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2019 | Annual Report

Executing Our Strategy

Manufacturing
Smarter, Not
Harder

In Victoria, Texas, thousands of large hydraulic excavators, including the 336, 349 and 352 roll out of the Caterpillar manufacturing facility annually. With this level of volume, working toward greater operational excellence has translated into significant cost and productivity improvements for this prime product facility.

Building an excavator is a complex process. To simplify the main assembly process, Victoria assembles major structures on small sub-assembly lines. For example, the front of an excavator has two large structures that connect to the core of the machine: the stick and the boom. In early 2019, Victoria had two sub-assembly lines, one for assembling booms and another one for assembling sticks.

Two shifts of employees worked day and night on each of these lines. A tremendous amount of floor space was required to conduct the sub-assembly operations and store enough components and work-in-process inventory to adequately supply the main assembly line, which operates on one shift. During peak production times, there was significant in-process inventory on the booms and stick line.

As the facility began to reach record-high production volumes, it was clear that process efficiency needed to improve to allow faster flow of parts with less excess inventory and storage space. But with large buffers in place across most of the floor space, doing something as simple as moving parts around made achieving the “right part, right time” Lean principle nearly impossible.

Identifying ways to improve

Leaders at Victoria knew they had room to improve and focused on Lean manufacturing principles to help them achieve their goals. They found other Caterpillar facilities that had successfully simplified their assembly workflows, such as Xuzhou, China; Akashi, Japan; and North Little Rock, Arkansas, U.S., and shared those success stories with the Victoria team.

“When we first started talking to employees about eliminating buffers and consolidating sub-assembly lines, no one thought it was possible,” says Chris Heitzmann, Victoria factory manager. “But once we showed them that other facilities were doing it, people immediately started to say, ‘If they can do it, we can do it even better.’” Strong teamwork and global collaboration, along with a little friendly competition, had emerged.

Victoria team members were trained on Lean principles and then put them into practice daily by implementing continuous improvement ideas that simplified work and eliminated waste. The facility conducted hands-on simulated work environment training, which helped team members identify inefficiencies and work together to reorganize the line to increase throughput. The leadership team also implemented a daily leadership process improvement dialogue to enable continuous improvement to happen quickly.

A Lean boom and stick assembly line

Through these activities, Victoria made several important changes. The supply chain and logistics teams worked together to organize parts into kits and present them to the line so that assemblers had everything they needed within arm’s reach. The manufacturing engineering and operations teams collaborated to redesign the stick and boom assembly process to optimize parts flow and provide all assemblers with safety training and coaching on the new procedures.

In less than six months, Victoria saw positive results. By applying Lean principles, the facility was able to consolidate two separate boom and stick assembly lines into one single line and assemble more booms and sticks with fewer and shorter shifts. With more reliable cycle times, they reduced their buffer, freeing up floor space and improving machine availability for customers. As a result of these and other improvements, Victoria was among the top producing operating profit after capital charge facilities for Caterpillar within North America in 2019.

The Victoria facility’s Lean efforts don’t stop there. Dozens of Lean projects were completed in 2019, with many more on the horizon for 2020 and beyond. Constant dialogue and discussions around Lean have prompted a shift in mentality and work culture, which is critical for making Lean initiatives stick.

“While Lean is often focused on efficiency improvement, what it’s really about is providing value to our customers,” says Alan Yang, Victoria facility manager. “Lean helps us deliver machines to customers on time and defect-free, providing them with the best solution to build a better world. Exceeding our customers’ expectations is why we focus diligently on continuous improvement all day, every day.”