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DTD Guidebook for Effective Measurables

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Name of Document: Guidebook for Effective Measurables - Dock to Dock 0Current Effective Date 3/05/99 Current Version Number 2.0

0Record of Revisions
Version Number 1.0 2.0 Effective Date 12/98 3/05/99 Revision Description Initial Release Revisions done in conjunction with information gathered at the GEM Review meeting Authorized By S. Rezabek S. Rezabek

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Ford Production System

Guide Book to Effective Measurables


Dock to Dock

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"Ordinarily
money put into raw materials or finished stock is thought of as live money. It is money in the business, it is true, but having a stock of raw materials or finished goods in excess of requirements is waste - which like every other waste, turns up in high prices and low wages."

Henry Ford
Today and Tomorrow, from Productivity Press

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TABLE OF CONTENTS
WHY MEASURE DOCK TO DOCK?...................................................................................................................................7 WHAT IS DOCK TO DOCK & HOW DO I CALCULATE IT? ......................................................................................15 WHAT IS DOCK TO DOCK? ....................................................................................................................................................17 IMPROVEMENT PROCESS SECTION .............................................................................................................................31 STEP 1: LAUNCH PLANNING ........................................................................................................................................34 STEP A: LAUNCH STRATAGY CHECKLIST................................................................................................................34 STEP B: DATA COLLECTION CHECKLIST ................................................................................................................36 STEP C(A): REPORTING CHECKLIST ........................................................................................................................37 STEP C(B): EXTERNAL REPORTING - PLANT LEVEL DOCK TO DOCK ...............................................................38 STEP 2: LAUNCH PREPARATION .................................................................................................................................38 STEP 3: IMPLEMENT DTD MEASURABLE PROCESS................................................................................................38 STEP 4: ESTABLISH BASELINES ..................................................................................................................................38 STEP 5: PROCESS IMPROVEMENT CYCLE.................................................................................................................39 STEP 1: PLAN ..............................................................................................................................................................40 STEP 2: DO ...................................................................................................................................................................46 STEP 3: CHECK .............................................................................................................................................................46 STEP 4: ADJUST ............................................................................................................................................................47 DIVISION SPECIFIC EXAMPLES SECTION ..................................................................................................................49 DIVISION SPECIFIC EXAMPLES ..............................................................................................................................................50

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SECTION

0Why Measure Dock to Dock?

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Defects

Over Production Inefficiency Over-Processing

Waiting

Inventory Motion

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INTRODUCTION
Dock to Dock is a FPS Measure that helps identify waste that occurs in the manufacturing process. It focuses on the non-value added activities between the time raw materials are brought into the process and the time they are shipped out as Products. Whenever parts stop and wait in the process, costs that do not add value begin to build up. The following are some examples from our plants: = Space and storage systems for Work In Progress(WIP) are accepted as necessities. = As inventory builds parts are moved to unused areas and when needed can be difficult to locate. = Parts must be disposed of when they become obsolete by production or design changes. When many parts are involved, the problems can become hard to see. Vast amounts of money are tied up in inventory! The major waste categories are shown on the facing page.

h in g . a n y tu r c e s t) n o (w a s m e , re s t a d d e t no w a s a k e s ti o e s ro d u c t t d th a t a c e b u t e p e o f th e d to th sp r ue o al er t h e v c e d e liv to e rvi or s e r. to m cus

Dock to Dock (DTD) is the elapsed time between the unloading of raw materials and the release of the finished goods for shipment. DTD is a measure (in hours) of the speed of material through the plant,
not the speed of the processes. By building large buffers you may produce more parts (increase the speed of your process) but slow down the speed of the materials. DTD should not be confused with inventory management tools and metrics. It can't replace the inventory metrics used today (e.g. Days-of-Supply, Inventory Turns, Float reductions, etc.). Since DTD only focuses on a control part for a Product Line, not all inventory, it's important that plants implement Synchronous Material Flow to reduce total plant inventory. DTD provides a focus for the entire plant. It can be one of the best indicators for a plant to use in determining progress in implementation of lean manufacturing. DTD is like taking your temperature; it tells you, "your sick", but it doesn't tell you where or why. This document is aimed at showing you where you can improve.

How can I get better?

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OBJECTIVE: The Ford Production System objective is less than or equal to 1 day Dock to Dock Time at each plant. Why is speed (and Dock to Dock) so important? New demands are being made on our industry. Plants must eliminate waste and move towards a customer "PULL" system.

Order to Delivery: The time it takes to produce and deliver a vehicle from final order amendment to delivery to the dealership. The vision of OTD is a lean, flexible, and predictable process that combines the efforts of all Company components to enable Ford to provide its dealers and their customers with the right products in the right place at the right time. Ford's OTD is currently among the longest in the industry. Typically, a very small percentage of our customers get the exact vehicle they want. The Dock to Dock trend will help display the plants ability to minimize waste and increase inventory speed. Building what the customer wants, when they want it, at the lowest possible price (by getting rid of WASTE).

Our target is to meet exact customer specification within 15 days.

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What will it take to compete in the future????


Three undeniable phenomena will shape the future: 1. shrinking product life cycles 2. intensified competition 3. the global penetration of the Internet In this environment, flexibility, cost/value (obtained by elimination of waste), and the ability to get the product to the customer become an absolute necessity for us to remain competitive.

What is Ford Doing????


Cover stories in business magazines recently are describing the explosion of e-commerce. It was not long ago that many people believed that cars and trucks would never be sold over the Internet. But, David Ropes reports that as many as 15 percent of new car buyers in 1998 will shop the Internet before visiting the dealers. Last month, Ford facilitated more than 1,000 new car sales through our dealers from sales leads from our customers using our On Line Shopping Service through www.ford.com. David also reports that more than 400 of these sales were financed through Ford Credit. Dec. 4, 1998

According to estimates from J.D. Power and Associates 50 percent of new car buyers will use the Internet to car shop by 2000, up from 16 percent in 1997. Most shoppers use on-line information as ammunition in their dealer negotiations. But a few consumers are already using the Internet to actually make a purchase. The researchers say statistics are still fuzzy but estimate 1 to 4 percent of new cars were bought through Internet services in 1997. Industry forecasts suggest the number could reach 20 percent in three years. Dock to Dock and Order to Delivery are focused on the same concern: CUSTOMER SATISFACTION! From exciting, crowd pleasing designs, to getting the exact vehicle the customer wants delivered quickly! In the future, Ford customers will expect to order their vehicles on the Internet. This will intensify the pressure on quick/cheap delivery, since people expect to know when their order will arrive.

