General Motors Standardization Facilities Processes in Manufacturing
General Motors Standardization Facilities Processes in Manufacturing
The Worldwide Facilities Group of General Motors Corporation (GM) has begun standardizing facilities processes in its manufacturing plants to reduce costs and improve quality, building on the success it has had on the non-manufacturing side of the company. The strategy allows the manufacturing employees to focus on their core competency--building world-class automobiles--while the facilities people handle everything related to the buildings themselves: 200 million sf of manufacturing space in North America alone.
GM's Worldwide Facilities Group (WFG) was formed in 1993 to consolidate 20 decentralized facilities organizations that maintained millions of square feet in hundreds of buildings worldwide. This included 50 non-manufacturing sites and 80 manufacturing sites in the United States. WFG employs 12,000 predominantly unionized hourly employees, and 1,200 salaried employees in the United States.
The first major goal of WFG was to standardize processes on the non-manufacturing side of the company. This effort began in 1998 and saves more than $1 billion a year.
"Standardizing processes started in non-manufacturing with housekeeping," says Tom Blakeslee, director of facilities management for the GM Technical Center and GM Vehicle Manufacturing Facilities. "It blossomed into sustaining the assets, including the entire envelope from the roof to the walls to the grounds.
"Manufacturing was the next logical step. Without standardization, it's almost impossible to determine your cost of facilities in manufacturing," says Blakeslee. "Our focus is simply to reduce costs and allow the plants to work on their product by separating production and facilities."
Despite proven success on the non-manufacturing side, standardization was a hard sell among plant managers.
"The plants didn't want anything to do with us," he says. "We're facilities people; they wanted to run their plant. At one time, the plant manager was like a king: he made all the decisions for how things would run. The problem was that costs were twice benchmark in some of the facilities areas."
WFG got a handle on facility expenses by tracking labor costs using proprietary GM software called FACIS (Facilities Information System) as an alternative to traditional accounting practices. FACIS aligns with standards set by the Building Owners Management Association and the International Facilities Management Association allowing WFG to benchmark against other automakers and other GM plants.
The goal was to establish a common standard for both cost and quality across all facilities. The standard organizational template includes a facilities manager at every site who incorporates common processes, including services provided by both internal and external providers, and both represented and non-represented workers.
"The interesting thing is the template works for both manufacturing and non-manufacturing," says Blakeslee. "The way we run our General Motors Technical Center in Warren, Mich., is the same way I run facilities operations at my Baltimore truck assembly plant."
The common standards that help achieve that quality are so well defined that Facilities Management is the only department of GM to earn ISO-9001:2000 certification: 43 common central processes in two plants in Pontiac, and plants in Detroit, Warren, and Lansing, Mich., all are certified. Plans to bring the remaining 165 plants under ISO certification within the next few years are well underway.
"That says you're doing everything in every plant by the same process," says Blakeslee. "You plan, you execute, and you prove you're doing it. That's difficult."
The commitment to quality is clearly stated in a new FM Quality Policy: "Facilities Management is committed to implementing an effective quality management system." The framework for providing Best-In-Class Facilities Management Services includes customer satisfaction; reviewing quality goals and objectives; providing proper resources; measuring, analyzing, and evaluating performance; and integrating continual improvement.
Maintaining Standards and Saving Money
WFG is in the process of implementing the standardized processes in five major areas: administrative services, housekeeping services, maintenance services, construction services, and space management. Because the process started with housekeeping, it is almost 100 percent implemented in that area, with the exception of controlled document disposal.
WFG has developed a Non-Technical Maintenance Specification, which standardizes all supply specifications and purchase orders for housekeeping. In the past, plants would negotiate their own contracts with suppliers, using their own specifications.
A key element to the success of the housekeeping program is "work load leveling," a process by which a labor rate is assigned to each task. For example, Blakeslee looked at the average time it takes to clean a restroom, and how often it has to be done in a week.
"We used industry standards, to the minute, then assigned a fair amount of work to each employee," he says. "We make sure our janitors work 7.2 hours a day per their contract, and we tell them how long they're going to work on all their areas of the business."
This system, combined with buying less expensive products and more power equipment, reduced the cost for janitorial services from $5.18 to $4.50 per sf, which resulted in a savings of $90 million a year.
