Case VI-I

Vitreon Corporation:The Hyalite Project

Case VI-I

Vitreon Corporation:The Hyalite Project

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CASE SUMMARYCASE SUMMARY

Summary:

Considers decisions facing the leader of a manufacturing staff project team assigned to a plant

where yields have deteriorated sharply. The process is complex: the plant organization is not cooperative, and there are deep disagreements about what is wrong and

how to fix it.

Case VI-IVitreon Corporation: The Hyalite Project

Vitreon Corporation in The new millennium

• Vitreon is a leader in the development of glass and ceramic products for the automotive industry.

• Although Vitreon’s well-known Thermalite and Microwave cooking products and Calescia dinnerware, it’s most successful product was a line of innovation, water-repellent windshields.

• Using an innovative glass-forming and coating process, Vitreon had entered the market for specialized automotive glass in 1985 and the profits at the Automotive division constituted the backbone of Vitreon’s income statement.

• The operating divisions had had considerable control over marketing and manufacturing decisions, and corporate staffs in these areas had been relatively small. Only in research and development did corporate staff influence the company’s direction.

• The Techinal Staffs Devision was responsible for all research and development activities as well as for manufacturing engineering. New products were regarded as the life-blood of the Corporation, and the director of new product development was “Harold Accrington”.

Changes in the automotive business and corporate reorganization

• In 1995, two large Japanese automotive customers had encouraged a Japanese supplier to open a plant in US to produce windshields for their U.S.-produced automobiles. Although Vitreon remained profitable, growth over the next three years slowed, and its market share declined.

• This lead to a reemphasis on the technology competence of the company in new product development and a focus on both process excellence and productivity.

• A major step was the establishment of M&E, manufacturing and engineering division, at the corporate level. This reorganization brought together staff specialists in processes, data gathering and analysis, systems, and equipment under the direction of “Angela Harris”.

• Shortly after that, “Paul Connor” was named president of the company.

Manufacturing and Engineering Division

• From 1999 to 2004, engineers from the M&E Division participated in numerous projects throughout Vitreon involving both process changes and the installation of new equipment.

• The group also participated in the transfer of products from R&D to production. Harris believed that successful transfer required people who appreciated both the development process ad problems of production. M&E product teams served as mediators and translators; their primary task was to establish credibility with the R&D group and with the manufacturing people in the operating divisions.

•By 2003, the manufacturing organization in Industrial Products Division had been relatively strong and independent, but Harris felt that the reputation and expertise of her staff was increasing and that opportunities for collaboration were not far off. She also thought that M&E was ready to take on a new responsibility – a turnaround project.

The Hyalite project

• Since 2004 June, yields on the Hyalite process at the division’s Fontana plant had declined sharply. “Jane Welsh”, director of manufacturing for Industrial products, met with Harris to establish an M&E first turnaround project at Fontana.

• M&E project team would work in the plant under the general supervision of a review board. The team’s charter was to increase yields, define and document the process, and train the operating people.

• Harris chose “Michael Andrews” to lead the Fontana project, and then Andrews chose four specialists to work on the first phase of the project, data – collection and problem definition. They are:

1.Anders Lindstrom – an expert in statistical process control. 2.Alejandra Perez – with a master’s degree in industrial engineering from the University of Texas. She had worked in the Fontana plant for six months. 3.Joe Smith – a mechanical engineer and, in Andrews’ words, “a wizard with equipment.” 4.Michelle LeBlanc – a chemist. She had earned Andrews’ admiration for her ability to solve processing problems.

• For the first two or three weeks, Andrews planned to use the small group to identify problems and then expand the team as specific tasks and subprojects were established.

• Andrews’ objectives on the long term is permanent improvements in the process. His whole approach is based on the idea of receivership; each subproject will have two co-leaders, one from M&E (the transferer) and one from the plant (the receiver).

Hyalite: Product and Process

• Hyalite was Vitreon’s code name for a multilayered, compression-molded glass product that was exceptionally strong and impact-resistant for its weight. • Accrington and his staff had developed Hyalite during the late 1990s. Introduced in 2000, Hyalite products were an immediate success. From 2000 to 2004, production capacity grew 35 to 40 percent annually yet failed to meet demand, and then in the late 2004 yields on the Hyalite process had declined sharply

Making Hyalite products consisted of three main steps: 1.Melting – The first step was preparation of the different types of molten glass that constituted the various layers. These mixtures were prepared in separate electrically heated vats. Each vat was monitored to ensure that the ingredients of the glass were in correct proportion and at the appropriate temperature. The base layer was poured continuously onto a narrow moving strip. The other layers were poured on top of each other at precisely controlled intervals. Minor deviations from the recipe could lead to major problem, often requiring ad hoc solutions using the unprogrammable skill and deep experience of the operators and technicians.

Some problems in this stage is the existence of blisters, stones, and streaks (imperfect melted or mixed ingredients). Despite the difficulty of maintaining control over the melting operation and of correcting it when problems developed, Vitreon had been able to achieve yields as high as 95 percent at this stage of process.

2.Molding – Rectangles of the soft glass sandwich were cut off the moving strip and moved onto a series of separated conveyor belts. Each slab was inserted between the jaws of a compression-molding device that contained molds for the particular parts being produced. After the parts were stamped out, they continued down the conveyor line while the glass trim was discarded.

