Project management in a stamping plant
do's and don'ts
Richard E. Ryder, PMP
A sheet of metal bent and stretched between the shoes of a die will never be the same. We see the output of this simple process every day in our beloved conveyances. The body of a modern car contains around 150 pieces of stamped metal held together with spot welds. They range from sweeping hoods to unseen brackets. This article is a look at how project management applies at an automotive stamping plant, with some lessons learned and suggested strategies for successful implementation.
Let's start with a stamping primer.
What brings the aforementioned dies and sheet metal together is a machine the size of a decent house: the press. Dies are specific to a part, but presses run many different dies, and thus make many different parts. Since sheet metal can only bend and stretch so much in a single “hit” of the dies, complex parts require several hits (as many as six). This is done in a line of presses with the parts moving between them by means of automated transfer mechanisms. Consider the size of these monsters. A football field can barely hold six presses lined up for operation. They stand 40 feet high from floor level, and go down another two floors. Another 40-foot dimension spans the width. The word “press” hardly seems adequate to describe the generation of 15,000 tons of force 12–16 times a minute. Interestingly, all this size, motion and force is remarkably quiet. You can hold a conversation while standing next to it. If an industry can be said to have muscles, these are good candidates.
Some of the stamped parts must be welded into sub-assemblies, like a door or fender, prior to shipment. This is done by automated spot-welding systems that grab the pieces and clamp them in position for the weld guns. Examine a metal joint on your car and you will see a string of neat round circles marking the spot welds. These welding systems are called “tools,” a terminology that belies the cost, complexity, and the many months required to design, build, install and try them out.
If time is money, press time is big money. These multi-million-dollar assets must produce to justify their existence. This is the core business of the stamping plant, its reason to be. This puts short-term and long-term decision making into a state of constant conflict. Dollars hang in the balance. On one side of the fulcrum is the need for immediate production, on the other is all that makes it possible: die changes, maintenance, and equipment upgrades. Immediate profit requires short-term and long-term decisions focused on operating presses today. Continued profits require looking a year or more ahead.
As time horizons and decisions exist in the minds of humans, let's consider the human factors that influence the practice of project management in this environment. Tradition is a strong influence. Project management as defined by a PMI professional is not long-term tradition in these facilities. Only relatively recently, and even then in fits and starts, has the recognition of project management's potential contribution to the viability of stamping plants become a topic of conversation. A far stronger influence is the gaping maw of the ever-hungry production machine that must constantly be fed.
Areas for Application
There are several areas where the stamping plant benefits from project management. Each of these areas deals with that which must be done today so that tomorrow's productivity is maintained.
Press Line Refurbishment. Over time the performance of a press line degrades and a refurbishment is called for. The scope of the project is determined by an evaluation of the various parameters of performance, diagnostic examination, and maintenance records. There are long-lead procurement items; resources are constrained. Time, as mentioned, is money, but the time issues are magnified when refurbishment coincides with a new model changeover. Delay at that point can have a dramatically negative impact on start-up costs, opportunity costs, and human costs incurred in launching the new model.
Press Line and Assembly System Installation. Installing new press lines or weld systems are also classic projects well suited for modern project management techniques. Typically the floor space desired by the new equipment is currently occupied by old equipment, which must be removed or re-located. This alone consumes a significant amount of resources. Once clear, the site must be prepared with foundations and utility connections. The arrival of the new machinery kicks off the installation stage, culminating with tryout and operational certification. Each press can weigh 22 tons, and installing a relatively small line can require 17,000 labor-hours.
Facility Improvements. Facility improvements and modifications fit the profile of normal construction projects. Often these must be coordinated with re-arrangement projects.
Tool and Die Construction. The projects for design and construction of the dies and tools have a large influence on the plant. When they are late, the plant suffers greatly. The complexity of this tooling has increased dramatically over the past 20–25 years just as the time allowed to build it has decreased. Tool and die making projects that could once be managed with rules of thumb and details kept in experienced heads are beginning to be viewed as a high-benefit application for project management techniques.
New Programs. Less obvious applications are the management of the implementation for new programs or systems in quality, training, or process re-design.
