Akebono and the power of process. (Manage).

BEYOND RHETORIC

The fourth and final point in the Akebono Brake Industry Co., Ltd., "Declaration for the 21st Century" is that the organization will endeavor to:

"Achieve our ASPIRATIONS through the pride of each and every individual."

Which, of course, is the kind of statement that is common in corporate rhetoric.

But the remarkable thing about Akebono is that if its leaders in the U.S. are any example, then it is more than a little obvious that this outfit, which is in the business of designing, engineering and making brakes (disc and drum brakes; pads and liners: the terms friction and vibration figure predominantly in the company's materials), recognizes that people truly are the important asset of the company. How important? Just listen to Bill Hilbrandt, vice president of R&D, who is sitting in the company's 80,000-[ft.sup.2] headquarters/engineering facility in Farmington Hills, Michigan, who is referring to the array of dynos, test stands, climate-controlled enclosures, and other test equipment that are located there: "If we took out all of the people in the building, then all of that stuff is rusting junk." Exceedingly expensive rusting junk. "But if we took every machine out of the building and kept the people, we'd figure out how to get the job done." Fortunately for them, they have both the people and the eq uipment. One more thing about the aforementioned building: it is in the process of being expanded to 140,000-[ft.sup.2]. In a period of contraction, here is an operation that is undergoing expansion.

A thumbnail of Akebono in North America: The Japanese parent established a sales company in the U.S. in 1980. In '86 it established a joint venture, Ambrake Corp., with what is now Delphi. In '94 it established a second production operation, Amak Brake. Akebono Corp. was established in '95. The company operates four manufacturing plants, all of which are located in Kentucky (Glasgow, Elizabeth-town, Springfield, and Munfordville). It has 1,600 employees in North America. Customers include DaimlerChrysler, GM, Ford, Nissan, Honda, Toyota, Mitsubishi, Delphi, Bosch, and TRW It supplies both original equipment and aftermarket products.

SERVICE BEFORE SYSTEMS

In a period when seemingly every automotive supplier is hell-bent on supplying as large a portion of the vehicle as possible (i.e., modules that are sometimes no more than tangentially related to what the firm makes), these guys aren't interested in taking that approach, in being a "full systems supplier." That's simply because they know what they're good at, and believe that it is good business to put the interests of their customers first. "No one supplier can give you the best of everything. When you talk about a broad, complex brake system--or any other system--when you have the pedal and actuation system, and the ABS, and the foundation brakes, and everything else, there are a lot of different core competencies that go with that. And we all execute some things better than others. What happens in the full system supply is that you don't necessarily get the best of a given component or a section of that system that exists. You get what that guy happens to have. And that is showing to be a negative in a log istics sense and in warranty," Hilbrandt says. And Kevin J. Alder, president and chief operating officer of the corporation, amplifies that by acknowledging that unlike some of the full-system suppliers who are responsible for entire corner systems, "We don't feel we have that expertise." But when it comes to all things related to friction and vibration, which typically fall within the category of noise-vibration-harshness (NVH), then they'll go the extra mile, they'll be a "full service supplier," if not a "full system supplier." Speaking of NVH issues that may arise, "We do an awful lot of extra work to make sure that it's handled-even if it's not our part, if it's an adjoining part," Hilbrandt says.

The parent company has about a 40% market share in Europe. The corporation has achieved a 28% market share in North America. There is something to be said for concentrating on one's competency.

Process Measurements

"If you walk though our facilities and don't get the sense that we are committed to perfect quality, then we've missed an opportunity," Alder says. And when he refers to "we," he means everyone in the organization. Not surprisingly, there is the company's variant on the Toyota Production System, the Akebono Production System (APS). Hilbrandt points out that for many companies, a production system is just that: "It begins and ends in production." But the engineering organization that he heads up also uses the processes that are APS. "We have more than 40 metrics here." They're looking at indications of efficiency and quality. Test equipment utilization. Overtime. Throughput. And on it goes. They look at the reports, run a Pareto analysis, and establish the action plans for improvement. ("You don't collect a metric unless it is meant to drive a behavior. Otherwise, it's useless," he says.) Alder points out that in addition to Production and Engineering, Sales and Finance have metrics, as well.

If there is a word that can be used to characterize what goes on at Akebono Corp. it is: Process. It is a process that is aimed at delighting the customer. It is not a program, something that is bounded by start and finish points. "I've been in a number of North American companies," Alder says. "The difference here is that continuous improvement is not a program. It's just like breathing--expected." Those who don't understand the fundamental, thoroughgoing aspect of the Akebono culture don't last there.

But based on the turnover rate (Hilbrandt says that in the Engineering Dept., where there are more than 100 people, the number of people who quit during the past two years is zero), people who join the organization tend to last-- because before they join it is determined whether they have what it takes to be part of that culture. There are five main attributes that they look for:

* Energy level

* Enthusiasm

* Optimism

* Basic good work ethic 

* Ability to work in a team

Hilbrandt maintains, "If you hire someone with those five attributes and they are intelligent adults, you can teach them the technical side. If you hire Albert Einstein's smarter brother and he can't work well in a team, you have a useless person in your organization."

So they have a stringent hiring process. After prospects have been selected, they undergo a weeklong training program with Akebono associates. If they exhibit the five attributes in action, then they're paid for the week. If they don't, then they don't get paid. Next, there's a week's worth of problem-solving training. "We're teaching how to look at current situations to evaluate them from the point of view of continuous improvement," Alder explains. It is only in the third week when the people get to the actual work areas. But even when people make it, even though there are conscious efforts to keep people working, this is not a place where anyone is guaranteed a job for life. "Our performance expectations are high," Hilbrandt says. "We will not put up with someone who is not contributing and is letting their team members down."

Many organizations talk about "continuous learning." And so they run some programs and have a partial tuition reimbursement program. At Akebono, within the past few years, the tuition reimbursement program went from 75% to a maximum of $1,500 per year to 100% of a maximum of $1,500 per year to 100%, no limit. "They could take that diploma and leave the next day," Hilbrandt admits. "But we're betting they'll want to stay here, because that's not the end of our commitment to them."

got qame

Process. Teamwork. Improvement. The emphasis on those is unmistakable. It is almost like breathing. Hilbrandt provides an example from his own experience of his understanding of the importance of why those elements matter. He played in a basketball league. He was on two separate teams in two divisions, which allowed him to play a lot of ball without scheduling conflicts. On Team A, he says, all five of the players were fairly equal in abilities, with each shooting double digits every game. On Team B, "there were four absolutely awesome players--and me." His task on Team B was to bring the ball down the court and to pass it to someone who'd shoot. "I was there to be the fifth guy." When it was time for the league finals, Team A and Team B were scheduled to play. Hilbrandt had to decide which team he'd play with. "I picked the one that was a team," he recalls. Team A won. "I scored 16 points in that game. When I played with the other team, I scored no more than two points all season." After the game, members of Team B asked Hilbrandt why he never played like that when he was with them. "I said, 'When did you ever give me the ball?"'

As in playing as a team, working as a team gets things done. And when you have a process in place to make sure that happens, and when you have all of the team members working to get better...