Caterpillar Uses “Value-Stream” Manufacturing to Meet 993K Demand
When Caterpillar introduced the 993K wheel loader in March 2008, mine and quarry operators immediately recognized the machine’s capabilities and placed orders exceeding the company’s expectations. But this good news for Caterpillar was soon tempered by the strain placed on the company’s large-wheel-loader assembly line by adding the 993. Then came the economic downturn, an unwelcome development for all manufacturers, but Caterpillar saw the temporary decline in 993 sales as an opportunity to address the manufacturing situation. In only seven months, the company created not just a dedicated assembly line for the 993 at its Aurora, IL, plant, but an entirely new, integrated production system, a “value stream,” that has become the model for all future assembly-line overhauls.
“The value-stream manufacturing system not only has ample headroom to accommodate future 993 demand,” says Sri Srinath, product manager—large wheel loaders, “but also allows Caterpillar to deliver machines much faster and with even greater quality.”
According to Pat Ryan, value-stream manager for large wheel loaders, the new manufacturing system consolidates all aspects of machine production under a single dedicated team—from the first cut in steel plate to fabricate the frame, through assembly, through paint and on to shipping. Before, says Ryan, each of these operations was handled by a separate group. The value-stream concept, he says, brings a heightened sense of accountability to the machine-building process.
“If something isn’t right,” says Ryan, “we look in the mirror to find the responsible party. Value stream means that customers have a single point of contact with the people building their machines.”
Creating the new system in such a short time, says Srinath, involved three key elements: developing both the facility and machine assembly procedures in a virtual environment before making changes in the factory; the willingness of Caterpillar top management to invest in the 993 despite the economy; and the positive response of employees to accept responsibility for the value stream.
According to Amit Kashyap, manufacturing engineering manager at the Aurora plant, “every square millimeter of the new 993 production area was digitized” in order to precisely plan floor space for streamlined material flow. Then, digital files from the 993′s design engineers were incorporated into the system. With the latter files, Kashyap and his team at the Caterpillar Virtual Collaboration Center (VCC) created “playbooks” for assemblers—step-by-step procedures for installing “every nut, bolt, washer, switch, hose and wiring harness on the 993.” The playbooks presently are used in hardcopy, but soon will be available to assemblers on their own laptops and on a large flat-screen monitor adjacent to the assembly line.
“The assemblers were actually involved in the development of the playbooks,” says Kashyap, “and could visually check if our avatars [simulated humans] were performing assembly operations without banging their heads or elbows or having to stretch beyond their reach.”
The virtual planning system also permits manufacturing engineers to assess production problems, says Kashyap, allowing them to instantly see how the system is affected and, more importantly, how to remedy problems. The VCC group invested in extremely powerful computers—Kashyap calls them “flamethrowers”—to provide this problem-solving capability.
Back in the real world, modifications at the Aurora plant to accommodate the new 993 production system have been extensive, but were quickly implemented, says Ryan, thanks to detailed virtual planning. Changes included moving the 993 assembly line to a different building; relocating the adjacent 994F line; installing three new machining centers (each worth $8 million); installing a push-pull air-handling system to effectively evacuate welding fumes; replacing wood-block floors with epoxy-finished concrete; painting ceilings (bright white); installing new lighting; and equipping the assembly line with specialized handling devices.
“Value-stream manufacturing involves people, quality, velocity [timing] and cost—in that order,” says Srinath. “On the people side, I can’t say enough about the enthusiasm and involvement of our employees in this project. An employee recently asked me if he could paint a mural in the assembly area, because he thought it would convey a good impression to visiting customers. That’s pride, and that’s what will make the 993 manufacturing system work.”
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