Axalta Operational Excellence JiaDing

Background

Axalta Coating Systems is a leading global supplier of liquid and powder coatings, supplying to manufacturers such as Volkswagen, Mercedes, General Motors and BYD.

Project7 [P7] were engaged to work with Axalta, leading to the introduction of the Axalta Operational Excellence [AOE].

The aim of the project was to increase production capacity at their waterborne paint-making operations. As Axalta China’s main customers were investing in the east of China, the JiaDing site was strategically located nearby to serve them, whilst their other site was in operation in Changchun, close to Russia. The Changchun site had higher production costs in the winter, and products were often damaged in transit, so the factory invested in heated trucks to transport paint from the north to customers in the east, which greatly increased transportation costs.

Additionally, OEM car manufacturers recently migrated their process to use more waterborne paint products, which has created further business for the company. Consequentially, Axalta aimed to increase production capacity at the Axalta JiaDing facility.

Challenges

The main concern for Axalta was that production planning and operational management skills were lacking in their facilities.

Slow production output led to inventory cost control at the end of each month, affecting the first two weeks of production every month and causing extensive overtime in the last two weeks of each month in order to catch up.

The production team were constantly facing under-utilised resources and shortages of materials, leading to more “firefighting”, and unproductive meetings over unaccountable activities amplified the problem further.

P7 aimed to introduce structure to the production process, while the production and planning teams were responsible for level loading production. Functional teams were brought in to resolve any issues that would get in the way of these aims.

Solutions

To overcome these challenges, P7 recommended Tiered Visual Performance Management [TVPM] for the OEM Waterborne Cell, as part of a Lean Management solution approach. This helped participants visualise elements of operational performance, for example the availability of raw materials, through specific KPI metrics.

The team launch a Quickwin project using the Scrum methodology, a rapid approach to problem-solving, and Leadership Standard Work in order to sustain the positive impact.

The team’s first defined target was having raw materials available 24 hours prior to production. The roots identified were: lack in management discipline, leading to materials not being ordered in time; production shift leaders ordering the wrong materials; lack of planning regarding materials; and frequent changes to the weekly production schedule making it harder to stay organised and deliver on time.

The team developed a standard routine for production shift managers. This eliminated the issue of raw materials not being ordered in time, and shortened the training time for newly hired shift leaders.

It was requested that raw material orders were based on the production capacity of 7 orders per day, reducing the need for additional storage of any surplus materials. The material handlers established an agreed-upon lead time and service level for the raw material delivery, and agreed to return unused raw materials to their suppliers.

Communication between departments vastly improved as cross-functional teams worked together on projects, for example, Planning and Production Shift Leaders joined together to assess past production performance and plan 7 batches of work orders together at the TVPM meeting. Communication-related issues disappeared when the project team sat down together to identify improvements and solutions.

Impact on Performance