|Continental AG Case Study|
Components Supplier Goes Lean with RFID
Customer: Continental Automotive is one of the world’s leading suppliers to the automotive industry, employing about 150,000 people in 36 countries. The huge Huntsville plant alone runs thirteen 600-foot assembly lines for two to three shifts per day. Those operations include the manufacture of powertrain components, transmissions, engine controllers, automotive infotainment systems, body controllers, "and a variety of electronics that go into a car,” according to Dr. Gokhan Sarpkaya, Project Leader for Logistics at Continental Automotive.
Several years ago, Continental launched its lean manufacturing initiative, intended to identify ways in which the company could improve its manufacturing processes. As part of that initiative, the plant is converting the existing lines into lean manufacturing cells. To feed the assembly lines and cells, the Continental facility each day receives eight truckloads containing some 5,000 types of electronic and mechanical parts originating from about 160 manufacturers. Continental receives those supplies directly from its three third-party logistics suppliers, who receive them from the manufacturers.
Shrinkage was one result of errors made because the locations of parts were noted manually. Time-consuming delays occurred if the advance-shipping notice sent by the logistics’ suppliers to Continental failed to match the parts that Continental actually received from those suppliers — or, if the advance-shipping notices failed to arrive in time for Continental to compare them to the shipments.
Solution: Continental wanted to reduce waste such as the time and cost to receive and handle incoming shipments. The solution has met those goals, according to Sarpkaya. The receiving-cycle time has been cut in half — saving 20 minutes per incoming shipment. The costs associated with that process have been slashed by 30%.
Given those reductions, Sarpkaya anticipates an annual return on investment of about 100%. Some of those savings come from increased labor productivity. Before Continental implemented the new solution, incoming shipments were received by two workers — one operator who scanned the bar codes and logged the shipments into the SAP system, and a forklift driver who looked for, and placed the shipment in, a storage location. The new solution automates the scanning and logging of the shipment, enabling the forklift driver to manage the process without additional effort.