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To achieve the goal of "one day Dock to Dock", plants must eliminate WASTE and increase speed!

Common Causes for Dock to Dock Problems


excessive inventory is costly! 1. Inventory 2. Inefficiencies buffers - needed to keep machines going; looking for "misplaced" inventory, or just buying more - when you can't find the parts you need. building products with no immediate 3. Overcustomer demand. Production moving inventory around then letting it 4. Motion sit, unpacking racks holding repairs so they can be used for production changeover, equipment breakdowns, minor 5. Waiting stoppages, excessive tool change times repair time, scrap 6. Defects inspecting - instead of Error Proofing 7. Over Processing

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Benefits of Improving Dock to Dock


Shown on the facing page are common Dock to Dock concerns. If waste is reduced, improvements in the other FPS Measurables will also be obtained. Some typical examples are described below: = Improve scheduled performance - increase Build to Schedule = Only build what the customer wants now. Don't let excess finished goods sit on your dock, just because someone may want them someday. Building large amounts of goods that are not needed is the opposite of LEAN. This attacks excess inventory, over production and motion. = Reduce scrap/improve quality - increase First Time Though Defects that require repair can slow down the entire process. Better quality should decrease the wastes of defects, motion and inefficiencies. = Improve equipment reliability/reduce downtime - increase Overall Equipment Effectiveness To achieve a low (fast) Dock to Dock, you must be able to run when you need to. OEE is a great tool for measuring and reducing unplanned downtime. Waiting should be minimized. = Reduce cost - Total Cost Eliminating waste will result in big savings. These can affect any and all of the major waste categories. Lower material handling, less dunnage, reduced storage space for excess inventory, less obsolescence and lower inventory carrying cost are just "the first step in reducing waste". Space regained by eliminating excess inventory provides room to grow future business!

Eliminating Waste to be on TOP!

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SECTION

What is Dock to Dock & 1How do I Calculate it?

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DEFINITION OF DOCK TO DOCK

Inventory (control part) Dock to Dock Time = {End Of Line Rate}

Inventory is made up of
Raw Materials ManufacturingWork In Progress Finished Goods

0 0

Whenever DTD is used in this document it refers to Production Dock to Dock. Production DTD tells how long a control part will normally take to be converted from Raw Material to a Finished Good and shipped from the plant, measured by when the facility is running.

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1What is Dock to Dock?


Dock to Dock (DTD) measures the plant's ability to convert raw materials to finished goods. DTD and Build to Schedule are the key measurables focused on the plant's ability to respond to changes in customer demand. As the company focuses on "Order to Delivery", the plant's ability to respond to product and demand changes will require increased efficiency . This means reducing non value-added time and maximizing the velocity (speed) of all inventory. 0Calculate Dock to Dock time by counting the number of pieces of a control part within the walls of the plant. Then divide this number of pieces by the average number of parts/jobs per hour for that particular Product (End of Line Rate). When the term Dock to Dock is used, it refers to the Production Hours Dock to Dock. The production hours Dock to Dock tells how long a control part will normally take to be converted from Raw Material to a Finished Good, measured by when parts are being manufactured. A common question is: "Why can't I just mark a control part, note the time, then note when it exits my area?" Although this can give you an idea of how long a part takes to process, you would need to mark a statistically significant number of pieces to get good data and you would lose the inventory information critical to ridding your area of manufacturing waste. DTD must be calculated using the formula on the facing page.

What is a 'PRODUCT'?
End Item Product This is a part/unit that is shipped out of the plant. To make DTD calculation simpler, Plants may group a number of derivatives or models of a Product together, as a single end item product, if they flow through the same process and use the same control part. Example: End Item Product = X.X Liter Engine (derivatives CAL, 49S, High Alt., CAN,)

Internal Product This is a part or unit that is shipped internally within the plant. It can have a number of derivatives of models, as long as they flow though the same process. The Internal Product can have the same name as an End Item Product, but is not the completed unit.

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Why we dont use Total Dock to Dock!


Total Dock to Dock = Production Dock to Dock * 168/production
where 168 is the number of hours in a week and production hours are the number of hours in the week, when the plant is making parts. The following example shows a plant with 40 production hours a week, with a 12 hour dock to dock.

Best Case Scenario


Monday Morning start of shift Tuesday Morning start of shift Tuesday mid day the part is shipped

8 hours

16 hours

4 hours

In this case the plant would take 28 hours to ship.

Worst Case Scenario


Friday Afternoon near the end of shift Friday afternoon end of shift Monday Morning start of shift Monday afternoon end of shift Tuesday morning the part is shipped

1 hour

64 hours

8 hours 16 hours 3 hours

In this case the plant would take 92 hours to ship

Total Dock to Dock= 12 Hours (Production DTD) * (168/40) = 50.4


As shown in the examples: 50.4 is the average number of hours a control part would take on average to be manufactured from Raw Material to be shipped as a Finished Good. This number shows how the operating pattern of the plant effects Dock to Dock. A better way to report would be to show the shift schedule with the Production Dock to Dock. EXAMPLE: DTD = 12 Hours with one eight hour shift per week.

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DTD Guidebook for Effective Measurables What is Total Dock to Dock:


Total Hours Dock to Dock provides the average amount of time the customer must typically wait for Raw Materials to be shipped as Finished Goods. For example: The plant level control part's DTD is 80 hours. That means if a plant is running one 40 hour shift per week it will typically take more than two full weeks to convert Raw Materials to Finished Goods. DO NOT report Total Dock to Dock. An example is shown on the facing page showing why Total Dock to Dock should not be used. As you review the example notice that in both the best and worst cases, the production dock to dock stays the same (DTD = 12 Hours). The total dock to dock, only reflects the production schedule. A much simpler way to show the same information is by reporting the Production Dock to Dock and the plants operating schedule. Remember the goal is to improve Dock to Dock by reducing waste! Total DTD can show improvement by increasing the production hours.