The Implementation Environment
The introduction of project management in this highly traditional environment has spawned several less-than-op-timal strategies, which we will now describe in the interest of learning from the past. Keep in mind that project management has not been implemented in enough stamping plants to provide a clear, undisputed path to success. Furthermore, those plants enjoying some success have little economic incentive to share lessons with others since they are all to some extent competitors, even within the same company. The situation is one of many experiments, with little information exchange between the experimenters. Project management concepts tend to enter these facilities through individuals who have direct experience with successful use in a prior location, or new engineers with a school-induced appreciation for the subject. Implementation only begins when an individual with sufficient clout, belief, and motivation appears on the scene.
Strategies that don't work have been tried repeatedly. This is because they look promising to the uninitiated, and the seeds of failure take time to sprout. These attempts share a lack of appreciation for the need to define a project management process and create the necessary project management infrastructure. The results are a few fading Gantt charts, boxes of unused software, and the feeling in many that they have been there, done it, and it didn't work. With this type of experience, it is understandable that few people willingly do this more than once in their careers.
Laissez Faire. The first example of a strategy pitfall allows everybody to “do it their own way” without thought given to process or procedure. This closely parallels the “unfulfilled miracle of software” described by Phil Nunn in the January 1995 PM Network. This feels good at the start, no egos are bruised and it also fits well with an frightfully simplified interpretation of “work force empowerment.” The implied assumption appears to be that making PM software available, and then asking for Gantt charts will result in project management bursting out like apple blossoms in spring. Predictably, busy plant personnel working seven-day weeks do not leap at this opportunity to further complicate their lives.
Do the Big Ones. A second strategy is to “do it only for the big jobs.” This is akin to a small flashlight in a large dark room: it makes you feel good, but many unseen dangers lurk in the shadows. Project management techniques may actually prove something, but only after the “big one” is done, and likely only to previously converted believers. Furthermore, chances of a decisive demonstration of benefits are small if project management techniques are introduced as rescue measures. The problem is that results can only be seen as improvements at the margin rather than either/or propositions, and in these experiments there are no control samples. Seeing the improvements is difficult against a fuzzy-to-nonexistent baseline.
Get the Big Picture. A third strategy is the “big picture” approach. This is a well-meaning attempt to get some benefit for the whole facility by modeling all projects at a summary level so as not to get bogged down in detail. Alas, the resulting schedules do not have sufficient teeth for effective control of the projects, so they cause an extra reporting requirement with no commensurate benefit for those executing the work. This is an ironic consequence of attempts to keep project model detail from causing “too much work.”
The Gradual Approach. A final example of pitfall strategy is the “gradual approach.” This is for patient people. It involves application to small projects, or a series of “pilot” projects with the hope that it will catch on and grow a cadre of faithful followers. The good news is that not too many boats get rocked. The bad news is that the flaws are fundamentally fatal: there is never a critical mass of benefits or decisive evidence of high-level support. Project management forever looks like the program-of-the-month, an optional way of doing things that, if ignored long enough, will go the way of all management fads.
So what has worked? First let's propose a definition of project management “working” in a stamping plant. One would like to point to large dollar savings, but such benefits are largely invisible to normal plant accounting systems. Those systems are focused on production measures, which is, after all, the core business. A believer in project management might salivate at the potential project savings in these facilities, and there is intriguing anecdotal evidence in the tales of project survivors. Solid numbers, however, don't exist. Also, few projects are similar enough to allow “with” to be compared to “without.” A side step to these dilemmas, perhaps, is to define “value” from the use of project management as opposed to documented savings. Value is derived if the information derived from the project management system is used for improved decision making. Admittedly, this definition is based on a leap of faith and the assumption that better decisions regarding project issues will improve performance in ways which could be eventually quantified.
The barriers to success are inescapable products of the driving forces of the situation: an overwhelming preoccupation with the needs of production. From a systems thinking perspective, the management attention that could solve the problems in the future are systematically embroiled in the day-to-day. Just as the problems of tomorrow are beginning to grow today, the attention-consuming crises of today had their birth in the dim mists of the past. The phenomenon is like the plight of firefighters who are too busy to encourage fire prevention. The cycle is enormously stable, self-reinforcing and, unlike the accepted cause and effect of the firefighters, frequently unseen. The question is how to break the cycle.
