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Autoliv s largest airbag assembly plant is in Ogden, Utah. The plant produces more than 13 million airbag modules a year, supplying automotive makers in North America and Asia. The Ogden plant sits at the end of a
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AUTOLIV PROFILE: Applying Rocket Science to the Supply Chain
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50-mile supply chain linking operations that handle bulk chemicals, textiles, and sophisticated electronic components. The Utah facilities were Morton plants prior to the merger, and they trace their roots to the rocket fuel industry. Morton ASP spun off from Morton Thiokol, which built solid rocket boosters for NASA. Looking to expand into new markets, engineers at Morton Thiokol began exploring airbag technology as a new use for the company s rocket fuel. An airbag works by the split-second inflation of a textile cushion that, in turn, softens the blow of passenger impact during a crash. The technology required to inflate that cushion precisely when needed, at the right internal pressure, in time to protect the occupants of a car in a crash is the core element of an airbag system. Morton used its chemical expertise to develop an inflator that was, essentially, a small rocket engine mounted within the steering wheel. During an accident, electronic sensors signal the airbag to deploy, starting a pyrotechnic chain reaction. The gas generant pellets inside the inflator burn, generating a rush of exhaust gas that inflates the airbag. In Utah, Autoliv runs a chemical plant that produces combustible fuel for the airbag systems. The fuel is trucked to a facility where Autoliv manufactures the inflators. Then the inflators are shipped to Autoliv s assembly plant in Ogden, where they are integrated with textile cushions and numerous electronic components to create complete airbag modules for installation in vehicles. This supply chain worked well for years, but in the mid-1990s Autoliv s Utah operation reached the limits of its ability to improve. Autoliv was no longer seeing progress in its key operational metrics, such as defect rate, inventory turns, labor minutes per part, lead time, and the like. With annual price reductions built into its customer contracts, the company could not afford to plateau. Realizing the dilemma, Autoliv embarked on several internal projects in the mid-1990s to boost efficiency and reduce costs at its Utah operations, but none yielded the desired results. In 1998, the company looked outside for help. It turned to one of its most successful customers, Toyota, which was well established as a pioneer in efficient manufacturing. Autoliv had a long-standing relationship with Toyota and by 1998 was supplying the automobile maker with nearly 70 percent of its airbag requirements, even though Autoliv faced growing difficulties in getting Toyota exactly what it needed, when it needed it. When Autoliv asked for assistance, Toyota was quick to agree. The automobile maker sent one of its top manufacturing experts, Takashi Harada, to Utah for two years to work with Autoliv managers and teach them the fundamentals of the Toyota Production System.
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Toyota paid Harada s salary while on assignment at Autoliv because the automobile maker believed that helping a key supplier adopt and adapt best practices for manufacturing ultimately would be to its benefit. Within three years of Harada s arrival in Utah, Autoliv s manufacturing process would be completely transformed. The changes began on the shop floor in Ogden and rippled back to reshape the company s internal and extended supply chains.
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The Ogden plant was designed originally with 200-foot-long assembly lines. Conveyor systems moved components through the long, linear production process. The lines built airbag modules in large batches. Automated storage and retrieval systems moved 500-pound containers of parts, delivering them from stock areas to stations along the production lines, where they sat until needed. The assembly lines were grouped by customer and tooled up for the needs of that particular automobile maker. No two cars use the exact same airbag system not even very similar cars such as the Chevrolet Camaro and the Pontiac Firebird. And subtle variations in design create different crash profiles, requiring different airbag system configurations for every car model. As a result, the production process at the Ogden plant uses hundreds of parts and is subject to frequent changeover, depending on customer demand. Modeling itself after the Toyota system, Autoliv chopped up those assembly lines and converted the plant to clusters of 20-foot, U-shaped manufacturing cells. Each cell contains all the connected processes that produce a particular airbag module. A typical cell is staffed by four or five workers, all cross-trained to handle each job in the cell. The cells are grouped by product and customer, with significant cross-training among workers on related cells, so shop-floor managers can shift resources to cells where customer demand is the highest. Gone is some $15 million worth of automated equipment Autoliv had installed to supply the old assembly lines. Now the manufacturing cells are supplied by tuggers delivering small-quantity totes, with each tote containing everything needed for the processes in the cell. When a tote is opened and its contents removed for assembly, an electronic signal is sent back to the supply area so that another tote can be sent to replenish the cell. Based on the kanban system developed in Japan, the whole idea is to pull one product through the plant at a time, driven by actual customer demand. It s build to order, not build to stock.
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