PRODUCTION DTD GOAL

DTD =

In v e n to ry Speed

R educe T im e Spent W a itin g

DTD H o u rs

R ed u ce In ven tory In crease Sp eed

Jan F eb M ar A pr M ay Ju n

DTD Vision:

Key FPS concepts and processes, like Synchronous Material Flow, are reflected in the chart illustrated below. These processes will drive the Dock to Dock measure in the right direction.
Pull by downstream manufacturing process

Push by upstream manufacturing process

Min 1 Max 3

Marketplace
Raw material ordered to support predictable customer demand No schedule Pull based on predictable customer demand

Material manufactured when material is recieved

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How to select Control Parts


1. Diagram the processes as illustrated below, use the FPS defined plant wide control part if it is processed on your line. 2. Determine characteristics of the Internal Products that are contained in the End Item Product (In this example all four feeder lines manufacture parts included in the End Item Product.)

Feeder Line 1
(Internal Product A)
OP10 OP20 External Process OP40 OP50

This is the longest manufacturing processes and due to the external shipping has the largest inventory.

Parts are shipped outside the plant for processing.

Main Line Feeder Line 2


(Internal Product B)
OP10 EP20 OP30 OP40 OP10 OP20 OP30 OP40 OP60

(End Item Product)

Product B is the least expensive internal product and little inventory is held in plant.

Feeder Line 3
(Internal Product C)
OP10 OP20 OP30

Inventory for this interal product is very expensive


OP10 OP20

Feeder Line 4
(Internal Product D)
OP30 OP40

Process runs well, inventory costs are stable and not excessive.

3. In the example Feeder line 1 and 2 have the highest inventory costs. Due to the external processing, delays are common on Feeder line 1. Analyze total cost and pick the control part that has the highest cost and the longest process.

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What is a CONTROL PART?


A control part is a significant piece of the End Item Product that travels through the major processes involved in the manufacture of the product. FPS requires the following plant level control part be used for: Operation Stamping Assembly Engine Transmission Electronics Casting/Chassis/Plastics/etc Control Part Blank Front Floor Pan Cylinder Block Output Shaft Board Division selects a control part for end item product (SEE THE DTD MATRIX at the beginning of the Division Specific Examples section.)

Work Groups should use the plant level control part if it travels through their processes; otherwise they should select a control part which travels through their major processes. Use the criteria given on the facing page example. First identify parts that travel through the major processes, then consider Total Cost: Volume, Length of Process, Material Cost, and the cost to collect information. 1 What are CONTROL PART NUMBERS? The control part number represents the actual part number(s) for the control part. In some processes the control part may be several part numbers, all which have the same function in the End Item or Internal Product. The correct mapping of part numbers to control parts is critical when using any of the Measurables Extractors.

What is End of Line Rate? The division must indicate which of the following values they will use to represent End of Line Rate: 1. The rate at which units are turned into shippable items. (Typically this is the average number of Products, either end item or internal, that are made at either the last operation.) Example: In Engine Assembly - The rate of engines out of the hot test area. End of Line Rate It can be calculated by _Manufactured End Item Products per week_ Production Hours per week 2. Customer Demand Rate - The rate at which the customer requires the End Item Products per week. (SEE THE DTD MATRIX at the beginning of the Division Specific Examples section for your operation's EOL standard.)

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What is a Value Add Operation? Activities that add form or function to the Product and that the customer is willing to pay for. 2DATA COLLECTION REQUIREMENTS: 3 4A plant wide Dock to Dock must be calculated for all End Item Products. As work groups are formed they may want to calculate their own Dock to Dock measure where it makes business sense. Work groups can calculate DTD for selected Internal Product(s).

What to count? / Where should I count? Plant Level DTD: Raw Material - Purchased Part (control part) - begin counting when it is received in the plant, even on consignment, because it is already in its product form. Some product, like rolls of steel, have considerable value added before they are received into the plant. Furthermore, purchased part inventory has a greater amount of exposure to engineering changes; the goal is to keep low inventory to minimize the time to respond to an engineering change. For example: = door inserts - counted in the plant's DTD when it is received at the plant = raw castings - counted in plant's DTD when it is received at the plant = rolls of steel (blanks)- must be counted when they are received at the plant. NOT after the = first operation. Rolls of steel can take significant floor space are expensive.

Raw Material (control part) - begin counting when it changes to the product form. For example: = Plastic pellets are not counted in DTD until after the first operation (molding) and therefore have changed from a raw material form to a product form = Vinyl/body cloth - not counted in DTD until after the first operation (laminate or cut) (SEE THE DTD MATRIX at the beginning of the Division Specific Examples section for your operation's Raw Material Standards) Work-in-Process (WIP) - all Work in Process inventory for the control part is included in the DTD calculation, including material in repair/rework areas, and all buffers including any parts awaiting disposition such as Units On-Hold, Units Waiting for Repair, and Parts In Scrap Bins which havent been scrapped. WIP stored in external warehouses must also be counted, this often occurs when parts require processing outside the plant. If all work groups involved in processing the control part are calculating a Dock to Dock value, the plant level DTD WIP inventory can be calculated by: Plant Level WIP = the SUM of all work groups (RM + WIP + FG) inventory Note: Remember to add the Raw Material and Finished Goods that are not included in any of the work group calculations. Page 22 of 54 Version 2.0 Revision Date: 3/05/99
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Finished Goods End Item Products - all finished goods containing the control part are included in the DTD calculation until they are physically shipped from the dock. Finished Goods stored in external warehouses should not be included in your DTD calculation. For example plants in Mexico may have external warehouses in the USA, because of border crossing concerns. These warehouses are not part of the manufacturing processes and must not be included in DTD. Material Procurement & Logistics Role: MP&L plays an important role in the plant wide Dock to Dock improvement process. They are critical to the implementation of Synchronous Material Flow, and should be part of the team focused on reducing inventory. If you are getting data from a corporate system through a Measurables Extractor, it's important that your MP&L people are involved in the configuration of the extractor. The extractors require up-to-date part numbers and MP&L is usually the first to know about part number and plant scheduling changes. It may make sense for MP&L to handle the configuration of the extractors.