Blakeslee stresses that you can't cut costs while letting quality slide. Measuring site performance used to be inconsistent or non-existent. A new Housekeeping Quality Audit Program now uses outside auditors to track quality and cost. The company also instituted Customer Satisfaction Surveys. They found that while costs have plummeted, customer satisfaction has steadily increased.
"If you don't have customer satisfaction, you can have the greatest, lowest costs on earth, but your customers are going to throw you out," he says. "For the first time ever, we told our plants we're going to measure how clean is clean. It's an interesting phenomenon: When everybody figures out they're being measured, all of a sudden they perform better."
Tradeline Partner-level Sponsors
The audits keep track of performance by ranking each area on a scale from 0 to 110; a score of 88 is considered acceptable.
"I've had some bad audits," concedes Blakeslee. "One of my assembly plants typically has been lower than 86. ISO procedures require a written Corrective Action Required report after the third unacceptable audit. We have to correct that by whatever timetable we put in the action plan, or we lose our certification."
WFG also developed a Web-based facilities management manual that outlines how each process is to be performed and establishes a process owner. Each task is defined, documented, and measured using the manual, which is the basis for the audits.
"With one click, our FM Manual tells you how to run the operations side of your business," says Blakeslee. "This is our bible."
Not only are existing facilities better maintained under this system, new facilities are being designed with cleanability and maintainability in mind, resulting in lower housekeeping costs over the asset's lifecycle. WFG now takes best practices for cleaning and maintenance, which are continually developed by joint GM/union teams, and brings them to the design team.
GM's new Cadillac Grand River plant in Lansing became a test case for these innovative systems when WFG participated in the design and construction from the outset. The result was a 1.8-million sf facility designed for maximum efficiency in cleanability and maintainability.
"That's probably the finest example of how to have a world-class facility," says Blakeslee. "It's what we're trying to do with every new plant: make it world class."
Company-wide Contracts Provide Uniform Quality
WFG leverages GM's size to win favorable company-wide service contracts and manages them regionally rather than from plant to plant. Five U.S. regional managers negotiate contracts for elevator/escalator maintenance, filter management, HVAC services, copiers, faxes, pagers, food services, and the vehicle pool. Vendors are in charge of maintaining all office supply inventories in universal pull stations, and two suppliers provide fleet truck management for WFG's entire U.S. operation.
Site based regional engineers are assigned to sustain the assets, including roofs, grounds, and utilities, and provide technical engineering support to maintenance operations. In the past, there was little planned maintenance. Now, MAXIMO software creates work orders through the help desk and subject matter experts establish scheduled maintenance.
"There is now one plant engineering department instead of 170," says Blakeslee. "In the past, every plant did its own five-year estimate of the work they needed done. All that money was transferred to us. Now it's in our budget, not theirs, and we set priorities across the company, of course working with our customers."
Regional engineers also work with regional managers and facility area managers on new construction projects within existing plants. Managing these projects used to be among the many responsibilities of plant managers, in addition to their regular duties, with no external accountability. Construction services are now standardized and regional engineers hire contractors to perform work once the decision to contract has been made.
WFG also instituted a formal change order process. In the past, change orders were approved locally without any accountability or cost tracking.
In the area of space management, WFG has established Project Delivery Program Management (PDPM) as a way to streamline contracted construction jobs that cost less than $1 million. Regional engineers have established blanket contracts on a regional basis, which are used for all types of construction activities from office renovation, plumbing, and electrical installation to process equipment installation.
"Say you wanted to spend $15,000 to renovate a restroom," explains Blakeslee. "In the past, the plant engineer would develop specs; they would go to purchasing, which would develop the bid specs; then you'd go out to bid. Now, cost estimates are agreed upon with the supplier who goes out and immediately gets the job done. The PDPM contractor has the authority to hire the subcontractors or self perform the work as required.
"The real key is work elimination," says Blakeslee. "We are eliminating redundancies. It is a continual cultural change."
The company-wide savings could top another $1 billion a year by the time the program is fully implemented, probably in less than five years, says Blakeslee.
By Lisa Wesel
For more information on the above report, please contact the Tradeline Editor