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RFID Revs Up Hummer Plant
AM General needed to boost production of its Hummer H2 to meet demand, but its manufacturing facility had limited space for parts. The automaker turned to RFID to keep the plant humming.
Dec 06, 2004—Demand in 2002 for AM General's Hummer H2—a sport utility version of the 4-wheel drive vehicle popular with the U.S. Armed Forces—was so strong the company was struggling to keep pace. It was a good problem to have, but a problem nonetheless. The company needed to boost production by 25 percent, but its factory, built in a joint venture with General Motors, was designed to operate more efficiently than conventional auto plants. That meant less inventory was on hand.
Since AM General's plant in Mishawaka, Ind., was located hours away from most of the nation’s auto parts suppliers, which are based near Detroit, Mich., the company couldn't count on suppliers to make just-in-time deliveries. AM General found another solution. The company had deployed an active RFID real-time locating system when the plant first opened in 2002, and managers used that technology to automatically identify parts that needed to be replenished and move them to the floor as it churned up production from 148 to more than 200 cars per day.
In conventional auto manufacturing plants, dashboards, doors, seats, roofs and other parts are stocked in factory warehouses according to regularly scheduled deliveries, which are not necessarily based on demand. The plants rely on an electronic pull system, a series of overhead cables and electrical wires, to connect the factory to the warehouses. Workers on the assembly lines typically communicate with the warehouses by pressing a re-stock button, but production is sometimes slowed by missed signals or delays. To increase production or introduce new makes or model years, the cables and wires have to be re-engineered by contractors and electricians in a costly process that often takes weeks.
The concept for AM General's plant was to create a leaner manufacturing process, where there was less inventory and deliveries were timed to match demand. Tim Kurtz, AM General’s manufacturing systems coordinator, looked for a technology that would help the plant operate in a “lean environment”—faster, more productive and without wasting valuable factory floor space with unnecessary surplus parts. At the same time, his team wanted a technology that would allow the plant to be able to increase or slow production at the drop of a hat and to change to new makes and model years more quickly.
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