Pictures of the Future   Fall 2007

Simply the Best

^{Precise facility planning (above), 100 % quality achievement (below left), and continual process control (below right) helped ensure that the Amberg plant was named Europe’s Best Factory}

Tack-tack-tack-tack…"—it’s practically impossible for the human eye to follow the extremely rapid movements of the machines in the Amberg Electronics Manufacturing Plant (EMP) as they stamp chips, transistors, resistors, and capacitors onto blank circuit boards that fly by on conveyor belts. Here at the EMP, Siemens Automation and Drives (A&D) produces "invisible intelligence" for industry and everyday applications. The associated devices are part of Siemens’ Simatic line of programmable logic controls—a product family used in regulating just about every kind of production machine, from welding systems and cement manufacturing facilities, to bottling equipment, automated car washes, dairy products processing systems, and ski lifts. The EMP itself has 16 production lines operating around the clock, each of which processes 150,000 electronic components per hour.

Siemens is—by a wide margin—the world market leader in electronic controls for industrial automation, What’s more, its market share has been growing by one percentage point per year for some time. This achievement is in no small part due to the Amber plant’s 870 employees, who produced 11 million Simatic modules last year. "And this year, we plan to build more than 12 million," says plant manager Hans Schneider.

Amberg’s factory hall is as tall as a two-story building and covers an area the size of one-and-a-half soccer fields. A gallery offers a view of the production floor, which is as clean as a whistle. Wide aisles can easily accommodate three workers walking side by side, and with most machines no higher than 1.4 m there’s no problem making eye contact.

Cost Effective. The EMP is living proof that it’s possible to manufacture products in Europe at the same low cost as at a sister factory in Nanjing, China on a daily basis. What’s more, this year the facility captured first prize in Germany’s Best Factory/Industrial Excellence Award 2007. The two organizations that present the award—the INSEAD Business School in Fontainebleau, France, and the Department of Production Management at the Otto Beisheim School of Management in Vallendar, Germany, also named the plant Europe’s Best Factory.

The awards jury assessed operational strategy, product development, supply chain management, organization, human resources, service, partner management, and continual improvement and awarded the EMP top marks in nearly all categories. The plant’s success is partly due to its use of the best machines available, its low-cost procurement sources, and its mastery of the production process. Still, other plants can boast the same virtues—so what makes a champion a champion? "We use comprehensive information and communications technology that provides us not only with basic production data but also the coordinates for the insertion machines," Schneider explains. "These systems collect, analyze, and assess manufacturing data—so we always know what’s going on at the plant, and we also have up-to-date information on production figures, downtime, and inventories. Our flexible order logistics system also ensures that the material logistics and production departments are not negatively affected by fluctuations in order volume. This supports efficient capacity planning and high machine-capacity utilization."

The EMP, which produces exclusively on a made-to-order basis, has an amazing delivery reliability rate of 99 %, meaning that 99 out of 100 customers receive their exact number of ordered units within 24 hours at the requisite quality.

Flawless from the Furnace. Production processes at the EMP are synchronized and perfectly aligned with one another. Practically nothing is done by hand at the plant, with the exception of machine setups and repair and maintenance work. Men and women in blue overalls at the facility plan production, make decisions, and coordinate and monitor activities.

Snapshot: A worker carefully examines a module under a magnifying glass. The module has just emerged from a soldering furnace, where printed components are mounted on circuit boards at a temperature of 250 °C. The worker is responsible for ensuring that the circuit board is stable, and that nothing is missing or incorrectly mounted.

Ulrich Brück, who is responsible for Employee Initiatives and the Siemens top+ Management Program, refers to this employee check as statistical process control. Here, a computer randomly determines which modules should be examined. Brück points to a monitor at the testing station. "Our colleague here sees an interactive model of the selected module on the screen, and the functional units she needs to check are marked in color. If she finds one to be defective, she clicks its virtual counterpart on the monitor, automatically identifying the real part and generating a message that is sent to the Production Planning department." Since each circuit board has a barcode, "fishing out" defective modules is not a problem. But when defects are identified, an analysis is performed to determine the cause of the problem. "If necessary, we’ll even go to the lab and examine circuit board components under a microscope," says Brück. "No matter what the error, we’ll find its cause."

The Amberg team is renowned for its ability to bring innovative products tailored to its customers’ needs to market faster than its competitors—a feature that significantly influenced the Best Factory jury. The EMP also stands out thanks to its employees’ great commitment to quality. "Things can always be done better," says Schneider, whose office door—which is just a two-minute walk from the production hall—is always open. Schneider pulls out a chart that shows error rates for the past few years. This year, only 28 of the one million units produced were defective, a very low number for electronic components. However, it’s still not low enough for Schneider and his team, who want to reduce that figure to less than 20.

Ideas and Ideals. Every year, EMP employees—from line workers to managers—submit an average of 15 improvement suggestions per person that are implemented; the norm for the electronics sector is one suggestion per employee and year. Plant management actively encourages this commitment. For example, it allows staff to meet any time they want in creative offices in the factory hall. These meetings are used to discuss issues, depict ideas on flip charts, or directly enter ideas into special databases.

This improvement process has nothing to do with coincidence, as it’s based on a specific methodology. Brück displays the CIP (continual improvement process) mobile—a pinboard on wheels that displays key issue areas (Keys) at the EMP. There are a total of 16 Keys covering everything from quality and waste to cleanliness and machine setups. Each Key also has a description of its ideal state and the abilities required to achieve it. Managers and experts update these Keys every year in the form of master charts.

"Employees compare the ideal with the actual situation, draw up proposals and measures for reconciling them, and then put these on the pin boards," says Brück. One working group can address 25 % of the Keys in one business quarter. All results are presented to supervisors, who support staff with implementation.

The "champion" of industrial plants is thus now much more than just a production facility. "Modern factories need to have a clear strategy for moving forward—one that involves entering new markets and assuming responsibility for achieving sales and profit targets," was the judgment of the jury, which added that "the EMP comes very close to this ideal."

Schneider has a humble explanation for the plant’s success: "We simply utilize all the levers at our disposal." In its systematic search for hidden potential, the EMP has achieved average productivity increases of ten percent per year. That’s why EMP workers are not afraid of competition from Asia. "Our advantage lies in having the best-trained employees, proven engineering know-how, and an outstanding infrastructure," says Brück. For example, if a machine fails, our machine supplier shows up right away to fix the problem."

This year’s Best Factory award has served to motivate the team even further. Recently, Schneider and Brück set themselves the goal of improving quality by a factor of ten and thus reducing EMP’s error rate to the unbelievably low level of only 3.4 pieces per million units produced.
                                                                                                        Evdoxia Tsakiridou