Alfmeier Corp.

Lean leverageLeadership in lean is opening up new opportunities for auto components manufacturer Alfmeier Corp., Keith Regan learns from Mark Rose-Innes, director of North American operations. Alfmeier Corp., a wholly owned subsidiary of Alfmeier Praezision, based in Treuchtlingen, Germany, has been a key tier two supplier in the US automotive sector since 1995, with its specialty components in the powertrain and seat systems found in many of the worldÔÇÖs most popular automobile brands.  Alfmeier Praezision has been supplying the automobile industry since the 1960s. Seeking to reduce dependence on any single industry, the company has begun a diversification effort that will soon move to North America. AlfmeierÔÇÖs North American operations, Alfmeier Corp., had 2007 sales of around $30 million and consist of headquarters and manufacturing operations in Greenville, South Carolina and a plant in Monterrey, Mexico. Those facilities complement global operations in Germany (where the parent company is based) as well as the Czech Republic, Korea and China. The North American operations produce and assemble parts in two categories: powertrain, which includes fuel management components and engine systems, including non-return valves used in braking systems; and the seat comfort unit, which makes mechanical or pneumatic lumbar support systems for passenger vehicle seats. Those operations are already considered pacesetters within the corporation for the success they have had with driving lean philosophies into the operational side of the business, says Mark Rose-Innes, director of North American operations for Alfmeier. Recent sales slumps with the Big Three automakers have prompted cost-cutting measures in Greenville, but the companyÔÇÖs lean journey and use of Toyota Production System (TPS) techniques have put it in a position to weather such dips. ÔÇ£We are a very lean organization in North America,ÔÇØ Rose-Innes says. ÔÇ£Even before the latest slowdown, we were already well into looking at ways from a continuous improvement basis to manage costs in operations, so we are ready for any kind of fluctuations.ÔÇØ As the Big Three reduced production, Alfmeier did lay off some direct-labor workers at its Greenville plant, but was able to keep intact its core manufacturing support base. The lean journey has been driven by dozens of kaizen events at every level of the company with a focus not just on bottom-line cost-cutting benefits but also on factors such as quality, delivery time, safety and service. ÔÇ£In some companies, these events go on for three or four days at a time, but here itÔÇÖs something that happens every single day.ÔÇØ When Rose-Innes joined the company, he made a decision to move the kaizen event presentations from the main conference room to the shop floor, called ÔÇ£gemba,ÔÇØ so that each employee could present his or her results in their own environment as they saw fit. ThatÔÇÖs important, because each event is not only an improvement exercise but also a teaching opportunity. ÔÇ£Lean works best when everyone is taking part and feeling part of it, and now weÔÇÖve got people who might have felt shy about going into the conference room and giving a PowerPoint presentation who are now finding itÔÇÖs not so intimidating, and that helps us get it down to the grass roots level.ÔÇØ Standard work is emphasized on the shop floor, where 5S techniques and visual workplace tools are also widely used. The leanness extends to the way the entire North American operation runs, with a focus on customer service (internal and external) that has everyone in the company thinking in terms of who their customer is. ÔÇ£We have become a functional organization rather than a hierarchical one, where we use the talents of everybody even if it sometimes feels like it goes beyond their normal job scope,ÔÇØ Rose-Innes says. Managing relationships with external customers is another strength of the operation, he adds. Still, Rose-Innes says work remains to be done in the supply chain area in particular. ÔÇ£WeÔÇÖre excellent at driving lean within our four walls, but havenÔÇÖt been as successful at extending that into the supply chain and how we partner with other parts of the company and outside organizations,ÔÇØ he adds. ThatÔÇÖs slated to change soon, with a company-wide push to take advantage of AlfmeierÔÇÖs new global footprint to capitalize on opportunities to source materials from low-cost markets around the world. The parent company recently created a global supply chain group, he notes, with the idea of integrating supply chain improvement responsibilities into existing job functions where possible.┬á The improvements already in place and those just now entering the pipeline will help as the North American operations begin to move to diversify their end-use customer makeup to reduce reliance on automakers. AlfmeierÔÇÖs diversification strategy has recently been supported by two new acquisitions and one new foundation. The groupÔÇÖs organization has been set up to sell more into other industries, such as medical devices, agricultural products and telecommunications. However, automotive will remain a key focus for the company. The company also believes it can find traction with services offerings, extending its in-house expertise in testing and product design to its customers and the open market.While nothing formal has been announced yet for diversification in the North American market, carrying out that diversification plan might mean strategic acquisitions in key markets. In such instances, the idea would be to leverage AlfmeierÔÇÖs existing excellence and its employee base and production knowledge in those new markets, Rose-Innes says. Many employees have been with the company for several years, a testament to the positive, safe and clean working environment where safety is emphasized and where everyone is part of the efforts to constantly challenge the status quo and improve. ÔÇ£We have very low turnover in our employee base and that is one of our key assets.ÔÇØ The company is known as being a leader in lean and TPS in South Carolina, a pacesetter in terms of how to maximize production and reduce waste. ÔÇ£Before too long, we could be looking at adding capacity here in Greenville to support those efforts and we want to be in a position to capitalize and be part of that diversification when it happens.ÔÇØ┬á