Work Group DTD: Work groups must define where they start counting Raw Material and stop counting Finished Goods. Work groups must agree when their Finished Goods become the next work group's Raw Material. Material must never be double counted (e.g. counted a one work groups finished goods and anothers raw material). Typically, buffers between areas are the producing work group's Finished Goods. Remember our goal is a pull system. The next work group "pulls" goods when they are required.

Feeder Line
(Internal Product)
OP10 OP20 Buffer OP30 OP40

Control parts stored line side

Work In Process

Finished Goods Buffer

Finished Goods
Raw Material - Purchased Part (control part) - count the control parts that are owned by the work group. Do not include the PLANT LEVEL control part's Raw Material held in the plant's warehouse or marketplace in any work group's Dock to Dock calculation. Work groups need only count Raw Material that is in their immediate control. In the example below, three work groups are making Internal Product A.

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(Internal Product A)
OP10 EP20 OP30 OP40 OP50 OP60 OP70 OP80 OP90

Work Group 1

Work Group 2

Work Group 3

Each work group should only count the internal product control parts that are stored in their area (line side) as Raw Material.

Work Group DTD:

Work-in-Process (WIP) - all Work in Process inventory for the control part is included in the DTD calculation, including material in hold/repair/rework areas, and all buffers belong to the operation that generated the WIP. Finished Goods End Items - all parts containing the control part are included in the DTD calculation until the next process claims them. End of Line Rate - Each work group must calculate it's own end of line rate. If your division is using the rate at which parts are turned into shippable items. The work group will typically pick the rate of their last operation and use their own Production Hours. If the division is using customer demand rate, then the work group should use the demand rate of the next process.

How to Count? (Both Plant and Work Group Level) Manual data collection is encouraged. Periodic (weekly) manual data collection provides the plant with better idea of where inventory is accumulating. Remember since only the control part is measured in the Dock to Dock calculation, effective implementation of Synchronous Material Flow is critical to reducing all excess inventory. Effective Value Added Analysis can only be done if data is collected by, and used by, work groups. Manual data collection should be performed every week at the same time. FPS recommends that manual collection be performed on Mondays. If cost effective, more frequent data collection is encouraged.

Daily collection of data can be automated, when corporate inventory systems are used to collect data. Plants may be able to use the corporate inventory systems to count the number of control parts in Raw Material, Work In Progress and Finished Goods for either Plant level or Work group DTD. It is important that the plant understand how they are using the inventory system to adjust part shipments and select the appropriate time to extract the data.

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If the plant is NOT using the system as described below for each computer application, they CAN NOT use the information from the system to calculate their DTD measurable, since BAD INFORMATION can not be used to make effective changes. CMMS may provide all necessary Balance on Hand (BOH) data (Purchased Parts, Work in Process, Finished Goods) to Measurables to calculate DTD by Product Line if the following rules are followed: = Typically, plants can not get work in progress data from CMMS, since there are not CMMS pay or count points between the Raw Material (production inventory) and the Finished Goods. To be able to distinguish raw material/purchased part BOH from Work In Progress BOH, the plant would need a CMMS count point set up at the first manufacturing operation; however, this is not always feasible or practical. = Control part scrap must be recorded in CMMS every day at the same time. If control part scrap is reported any other way (weekly/monthly/or when you have time), CMMS will not provide accurate information (and may give negative values). If production counts of Finished Goods for the plant or work groups are reported in batches/lots/pallets/standard packs, then the data extracted from CMMS will reflect only the completed batches (for example: 168 parts are indicated as one shipment in CMMS, but at the end of the day only 160 parts were completed for the final batch). Since 160 parts do not fill a pallet, typically a plant will not report these parts to CMMS. Therefore, the number of parts actually built will be 160 greater then the finished goods reported by CMMS. Since the 160 parts manufactured today can not be shipped until the batch is completed these need to be counted as FINISHED GOODS. To override the values from CMMS you can use the Measurables Input screen. You have to type in the corrections after the CMMS Extractor has run for the PREVIOUS day. DTD information can be corrected in CMMS until one day after the production date. This information will overwrite any updates made on the Measurables Input Screen, so you normally do not want to update information manually in the Measurables application until two days after production. To provide a plant wide Dock to Dock, the plant should be using the CMMS schedule (the CMMSEXNA screen). Random inventory checks of the Raw Materials should typically match the CMMS balance. If the CMMS balance is often manually adjusted and/or the plant does not build what CMMS expects then CMMS SHOULD NOT be used to calculate the plant's Dock to Dock. Rules for using data from ILVS/AVS/PVS, MS3 and MIS will be added in the next version of this document.

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When to Count/Data Collection Frequency? (Both Plant and Work Group Level) Data should be collected at the same time of week, which best represents the operating pattern for a product line. Consistency in the time of the data collection will ensure that the DTD numbers measured and reported are a true reflection of the material velocity.

Manual data collection Measure DTD weekly. This will help to ensure that DTD is a reflection of a normal production operating cycle and not a snapshot in time. Data can be collected more frequently, if cost effective. Automated data collection Measure DTD daily by end item product. Operating decisions should be made based on weekly or monthly trend, do not use a single day's information to make decisions. Typically a minimum of 30 days information should be analyzed before changes are made.

What should we do with the collected information ? The Synchronous Material Flow process provides tools to focus on inventory control and reduction, which can dramatically improve the plant's DTD measurable. Knowing where your excess inventory is can help you focus on reduction. A Value Added Analysis should be performed during the Current State Mapping for each new application area that launches FPS. The VA Analysis should be done periodically within a product line to measure progress toward the elimination of non-value add activities. Value added analysis is one of the primary tools for identifying and eliminating WASTE!

