Subaru of Indiana Automotive Inc.

Subaru of Indiana Automotive optimizes its plant to increase production and remain agile in building a third Subaru vehicle.

By Janice Hoppe-Spiers

Subaru of Indiana Automotive Inc. (SIA) has been manufacturing Subaru vehicles for 30 years and is the home of North American production. To prepare for the launch of the Subaru Impreza model and increase in production, the company invested $1.3 billion in its plant from 2012 to 2016. It also transitioned to a lean supply chain process flow to meet the demands of flexible manufacturing.

“We are working with Venture Global Solutions, a third-party logistics provider, to make changes with our supply chain,” says Darryl Bol, section manager – material management, logistics. “Prior to this we had one production line. By adding a second production line and bridged production, we had to start looking at optimization methods that could adapt to the needs of the business.”

SIA, a subsidiary of Subaru Corp., specializes in building the Subaru Legacy and Outback models in its Lafayette, Ind.-based production plant. Last fall, the first all-new 2017 Subaru Impreza rolled off the SIA assembly line, making it the first-ever American-built Impreza.

Historically, the Impreza had only been produced in Japan. The start of Impreza production marks the culmination of more than three years of preparation and highlights the consistent growth in Subaru demand in the United States, the company says.

Subaru decided to move the production of the Impreza to the United States because of increased demand for Subaru vehicles. The company says this is evidenced by eight consecutive years of increased sales in the United States. “Overall demand of the Subaru product is up,” Bol notes. “We have continued to see increases in sales and demand over the past 68 consecutive months.”

SIA will produce more than 380,000 vehicles annually by adding the Impreza. Since its start in 1989, SIA has built nearly five million vehicles and continues to pride itself on quality, safety and environmental stewardship.

“We are excited to bring the Subaru Ascent, a three-row, seven-passenger vehicle, to the plant,” says Media Oakes, manager of communications. “We feel good about where we are and it’s a great time to celebrate our 30th anniversary. We are stronger than we have ever been.”

Plant Improvements

In October 2015, SIA adopted a new transport management system, implemented lean separation centers or crossdocks, and reduced miles, inventory and optimized costs. At the same time, the company added a production line and started the process of producing the Impreza. “Back in 2015, we weren’t engaged with Venture Global yet and weren’t prepared for optimization,” Bol admits. “We were using spreadsheets and maps to set up our routing.”

The company started to optimize in 2016 with a lean process flow that allowed it to increase production from 850 vehicles per day to 1,000. It expects daily volume to continue to increase through next year and level off at about 1,800 vehicles per day. To handle the increase in production, SIA’s plant produces multiple models on single production lines as well as one model on both lines.

SIA also converted a significant amount of warehouse space to production space and added a second paint shop. “We had to tighten up our warehouse space and make changes in our logistics system and planning,” Bol notes. “We knew from an inventory policy we were going to go from 1.25 days of standard inventory down to 4.5 hours. We wanted a high-frequency, low-volume parts flow coming into our facility.”

In April, SIA implemented a yard management system to track and trace everything inside and outside the yard. The company will add two ground drones in October to track inventory in the yard. SIA’s lean transformation included the implementation of Venture Global Solution’s The Digital Yard. “The Digital Yard is real-time, data-driven, automated and integrated,” Bol says.

The real-time data is supplied by an autonomous drone, explained Dr. Mani Manivannan, vice president of business development at Venture Global Solutions, at the Automotive Logistics Supply Chain Conference in May. “All the trucks, all the materials come to a center point – be it an assembly plant or distribution center – and it stays there,” he said. “The challenge is to know where the trailers are at all times.

“When you say ‘yard management system,’ we always think of a guy with a clipboard counting the number of trucks,” he continued. “You come back to your office, put the information in your computer and through that the yard gets the data. By the time you enter all the information, half the data is already old. We integrated the concept of drone technology with software that integrates with our WMS and TMS, and we can see where everything is. You have information at your fingertips.”

Staffed to Meet Demand

Beginning production on the Impreza line required SIA to add suppliers to its network and resulted in a cultural shift, Bol says. “It was about standardization, more rules and getting our entire supply base to follow the same protocol,” he explains. “We are always looking for optimization. We hold development meetings with our partners and have ‘go and see’ activities where our suppliers visit us or we visit them.”

SIA also hired 1,400 employees to increase its production. The company looks for people who are prompt and those who look for ways to improve its processes. “Manufacturing is not quite the environment people tend to think it is,” Oakes says. “They are surprised when they come in and it’s well lit, for example. We are happy to connect our associates with classes to learn advanced manufacturing skills. It’s a bonus for us and the more our associates are interested in education and advanced manufacturing, the more valuable they become.”

The company partners with local high schools and colleges to connect with the new generation. SIA associates are recruited through traditional channels such as radio and television ads, as well as through programs that work with military members who are ready to re-enter the civilian workforce and internship programs. “We pride ourselves on how we connect to the community in terms of job development and programming with local schools and colleges,” Oakes adds. “We find military veterans work well in the manufacturing environment.”

Moving forward, SIA will continue to focus on production efficiencies and lean manufacturing principles. “This is an exciting time for SIA,” Senior Executive Vice President Tom Easterday says. “With our rapid rate of growth, recent expansions and strong Subaru sales, it’s easy to see that the next million vehicles will come much faster. That’s good news for all of us at SIA, for our local community and for Indiana.”