FREMONT, OHIO — One of the first acts of Inoac Corp. after buying into an existing plant owned by Aeroquip Corp. was to send for a Daruma doll from Japan.
Daruma, a mythic figure in Japanese lore, sat for years contemplating a problem plaguing his village. In fact, Daruma sat for so long that his arms and legs eventually fell off from disuse. Still, the story goes, he ended up saving his village from disaster.
That amazing feat of persistence was not taken lightly at the Aeroquip plant in Fremont. In a spirit of solidarity, each plant employee was asked to paint a small black dot on Daruma's one white eyeball.
More than 600 people did that, together creating a large, all-seeing pupil on the plant's new mascot.
``It was incredible,'' said spokesman Lee Brower of Aeroquip, a subsidiary of Maumee, Ohio-based Aeroquip-Vickers Inc. ``People lined up just to join in painting a black dot.''
Since 1990, when Inoac of Nagoya, Japan, first teamed up with Aeroquip, the Fremont plant has become the firm's standard-bearer for success. From a struggling operation in a factory town that had seen its share of plant closings, the plastic automotive parts plant has become one of Aeroquip's most-profitable and leanest-running facilities.
Credited for the turnaround has been the plant's immersion in Japanese-style management techniques imported by Inoac. That style is known broadly as the Toyota Production System, so-named because Toyota Motor Corp. is considered one of the first automakers to bring the participatory system to America.
Whatever its origins, it seems to be working for Aeroquip. The company announced in July that Inoac had purchased a similar 49 percent interest in its two other plastics exterior trim plants in Atlanta and Livingston, Tenn.
Aeroquip is banking that Inoac will work the same magic there. The Fremont plant saved about $1.5 million in costs last year through use of the Japanese system, said Michael Beebe, the plant's vice president of operations. And that was a typical year, he added.
``The joint venture has taught us a lot,'' he said. ``We'd like to duplicate that in other facilities.''
Surprisingly to some, that system has not been broadly embraced by other North American auto suppliers. Obstacles include an unwillingness to shift wholeheartedly to a new management mode and the potential balking of unions over the threat of lost jobs.
``I think suppliers who have problems with these methods are largely impatient and too quick to want results,'' said Michael Flynn, associate director of the University of Michigan's Office for the Study of Automotive Transportation in Ann Arbor, Mich. ``Those who take the time and effort to make a major overhaul generally feel aptly rewarded.''
One role model for the Japanese management style is Freudenberg-NOK of Plymouth, Mich., a partnership of Freudenberg & Co. of Weinheim, Germany, and Tokyo-based NOK Corp. That firm has adopted its Growtth — Get Rid of Waste Through Team Harmony program at 17 North American plants.
However, the Japanese system requires a sea change in plant mind-set, said Melissa McCoy, assistant director of Freudenberg's Growtth and lean system implementation program.
``Sometimes, managers aren't educated enough in the system to understand its true benefits,'' McCoy said from her LaGrange, Ga., office. ``They think that if you keep a machine running 24 hours a day, you'll achieve the efficiency you need. It takes much more than that.''
At Fremont a top-heavy management structure has been replaced by trust for those on the lowest rungs of the corporate ladder. A centerpiece of the program is the slogan: ``building a continuous improvement culture from the bottom up.''
That message is reinforced in several ways. The 235,000-square-foot plant, touted by Aeroquip as the world's largest maker of plastic automotive spoilers, operates quality-control circles, small teams of three to eight people, within a department. In addition, the firm also runs five-day kaizens — a Japanese term for continuous improvement — featuring cross-functional teams discussing solutions in such areas as scrap reduction, downtime and low morale.
Each group targets a task, such as reducing defects from a particular machine or cutting time moving parts from one plant area to another. Within days, most teams come up with a laundry list of solutions. Aeroquip has instituted as many as 50 quality circles and kaizens since 1990, Beebe said.
``It definitely helps us feel more important when our ideas mean something,'' said paint-line worker K.C. Haycox, who doubles as a trainer. ``And we know we're contributing to the company instead of just working on a line.''
The teams track their work on a laminated storyboard with computerized and hand-drawn visuals and generate suggestions.
The most successful kaizen groups also travel once a year to Japan, where they make a presentation in a contest with teams from other Inoac plants to showcase the best problem-solving abilities. Inoac, which recorded about $2 billion in 1996 sales, is one of the world's largest suppliers of instrument panels.
``Overall, our system is a proven method of including people in decision making,'' said the plant's organizational development manager, Rita Darga. ``Areas such as scrap, downtime and defects have shown ongoing improvement since we started this program.''
The plant continues to prosper, recording $65 million in sales for 1996. By year-end, it will add three blow molding machines in an expanded, 20,000-square-foot space, giving it seven blow molding machines total.
Fremont, which specializes in spoilers and exterior body side moldings, makes about half a million spoilers a year for the Big Three and Japanese transplants. The spoilers are blow molded, injection molded or reaction injection molded from such resins as ABS and Noryl polyphenylene oxide. Body moldings are injection molded or extruded from PVC.
Sales there have more than doubled in the past few years, Beebe said. On top of that, the operation stands out in a city where many companies have left town.
``What's really special is that a lot of our employees have worked at plants with failed histories. They've seen businesses close and they've seen us thrive. They know what poor management can mean to a plant's downfall,'' he said.
Freudenberg can quote similar growth figures. The injection molder of plastic engine components and other parts more than doubled its sales between 1989 and 1996. The firm recorded $600 million in 1996 sales, claiming to have saved $7.5 million last year and $24 million total since 1989 by using its Growtth system, instituted corporatewide.
``All our employees speak a common language and understand our manufacturing flow,'' said McCoy, who has visited the Aeroquip plant. ``We have the whole company involved and the support of our [Chief Executive Officer Joseph Day].''
While growing, the number of American-owned firms using the Toyota production system is relatively small. But the influences are sometimes more subtle, said Ronald Harbour, vice president of Harbour & Associates Inc., a consulting firm in Troy, Mich.
``The best thing that ever happened to the Big Three was the Japanese,'' Harbor said. ``Otherwise, we'd still have poor-running cars and high prices. Instead, every company is looking for ways to improve quality, reduce waste and lower costs.''
Still, U.S-owned firms have only taken bits and pieces of the program, said University of Michigan's Flynn. The system also has not worked well in heavily unionized environments. But that could be changing.
United Auto Workers spokesman Reg McGhee concurred that the union is less likely to oppose Japanese management techniques than in the past, especially if jobs are protected.
``Our biggest concern is that efficiency savings do not eliminate jobs,'' McGhee said from UAW headquarters in Detroit. ``Employees will only be comfortable making suggestions when they know it will be a win-win for both management and themselves.''
Many companies have an agreement with the UAW that restricts them from axing workers as part of a lean-management scheme, McGhee said. Freudenberg, which has some union shops, has such an agreement.
The nonunion Aeroquip plant, has continued to add workers, making certain employees are comfortable with change. Top officials spent months schooling workers in participatory management.
``The people become the business,'' Darga said. ``Because of that, the culture will go on after they leave the company.''