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By using both Value Add Analysis and Synchronous Material Flow concepts, the results should be considerable improvements in the Dock to Dock measure. The following section of this document focuses on using data to improve the process.

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Sample calculation sheet: Total Dock to Dock Time


Calculation Worksheet
Section I
Control Part Name: Product (End Item/Internal) Date Data Collected:

Section II End of Line Rate = = Manufactured products/week Production hours/week End Of Line Rate (C) (A) (B) OR Customer Demand rate per week

Section III
(D) Units in Area Raw Materials = (E) D/C Production Hours

Manufacturing Processes: (optional) Work Group 1 = Work Group Work Group Work Group Work Group Work Group Work In Progress Finished Goods 2 3 4 5 6 = = = = = = =

TOTALS

= Total Units DTD Production Hours

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Total Dock to Dock Time


Calculation Worksheet Instructions

Section I

= Control Part Information Record information on control part in Section I of calculation sheet. - Record control part; Remember a control part may map to several part numbers. - Record the date. Manual data collection should be performed once a week. Typically plants should collect data on Mondays. Product, circle internal or end-item = Calculate End of Line Rate End of Line Rate = #of products built per week of the Product
Number of production hours per week or End of Line Rate = Customer demand rate per week of the Product.

Section II

(A)
(B)

- Production hours per week = The number of manufacturing hours. - Production hours per week. Do not include contractual downtime (contractually required breaks and paid lunches are excluded).

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= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
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SECTION

Improvement Process Section

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Dock to Dock focuses on: W here Does The Tim e Go?


Dock to Dock Production Hours Raw M aterials ManufacturingW ork In Progress Finished Goods

7 /1 6 /9 7

V alue A dded 5% Buf f er 10%

Tr ans f er 53%

Rew or k 31%

Ins pec tion 1%

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How to Improve Dock to Dock


'Value Added Analysis' (VAA) is an excellent tool to analyze and improve the elements of DTD. When FPS is launched in an area Current State Mapping is performed. Part of the process is a Value-Add/Non Value Add analysis. This process must be performed regularly to ensure that waste is being reduced and DTD is improving. FPS recommends that DTD be measured and the trend charted for at least 30 days before and after changes are made. Value-Added Valued added activities are those that add form or function to the product and the customer is willing to pay for. Any activity that does not add form or function to the product is considered non-value Non-Value added waste. Added No company can have 100% value added activity. World class companies have between 30% to 50% value added activities. Typical areas in our plant have from 0.3 % to 25% value added activities. Recent studies put our average process at 4% to 10% value added activities. Displayed in the following chart are typical Value Added / Non-Value Added activities. There are some operations that are needed that do not add value to the part or product but are required to run the business. It is important that the difference between these functions is clearly understood.

Value Added Necessary


Welding component to unit Extra time unit spends in oven due to process

Non-Value Added
Transfer unit between operations Excessive buffers, inventory, and raw materials

Unnecessary

Value Added / Non Value Added Matrix

The goal is to reduce or eliminate Non-Value Added activities and speed up all activities to allow your plant to respond quickly to changes in the marketplace or demand.
As the plant begins internal logistics portion of the Synchronous Material Flow process, they will implement a Plan for Every Part. This plan considers all information about a part including: Lot Size, Packaging, Presentation to the operator, Delivery strategy (scan, card, call, in sequence), Float at lineside and the marketplace, etc The work groups participation in the planning and implementation of the Synchronous Material Flow process where it affects their jobs will be key in reducing inventory and improving Dock to Dock.

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How do we get started? Follow the DTD Cycle!


STEP 3
Implement DTD Measurement Process

STEP 1
Launch Planning A. Complete DTD Launch Strategy Checklist. B. Determine Data Collection Method(s) C. Plan for Reporting

STEP 2
Launch Preparation

STEP 4
Establish Baselines

Do

Check

Plan

Application Area

Adjust

STEP 5
Continuous Process Improvement Cycle

The Dock to Dock Measurables Cycle


The DTD Measurables Process is outlined in the figure above. Outer circle: Steps One through Four are required to effectively launch the process. Step Five is the continuous process improvement section which outlines the actions needed effectively use the DTD Measurement process on the plant floor. In this section guidelines are provided for improving DTD by eliminate waste using a period value added analysis and by implementing Synchronous Material Flow.

2STEP 1: LAUNCH PLANNING


0STEP A: LAUNCH STRATAGY CHECKLIST
The plant completes the implementation checklist (on the facing page). The checklist is an excellent refresher and should be completed by plants that have already deployed DTD.

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Dock to Dock Launch Strategy Check List
Directions: Enter a check for each com pleted action. W hen an action has not been completed, use the description for your action plan and projected com pletion date. Plant: Process / product: Checklist com pleted by: (please list all names) Checklist reviewed by: Check List Q uestions Obtain a list of all End Item Products produced by the plant Diagram processes and understand how m any of the products flow through the sam e process. Are all product lines calculated? Have you established a plantwide control part? Do you have m ore than one plantwide control part? Do you ship the control parts outside for processing (paint, plating, etc..)? Have you established work group control parts (if the plant wide does not travel through their processes)? Has a value-add-analysis been performed with current state m apping? Is your control part a significant piece of the final product that travels through the major processes involved in the m anufacture of the product? Is DTD currently measured plantwide? M anagement has received M easurables training and understands the value of a low Dock to Dock? M anagement regularly reviews the Plant Level Dock to Dock value and m ades business decisions based upon it? M anagement has established goals for Plant Level Dock to Dock? A process for determining business value and cost of measuring Dock To Dock for work groups has been established? Is DTD currently measured by individual workgroups? Does the Team leader / Superintendent / Supervisor (for every work group collecting DTD) understand the business value of DTD? Describe training. Have Team Leaders/Superintendents/Supervisors been shown how to set DTD goals? Do Tean Leaders/Superintendents/Supervisors understand how to use Value Added Analysis to drive down DTD? Describe training. Do Team Leaders/Superintendents/Supervisors understand how Synchronous M aterial Flow effects the Dock to Dock M easurable? Has at least one m em ber of each workgroup received some type of M easurables Training? (Joe's Pizza / Henry's House Sim ulation) Do the workgroups understand how DTD goals are set and reviewed? Do work groups understand how to use Value Added Analysis to drive down DTD? Describe training. Do work groups understand how Synchronous M aterial Flow effects the Dock to Dock M easurable? Check for yes Description/Date

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1STEP B: DATA COLLECTION CHECKLIST


The plant completes the data collection checklist (displayed below).

