Focus: Europe Plant Tour: Czech auto supplier takes fast track to world-class title

Editor's note: Four years ago Injection Molding International visited TRW-Carr's molding operation in the Czech Republic. Given the rapid expansion of business in Eastern and Central Europe, we checked back to see how the company was doing. Since our last visit, TRW-Carr has expanded from 26 to 32 molding machines, and the top of the range rose from 220 to 1000 tons. The company went into lean manufacturing in 2000 and it shows. Productivity has increased dramatically, the amount of resin processed has tripled, and the number of parts and assemblies has doubled. Still, the number of employees is about the same now as it was in 1997. 

In 1989, socialism ended in the Czech Republic. Three years later, U.S.-based multinational TRW bought an existing molding plant in Mladá Boleslav, about an hour by car from Prague. It employed 31 people in a small building with six molding machines. The average age of the machines was about 20 years. Pavel Zikmund, who is now production manager, says there had been no real product or market focus. The company made agricultural tools, toothbrushes, and packages. All of the products did have one thing in common: They were not very technical. 

Since its own products are virtually all technical, primarily automotive assemblies, TRW immediately started replacing the old machines. There are now 32 machines, ranging from 35 to 220 tons, all Arburgs but the four largest, which are Demags. The average machine age is down to less than eight years, and falling. 

Customer Access 
Location, location . . . strategic location. In making the acquisition, TRW could not help but notice that Skoda's largest automotive assembly plant was but a few kilometers away in Mladá Boleslav. As Skoda became the facility's first major auto customer, this plant stopped being a generalist and became a specialized automotive systems supplier. Over the years other customers have been added--Audi, Renault, Volvo, and a number of Tier One suppliers. 

In the beginning, says Zikmund, the parts were simple things, such as the clips and fasteners used in auto assembly. Many of these were moved from other TRW plants in Germany. The parts had to be simple due to the relatively low level of engineering skill, but that was something that would change fast. Zikmund says being part of the TRW group was and is a huge advantage. 

The established TRW plants in Western Europe, particularly the Enkenbach, Germany headquarters of the Engineered Fasteners & Components Group, were immediately and completely supportive. Czech employees spent much time in other facilities learning proper molding methods and techniques. At the same time, employees from Germany came to work in Mladá Boleslav. This interchange was the fuel that accelerated the increase in skills needed to compete in the auto market, says Zikmund, and led to improvements on both sides. 

Labor Costs 
Cost of labor in the Czech Republic is around DM 9/hr, less than US$ 5.00/hr. That makes the company extremely competitive for assembly-intensive products. Zikmund says the more complex the assembly, the more competitive TRW-Carr is. However, that is not enough. Auto OEMs want it all: quality, reliability, engineering support, JIT, and ever-lower prices. Notice, though, that price is way down the list. Zikmund says quality is at the top. That, in a nutshell, is why TRW-Carr immediately set about ramping up the techno-quality levels. 

TRW-Carr, like the rest of the molding world, has cost pressures that at least partially offset the lower cost of labor. Automakers want cost reductions of 3 to 5 percent per year, no matter where the supplier may be. You cannot get that out of an already low-cost labor pool. Moreover, labor costs rise as the country's economy improves. The solution is to increase productivity. 

One way TRW-Carr does this is with extensive employee training, tailored to the individual and the application. This includes process control, CNC programming, hot runner system management, and other responsibilities. Zikmund says that the employees, more than the systems or machines, have been upgraded the most. 

Still, Zikmund says finding skilled people in the Czech Republic is not easy, and thus it makes sense to develop them from within. Employees are trained on a variety of technologies and processes to make them versatile. To thoroughly train a person takes about five years, he says. 

Zikmund speaks frankly about the transition from the socialist environment to the free market economy. The employees at first simply did not understand why they should have an orderly workplace, or why timeliness was important throughout the factory. It never was an issue before. Understanding was not always easy, he says, but the employee exchanges provided a perspective that proved very helpful. 

Materials Cost Control 
Raw materials management poses some special challenges in an emerging market. Zikmund says every mold moved from a plant in Western Europe brought material specifications with it. This led to an inventory of more than 120 specified materials, which meant volumes were relatively small and prices were high. It was not unusual to have basically the same material specified to come from four different suppliers. To get a decent price, it was sometimes necessary to buy six months or a year's supply of resin and carry it in inventory. 

The company set a goal of cutting the number of material specs in half. Anyone who has tried that, says Zikmund, knows it is not easy. Another strategy is to find material suppliers that will consign material into a metered silo onsite and bill for monthly consumption. TRW's centralized purchasing structure is a big help in keeping prices steady, and buyers shop on the Internet to compare prices. All of this, says Zikmund with a smile, takes work, but with material as much as 60 percent of part cost on some jobs, it is worth the effort. 

Climbing the Tech Curve 
In 1993, TRW-Carr made six molds, all of them simple, and the tool shop spent most of its time repairing and maintaining molds made by others. When we visited in 1997 the production level was less than 50 molds/year. In 2001, the Mladá Boleslav tool shop built about 100 molds, with some going to other European TRW plants. Complexity has increased even more than volume. Multiple slides and core pulls are standard these days, and the percentage of tools with hot runners has increased greatly. The technology level is even up to making some of the tools for the new two-component machines. 

This growth into complex moldmaking was done mostly through the employee exchanges with more sophisticated tool shops in Western Europe. Now, the 270-sq-m (2900-sq-ft) tool shop operates five days/week with three shifts, and the wire and spark EDM machines work a sixth day unattended. There are two tool designers working on CAD systems today--in 1997 they designed tools on drawing boards. All told, there are 18 toolmakers, plus shift leaders and CNC programmers. 

Out on the production floor, molding operations were likewise upgraded on a fast track. When TRW-Carr began making seat belt assemblies for Skoda in 1995, it was assembly only. Molded components came from Germany. The skills for molding these parts, particularly insert molding, were learned in more employee exchanges. Some technology was also home grown, including a closed loop recycling system that would not undercut TRW-Carr's quality guarantee to customers. 

Among the company's 32 molding machines are two recently acquired two-component Allrounders from Arburg--an 80-ton and a 150-ton. 

Zikmund says the demand for more multicomponent parts for functional or decorative reasons, or both, is clear in the auto business. This also fits with TRW-Carr's strategy of adding value to a part or assembly. This plant's specially developed technology for multipart air ventilation systems made it the center of European production for this TRW flagship product. There are now four foaming/assembly systems specifically for air vents, with a total capacity of more than 270,000 assemblies/week. Air vents are the plant's highest-volume product. 

Full Quality, Lean Manufacturing 
The range of quality programs at TRW-Carr is the best proof that low labor costs are not the determining factor in supplying automotive customers. ISO 9001 certification took place in 1996. VDA 6.1 came in 1998. QS 9000 followed in 1999. ISO 14001 preparations are almost complete. 

TPM (Total Product Management) has been in place at TRW-Carr since mid-2000, which is about the same time lean manufacturing was introduced to the facility. Last year the company began implementing a factory management system from the German supplier Ville System. All machines in the molding room are now monitored; the system is being extended to provide shot-to-shot control of all the molding machines. The foaming/assembly lines for air vent systems will also be included in this control strategy. 

This strict attention to quality, says Zikmund, is what allows TRW-Carr to increase its level of technology. A centralized material handling and conveying system supplied by Colortronic produced such good results on the larger molding machines that it has been recently extended to the small presses. More robots will be added gradually, as will additional machine-side secondary operations. Expansions such as this helped TRW-Carr add $2 million in new business in 2001.