Intermet Corporation ÔÇô Die Cast Group

Improving to thrive Despite dark times for much of the industry, Intermet Corporation believes the next 18 months will be bright ones as it continues to reap gains from lean manufacturing and related initiatives, Keith Regan reports. As a major supplier to the automotive industry in the United States, itÔÇÖs easy to imagine Intermet Corporation girding for the worst.  As automakers such as Ford and General Motors shift production and cut costs, the outlook might be expected to be grim for a downstream supplier such as Intermet, which supplies aluminum, magnesium and zinc die-casting and molding products to those OEMs as well as some tier two suppliers. In fact, the outlook at this division of IntermetÔÇöwhich also has a ferrous-metal casting division and a third that makes pressure-counter-pressure castings (PCPC)ÔÇöis anything but dour. ÔÇ£We see a lot of work coming online in 2009,ÔÇØ says Bob Axe, group president of IntermetÔÇÖs Die Cast Group. ÔÇ£WeÔÇÖre very optimistic about our position in the marketplace.ÔÇØThat optimism is driven by a couple of factors, according to Axe. For one thing, Intermet, like some other US-based manufacturers, is seeing a benefit from the low exchange rate for the US dollar, with several key customers moving production that had been taking place overseas back into North America. Perhaps more important, however, has been the combined impact of lean manufacturing and six sigma efforts aimed at comprehensively improving processes and streamlining operations at the division. That effort got under way even before Axe was tapped to head the division early in 2008, bringing more than two decadesÔÇÖ worth of experience at the North American arm of Honda to the job. The lean initiative began as a result of the efforts of IntermetÔÇÖs Board of Directors and Advisory Board, which includes top executives from across the automotive world, with companies such as Toyota, Hyundai and Honda represented. The board tapped outside consultants to come on board and begin the lean program. This was embraced by workers at all levels of the company, which had been through a bankruptcy re-organization in 2003 and was eager for a fresh start. ÔÇ£It started as a project-driven exercise, but itÔÇÖs really starting to become part of the culture,ÔÇØ says Axe. ÔÇ£Having been at Honda for 24 years, I can see that itÔÇÖs working like itÔÇÖs supposed to work.ÔÇØThe Die Cast division did more than $100 million in sales last year. It recently reduced its footprint from six plants to five, closing a plant in Pulaski, Tennessee. A nearby plant in Jackson, Tennessee, will likely grow over time, with capital investments aimed at expanding the capacity at that facility. Other Die Casting plants are in New Hope, Minnesota, and Monroe City and Palmyra, Missouri. The lean culture is taking root throughout Intermet, which recently saw first-hand how the facilities in the ferrous division have been revamped to eliminate waste. ÔÇ£They are very well run,ÔÇØ says Axe. Axe says he knew the lean efforts were taking hold at the all-important shop-floor level as he visited the divisionÔÇÖs plants shortly after taking the helm. ÔÇ£When I go on tours of the various facilities, the people explaining the projects arenÔÇÖt management; theyÔÇÖre the employees who work on the shop floors. You donÔÇÖt create the culture from the top down; you do it from the bottom up, by enabling people to see the value of what they do. If they can see that they turn things 500 times; they unload a machine and walk twenty feet and then cut that down to three feet. If you correlate that to dollars and cents and take it out over the course of a year, youÔÇÖre talking real money.ÔÇØ The other benefit is that the associate can go home less fatigued than before because of the reduced the physical work required to do the job.Eliminating that kind of waste is essential because ÔÇ£customers arenÔÇÖt willing to pay for that anymore,ÔÇØ Axe adds. ÔÇ£And they shouldnÔÇÖt have to.ÔÇØEach plant in the die-cast division has multiple green belts moving lean forward, and a full-time lean coordinator has been hired at the corporate level. ÔÇ£Right now, instead of focusing on trying to train the masses, since weÔÇÖve gone through some organizational changes, weÔÇÖre really focusing on whatÔÇÖs needed at each position. We realize we donÔÇÖt need to teach everybody everything, so weÔÇÖre using a stepped approach to train and teach people what they need to know to keep us moving forward,ÔÇØ says Axe. Early projects focus on eliminating travel time, reducing lead time and cycle time, locating parts and products closest to the machines where theyÔÇÖre worked on and creating maximum efficiencies. For instance, reducing die-change times alone can drive significant cost savings. ÔÇ£If you can reduce die-change times by an hour, thatÔÇÖs an hour more of productivity and profitability the company can achieve,ÔÇØ Axe notes. While the classic low-hanging-fruit scenario is often referenced in terms of early lean achievements, Intermet has those first rounds of changes in perspective. ÔÇ£The gains are really huge in the beginning,ÔÇØ Axe says. ÔÇ£At the same time, the more you understand, the more you can see, the more your eyes open to the possibilities. In the end, itÔÇÖs the incremental things that make the biggest difference. The big things are easy to spot, but the hundreds of incremental things are where the real gains are made; thatÔÇÖs what separates good companies from great companies that really get it. When you get everybody involved in small activities on the shop floorÔÇöthings the president isnÔÇÖt even aware ofÔÇöthatÔÇÖs when itÔÇÖs working the way itÔÇÖs supposed to.ÔÇØIntermet Corporation has a capital budget of about $8 million to invest in new equipment to assist with the process improvements across the division. ÔÇ£Based on what IÔÇÖve seen in my 24 years in the industry, I can say that weÔÇÖre very much on track to be in a leading position in 2009,ÔÇØ he adds. ÔÇ£The companyÔÇÖs really focused on regaining our world-class advantage. In 2009 youÔÇÖre going to see the benefits of that commitment.ÔÇØ┬á