Project of the year

This award-winning supply chain collaboration has helped a major auto supplier “lose” 14,000 pounds of hazardous waste and increase productivity for a net savings of more than $250,000 a year. Here’s how they did it.

by Rich Vurva and Tom Hammel

To paraphrase Donald Trump, trust is “huge” in manufacturing. It’s tough enough to tell who you can trust outside your plant walls, but if trust is an issue inside the plant, too, well, you’ve got problems. What if finance doesn’t trust production to purchase wisely? What if the home office is slow to develop confidence in a remote facility’s management team? What if the home office is in another country? It’s a legitimately tough nut to crack.

A case in point is DENSO Manufacturing Athens Tennessee Inc. (DMAT), which produces automotive fuel injectors for Toyota, GM and other carmakers. When the parent company from Japan opened the DMAT plant, it brought equipment, personnel and suppliers along to help it hit the ground running.

This meant that for the first few years of operations, critical operations at DMAT were supplied with MRO products from Japan. Even if equivalent products were available in Tennessee, in order to maintain the quality of products coming out of the new plant, DMAT’s home office had no choice but to stick with the processes and products that worked in Japan.

Injecting new life
To build fuel injectors, DMAT uses large automatic lathes to machine fuel injector components out of stainless steel. When the machining process is complete, workers take the finished components and dip them in a cleaning solution to remove residual cutting tool oil. But this process created unique problems.

First, because the cleaning solution is considered a hazardous material, the dip washing process generated about 14,000 pounds of hazardous waste per year that had to be disposed of.

In addition, cutting oils and gear oils in the lathes become mixed during machining. The cutting oil has a lower viscosity than the gear oil. Eventually, the viscosity in the cutting oil rises too high and all of the lathe oils must be drained so new oil can be added. Each lathe contains about 220 gallons of cutting oil, which had to be replaced every 12 weeks.

Through a relationship with a local distributor, DMAT production engineering supervisor Aaron Cross believed he knew a better way. He just needed permission to try it.

“After three years or so of working with our Japanese management and learning the DENSO philosophy, they began to gain a level of trust in our abilities,” Cross explains.

He invited two U.S.-based suppliers to help him come up with a solution. Working as a team, Doug Strait, regional manager for Hangsterfer’s Laboratories, a metalworking lubricant manufacturer, Kevin Wilson, for local cutting tools distributor Major Tool Company, and Aaron Cross came up with a solution that was not only more environmentally friendly, but also improved DMAT’s manufacturing productivity. DENSO Japan agreed to give it a test shot.

The team began by replacing the harsh cleaning solution being used at DMAT with Hangsterfer’s Ozonic brand cleaning solvent, which is free of chlorine and ozone depleting chemicals. The change eliminated the need to periodically dispose of hazardous waste and used oil, which saved about $800 in disposal costs per year. (Strait says disposal costs can run as high as $125 for a 55-gallon drum.)

Improvement, phase two
So far, so good, but the Ozonic cleaner was just part of a larger system, one that would require a much greater commitment from DMAT.

DMAT evaluated and ran with the ozonic cleaner for two years before DENSO Japan agreed to allow DMAT to do a limited test of another Hangsterfer’s product, Hard Cut cutting oil. This oil not only promised tool life improvements, it was also compatible with the cleaning fluid already in use.

“We were able replace a hazardous solvent with a mild one,” says Major Tool’s Kevin Wilson. “And better yet, when that solvent was ready for disposal, we could simply toss it back into the machining oil.”

The chemical compatibility of the new cleaning fluid and cutting oil meant DMAT could recycle the spent cleaning fluid back into each lathe’s cutting oil tank, where it would be burned off during the machining process.

“The previous cleaning product was also leaving some oil residue on the machined parts, which was contaminating the secondary aqueous cleaning process,” Strait explains. “Our ozonic cleaner removed much more of the oil residue, which made DMAT’s secondary aqueous process much more efficient, so that also lasted longer and produced less waste.”

But, mindful of the fact that you don’t just say “oops” to a customer like Toyota, DENSO management demanded more than feel-good assurances that switching cutting oils would not negatively impact product quality. DENSO wanted proof.

Mountains of data
And DENSO made it clear it would wait as long as necessary to collect it.

“Hangsterfer’s promised their Hard Cut oil would last a full year in our milling machines before it needed to be changed out, so our parent company decided to conduct a one-year test,” Cross says.

DENSO also restricted the test to one phase of production in one area only, a fuel injector body valve.

“The first thing we had to do when we put the oil into the system was do a quality confirmation,” Cross continues. “We ran parts to each tool life interval to make sure no tools were adversely effected. The parts produced in the testing phase were held back for capacity studies to confirm that our cutting tools were maintaining their capability with the new oil.”

