, Ford also had mostly a flat performance overall.

* Nissan, though lowest among North American OEMs in capacity utilization, again was the No. 1 manufacturer in overall assembly productivity.

* Honda turned in another strong performance, finishing second among all manufacturers in assembly productivity while preparing for some major challenges in 2000.

* DaimlerChrysler made excellent progress in reducing non-scheduled overtime and total labor hours in manufacturing, though the automaker still requires more people and labor hours to assemble vehicles than its competitors.

* Toyota's company-wide implementation of the Toyota Production System continues to pay dividends. As the results again prove, Toyota's system for continuous improvement remains the industry standard.

We saw improvements at many individual facilities, as well. Still, if one automaker deserves praise for its overall 1999 manufacturing performance, it's General Motors. In the past, most industry analysts never would bring up GM in any discussion of premier manufacturing. The company was bloated, inefficient and arrogant. And it had a bad relationship with its union-represented workers.

That was then. Now, after several years of hard but quiet work, GM arguably is the leanest manufacturer of the former Big Three.

Back in the early 1980s and long before Chrysler and Ford ever paid attention to it, GM was working on lean manufacturing. Unfortunately for GM, both application and implementation were lacking for a long time. But not anymore.

Today, a tour through GM facilities is strikingly different than the same tour even a few years ago. GM has made more progress at implementing aspects of lean manufacturing than Ford or DaimlerChrysler. Material systems have been streamlined, and signs of error-proofing are plentiful and growing. Assembly aids are widespread throughout the plant network.

One of GM's biggest initiatives has been its drive to standardize and commonize. Each GM plant is focused on the same cost, quality, safety and responsiveness objective. For example, the gigantic GMT800 truck program, which is now in six plants, uses nearly identical processing and tooling in each plant to allow for shared learning. And each subsequent launch has been faster and higher quality than the one before.

GM still trails the Japanese transplants and Ford in labor productivity. So obviously, there is still much work to be done. But GM has made the most significant improvement in labor productivity of all the multi-plant manufacturers.

Perhaps even more importantly, other automakers that have lagged in labor productivity may have come to the realization they might be better off not focusing on it. Companies like GM are finally making progress because they learned better productivity is a natural fallout of improved product design, engineering and processing.

And that, to me, is the biggest story of the year.

(For more information about The Harbour 2000, visit the Harbour and Assoc. website at http://www.harbourinc.com.)

Ron Harbour is president of Harbour and Assoc., manufacturing consultants in Troy, Mich.