Dock to Dock Data Collection Check List


Directions: Enter a check for each completed action. When an action has not been completed, use the description field for your action plan and projected completion date. Plant: Process / product: Checklist completed by: (please list all names) Checklist reviewed by: Check List Questions Are responsibililities for who collects/enters/edits/configures plant level DTD clearly Does each work group understand who is responsible for configuring/entering/editing DTD data for their internal products? Do you collect all your data on the floor at the point of l manually collect data, do you collect it once a week If you ti ? on Monday? Or do you use a corporate or local computer system to collect information? Please describe which system is used and what data it collects. Have all requirement for using a corporate system been reviewed and processes are in place to assure data integrity? Do you begin counting purchased parts when they are received in plant (already in product form)? Do you begin calculating DTD when the raw material changes to the product form (I.e. vinyl not counted in DTD until after it has been laminated or cut and is now in product form)? Do you include your Work in Process (including material in hold/repair/rework areas and all material in buffers) when doing calculations? Are all finished goods included in your calculation until they are shipped from the dock? Do you have an outside warehouse for your parts? Outside warehouse parts are excluded from your Finished Goods count? Do you take out any other time other than contractual for net available time when calculating end of line rate? Describe what is subtracted and why. Check for yes Description/Date

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2STEP C(A): REPORTING CHECKLIST Dock to Dock Reporting Check List


Directions: Enter a check for each completed action. When an action has not been completed, use the description field for your action plan and projected completion date. Plant: Process / product: Checklist completed by: (please list all names) Checklist reviewed by: Check Check List Questions for yes Description/Date Are responsibililities for who prints plant level DTD trends, value added analysis and inventory status clearly Does each work group understand who is responsible for printing and distributing DTD data and reports for their internal products? Does each Team Leader/Superintendent/Supervisor receive their area's reports on a regular basis? Is their a regular meeting where management reviews their plant level DTD information? Do work groups post their internal product DTD information and value added analysis for regular managment/superintendent review? Does management express interest in getting more DTD information? Are work groups showing sustained improvements in eliminating waste, via their Value Added Analysis reports? Do you begin calculating DTD when the raw material changes to the product form (I.e. vinyl not counted in DTD until after it has been laminated or cut and is now in product form)? Is their an escalation process where work groups can ask for assistance to make improvements in their area to eliminate waste? Is the FPS Measurables system used for reporting? Does the FPS Measurables system provide useful reports for Plant External Reporting? If not, do you have a good alternative? Please describe. Does the FPS Measurables system provide useful reports for management? If not, do you have a good alternative? Please describe. Does the FPS Measurables system provide useful reports for Team Leaders/Superintendents and work groups? If not, do you have a good alternative? Please describe.

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3STEP C(B): EXTERNAL REPORTING - PLANT LEVEL DOCK TO DOCK


Plants are currently required to roll up the individual product line DTDs into a DTD for the entire plant. Plant Controller offices typically provide the Measurables Coordinators with a cost weighted average for each product line. Per the FPS Measurables Coordinators Guide (pg. A-20), this cost weighted average is a function of the budgeted volume and the 'cost added' (excludes material cost) for each product line. The group agreed that this approach would remain unchanged in the future. It is important to note that plant-level DTDs are should not be used inside the plant (since work groups can only effect their DTD's); this type of reporting is done for Division and System Business Unit management only.

3STEP 2: LAUNCH PREPARATION


Use the completed checklists for Strategy, Data Collection and Reporting (completed in Step #1) to determine which activities are not completed. Create a project work plan that details all tasks, person(s) responsible for the task and forecast completion dates. A standard project management software package like Microsoft project can be useful to track your progress. This project plan should be the responsibility of the plant's FPS Plant Implement Team and FPS Measurable Coordinator. It should be reviewed regularly by the plant's management. Remember implementation of the Measurables (including DTD) should follow the plant specific implementation plan (for FPS). A current state mapping and Value Added Analysis are critical to the successful use of the Dock to Dock measure.

4STEP 3: IMPLEMENT DTD MEASURABLE PROCESS


Once launch planning and preparation have been completed the plant begins the process of implementing the DTD Measurables Process. First by collecting data in the Initial Application Area followed by all other areas in the plant in accordance to the predetermined launch plan. Second, inn sync with data collection, Base Lines are established (Step 4) and the (PDCA) Plan, Do, Check, Adjust process (Step 5) are employed to attain continuous quality improvement.

5STEP 4: ESTABLISH BASELINES


In order to identify opportunities for improvement and evaluate the effectiveness of improvement efforts, it is necessary to establish DTD baselines within each Plant Application Area and for each Plant end-item product. DTD baselines should be used to establish internal DTD targets and trend improvement progress. It is recommended that thirty (30) production days of data be used to establish DTD baselines. Internal targets should be reasonable and clear action plans must be developed which outline how these targets will be achieved.

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6STEP 5: PROCESS IMPROVEMENT CYCLE


Each Application Area should continuously follow the Plan, Do, Check, Adjust (PDCA) Process Improvement Cycle (shown below). Plan (set targets) = Identifying opportunities for the elimination of related wastes (Value Added Analysis and Internal Logistic Synchronous Material Flow) = Do = Applying the appropriate Ford Production System tools to improve the processes = Check = Checking the effectiveness of work group improvement actions = Adjust = Standardizing improvements (Adjust).

The Problem Solution Cycle is the process for driving and measuring the improvement of equipment operation. The process is continuous until the objective has been met.