Top-Level Support. What works is a combination of top-level support and single-minded efforts. What does top-level support look like? It is a series of actions by the plant manager that have high leverage effects on the project process. Examples of these are:
- Learning project management methods, techniques and philosophies
- Requiring detailed plans for project approval
- Asking status questions in project management terms
- Insisting on meaningful action plans during project execution
- Asking about start dates rather than end dates
- Enforcing project accountability
- Reading project lessons learned reports
- Funding and encouragement of a determined, single-minded project management effort
- Defining a project management organization.
What does determined single-minded effort look like? It is the focused activity of an individual who is well versed in project management tools and techniques, knowledgeable of the plant environment, and highly computer literate. This individual's mission is to build the required infrastructure (models, reports and systems and knowledge needed for project management) and instill a project management culture.
An early step is to build models of all projects, rapidly creating a total plant view. This must include the big three: time, cost and resources, resisting the normal temptation to stop at time. The additional effort needed to estimate all three is well spent in order to get the full benefits as soon as possible. A parallel effort is the assigning and training of the project teams.
In the initial stages of the progress reporting cycle one can expect many irregularities to fall out of the woodwork—people have been estimating, defining, and performing work differently from each other for years, so it won't change overnight. Early participation is likely to be less than fully serious. The realization that it is real will come later when top-level support is obvious, and decisions are made from it.
Make Project Management Useful to Many. Now the suggested strategy is to make the fledgling project management system useful to as many people as possible. The following paragraphs contain ideas for doing this.
Beware of the power of labels. Specifically, don't call any project management effort a pilot. That term implies optional, rather than mainstream—merely a test, rather than an internationally recognized methodology for success. The brave new world is explored only when the bridge back to the familiar is burned.
Ideally, match up a plant insider with an experienced consultant. Skills must be transferred, and someone must be the recipient of those skills. It is important to keep this person fully focused on project administration tasks. Do not split duties with other departments. The systemic problem, as mentioned, is that production needs are an overpowering magnet for attention—everyone knows what an hour of downtime costs but few know what a week of project delay costs. As an incentive, the position can be set up as a means to rapidly give the incumbent a broad and penetrating view of many aspects of the plant.
Develop project models and reports that pinpoint crucial issues. One perpetual concern is labor requirement projections in order to decide the timing and needs for outsourcing work. These issues are of particular interest to members of the local bargaining unit. From their perspective it is irksome to see work given to an outside contractor when it looks unnecessary from the plant floor. A remedy is to ensure bargaining unit members participate as part of the planning and resource analysis effort. This helps communicate the rhyme and reason of these decisions. With this focus and approach, modern project management techniques have generally been welcomed by the members of bargaining units.
Produce reports illuminating the concerns of the plant controller's office. This is a source of support that is crucial to the longevity of project management use. The financial impact of the above-mentioned outsourcing decisions are a good example. Another worthy goal is to set project budgets with figures generated from the project models rather than traditional methods.
Another issue from the controller's office is how the corporate budget concerns impact the plant. In one case a controller wanted to delay planned expenditures by six months to push them into the next fiscal year and thus improve the look of the books. This would have delayed the start of a rearrangement project necessary to prepare for the arrival of a new press line. The detailed project plan showed a non-intuitive, year-long chain of events. Delaying the start of the project would likely have resulted in a huge and expensive resource spike one year hence, just prior to the new equipment's arrival. Review of the project model's projections helped sway the decision to start the work in time. Did this generate real savings? It depends on who you ask—when is a potential cost avoided a real cost savings?
Aim for Higher Order Value
A longer-term strategy is to use modern project management to address difficult and persistent problems. Here are descriptions of three: control of indirect labor, quantification of overtime productivity, and management of tool and die suppliers.
Control of Indirect Labor. The resources devoted to projects in a stamping plant are classified as indirect labor. That is an artifact of the traditional accounting production system—the costs are difficult to directly trace to the cost of the produced parts. Production decisions are based on data: SPC charts, inventory levels, visual factory techniques. As clearly stated by an experienced stamping plant denizen, “without project management, you don't have data.” Consequently, decisions can only be based on gut feel.
