Yokohama Restructures To Face The Future
The Yokohama Rubber Company is the second largest tyre manufacturer in Japan with net sales for the financial year ending 31.3.2000 of just over 392 bn Yen.
Tyre sales account for just under 70% of turnover, with the remaining 30% coming from the multiple business (MB) division, whose products include such items as hoses, fenders, golf clubs and anti-seismic rubber bearings. This is 2.2% down on the 1999 figure, due mainly to falling demand on the Japanese market, where 60% of Yokohama’s tyre production is sold.
Despite this, the company’s operating profit increased 20.5% to 19 bn Yen, although a net loss of 9 bn Yen was recorded, as a result of writing off 23 bn Yen of service costs previously incurred for a pension plan. Founded in 1917, Yokohama manufactures tyres in five factories in Japan, plus there are overseas production facilities in the Philippines and Vietnam and a joint venture with Continental General Tire in the USA.
TYRES & ACCESSORIES recently visited one of these factories, at Shinshiro, 300 km west of Tokyo. Director and Plant Manager Hiromitsu Akashi provided background details of the facility, which was opened in 1964. The site area is 221,000 sq.
m., and the buildings cover 133,000 sq. m.
1,100 employees produce one million tyres a month, mainly high performance 15″ and 16″ passenger car radials. Taking October this year as a production snapshot, the factory produced 1,022,300 tyres, 30.1% of which was for OE (Toyota, which has a factory close by Shinshiro, is by far the biggest customer, but Yokohama supplies all Japanese manufacturers); 52.
4% was destined for the domestic market and 17.5% was sold abroad. Shinshiro achieved ISO 9001 quality accreditation in 1995 and, last year, gained the ISO 14001 environmental standard.
Like many other tyre companies, Yokohama is aiming to improve productivity while, at the same time, reducing its costs. In Japan, as in western Europe, labour accounts for a significant proportion of costs and the staff numbers at Shinshiro have been reduced from 1,350 in the early 90s to the current level of 938. By the middle of next year, this will be below 900.
Alongside this, production has steadily risen, and the product mix has changed radically. The table compares an average for the first half of 1994 with November this year. 1994 was when Shinshiro introduced its Total Productive Maintenance concept, which encourages employees to consider how to improve productivity and reduce costs by making them feel involved as part of the team.
We have already seen the increase in production, but there are other indicators, such as the defect ratio (now less than 0.5%, compared to 2% in the late 90s) and the scrap ratio (now 0.4%, 1997: 1.
3%). In 1994, the factory was suffering more than 2,700 machine breakdowns a month – the figure today is less than 200; something which Mr. Akashi says is due entirely to TPM.
The Factory Walking round Shinshiro, it was puzzling to see some notices written in Portuguese. The reason is that, some years ago, a number of Japanese emigrated to Brazil to seek their fortunes, for want of a better phrase. Now, the grandchildren of these émigrés are returning to Japan, looking for work and there are over 100 such returnees working at Shinshiro.
The reduction in the number of workers has not been achieved by the wholesale introduction of new machinery (although when the tyre building area introduced combined first and second stage building machines, there was a considerable manpower saving), rather by improving efficiency. Another area where labour has been reduced is in the transportation of components and products from one stage of the production process to another. This is carried out by small, battery-powered trucks, which sense and follow guide paths in the floor of the factory, and it is completely automatic.
Production is carried out seven days a week on a three-shifts-per-day system, averaging 20 hours a day. One area where there has been no compromise is that of quality – at the final inspection stage, every tyre is checked for balance and uniformity. The warehouse capacity, incidentally, is a modest 150,000 tyres, or five days’ production, as Shinshiro operates on a just in time basis for its OE customers, with tyres shipped straight from the plant to the customer.
As stated earlier, the objective of increasing production while reducing costs is on-going, but how far can this be taken with existing plant and equipment? Mr. Akashi believes that there is plenty more potential for savings without the need to invest heavily in more modern machinery. For example, extra productivity can come through changing shift patterns (perhaps moving to four daily shifts), making better use of time and machinery.
Certainly Mr. Akashi is convinced that Shinshiro – and, indeed, the company – will continue to reconcile the twin problems of improving production and driving down costs..