Harvesting Operational Efficiency at AGCO...Worlds 2nd Largest Farm Equipment Mfg. Largest...
Transcript of Harvesting Operational Efficiency at AGCO...Worlds 2nd Largest Farm Equipment Mfg. Largest...
Harvesting Operational Efficiency
at AGCO
Michael J. Bradford
Introductions – Industry
Challenges & Direction
Industry Challenges – Industrial Equipment
Shifting market dynamics − Pressure from customers
Product innovation − Faster time-to-market
Distributed manufacturing − Global supply chains
Increasing regulation − Cost of compliance
New market opportunities − New competitors
Profitability − Shareholder demands
Industry Challenges – What About You?
What’s Your Industry?
Do These Challenges Apply?
What Other Challenges Do You Face?
CASE STUDY: Transformation at
AGCO
Who is AGCO?
Worlds 2nd Largest Farm Equipment Mfg.
Largest manufacturer in the world focused solely on
Agricultural Equipment
Currently #262 on Fortune 500
Established in 1990
Branded heritage reaching back to the mid-1800s
Brands include:
AGCO Hesston
6 Manufacturing Plants Covering 345 Acres
State of the Art Paint Facility Recently Added
Vertically integrated
− 11 Final Assembly Lines
− Raw Steel Finished Combines, Balers, etc.
Over 1,500 Employees, USW Union
Products Sold in > 140 Countries
Largest AGCO Manufacturing Facility in North America
AGCO Hesston
AGCO Hesston
AGCO Hesston Project Drivers
Synchronous Manufacturing
− Part Management / WIP & Stores Inventory
− Pull Material to Assembly Process
− Sequential Manufacturing on Assembly Lines
− Task Based System – What to do When
− Relieve Inventory at time of Consumption
− Kitting – Reduce Line Side Inventory
− Flatten BOM
Eliminate Paper – No More Work Order Packets
Time & Labor – No More eBay!
In Their Own Words
To view the complete Video, go to:
http://www.apriso.com/library/video/agco_hesston_success_story_en.php
Note: Name & e-mail address are required to view the video
AGCO Hesston Project Timeline
2007-2009 – Infrastructure Upgrade
− Web-based Application
− Better Throughput
September 2008 – Project Kickoff
February 2009 – Project Start (after blueprint / design)
September 2009 – Go-Live
December 2009 – System Shutdown /
Reconfiguration
January 2010 – System Restart
2010-2012 – Stabilization, Enhancements
3 Simultaneous Transformations
Business Transformation
− Re-engineering manufacturing process in place for decades
Cultural Transformation
− Required collective acceptance of change to shop-floor job
responsibilities around a disciplined, repeatable, paperless process
Technology Transformation
− Distributed use of technology across entire manufacturing shop
floor
− Replace data entry gathering from small group of clerks located in
central dispatch office
AGCO Hesston – Measurable Areas of Success
Inventory
− High-rise Storage Area reduced by ~40%
− Line Side Inventory reduced by ~80%
− Inventory Accuracy increased by ~10%
Quality
− First Time Right increased by 400% for Combines (missing parts
originally represented 90% of Defect Rate)
− Scrap / Rework Cost reduced by ~15%
Labor
− Material Handling FTE Hours reduce by ~20%
− Overtime reduced by >85% in Mtl. Handling, nearly 20% plant-wide
Unplanned Savings
− Safety Metrics improved by ~10%
How Did They Do It?
3 Focus Areas
Move from Push to Pull for Materials
Move to “Paperless” Manufacturing
Manufacturing Process Changes with Technology as the
Catalyst
Move From Push to Pull
The Primary Focus – The Move from Push to Pull
Line-side materials limited
− Re-supply based on material levels and employee call-outs
− NOT “water-spider” (even thought it appears so); resupply based
on system-driven tasks generated by above activities
− Shortage report based on real-time inventory also key
Kitting implemented
− Initially 2-4 Assemblies / Kit
− Now single Assembly / Kit
− Based partially on locked Sequence and partially on Trigger-points
in assembly line
Move From Push to Pull
BEFORE AFTER
….
Move From Push to Pull
Primary Benefits of the move from Push to Pull:
30-40% Inventory Reductions
20% Lower Material Handling costs
Key Component in 400% improvement in First Time Right
(combine line)
Secondary Benefits of the move from Push to Pull:
Key Component in reduction of Overtime (85% in Materials,
nearly 20% plant-wide)
Increased “Value Added” (production) space
The Biggest Surprise – Improved Safety Metrics by 10%
Paperless Manufacturing
The Problems with Paper:
Large, Complex Equipment with Multiple Options
− As many as 5,000 components
− Variants for Color, AC, Radio, Interior…
Result Was Complexity on the Floor
− Large Shop Packets – 50-500 pages
− 2 full-time staff to print and organize packets
− Operators spent significant time looking for information
− Lost / damaged pages caused issues
− Wrong / Missing components drove First Time Right and Quality
issues
Manual reporting of all activities
Paperless Manufacturing
The Paperless Solution:
No More Packets – A Single BC Label
− Serial of Finished Item identifies Components and Variants
− Scan at each station for required information and for validation
All Necessary Details Available On-line
− Operators have information at their fingertips
− Information is always current
Production Reporting On-line
− Operators scan in
− Completion of Tasks drives Automated Production Reporting
− The ability to clock on to and report multiple jobs saves significant
time reporting labor
Paperless Manufacturing
Primary Benefits of the move to Paperless:
Significant impact on Quality improvements
− First Time Right increased by 400% for Combines
− Scrap / Rework Cost reduced by ~15%
Key Component in reduction of Overtime (85% in Material
Handling, nearly 20% plant-wide)
Direct reduction in non-value added labor and paper costs
Manufacturing Process Change
Technology as a Catalyst for SOME Change
− Forces re-evaluation
− Enables some new processes
− Provides better access to data and new views of data
Fixed Sequence (Technology Independent)
Kitting
Flexibility to Support Current & Changing Processes
− AGCO Processes, not Vendor Processes
− New Product Lines
− New, Automated Paint Plant Assembly Process Changes
Lessons Learned
Develop a Good Plan!!!
− Understand Your Business
• Document Current Processes
• Document Ad-Hoc Processes
• Drive Deeper Into the Work Force in the Development Stage
− System Readiness
• Test, Test, Test, … !!!
• User Acceptance Testing
• High Volume Stress Testing
• Test Interfaces
• Train, Train, Train, … Users and IT / Support
− Establish Support Center
Great Flexibility CAN Result in Great Complexity!
− Understand Your Needs – Keep It Simple!
What about YOUR company?
Goals, Concerns, Challenges…
Operational Efficiency at Your Company
What Projects are you working on?
What are your Goals / Targets?
Is there Hidden Potential?
What Tools / Approaches are you using?
What are your Concerns / Potential Challenges?
Wrap up / Q&A
Harvesting Operational Efficiency
at AGCO
Michael J. Bradford
Thank You!!!