Maytag's Galesburg, Ill., facility may be 88-years-old, but it is using some of the most innovative product development strategies in the industry. In recent years, this Refrigerated Products division began joining engineering, purchasing, and suppliers early in the design stage. The results have been impressive.
"Supplier-integration benefits have resulted in about a 50% leadtime benefit with respect to time-to-market over the past three years," says Scott Giles, director of procurement at the Galesburg site.
Early supplier involvement also has helped Maytag integrate advanced materials into new products and develop new production methods, such as a more efficient pre-coating process for refrigerator cabinets.
The Refrigerated Products group used this innovative design strategy (and the subsequent manufacturing process) to design and develop a new line of energy-efficient refrigerators. The Advance Performance Design (APD) line, which includes a top-mount refrigerator as well as a side-by-side model, not only meets today's tough energy-conservation requirements but also uses new materials and manufacturing methods that have improved quality, increased productivity, and reduced costs at the Galesburg site.
Teaming up for success
Maytag's Refrigeration Products division has made a concerted effort during the past three years to integrate suppliers early in the design stage. At the same time, efforts continue to reduce the number of suppliers both at Maytag Corp. and at the Galesburg facility.
"The supplier rationalization process holds the key to the Maytag Procurement Center's '334' strategy," says Giles. "The strategy aims to have 300 suppliers with an aggregate 3-parts-per-million quality level providing services to us over a four-year business plan." Maytag is in the second year of the four-year initiative.
At Galesburg, the group hopes to achieve the same results with less than 100 suppliers. To make the grade, suppliers must meet stringent business and quality standards. Through this certification exercise, Giles says, "we can evaluate a supplier's competencies and properly align with those that meet our sourcing strategies and technological expectations."
Under the program, buyers have been elevated to the role of "supply team leaders." In this capacity, they act as supply champions to maximize the efficiencies of the supply-chain process.
Major redesign programs that are predominantly engineering driven are managed through a formal project management process led by Tom Johnson, Maytag's major project manager, engineering. Such new programs are headed by a project manager, normally an engineer, who coordinates the activities of engineering, manufacturing, procurement, quality, finance, service operations, and suppliers.
On large programs, like the APD project, almost all functional areas get involved in the design process. A category management team process established recently improves the redesign programs' time-to-market, says Giles.
For example, with the supply team leader process in place, Maytag has been better positioned to tap a supplier's technical expertise, according to Giles. Moreover, added resources within Maytag assure that quality improvement escalates in conjunction with any design improvement.
"What this means," says Johnson, "is that everyone now deals with his or her peers in other departments. No longer do we have a 'throw-it-over-the-wall' operation, but a gradual movement into the world of concurrent engineering. It involves suppliers at the outset of the design process so that we can make more use of their talents. In short, the roles of all the players are changing, based on their expertise."
Such teamwork also offers big benefits to engineers. No longer does engineering have to perform time-consuming testing and specification conformance approvals as its confidence in the certified suppliers' capabilities grows. This frees an engineer's time to concentrate on getting products to market faster.
From the top down
Not only has the APD process improved teamwork and profits, but it has resulted in other key benefits. For instance, the strategic endeavors involve more interaction with top executives from Maytag and its suppliers. Such joint alliances and innovations now drive design improvement and product quality.
Moreover, Maytag's key corporate executives have initiated a "top-to-top" forum with key preferred suppliers to assure proper communications exist on an as-needed basis. The process, says Giles, has proved "extremely beneficial in establishing a proactive business climate that is collaborative in nature, instead of adversarial. The meetings set the stage on a macro-perspective that assures specific innovation and growth goals are achieved to the benefit of the suppliers and Maytag."
As an aid in this endeavor, formal strategic business plans are communicated to suppliers. The increased expectations, value-added initiatives, and awareness of Maytag's product lines and core competencies permit cost reductions and quality improvements to be pursued among all parties on a regular basis.
"As a strategic partner, we are committed to continuously bringing new concepts to Maytag," says Thomas W. Poplar, manager for Ferro Corp., a Cleveland-based powder-coating supplier. "In fact, we have structured our organization to give Maytag optimum response. As a corporate account manager, I must pull together the right teams to develop new products for Maytag."
Ferro was one of several "cornerstone" suppliers that brought product and process expertise to the APD development project--at the project's outset. Other suppliers on the project include Nordson Corp. (Amherst, Ohio), which installed six powder booths, and Coral International Inc. (Waukegan, Ill.), which handled pretreatment operations.
Maytag says input from these suppliers was key to the company's decision to switch from a high-solids, three-dimensional, formed cabinet to powder, two-dimensional, flat blanks.
"We are pioneering in cabinet fabrications by pretreating and powder coating flat steel blanks," notes Rick Foltz, vice president and general manager of the Refrigeration Products unit. "We are different in that we notch, pierce, phosphate, and then paint the blanks."
As part of a $180-million investment in the Galesburg facility to design and produce the APD line, Maytag bought technologically advanced equipment to support this powder-coating process.
Tim Shelley, principal engineer on the project, says environmental considerations drove the change: "We used to put out 1 gal of solvent; now we're down to 40 oz."
With powder, "emissions were cut from 2.5 lb/gal VOC using the high-solids paint, to less than one-half of 1% total volatiles," adds Poplar. And any powder that falls on the floor can be recycled.
Poplar says powder coating of blanks also "controls film thickness tightly to 1.5 (+/-0.2) mils. With a 3-D part, you're likely to get +/- 1 mil."
More efficient use of space provides another plus. Now 1,000 refrigerator blanks can be inventoried in a two-foot-high stack in a space that typically would be occupied by only three finished refrigerator cabinets. Moreover, all cut edges are coated, eliminating rust and corrosion.
Such early involvement of suppliers in the design process has brought better alignment and communications with Maytag's engineering and procurement groups. Says Giles: "Expectations are formally documented and accountabilities assigned and measured to assure greater speed-to-market."
With such strong results from its "334'' strategy and new-product design process, Maytag appears poised to become a more efficient and more profitable player in the world of appliances.