MRO Today - Bobcat's new model

Bobcat's new model

With the housing market on the skids, Bobcat’s newest model is itself — redesigned and transformed into a Lean, agile manufacturer

by Tom Hammel

GWINNER, ND — It’s difficult to overestimate the “impact” this versatile little workhorse has had on construction in America. The skid-steer loader is the miracle worker of construction, moving rock and grading soil, digging, trenching and back-filling, clearing brush and trees and planting new ones, lifting, carrying and doing so many other chores that it has revolutionized homebuilding in the latter 20th Century. Bobcat has been at the forefront of this movement for nearly 50 years.

Unfortunately, that success on the jobsite tied it too closely to the fortunes of residential construction; when the housing market fell off, so did demand for Bobcat machinery and attachments. The housing crash of 2006 hit Bobcat by surprise. Sales fell; jobs were lost. Between December 2006 and January 2007 the company was forced to layoff about 150 workers, most of them members of United Steelworkers Local 560.

Ironically, the downturn came just as Bobcat began retooling its manufacturing processes to increase productivity to meet predictions of greater demand.

Good idea, bad timing
“When we looked at our long-range plan volumes in 2005 and early 2006, all the indicators showed a steady upward demand,” explains Dan Antrim, site leader at Bobcat’s Gwinner, North Dakota plant, which produces small, medium and large platform loaders. “Our plan then was to offset any need to add headcount to meet that demand by achieving greater efficiencies. As it turns out, instead of offsetting volume increases with productivity improvements, we had to offset volume decreases with dramatic productivity improvements.”

“Better late than never” is a kind way to describe the plan’s timing.

“If we had been six months farther ahead in the process, we probably wouldn’t have had to layoff as many folks and we would have been in a much better position to ramp down production without the dramatic impact it had on us initially,” Antrim says.

Like a fiendish teacher who tests students on material they have yet to learn, the market downturn thrust Gwinner’s management team into a test of the very manufacturing flexibility it had just begun to pursue. And the only option was to plow ahead.

Uncontrolled growth, uncontrollable processes
The late 1990s and early 2000s saw a flurry of activity within Bobcat. Riding a construction market at historic highs, Bobcat was producing skid steer loaders in three platforms (small, medium and large), each with several versions.

Then, beginning in 1999, a trio of new models came in rapid succession: first, a track loader; next, in 2001, the all-wheel steer loader; finally, in 2003, the Toolcat utility vehicle. Process cells were jammed into the plant wherever they could fit and the company strained at the seams.

“We were a component manufacturer. We had process cells; machining, welding, painting, assembly — but none of them were linked,” Antrim says.

That year, then company president Mike Ryan introduced what he saw as a cure for Bobcat’s increasingly unwieldy process-based manufacturing — true product cells. Ryan brought in help in the form of Chihiro Nakao, the principal sensei and founder of Shingijutsu Consulting Group. Nakao, a one-time pupil of Lean pioneers Shigeo Shingo and Taiichi Ohno, visited Bobcat for the first time in August 2003 and began teaching the Gwinner managers Lean manufacturing, kaizen and true product cell production.

In early 2005, this led to the formation of a global organizational development team comprised of leaders from every Bobcat facility. It was charged with envisioning the company’s future state and each facility’s place and function in it. The team looked at all of the Bobcat facilities with one question in mind: How to take disparate processes in diverse facilities and create flow between true product cells within each plant and between the plants to jointly create the final complete product.

No one plant was, or is, self-sufficient, a fact that adds complexity to the process. For example, the Bismarck plant makes the hydraulic lift cylinders for every loader and excavator product made in Bismarck, Gwinner and two plants in Europe. The Gwinner plant makes drive trains that go into domestic and European market machines. And some parts now originate in Europe and are brought to the Bobcat plants here in the United States.

“We went through a process of learning the steps needed to get to true product cells and we spent quite a bit of time internally developing our own step one, which is ‘What does it look like when we’re done?’ ” Antrim says. “What is that vision of product cells for Gwinner, Bismarck and the plants in France and the Czech Republic?”

Developing the future state vision took the team roughly six months. Next, those team members went home to their respective facilities and applied what they had learned to develop future state maps for their plants.

“Once we have that vision, we had to put together a business case,” Antrim continues. “Does it make sense? What are the benefits? What is our plan to get there? What physical changes do we have to make to get there? And when? There’s a specific sequence you have to follow to be successful doing that.”

To answer these questions, each facility created a team to craft its own business case scenario.

“We locked them away for the better part of two months with the help of a facilitator and they put together a complete business plan,” he says.

After tweaking that plan, Antrim presented it to the Bobcat global leadership council. This presentation kicked off a two-month enterprise-wide communication program to explain the plan and gain buy-in across the entire Bobcat organization.

The execution strategy called for creating implementation teams for each major business unit. There would be six business units in Gwinner. Each implementation team would lead its assigned unit’s product cell transformation, and then “take ownership” by becoming its permanent staff. The plan looked great — on paper.

Those pesky realities
But realities have a way of getting in the way of best-laid plans. One such reality was the Gwinner plant itself. Like many companies that have overgrown their original footprints, the Gwinner facility has some unique obstacles that positively stifle true flow. A railroad line bisects the facility, slicing the property into distinct halves. Bobcat needs the spur to feed its steel appetite — one million pounds a day — but the line’s course across the property wreaks havoc on flow.

As Bobcat grew, its only option at the time was to erect another building about 50 yards away.

“When we built the north building back in 1994, it was the only room we had to expand into at the time,” Antrim says. “But it created a logical break in the flow of product in the facility. Assembly was up in the north plant and everything else was in the south plant. It was literally like managing two facilities. That assembly building might as well have been in Bismarck or Minneapolis — we always had a disconnect somewhere.”

