KENWORTH PLANT TOUR TEAM MEMBERS: JILL RYAN DAN JELLEN SUCHITA KODE CHERYL VIDAMO WINTER 1996
OUTLINE OF PRESENTATION: CORPORATE ENVIRONMENT l OPERATIONS STRATEGY l INFRASTRUCTURAL ISSUES l FUTURE TECHNOLOGY l
KENWORTH TRUCKS KW
CORPORATE ENVIRONMENT CORPORATE MISSION/STRATEGY l COMPANY, COMPETITION & CUSTOMERS l POSITIONING STRATEGY l COMPETITIVE PRIORITIES l
CORPORATE MISSION CUSTOMER SATISFACTION l SUPERIOR QUALITY l PREMIUM VALUE l
BUSINESS STRATEGY HIGHLY DIFFERENTIATED l CUSTOMIZED l LUXURIOUS l EFFICIENCIES l TECHNOLOGICAL SUPERIORITY l OUTSTANDING CUSTOMER SERVICE l
COMPANY DIVERSIFIED MULTINATIONAL l NOTABLE LOCATIONS l – CORPORATE - BELLEVUE, WA – ENGINEERING - KIRKLAND, WA – MANUFACTURING - 53, 000 TRUCKS (‘ 94) » » KENWORTH TRUCK COMPANY - (2) WA & OH CANADIAN KENWORTH - QUEBEC (1955) PACCAR AUSTRALIA PTY. LTD. KENWORTH (69) KENWORTH MEXICAN (1960)
COMPANY 1994 REVENUE Wholly owned subsidiaries in Canada, Australia, U. K. & Mexico Researching partners for emerging markets (esp. Russia & China)
COMPANY 1994 SALES - $4. 5 BILLION *40% of Class 3 -8 trucks delivered to leasing industry
COMPETITION (US & CANADA) MARKET SHARE FOR CLASS 8 TRUCKS COMPANY Freightliner 1995 (%) 25. 7 1994 (%) 24. 2 1993 (%) 23. 4 Navistar 17. 6 18. 9 20. 0 Kenworth 11. 5 11. 8 11. 4 Peterbilt 9. 7 10. 0 10. 1 Volvo/GM 11. 1 12. 1 11. 5 Mac 10. 9 10. 2 10. 1 Ford 9. 7 9. 4 10. 2 Other 3. 8 3. 4 3. 2
CUSTOMERS STRONG CUSTOMER DEMAND l AGING TRUCK FLEET l RENTON - WEST COAST MARKET l TECHNOLOGY REDUCES OPERATING COSTS l
POSITIONING l HIGHLY CUSTOMIZED – 85, 000 PUBLISHED OPTIONS PREMIUM SEGMENT OF THE MARKET l TARGETING SMALL FLEETS l SUPERIOR PERFORMANCE l 3 HIGHWAY & 2 OFF ROAD TRUCKS l
SWOT (STRENGTH, WEAKNESS, OPPORTUNITY & THREATS) STRENGTH - OPPORTUNITIES l STRENGTH - THREATS l WEAKNESS - OPPORTUNITIES l WEAKNESS - THREATS l
OPERATIONS STRATEGY HOW COMPANY OPERATIONS SUPPORT COMPETITIVE PRIORITIES l FLEXIBILITY l DELIVERY SPEED l QUALITY
HOW COMPANY OPERATIONS SUPPORT COMPETITIVE PRIORITIES l FLEXIBILITY » Paint System » Custom Premium Trucks » PROSPECTOR » JIT » No Automation, Robotics
HOW COMPANY OPERATIONS SUPPORT COMPETITIVE PRIORITIES l DELIVERY SPEED » JIT Process » Order to Delivery » Actual Assembly » EDI » JIT W/Select Suppliers » Computerized Systems » PROSPECTOR
HOW COMPANY OPERATIONS SUPPORT COMPETITIVE PRIORITIES l QUALITY » Plant Certified ISO 9001 (Oct. 1995) » 88 Critical Characteristics » Standard Training » Reference Books » Customized Tooling » Paint Facility » Design Testing » Station QC » Receipt Check
INFRASTRUCTURAL ISSUES WORKFORCE l INVENTORY/PLANNING l MATERIALS MANAGEMENT l SUPPLIERS l
WORKFORCE 550 1 ST SHIFT, 350 2 ND SHIFT & 3 RD SHIFT MAINTENANCE l UNIONS/LOCALS l WORKSTATIONS l DETAILED MANUALS l
INVENTORY/PLANNING GOAL OF 20+ INVENTORY TURNS l FORECAST PLANNING l INVENTORY HOLDS l – 5 DAY MAXIMUM – 1 DAY MINIMUM SAFETY STOCK FOR QUALITY l TWO BIN SYSTEM l
MATERIALS MANAGEMENT SALES ORDER SHEET l PROSPECTOR SYSTEM l EDI l COMPUTERIZED SYSTEM IN RECEIVING l HAND LABOR (UNIONIZED) l KITTING l
SUPPLIERS l PARTNERSHIP WITH MAJOR SUPPLIERS – CAT, CUMMINS, DETROIT DESIEL JIT WITH SELECT SUPPLIERS l DELIVERY FLEXIBILITY l SUPPLIER HELD INVENTORY l DUNNAGE l
STRUCTURAL ISSUES FACILITIES l CAPACITY l TECHNOLOGY l
FACILITIES RENTON ORIGINAL SITE (1907 -1984) l ENVIRONMENTAL REMEDIATION (1985 - PRESENT) l – SUPERFUND SITE -WA STATE DEPT. OF ECOLOGY l STATE OF THE ART PLANT REOPENED MAY 1993
CAPACITY l l l l TWO SHIFTS MANUFACTURING & ONE FOR MAINTENANCE FINAL ASSEMBLY PLANT-KITTING SMALL WAREHOUSE FACILITIES ASSEMBLY NEAREST DELIVERY ASSEMBLY LINE 1. 5 FT/MIN AVG FLEXIBLE WORKFORCE TWO NW PLANTS
TECHNOLOGY PROSPECTOR - MATERIAL PROCESS SYSTEM & ENGINEERING DESIGN l STATE OF THE ART PLANT - PAINT EXCELLENCE l EDI AND JIT TRANSITION l COMPUTER SYSTEM OUT OF STOCK & DAMAGE l
DOWN THE ROAD. . . AUTO PAINT ENHANCEMENTS l MATERIAL FLOW IMPROVEMENTS l DUNNAGE REDUCTION l NEW PRODUCT DEVELOPMENT l
CONCLUSIONS SWOT l CUSTOMER DEMANDS VARIANCE l NW CAPACITY ADVANTAGES l PREMIUM STRATEGY l
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