A Lean Management Project at Magna Donnelly

The automotive supplier Magna Donnelly is the world market leader in rearview mirror systems. Like the entire supplier industry, though, Magna Donnelly is under enormous cost and performance pressure. As customers become ever demanding, margins continue to dwindle.

Some 700 employees work at the Dorfprozelten site in the Maintal valley near Würzburg, with revenues amounting to roughly 120 million euros. Though the company had launched in-house initiatives to enhance efficiency, it sought to accomplish greater improvements. Magna Donnelly decided to partner with Agamus Consult. “Rather than theoreticians, we sought consultants who would implement the measures alongside our employees and ensure sustained success," notes Herwig Polzer, Managing Director at Dorfprozelten.

Material flows, warehouse search times, inventory and defects incidence harbored the greatest potential. The project kicked off with a three-week analysis. As a direct result of this analysis, quick-hits were identified and slated for immediate implementation within the next four weeks. Interdisciplinary teams entailing five to six personnel worked on accomplishing various objectives, for example, reducing the inventory required to manufacture mirrors for BMW and reworking flawed parts in the paint line. While a quality assurance team endeavored to reduce the number of defects, another team pored over a tremendous amount of management and control data for the individual production areas to identify critical decision-making benchmarks.
Quick-hits were evaluated every week and presented to the department heads. The immediate successes impressed and inspired employees as well as managers, encouraging a readiness to accept more profound changes.

While these initial workshops were underway, the projects for months ahead were planned and prioritized:

Rework flaws in the flow
To date a considerable share of defective parts reached the production lines from the paint line, only to be disposed of as refined scrap. “With this (old; editor’s note) process, it was at times very difficult to identify external defects in workmanship because suppliers weren’t always held accountable. Though operations continued to run, it was at unnecessarily high cost for us," notes Purchasing Manager Alfred Himml.

Optimizing processes in the paint line was merely one of many measures. Among other efforts, full post powdering quality control was initiated, and a processing cell for immediate reworking was introduced in the production flow. "Now defective products are returned according to the costs-by-cause principle, either to the service provider or the in-house department," explains Bernhold Hagel, Head of the Painting department.
The medium-term goal is to shut non-value adding rework cells down again by leveraging investments in technology, among other measures.

Manufacturing also harbored decisive improvement potential: The company created transparency regarding processed and unprocessed parts in the flow, reduced the amount of rework, eliminated haphazard storage areas, and established order at workstations and machines.

Harmony through to shipping
Another joint project with Agamus dealt with the in-house flow of materials (value stream) from the manufacturing line to shipping.
Average processing time dropped 30 percent upon changing the processes. Manufacturing time for faceplates is down from seven to one to two days. The lot size and rework rate were the keys to these changes. Shop floor stock was lowered by some 50 percent in total. Managers and machine operators regularly receive training on the new processes.

SOS, but no a sign of distress
SOS at Magna Donnelly? No, the enterprise is not in distress. The abbreviation is short for Sauberkeit, Ordnung and Sicherheit, the German terms for cleanliness, order and safety.
The provision of parts for assembly -  the so-called supermarket - was optimized: Obsolete and displaced parts, which once accumulated without ever being required again, have been eliminated altogether. Fast-moving items, slow-moving items and customer service have been positioned for optimum effect. All shelves are grouped by customers and labeled accordingly. Now that clear responsibilities have been assigned within the supermarket, cleanliness, order and safety will prevail here as well.

The results are impressive - but at what price?
Magna Donnelly achieved return on investment (ROI) in less than a year.
“In order to seamlessly develop and exploit further improvement potential even after the project’s end, we appointed Mr. Laforet Interim Production Manager," notes Herwig Polzer.

Dirk Laforet, Agamus Consult