Do

Check

Plan

Adjust

At objective?

Continuous Process Improvement Cycle

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4STEP 1: PLAN
TO IMPROVE DOCK TO DOCK WE MUST UNDERSTAND:

Where Does The Time Go?


Raw Materials Work In Progress Finished Goods

Dock-to-Dock Production Hours


Raw Materials Work in Progress Finished Goods

NonProduction Time

Dock-to-Dock Total Hours


VALUE ADDED ANALYSIS - PROCESS FLOW
This analysis is a valuable tool for understanding your process and identifying waste. The format shown on the facing page can be used to analyze the flow of a part though a process area. The process flow sheet follows only the control part. When using this technique you must follow the flow of only one component and don't divert off into sub-assembly areas. Each sub-assembly must be the subject of a separate process flow sheet. Collecting the time of each step is critical, but must be supported by your Union and Management, remember we are attempted to reduce non-value added time. To generate a process flow diagram, you must understand the process, including the start and finish points. Ensure you spend adequate time in the area and fully understand the process before you create the diagram.

The following symbols are defined on the process flow: Operation (Value Add) Non Value Added Operation Storage [Buffers or queues of parts] Delay [material held between stations] Inspection [quality control checks, etc] Transport [truck and manual part handling]

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DATE :

Process =

Location =

Author : Version :

Description

Operation NVA Op Storage Delay Inspection Transport TIME (secs) DISTANCE QTY ( # parts )

REMARKS

: Visual / Sketch

Current State

: Improvement (future)

1. Complete the date, process and location fields. Use names that shop floor people will recognize. 2. For each step in the process fill in: = Description of the step. Describe exactly what happens to the control part at each process. Be specific! Don't leave it to peoples imagination.

= Mark the appropriate symbol on the chart, which signifies what is happening to the control part. = Note the time in seconds at the step in the time field. (If supported by your plant, you can also use a estimate to get started) = Show the distance traveled from the previous step. (use either meters or feet) = Record the number of control parts held at each step in the QTY field. (For this date/time) Version 2.0 Page 41 of 54
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Shown below is a sample of a partially completed Value Add - Process Flow.


DATE : 15-11-98

Process = Differential Manufacture

Location = John's Axle Plant

Author : Version :

Description
load to finall assembly station OP NO 160 Transport to Fianl assembly buffer store Load to shipping Pallet fit differential coverand Identification tag Aseemble break components Store in buffer

Operation NVA Op Storage Delay Inspection Transport TIME (secs) DISTANCE (meters) QTY ( # of parts )
60 0 1 10 0 1 852 0 1 10 1.5 1 450 0 1 30 1.5 6

TOTALS

1412 3 11

(secs) (meters) (parts)

Notice that the step descriptions are easy to understand and the control parts path through the steps is charted by the type of step. The total TIME, DISTANCE and QUANTITY OF Control Parts at the step are calculated.

Percentage of Value Added:


Once the process flow is completed (results resemble the chart above), you can calculated the percentage of value added operation. Value Add % operations = Number of Value Add Operations Number of steps in the process

If you have 38 steps and 8 are value added = 8 = 21% Value Add Steps 38 A better metric is the amount of time you are spending doing value added work. Since you could reduce steps, but not really eliminate waste. Teams should set targets to track their improvements. Value Added % time = Sum of value-added time = 60 + 450 = 35% Value Add Time

TOTAL TIME
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1412
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DTD Guidebook for Effective Measurables Step 1: Plan - Inventory Questions When studying Dock to Dock the following questions may help the plant find areas to focus improvement. Remember Dock to Dock is measures of time not inventory. It is intended to measure the how effectively inventory flows through the process, and although there is a connection to inventory in most of our manufacturing systems there is not a tight correlation.

Raw Material: Receiving Incoming Materials


How often does material come in? What are your receiving hours? Do you receive advanced shipping notices? Do you have the supplier inspect/[certify] material? Do you inspect the material? How do you know material is approved? Do you accept the material without the paperwork? Do you physically match material with the paperwork? Do you have an inspection plan? How quickly do you handle changes in specs?

Storage How do you know where to put material when it comes in?
How many different areas do you store material in?

Returns Where do you store rejected material?


How do you handle rejects?

How quickly do you handle rejects?


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Work In Progress
How do you get material to point of operation? Who do you tell when you need material moved? Is WIP stored in the same location every time? Do you follow First In First Out for all WIP? How do you know when you need parts or material brought to the line? How many hours is the line scheduled to work and what are the actual hours worked? How do you know how many parts to run? What is a normal run size? How many hours a day is scheduled and how many actual hours a day do you work? Do you know the Engineering cycle time and do you run at that time? What's the line speed/target?

Area/Process: Finished Goods Operations How do you manage shipping instructions to your customers?
Do you ship on time as the customer requested? How do you know what to ship and to where? How do you know if you are behind or ahead on shipments? How many times do you transfer stock? How do you ship, rail or truck?

Do you always ship full trucks?


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How do you handle returns? How many hours do you work Finished Goods? How many days inventory? Do you ship from the dock in First In First Out? Are Finished Goods stored in the same place, by type, every time?

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5 6STEP 2: DO
Evaluate your Value Added Analysis Process Flow and look for opportunities on the process can be improved. When you first study any mass production process it is very common to have a value add percentage (both of time and operations) of less than 20%. See this as an opportunity, not as a problem. Here are a few ideas to consider to improve the process: Can any of the non value operations, storage, delay, transportation, or inspection be reduced? = = Maybe an inspection could be removed if an "Error Proofing" device was installed. = Can the layout be changed to reduce the distance between process steps? Remember when you are implement flow racks to present parts to the operator (as part of Synchronous Material Flow) to try to eliminated wasted motion. = Can the number of parts be reduced at each process step? = Can buffers be reduced? = Can batch sizes be reduced? Remember where ever possible implement single piece flow. = Review the results of the inventory questions. Are there areas where you can make improvements? A common example would be to always store Work in Progress in the same location and to follow first in - first out. Discuss the opportunities for improvement with your team (either work group or plant level). Determine which items will be possible to implement. Prioritized your improvements based on cost benefits. You don't want to changes too much at once. By setting reasonable incremental targets (PLAN), correctly implementing changes (DO), you should see improvements after implementation as you CHECK your results. Once the team has decided what actions to implement a project plan should be created and updated to ensure that items are completed. Teams may want to use Microsoft Project or in Powertrain & Vehicle Operations the CPIP application, Visteon teams can use CSS, to help them track progress.

