Management style adapts to change

Automotive OEMs in the U.S. are accelerating the pace of change in their industry. Tier One and Tier Two molders who thrive tend to be the ones who can best adapt. Underpinning this flexibility is a management style that works in a dynamic environment. A case in point at NYX Inc.'s Plymouth plant and corporate headquarters (Livonia, MI) offers guidelines that apply not only to automotive but to any market in which rapid change is king.

IMM first contacted the growing Tier One supplier to find out how it manages a culturally diverse group of employees. Recently, we revisited CEO Chain Sandhu and other managers at the facility to find out how their operations have shifted as a result of the company's growth, QS 9000 implementation, and the dynamic swings of the automotive industry.

Last September, NYX received the Supplier of the Year award from the Michigan Minority Business Development Council in its category--companies with more than $10 million in annual sales ('98 sales reached $70 million at NYX). A month later, the company received QS 9000 recognition at all seven of its plants, the culmination of a two-year effort. According to Sandhu, the company's move from its earlier entrepreneurial phase to a system-dependent operation requires training and a commitment to sticking with its predetermined business strategy.

"We must commit resources such as product development, engineering, and equipment to the products we see as part of our core competency," says Sandhu. "All component suppliers such as NYX are now in the process of defining what they feel are their areas of expertise. For example, we have a large engineering department, assembly and tooling capabilities, and a decoupled molding approach for our molded parts. We need to take that expertise, apply it to other customers, and keep adding value. Five-to-ten-year forward planning projections help ensure that these decisions become reality."

Playing-field changes in automotive are putting more responsibility on component suppliers, who now quote jobs off the current model year, then work together with Tier Ones and OEMs on the future design. Sandhu outlines the new industry structure as follows:

Embracing Change

One of the ways NYX is keeping pace with OEM customers is by implementing a strategic equipment replacement program. All presses 1000 tons and larger have been replaced with new Ube equipment. Also, a new Cincinnati Milacron Elektra machine contains autoweigh indexing to automatically scrap any parts that are out of spec. New Mitsubishis have replaced the 300-ton and smaller machines. In the next phase, all 300- to 1000-ton machines will be replaced with new equipment.

Another major emphasis involves decoupled molding. Plymouth plant manager Dwain Dumas explains, "One of our major projects is a front step pad for a large GM van. Prior to the switch to decoupled molding, we struggled to mold 219 parts per shift on a 1500-ton Ube. Now, most of the work is done in fill, pack, and hold phases, and we are getting 270 per shift without breaking a sweat." Making the switch meant consulting with RJG Assoc. and General Polymers, purchasing a Dartnet closed-loop control system, and installing cavity pressure sensors on the mold in addition to digital cameras for part quality inspection.

Quality Benefits

Dumas also credits QS 9000 procedures for boosting productivity by eliminating inefficiencies. Sandhu adds, "Selling to anyone in the automotive industry without it is a nightmare, and the benefits to our organization have made it even more essential." Implementing the procedures helped NYX keep its focus squarely on its systems--molding machines, engineering, and assembly, for example. Audits performed every six months ensure that the vision stays clear.

"Information is now in an easy-access format," he says, "so managers can keep track of both internal and external goals. At NYX, general managers develop stretch goals, targets beyond what they think they can achieve, in order to raise expectation levels. QS 9000 has motivated us to do better, maintain our goals, and move ahead."

At the employee level, commitment to the new procedures was greater than expected. "It took some time for 'inculturation' of the process," adds Sandhu, "but now that we have a common system, our people love it."

A common system is no easy task in a plant where four languages--Arabic, Punjabi, Hindi, and Tamil--are spoken in addition to English. To that end, a quality operating systems board keeps everyone informed about measurables, such as purchasing, delivery, scrap rates, and target rates. In assembly areas, graphics-intensive instructions in two languages also ensure good communication.

Customer Dynamics

Jay Sandhu, who is CFO, believes there are several critical goals beyond QS 9000 that suppliers must meet to become a strong player in the automotive industry. "One of them is whether or not you have the resources to give OEMs the services they need," he says. "For example, OEMs and Tier Ones no longer want to manufacture. Their goal is to outsource subassembly, design, even resin purchasing at times. To do that, suppliers need larger capacity and a strong engineering team."

For future growth, he recommends defining product niches now, and setting aside the financial and human resources necessary to make that happen. "We had expertise in glovebox latches, for instance. Building on that, we are now handling entire glovebox programs, including molding, assembly, and metal stamping."

This trend offers major opportunities for engineering-oriented Tier Twos and suppliers. "We're being asked to source parts, buy resin, quote a rough design before we see it, finalize the design, and negotiate pricing through it all," he adds. "We are opening design centers in India and Windsor, ON as a supplement to our center in the Livonia headquarters to meet these needs."

More team engineering may also take the form of colocation, in which suppliers make parts at the customer's plant. "MCC's Smart Car is a prime example," he says, "but it is happening worldwide. We are now implementing such a program with a Tier One supplier in Louisiana to support production in Brazil."

Also see related article published in August 1997, Motivating a skilled workforce