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In the late 1980s, General Motors Corporation (GM) initiated a long-term project to predict and improve the throughput performance of its production lines to increase productivity throughout its manufacturing operations and provide GM with a strategic competitive advantage. GM quantified throughput performance and focused improvement efforts in the design and operations of its manufacturing systems through coordinated activities in three areas: (1) it developed algorithms for estimating throughput performance, identifying bottlenecks, and optimizing buffer allocation, (2) it installed real-time plant-floor data-collection systems to support the algorithms, and (3) it established common processes for identifying opportunities and implementing performance improvements. Through these activities, GM has increased revenue and saved over $2.1 billion in over 30 vehicle plants and 10 countries.
Key words: manufacturing: performance/productivity; production/scheduling: applications.
Founded in 1908, General Motors Corporation (GM) is the world's largest automotive manufacturer. It has manufacturing operations in 32 countries, and its vehicles are sold in nearly 200 nations (General Motors Corporation 2005b). GM's automotive brands include Buick, Cadillac, Chevrolet, GMC, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, and Vauxhall. In 2004, the company employed about 324,000 people worldwide and sold over 8.2 million cars and trucks-about 15 percent of the global vehicle markets-earning a reported net income of $2.8 billion on over $193 billion in revenues (General Motors Corporation 2005a, b).
GM operates several hundred production lines throughout the world. In North America alone, GM operates about 100 lines in 30 vehicle-assembly plants (composed of body shops, paint shops, and general assembly lines), about 100 major press lines in 17 metal fabrication plants, and over 120 lines in 17 engine and transmission plants. Over 400 first-tier suppliers provide about 170 major categories of parts to these plants, representing hundreds of additional production lines.
The performance of these production lines is critical to GM's profitability and success. Even though the overall production capacity of the industry is above demand (by about 25 percent globally), demand for certain popular vehicles often exceeds planned plant capacities. In such cases, increasing the throughput of production lines increases profits, either by adding sales revenue or by reducing the labor costs associated with unscheduled overtime.
The Need to Increase Throughput
In the late 1980s, competition intensified in the automotive industry. In North America, this competition...