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MIT Club NUMMI Tour

The MIT Club of Northern California took a tour of the NUMMI (New United Motor Manufacturing Inc) automobile assembly plant in Fremont. The tour was given by Sarah, a spunky tour guide who previously worked on the assembly line. After a classroom run-down of info about the plant, everyone piled into two amusement-park style trolley trains for a tour of the assembly floor. We got to gawk at cars as they traveled down the assembly line. The tour itself did not include paint or plastics.

The NUMMI plant

The NUMMI plant was originally a GM manufacturing plant from 1962-1982. At that time, a Ford manufacturing plant was just down the road, at the current site of the Milpitas Great Mall. In 1982, the GM plant closed down, leaving 6000 people out of work. Shortly thereafter, the Japanese partnered with GM, and decided to revive the plant with a $450M investment. The plant started operation in February 1984, and has had no layoffs since then. NUMMI is a privately held contractor which supplies cars to GM and Toyota, and operates on the pull system, meaning that cars are built only after they have been ordered. Each car is ordered nine days before it is built. NUMMI manufactures several car models:

• 2003 Toyota Corolla
• 2003 Toyota Tacoma pickup truck
• 2003 Pontiac Vibe
• 2003 Toyota Voltz (the steering-wheel-on-the-right version of the Vibe)

The 2003 Toyota Matrix is identical to the Pontiac Vibe, and is manufactured in Canada.

The plant is big. Really big. To be exact, it's 5.3 Million square feet (211 acres) under roof, equivalent to 118 football fields. Every day, the plant stamps 1 million pounds of domestic steel. The plant has ten 4600 ton Kamatsu stamping machines, and each machine is able to stamp out the side of a car in five seconds. NUMMI manufactures 390,000 vehicles per year. There are two lines: the truck line and the car line.

• The car line is 1.5 miles long, and it takes 6.5 hours for the car to get through the line. 850 cars pass through the line each day, and each car spends 58 seconds at each station before moving on to the next station. Each shift handles 425 cars.
• The truck line is 0.5 miles long, and it takes 3.5 hours for the truck to get through the line. 650 trucks pass through the line each day, and each truck spends 82 seconds at each station before moving on to the next station. Each shift handles 325 trucks.

Each station is about 18 feet long. As the tour drove around the assembly floor, the line workers enthusiastically waved, as if it was the high point of their day to see us drive by. We saw many robots working on the line, most of which were manufactured by Kawasaki. Perhaps the coolest robot was "dunk'n donuts," consisting of a huge arm that submerged gas tanks into a tank of water to check for leaks.

Employees

5500 people work at NUMMI, and 4600 of those are unionized. In order to facilitate cooperation, there are only two pay scales at the plant. In contrast, a typical GM plant has 70 pay scales, which makes it difficult to get employees to temporarily step in and help do a job that pays more.

NUMMI hires people right out of high school at $17/hour. Workers get raises every 6 months, and the hourly rate tops out at $23/hour. The first shift runs from 6 AM - 2:30 PM, and the second shift runs 4:30 PM - 1 AM. Any time in between is overtime. Welders are the most highly-paid.

NUMMI offers great benefits to employees:

• 100% medical coverage.
• 16 paid days off, plus everyone gets election day off.
• $3000 in assistance for books and tuition. Plus, classes are offered at the plants.
• Discounts on the entire GM and Toyota line, which includes Saab, Lexus, Saturn, Hummer, etc. When buying GM cars, employees pay dealer cost minus the dealer kick-back. When buying Toyota cars, employees pay dealer cost (dealers get to keep the kick-back).

Workers are grouped together in teams, where each team consists of 4-6 people from several stations, headed by a team leader. Several teams are grouped together to form 20 person groups. Assigned to each group is an andon board, which looks like a lighted scoreboard, showing the status of each team. When someone in the group needs assistance from a team leader, that person pulls a cord hanging from the ceiling, called an andon cord, which causes the number for that station to light up on the andon board. The andon board also starts playing a melody specific to that group. The melody alerts the team leaders that one of the stations needs assistance, and the team leader for that station swoops into action. The goal is to solve the problem quickly enough so that the line does not need to be stopped. Over the course of a shift, andon cords get pulled an average of about 1000 times. 95% of the time, the problem is solved before the line needs to be stopped. Team leaders make 60 cents more per hour than line employees.

The people who paint are not allowed to wear hair gel or deodorant, otherwise tiny craters will form in the paint.

The Japanese way

The Japanese have instituted several philosophies in the production line:

• Kanban - Just in time delivery of parts. This philosophy applies both to the supply of parts to the factory, and also the supply of parts to each station. Throughout the day, each station is supplied with a steady stream of boxes. Each box holds a 2 hour supply of parts. New boxes full of parts are continually delivered to replace empty boxes. Trailers behind the factory hold a 2 day supply of parts. The port stoppage in San Francisco in late 2002 caused the inventory of parts to run dry for several days. As a result, the truck line was down for 6 days, and the car line was down for 2 days. The NUMMI employees had the choice to take unpaid days, take vacation days, or show up to work and clean the plant. Not all the parts are made from scratch inside the plant: Some parts of the frame are pre-made elsewhere, and then shipped to the plant.
• Kaizen - continuous improvement. Employees can rack up bonus points by making suggestions that improve efficiency. Each idea is evaluated and assigned a certain number of points, and each point turns into a dollar for the employee. In 1999, employees racked up 550,000 points, saving the company $2.2M. One recommendation was to use a very cool collapsible box for parts delivery. After the parts are removed from the box, the box collapses, making is easier to send the empty boxes back to the suppliers.
• Genchi Genbutsu - Go to the source. Employees should get first hand information necessary to do their job by talking directly to other workers and by seeing exactly how things are done first hand.
• Jidoka - Quality in station. Rather than having a dedicated quality control team, the NUMMI plant relies on each worker to perform ongoing, continuous quality control. The idea is to fix defects before a car leaves each station on the assembly line.
• Muda - Waste and inefficiency. By using Kanban, Kaizen, Jidoka, and Genchi Genbutsu, one can avoid Muda.

Normally, it would be difficult to get North American unionized workers to adopt such philosophies. However, the union was game, because opening the NUMMI plant promised to offset some of the 6000 jobs lost by the GM plant closing.