One common situation is the sharing of resources between project work and production support. Production requires the skilled trade resources for immediate response, like a 911 call. The project work is interrupted, causing delays with a definite increase in cost, but by how much? The answer lies in a detailed understanding of the project work provided by modern project management techniques. With this detailed understanding several possibilities emerge:
- Quantification of impact of shifting resources to production support—how much slippage is happening? Is that acceptable for the plant?
- Forecasting project demands that will entail special considerations for this shifting—critical demands for resources prior to major product launches may argue for bringing in more external resources.
- Selection of project work to fill in between 911 calls from items causing minimum impact.
Overtime Productivity. Another issue with the indirect labor situation is that of productivity. Kenneth Cooper suggested in a Project Management Journal article that excess overtime can result in a $2,000 labor-hour from the combined effects of fatigue and rework. Informal observation of a stamping plant supervisor asserted that 4 hours of overtime (12-hour days) yield 1.5 hours of accomplished work. That gives us a $200 labor-hour for effective work during that period. The math here is $50/hr x 1.5 (overtime premium) x 4 hrs = $300 for 1.5 hr. Even this lower figure is an eye-opener, particularly if another factor is thrown in for interruptions from the aforementioned 911 calls. Is that really what happens on the projects in these facilities? Are $200 labor-hours common occurrences? What is the productivity impact on project work of prolonged overtime in this environment? The only way to find out is to measure the phenomenon. The tools of modern project management, and its analytical approach, provide an effective means to penetrate the myths surrounding the issue.
Die and Tooling Supplier Management. Many die and tool builders are small to mid-sized independent business entities. Some are family-owned businesses, started in the ’50s or ’60s. Their use of modern project management techniques, if at all, is just beginning. To further complicate matters, the stamping plant doesn't directly contract with them, but rather with a centralized procurement organization. This indirect relationship causes plant people to worry their concerns may not be adequately communicated, so they send out their own observers of the build process. These people are well versed in the technical issues of dies and tools but not in modern project management techniques. Are the biggest influences on reliable delivery technical or managerial? A good case can be made for the managerial side of the argument.
From a project management perspective, tool and die making is difficult to model and forecast. Typically, the start of a project is delayed and scope is guaranteed to change. Multiple projects in a shop compete for limited resources. The economics of the business generate pressure to overbook those resources, yet never can this obvious fact be admitted to their customers (unlike the airlines, as any holiday traveler can attest). These factors and others make for a bushel basket of variables, human dynamics, ploys and counter-ploys.
The traditional cost accounting systems or MRP systems found in these shops cannot possibly cope with these issues. Furthermore, they are designed to serve their owners, not the customers. Optimizing profit for the shop does not produce optimal deliveries for the stamping plant. Given these factors, there is a rich lode to be mined by analysis at a layer or two below superficial promise dates. Those analytical techniques and methods for improvement are supplied by modern project management.
Automotive stamping plants offer a challenging environment in which to implement project management. There is a large variety of potential applications, the most valuable currently focusing on the ability to forecast levels of resources for non-production purposes. The summarized lessons of many attempts will likely sound similar to those learned by project management professionals in other industries. Strategies that work involve top-level support, determined and skillful effort, and concentration on high-value uses. Modern project management techniques show promise for valuable insights and solutions to many elusive and expensive problems in the stamping plant environment.
Cooper, Harold. 1995. Interviews on stamping plant insights and observations.
Cooper, Kenneth G. 1994. The $2000 Hour: How Managers Influence Project Performance Through the Rework Cycle. Project Management Journal, vol. XXV (March), pp. 11–24.
Forrester, Jay W. 196. Principles of Industrial Dynamics. Cambridge: The MIT Press.
Nunn, Philip. 1995. The Transition to Project Management In Manufacturing. PM Network, vol. IX, no. 1 (January), pp. 7–10.
Senge, Peter M. 1990. The Fifth Discipline. New York: Doubleday/Currency.
Richard E. Ryder, PMP, is a vice president and project management consultant with Plan Tech, Inc., of Troy, Michigan. He received a B.S. from the United States Military Academy, West Point, and a M.B.A. from the University of Michigan.
PM Network • August 1995
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