There were obstacles to creating flow inside each building, too. Big, cast iron ones.

“We inadvertently set things up so they were not only very complex but also very difficult to change. We had — and still have — a lot of monuments out there. If you want to move or reconfigure them for better flow, doing so means scheduling a two-week shutdown. In some cases that prohibits change.”

“To give you an idea, one of our presses used to make parts for the Ford Model A, ” says Joe Volk, lean production systems manager for the Gwinner plant.

In these instances, the implementation teams are trying to reconfigure lines around those monuments. Fortunately, most teams are succeeding at least in minimizing their disruptive impacts.

Human obstacles existed as well, but they have been easier to move. As a union shop, Gwinner’s one-time cadre of 900 hourly employees was initially leery of the process.

“There was some resistance to start with because we were focused on process cells,” Volk explains. “We would make some process improvements in one area but they would not be visible to people working in other areas; they would see that area but not the larger vision. As we gradually came more into line with our vision — and as we communicated it again and again — the hourly employees began to see that vision, too. They began to buy in and take ownership of it.”

Oracle to the rescue
Compounding the issue, Bobcat’s haphazard physical expansions were matched by equally discrete control systems.

“You’ve heard the saying, ‘All problems flow to assembly,’ ” Antrim says. “We can really appreciate that here. Because of the way we were laid out and the complexity of our processes and products, it was very difficult to identify root causes of problems without a lot of analysis. I had to go through umpteen computer screens to figure out if the plant was running OK. It flew in the face of all the principles of Lean.”

In early 2005, Bobcat began migrating to an Oracle ERP system, which includes predictive maintenance modules. Maintenance mechanics now learning the system and maintenance manager Rodney Cary looks forward to the day when the system can automatically generate work orders based on programmed PMs.

Some process changes have also been driven by ISO documentation requirements. Beginning in early 2004 Bobcat’s governance team began tracking causes of lost throughput. To their dismay, machine uptime was one of the two main causes. Just by becoming more aware of and focusing on that problem, the maintenance team was able to drop machine uptime completely off the list of the top five lost throughput causes by the end of the year.

In fact, the focused awareness and cross-business-unit communication of maintenance issues has created improvement faster than management imagined. As maintenance improvements accumulate, their results are beginning to compound. According to Cary, merely announcing that maintenance teams were going to phase in more scheduled maintenance activities, other business unit leaders volunteered help in scheduling, which has led to immediate gains. In the first two months of 2007, Cary estimates that scheduled maintenance grew roughly 15 percent just by taking those initial steps.

“Once we started, our scheduled maintenance workload rose almost instantly,” he says. “Working with the business unit managers and explaining that what we are trying to do will help them over the long term to ensure that their projects are completed on time has made a big difference.”

The progress continued; in 2006, Bobcat maintenance teams adopted three leading tools of predictive maintenance; thermal imaging, oil analysis and vibration monitoring.

“We use our Flir system to conduct infrared imaging analysis on electrical panels, motors and gearboxes, heat losses in the drying ovens to determine where we need to reinsulate, and even to track down roof leaks, which have plagued us for years,” Cary says. “Our paint line is the lifeline of our system; if we don’t have the paint line running, we can’t deliver parts to our internal customers in assembly.”

Cary’s maintenance teams now perform oil analysis on a six-month rotation. “It helps us watch for acid buildup or iron or brass particle contamination that would indicate a gearbox is going bad.”

And, since these technologies are new tools for the maintenance teams, they conduct before-and-after testing, “to see how we improved that piece of equipment and what difference it made after we did the work.”

New equipment and fixtures are everywhere, many bearing the logo of Ingersoll Rand, Bobcat’s parent company since 1995. Has that relationship required Bobcat to buy “house brand” tools and equipment?

“Having Ingersoll Rand as our parent company definitely added value,” Volk says. “But even before they bought us, almost 70 percent of the hand tools, pulse tools, and nutrunners used in this plant were IR. Before IR came along, we had a very good relationship with our distributor and we still do. We have good service agreements, parts availability, and they’re good tools. So we continue to buy through our distributor.”

Closest to the customer
“We’ve mentioned internal frustrations prior to the change but there are external frustrations as well — we’re all here to serve the customer,” Volk says. “In this organization, the closest thing to the customer is the assembly process. From a flexibility standpoint, we couldn’t anticipate or act quickly enough to what the customer was demanding within those platforms. It was very difficult to meet those demands, but changing to this vision has flipped it 180 degrees.”

Today, Volk says, Bobcat is beginning to reap the benefits of its vision and its newfound ability to rapidly flex people, equipment and processes to meet customer demand.

Falling into place
The prognosis is promising. Even though a market downturn has challenged the company to produce dramatic results in a less than favorable environment, Bobcat’s transformation from unlinked process to linked product cells and from reactive to predictive maintenance is working. The small loader line became fully functional in May 2006, followed by the large loader line, which went live in January 2007. The medium loader production line will be completed this year.

“Next we have to start moving the upstream processes,” Volk adds. “The weld process has now moved within sight of the assembly process. The boom, frame, Bob-Tach and ROPS (Rollover Protection) welding service is common to all platforms, so it will eventually become part of the ‘Standard Parts Supply’ business unit.

“It’s like a chess game: I don’t want to move this process until I’ve got a product line set up from fabrication all the way to final assembly that you can see,” he says. “And it’s visible: I can see it. I can trace a problem to its root, address it and get it to flow. You start with the customer and you move upstream in the processes, getting them to line up to that vision.”

“We’re seeing results,” he adds. “We have increased quality, reduced early-hours nuisance issues and improved lead time from order placement to receipt.”

If the housing market recovers as quickly as experts hope it will, Bobcat will emerge more lean, more agile, and much better able to flex its workforce to keep them where they belong — on the job.

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