Despite the apparent simplicity of the process, it was generally considered to be even more difficult to control this stage than the melting stage. Typical problems included the basic dimensional specifications of the product, its edge configuration, and buckling and Flattening after molding. These made it difficult to achieve more than 80 percent efficiency during this stage.

3.Finishing – The operation comprised heat treating the molded objects, then applying one of several possible coating, from the functional to the ornamental. This operation occurred as the objects passed on conveyor belts through long ovens. The seldom-attained target yield was 95 percent

The unique characteristics of the three stages made over all control and fine-tuning of the total process quite difficult. Moreover, it was often difficult to isolated which part of the process fault because there was a high degree of interrelation among them. And, finally, once a problem and its cause were identified, it sometimes took a long period of trial-and-error fiddling until people could be convinced that it was indeed corrected.

• Built in 1985 and long devoted to the production of headlights and other auto products, the plant had operated with excess capacity for several years in the mid-1990s.

• In 1999, headlight production was consolidated in the Spoken plant while Fontana was set up for Hyalite production, but several of the production foremen and manufacturing staff members were transferred to Spokane and replaced by individuals who had been involved in Hyalite prototype production.

• The Fontana plant manager was “Jack MacIntosh”. He had been at Fontana for six years. The plant was organized along department lines. By June 2004, the management group at the Fontana plant had worked together for two years and had established what MacIntosh thought was a solid organization.

The Fontana Plant

Melting

Molding

finishing

Plant manager

Productionsuperintendent

Maintenance andengineering

Production planning andInventory control

Personnel

Organization at Fontana Plant

Industrial ProductsDivision General

Manager

Industrial ProductsDivision General

Manager

M&E DivisionA. Harris

M&E DivisionA. Harris

Hyalite Review Board

Hyalite Review Board

PresidentP. ConnerPresidentP. Conner

Director ofManufacturing

J. Welsh

Director ofManufacturing

J. Welsh

Processing Engineering

A. Gupta

Processing Engineering

A. Gupta

Equipment DevelopmentB. Wisniewski

Equipment DevelopmentB. Wisniewski

Fontana PlantJ. MacIntoshFontana PlantJ. MacIntosh

Hyalite Review

M. Andrews

Hyalite Review

M. Andrews

Organization Chart

M&E Project at Fontana

• In the first two weeks of the project, Andrews’ team tried to define the problem. One problem surfaced immediately: the relative inexperience of the department supervisors. MacIntosh explained to them that four of the six supervisors had been in the plant less than nine months. The people they replaced had been with the Hyalite process since its prototype days. MacIntosh felt that part of the explanation for the decline in yields was the departure of experts.

• Lindstrom’s preliminary statistical work pointed to the molding department as the primary source of defects, with melting the second major source. The team identified four areas for immediate attention: overall downtime, trim settings, glass adhesion, and layer separation.

• The team decided to use overall yield improvement to measure performance. A timetable for improved yields was established and approved by the review board in January 2005

Conflict Emerges

• Andrew thought a key element of the program was the development of additional instrumentation to collect information on the many critical operating variables, and the installation of sensors to monitor glass temperature in the molding process.

• Most subprojects, but the group working on materials control, were not accomplished. The M&E team did not get the cooperation from plant’s staff. MacIntosh viewed the team as part of the problem. He strongly belived that the problem was from the experts departure and yields have been increasing steadily in the last 12 weeks. He also thought Accrington was another problem, giving the operators some crazy idea and getting them to let him try out his latest scheme.

Resolving the Crisis

• On March 24 Andrews reviewed the events of the last three months. He was puzzled by The recent improvement in yield performance because the M&E team had done very little beyond data analysis. He never encountered such a complex process.

• Several options came to his mind as he thought of way to resolve the crisis; none of them were appealing. He could ask that MacIntosh be raplaced with someone more supportive. He could continue to try to build alliances with a few supporters in the plant. Or he could develop a new approach to the problem (perhaps new people) and attempt to win over MacIntosh.

CASE ANALYSISCASE ANALYSIS

Problems in Vitreon

• The present problem (at that time) was the inefficiency of Hyalite manufacturing process.

• The root cause was the Fontana plant organization and the plant manager, MacIntosh, which leaded the plant staff not cooperative with M&E Project.

• The disagreement between Andrew and MacIntosh postponed the resolution.

• Another cause was the misallocating of engineering resources among various Vitreon’s plants.

Advice for Andrew

• First, he should tell the review board the problems his team faced (both manufacturing problem and plant staff problem).

• He could ask the review board for more authority while working in Fontana plant, so he could get more support from plant staff. (This would be worked only in the short term.)

• In long term, he should proposed the Vitreon’s committee to change the plant organization (including new plant manager perhaps).

• Also Vitreon should reconsider the allocating plan of engineering resources among various plants.

Market

Lead customers

Value

Contribution

MarketingEngineering

Manufacturing

Management

Diagram of the Critical Elements of the New Product Development Process

Market

Lead customers

Value

Contribution

MarketingEngineering

Manufacturing

A Model of Internal and External Learning

Learning by doing

Learning by using

Learning by failureManagement

Existingorganization

Homebase

Newness oforganization

Existingmarket

Existing Technology

Newness of Technology

New

ness

of

mar

ket

Learning by Moving Away from Home base

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Q&A