Dumb competitors can be as dangerous as smart competitors. That’s what suppliers to 800-pound OEM gorillas are learning in the race to improve service to these animals.
Dumb competitors are the ones who, without sufficient training, go all-out to meet unrealistic service expectations, raise the performance bar, then eventually collapse under the pressure. Meanwhile, the customer still expects surviving suppliers to say “how high?” when he says “jump!”
Providing a service like make-to-order is a lofty goal, no doubt, and one day it will be an achievable best-practice for most good sup-pliers. It won’t be conquered with giant leaps, however. It’s more like a game of football, which is mastered by consistently gaining yardage. Many suppliers have made good progress starting with their own versions of just-in-time.
I saw a good example of this strategy recently at a plant in De Kalb, Illinois. It paints tractor parts for Caterpillar. Caterpillar wanted to produce a durable, corrosion-resistant tractor. The best way to do that is to prime and paint the parts before they reach the assembly line. The OEM also wanted to eliminate warehouse space at its plant through point-of-use delivery. This calls for a just-in-time approach, from supplier, through paint, then sequenced to point-of-use.
Rather than tackle this all at once, all by itself, Caterpillar enlisted the aid of a supplier. Eisenmann, designers and manufacturers of custom-engineered material handling systems, opened Encoat Services, the 140,000-square-foot De Kalb plant I mentioned. It is designed and built to paint parts ranging from less than a pound to 11,000 pounds. Half the building is used for shipping, receiving and sequencing, with minimal storage. The other half is dedicated to painting.
Power-and-free conveyor feeds parts through three paint processes: electrocoat, autophoretic, and manual wet spray. Eight hundred different parts travel this line. They arrive in 300 containers a day in 15 truckloads. Three hours or less worth of parts are carried through these processes and are sequenced to the point of use — the Caterpillar plant a mile away.
When parts are received at Encoat, their manifest is scanned, and the information is sent via EDI to the MRP system at the factory. The parts are then moved to the paint line, loaded onto a bar-code-etched carrier and scanned again so the conveyor system knows the processes through which to route them. The parts spend no longer than 72 hours at Encoat before JIT delivery to the tractor assembly line.
Power-and-free will enable modular additions and replacements as material handling technology improves and affords extra capacity and capability. Caterpillar will then be able to provide these services to other select OEMs, according to its project manager, Robert Davy.
“The power-and-free conveyor supports our strategic plan for flexibility and flow,” he told me. “For me to support these different paint systems, I would otherwise have needed an individual conveyor line for each one of them. This way I have one continuous system that I can load in one area at one time, handle the part once, and it can automatically transfer to different lines.”
The point is, Cat is approaching JIT a step at a time and is working with suppliers in the same fashion. In this way, state-of-the-art material handling technology is always within reach, and futuristic strategies like make-to-order become a realistic and affordable framework on which to build profitable supply chain partnerships.