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Remarks by Bill Taylor
President and CEO, Mercedes-Benz U.S. International, Inc.
Automotive News Manufacturing Conference
Birmingham, Alabama – June 14, 2005
(Spoken word prevails)
Good morning ladies and gentlemen.
And thank you to Peter Brown and Automotive News for bringing this event to Alabama for the third time.
I remember when Automotive News was thinking about bringing the conference here for the first time. Alabama was still relatively unknown in the automotive world. But much has changed in just a few short years. We’re glad you’re all here.
As Hans Weingarten just shared with you, we are extremely proud of the growth we’ve experienced in Tuscaloosa.
Our recent plant expansion was driven by the success of the first generation M-Class and the growth of our product offering to include the new R-Class.
Now, with two product families being built in Tuscaloosa, it was necessary to design our new and expanded plant in a way that is flexible and responsive to market demands.
In my remarks today, I’d like to walk you through how we have designed our new plant to support multiple products while, at the same time, preserve our unique corporate culture.
I’ll also touch on our production process, the role of the supplier, and the importance of a trained workforce, probably the key to any company’s success.
Plant Design & Layout
Back in the early ‘90s, when we were designing our original plant, we decided that all three shops – body, paint and assembly – would be under one roof.
This enabled us to take a holistic view of operations, rather than an individual shop approach.
Under one roof allowed us to connect processes and people and assure the easy movement of parts, product and people.
And it also made visual management much easier and more consistent.
This was not only critical to our production system philosophy, but it was also consistent with our “one team” and “open communication” corporate culture.
You see on the screen the way our plant looked through the first chapter of our life – before our expansion was complete in late 2004.
(Photo of original plant on screen.)
The orginal plant sat on about 300 acres and was approximately 1.2 million square feet. You can see that everything was under one roof.
(Photo of original plant in build-up.)
We’re following that same “under one roof” approach with our new and expanded plant.
You see where we added our second paint shop.
(Photo of new paint shop in build-up)
And, our expanded body shop, which links plant one and plant two.
(Photo of body shop in build-up)
The body shop feeds into both plant one and plant two paint shops, utilizing one common final line in the middle of the shop.
And, finally, you see on the screen our second assembly shop.
(Photo of assembly shop in build-up)
We now have more than three million square feet -- still, all under one roof.
Today, this is what our site looks like.
(Photo of aerial shot).
A one billion dollar investment, not including tooling.
This plant layout creates a platform to better accommodate our varied model mix to meet customer demands in 135 markets around the world.
Production System
From the beginning, MBUSI had a production system in place.
Today, that system is part of the Mercedes Production System, as Mr. Weingarten already discussed.
One key component of our production system that assists us in achieving higher flexibility isour “Just In Sequence” deliverysystem which fully integrates our suppliers with MBUSI’s production system.
This system enables us to support flexibility on line and also drives our suppliers’ manufacturing process, since we are so closely aligned.
Our suppliers are an extension of our business. In fact, about 75 percent of our vehicle is built by the supplier. That means we need a close network of communication. That’s why almost all of our in-sequence suppliers are located within a 40 mile radius of our plant.
In addition, our information technology systems must be tied together. And our organizations also must mirror one another.
For example, MBUSI has supplier quality engineers at our Tier 1 suppliers. They work together with the supplier to assure quality and delivery targets. At one time, these teams were looked upon as “supplier development” groups. Today, it’s known as our daily work, since our suppliers have become true extensions of our business.
Organization
Twelve years ago, when we were the first automaker to locate inAlabama, people asked:
“How will you do this?”
“How will you take people who never before built an automobile and be assured they can build a Mercedes-Benz?”
Well, we did and we are. However, it’s a never ending task.
You must constantly train and develop your organization to meet the constant changes and challenges of our industry.
In the mid-‘90s, when we were first setting up our operations in Alabama, we sent about 150 American team members to Germany to train on the line in our Sindelfingen plant.
When they came back to Tuscaloosa, they – along with 70 German trainers – became multipliers and trained the rest of our organization.
For our expansion, we followed the same process, only the number of team members moving across the Atlanticwas larger and the stages of their work were more complex.
About 300 of our American team members that worked on the first generation M-Class went to Germany as part of ramp up teams. They worked with their German counterparts on the development of the new vehicles, to assure a smooth integration and transition between development and the production process.
These ramp up teams were product specific – one team for the new M-Class and one team for the R-Class – and were made up of individuals from engineering, development and production.
One of their major assignments was working on the Null Series for each of these product lines.
Null series is the first phase of our new product build. It takes place in Germany, where research and development is located. It assures the design concept of the product can be manufactured in series production.
Team members from Alabama, working with German colleagues, are required to find resolutions to issues, prior to moving a vehicle from the development stage to the plant in Tuscaloosa.
The next phase is our Engineering Trials, and they take place at our plant in Tuscaloosa.
They carry the knowledge from Null Series, and are supported by our partners from Production Planning in Germany.
Engineering Trials are the final process confirmation of equipment and processes involved in building the vehicles.
Finally, we run a series of Production Trials that confirm our ability to build customer-ready vehicles. They validate equipment, processes, parts, and the training of our workforce.
Our suppliers run similar trials at their plants.
During Production Trials, our ramp up teams went from 200 to 500 people involved in the process.
For both the M-Class and R-Class, we ran three production trials and built some 400 vehicles.
Current Status
As you know, we are in the midst of launching multiple products at our plant.
Therefore, we’re only building about 400 vehicles a day in our two plants.
We’re building the M-Class in both plants, since it’s our volume leader.
The R-Class is being built in Plant 2. Currently, we are working two shifts in Plant 1. In Plant 2, we are currently working one shift, but will be going to a split shift later in the summer.
And we’re fortunate to be working overtime to meet the strong demand for our new products.
Our workforce today is about 4,000 team members, including 300 Germans.
People Factor
No matter how technologically advanced a plant is or how sophisticated our products are, the most important component of any company’s success is its organization.
In other words, it’s people. People still build cars. And hard-working and motivated people keep your organization alive and competitive and continuously improving.
I have a saying…MBUSI does not hire any industrial engineers. Rather, we have 4,000 quote “industrial engineers”, because each of our team members plays a role in problem solving and continuous improvement as part of their daily work.
That’s a vital part of MBUSI’s culture. And, we believe, that’s been the key to our success.
Closing
I hope you enjoy the conference and your visit to Alabama. As Mr. Weingarten said, Alabama has proven to be a great place to do business. In addition, it’s a great place to call home.
We hope that Automotive News brings you all back here again for another manufacturing conference. And that I’m at home and able to join you personally.