If a particular cutting tool had a 2,000-part capacity and it produced 5,000 parts, the additional parts underwent capability studies, too. Mountains of data were collected.

Throughout the test year, capability studies were conducted biweekly at first, then monthly. While Hangsterfer’s and Major Tool reps tested oil samples, DENSO required regular proof that the fluids were not effecting product quality.

“Cutting oils always promise that you’ll see a tool life increase if you switch to their brand,” Cross says. “Fortunately, Hangsterfer’s oil did what they said it would.”

In fact, Cross notes that a large portion of the savings generated by the test program came as a result of reduced tool breakage.

“With our old oil, we expected a certain percentage of tool breakage from day to day, but during the test we went for three months without breaking any tools,” he says. “When we switched to the new oil, that cost savings just compounded.”

Once the reams of data were analyzed and DENSO was satisfied with the results, it allowed the entire DMAT plant to switch over to the new cutting oil.

Now, the waste stream is reduced to zero because contaminated cleaning solution is recycled into the cutting oil.

Added benefits
The addition of the Ozonic product also reduced the viscosity in the cutting oil tank to the proper range needed for cutting performance. The change extended oil life in the lathes from four to six months to 12 to 14 months. DMAT estimates that it will consume about 50 percent less cutting oil as a result of the new approach.

The primary benefits of the new closed loop system included eliminating disposal fees and lowering labor cost because cutting oils are changed less frequently. In addition to savings realized by reducing hazardous waste, DMAT also saw a marked reduction in tool breakage.

Stabilizing the viscosity in the cutting oils used on the lathes made the machines to run cleaner, which provided better protection to the cutting tools. The better quality oil reduced tool breakage by $.0075 per piece, for a total savings of about $4,500 a month.

Hangsterfer’s, Major Tool and DMAT worked together to create new manufacturing processes that save DMAT thousand of dollars per month.

“They were dumping and recharging oil every six months with the competitive cutting oil because its viscosity climbed as a result of the tramp oils getting into the system,” Strait explains. “Over a period of several months, the viscosity would climb to the point where they were breaking tools and having surface finish issues on their parts.”

Ongoing tests conducted at DMAT demonstrate that cutting tools are showing fewer signs of wear and lasting much longer today.

Green with pride
As a result of their efforts, Hangsterfer’s Laboratories and Major Tool Company received the 2007 American Eagle Value-Added Partner Award from the Industrial Supply Association. In addition, DENSO also won the Tennessee Pollution Prevention Partnership Award from the Tennessee Department of Environment and Conservation, and the Tennessee Chamber of Commerce & Industry award for outstanding environmental accomplishments.

“Being recognized by ISA and the state of Tennessee are great honors for Hangsterfer’s Laboratories,” says Leslie Jones, Hangsterfer’s president. “To be able to demonstrate a case study like we had at DMAT epitomizes what we’re all about — bringing value-added solutions to the market.”

Open to possibilities
Although DMAT’s 550,000-square-foot plant has not been expanded since 1999, continuous improvement projects and equipment upgrades have allowed its production capacity to more than double since then. Plus, in the same space, DMAT plans to add 11 CNC and spindle lathe machines each year for the next four years. Each new machine will start out with a fresh charge of Hard Cut oil.

As the U.S.-based plant of a Japanese parent company, DMAT is well versed in continuous improvement philosophies and tools. Now it also has the confidence of its home office to pursue aggressive improvement initiatives.

In its turn, DMAT has gained confidence in both Major Tool and Hangsterfer’s Laboratories. So the next time Kevin Wilson and Doug Strait come calling on Aaron Cross at DMAT, the relationship will be in place to move things forward more effectively.

This level of trust between channel partners is essential if companies truly want to gain maximum momentum from each other’s expertise.

“The key to the success of this project was that a large production company kept an open mind when their vendors and distributors brought new process improvement ideas to them,” Strait says. “But we realize this is a very difficult thing. When you’re supplying parts to Ford, GM or Toyota, whenever you change anything in a clearly defined process you have to do a tremendous amount of testing to document and justify your case. Many companies simply say, ‘It’s just not worth our time.’ ”

Worth it
Fortunately, the rewards of pursuing improvement can far outweigh the cost of the work to achieve them. The more than $250,000 in annual savings from this team effort of Hangsterfer’s, Major Tool and DENSO is proof that channel partners can do great things if they simply work together. By any standard, that’s a pretty good payoff for being open to possibilities.

This article appeared in the October/November 2007 issue of MRO Today magazine. Copyright 2007.

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