7 8 9STEP 3: CHECK
After implementing changes from the improvement plan the group must trend data to verify that improvement actions are working. MEASURABLES trend reports will be inserted here in the next version 3.0 of this document.

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10STEP 4: ADJUST
Once the effectiveness of an improvement action has been verified by a review of the appropriate DTD information, the improvement must be STANDARDIZED. The Application Area should develop and implement methods to maintain the new standard. For example: If the area has implemented flow racks to minimize line side inventory and eliminate wasted operator motion. Some of the actions which should ensure that the change : = Revising the appropriate QPS SHEETS with the effected production operators, = = Applying VISUAL FACTORY techniques to provide clear visual indication of the location of the flow control racks and SMART mailbox, scan or call button. = = Continued monitoring of the DTD MEASURABLE and inventory levels & costs on a timely basis to detect if the new process fails to unction properly. Implementing and maintaining standards is a key application area responsibility in the Continuous Improvement Process.

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= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
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SECTION

Division Specific Examples Section

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7Division Specific Examples


Value Add Analysis - Process Flow Example
This example is based on a Rear Axle Assembly Line located within in a fictitious company Johns Transmissions ltd. The process flow sheet is completed for the control part only, which is the differential case. The differential case is the only component that flows through the entire application area. The production process for the axle is totally manual. There are13 operators that normally work at the same station every shift. The process is as follows: = Differential cases are unloaded from the pallet four at a time inspected, de-burred and loaded into the washing machine four at a time and washed Op No 10. = The cases are then unloaded one at a time and loaded to OP NO 20 where the Pinion cone is pressed to the housing. = The case is then moved manually to Op No 30 where the pinion shaft and remaining bearing cone have been pressed in place. The master setting aid is then inserted. = The friction moment is then measured at Op No 40 and the master setting aid disassembled and the differential flange coupling fitted and the torque measured to ensure correct pre-load. = At Op No 100 the Half shaft tubes are pressed into the differential case. = The two tubes are puddle welded at Op No 110. = The Differential Assembly is then transported to the cooling store as it takes approximately 30 minutes for each axle to cool to room temperature prior to fitting the differential ring gear assembly so as to ensure the prescribed amount of backlash is not effected by contraction. = The differential ring Assembly is fitted in Op No 120 and adjusted to the correct backlash. = The gear mesh pattern is checked at Op No 130. = The cover plate is fitted at Op No 150. = At the final Assembly station Op No 160, the following components are fitted: = Break calipers, Half shafts, Hand Break Cable, Break Drum, and Various seals. = The completed axle is then loaded in a shipping rack for dispatch to the customer.

On the following pages the Process Flow Chart is presented.

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Measurables Divisional Policies


Vehicle Ops Powertrain
Engine Transmission Casting Electronics Interior Exterior

Visteon
Climate Control Chassis Powertrain Control Glass Emerging Markets

Divisional Policies
DTD
Indicate your plant level control part When raw materials in non product form is counted (when received or after first process) End of line rate (customer demand rate per week or Manufactured End Item Products per week divided by the Production Hours per week)

Assembly

Stamping

Blanks When received

Plastic Pellets After 1st process

DATE : 15-11-98

REMARKS

Transport

Inspection

Delay

Storage

NVA Op

Operation

DISTANCE (meters)

QTY ( # of parts )

: Improvement (future)

: Current State

TIME (secs)

: Visual / Sketch

Description
Unload Differential Case 4 off and place on table Inspect each casefor burrs and correct thread Load Differential cases to Washining Machine 4 off Op No 10

Process = Differential Manufacture

1.5 0 1 0 0 1.5 0 0.8 0 0 0 0 0 0

20

4 4 4 4 4 1 1 1 1 1 1 1 1 1

90 30 180 10 5 8 3 10 27 30 8 3 30

Wash Diff cases 4 off

Blow off Differential cases

Location = John's Axle Plant

Load one differential case to Op No 20

Press pinion cone into differential case

Load part to Op No 30 Press in Pinion shaft and and pinion bearing cone

Turn upside down Version : 1. 12-12-98 Author : J. Woracker

Load Master setting aid

Measure friction moment Op No 40

turn upside down

Remove master setting aid

1 1 1 1 1 1 1 1 2 1 1 1 1 1 6 1 1

0 1 0 0 0 0 0 4 0 2 0 5 0 2 0 3 0

3 Instal Pinion Flange 4 15 12 6 Measuer torque 8 Retighten Nut 6 Check Torque 5 540 Buffer store 5 8 Press axle tubes 4.5 40 8 1800 10 270 Transport Axle to weld station Weld axle tubes to Differential housing Transport to cooling buffer Buffer storefor cooling Transport to differential gear asembly area Assemble differential gear to axle OP No 120 Load to tube press OP NO 100 Transport to Tube press buffer Load to to pinion mounting Op no 50 assemble Differential flange coupling Tighten nut with toque wrench

10

1 1 1 2 1 1 1 1 1 1 1 1 6

0 0 0 2 1.5 0 1 0 0 0 1.5 0 1.5

Check backlash 20 Adjust backlash 10 Check back lash 540 6 180 Check Gear Mesh Transport to diff cover assembly station fit differential coverand Identification tag Transport to Fianl assembly buffer store 4 60 10 852 Store in buffer load to finall assembly station OP NO 160 10 450 30 Aseemble break components Load to shipping Pallet Transport to Gear mesh test buffer Diferential and axle assembly to gear mesh tester OP 150

TOTALS

5380.5

29.3 (meters)

71 (parts)

(secs)