Case Study: International Game Technology

New plant cuts cycle time by a third

Gaming machine maker IGT hits the jackpot by betting on a flexible new manufacturing strategy, eliminating cost and inventory.

When a casino places an order for a custom type of slot machine, International Gaming Technology (IGT) now ships the units a week earlier than before.

That's because a plan to consolidate 17 separate facilities scattered around the Reno area into a single location not only solved a geographic problem, but also provided the company with an opportunity to rethink its manufacturing processes.

"Senior management realized that the company could not continue to operate what was essentially a job shop out of all these different buildings," says Tony Ciorciari, vice president, operations. "Growing sales, smaller order quantities, and increasing demands for custom features and shorter lead times were causing the company major growing pains."

But how to accommodate all of these changes? "Basically we have a business characteristic that requires us to supply a highly customized product quickly, but we needed to be able to meet that.requirement in the most cost effective way," says Ciorciari. "We knew the solution had to involve some type of pull-through manufacturing strategy, which would cut cost by reducing inventory all along the pipeline and shorten production cycle times."

The trick, though, was to build custom products on what would essentially be progressive assembly conveyor lines. "Just putting in a powered conveyor system was a very big step for us, coming out of an environment that basically had not changed much in the last 15 years," says Jeff King, project manager. Although IGT had installed two zero pressure accumulators in 1992, assembly work was still done on non-powered conveyors.

A further complication was that customers in the gaming industry frequently change orders -- often well after product has been released to production. "In order to be able to accommodate last minute changes, we felt we needed more flexibility and responsiveness in our manufacturing process," says Ciorciari.

Flexible assembly The solution was to create a flexible assembly process whereby any style machine could be built on any line with minimal changeover time. The powered roller conveyor system consists of a main line that serves 8 assembly lines and provides point-to-point transfer of product to 12 workstations on each of the lines.

Parts that are common to all gaming machines are delivered directly from the warehouse to the assembly lines on a just-in-time basis. A Kanban system signals when replenishment is required. Custom glass and unique components are kitted and staged in two vertical carousels. (Each kit contains 8 to 20 line items.) When the kit is picked, a bar code is scanned to ensure that the right kit is married to the right cabinet.

Before release to the assembly area, cabinets queue up in a multiple-lane accumulation zone. To ensure a smooth, uninterrupted product flow, two photoeyes were installed on the inbound conveyor line. These photoeyes note the presence of an assembly pallet, releasing the next cabinet through to production only after the preceding one has started down the assembly line. With kits inside, the cabinets are then released to the assembly area one at a time. Cabinets are then directed to one of 8 progressive assembly lines (each line can build any of the four cabinet styles).

Here, operators install up to 200 components per cabinet. Lift tables at each of the 12 workstations allow the operator to adjust the cabinet to a comfortable height.

"We tried to eliminate or reduce as much manual handling as we could," says Ciorciari, "but where we do have people in the process, we wanted to be sure that they weren't bending or reaching." Finished machines then travel to an accumulation area. From here, they are packaged and delivered to shipments to casinos worldwide.

Continuous improvement "One major benefit of this new system is that things can no longer be hidden," says King. "Any problems, for example if we are holding too much inventory on the line, will be exposed." Although Ciorciari says that the assembly operation is "close to where we want it to be," IGT doesn't intend to stop here.

The parts warehouse has begun working with suppliers to put bar codes on incoming shipments and will be installing a warehouse management system soon. "With real time information, we'll have better control and less paperwork," says Mike Jensen, logistics manager. "That will allow us to provide better support to the assembly lines."

IGT is also planning to bring the cabinet shop onsite, which will further integrate the process and reduce internal lead times. "The stakes are high in this industry," says Ciorciari. "But we view this entire operation as one of the competitive weapons that makes us successful."

Tapping into human potential IGT has also brought in Edd Richardson, who has a PhD in manufacturing, to examine its manufacturing strategy and explore how human potential can be tapped to improve the process.

"At times you can get so tied up with strategy that you lose touch with reality," says Richardson, "what we need to do is spend more time developing relationships with the people working on the manufacturing floor."

Richardson did his thesis on productivity improvement using high performance teams, a topic that he thinks may have application at IGT.

"What we've learned is that if you take a group of people and give them coaching, their performance can improve significantly," says Richardson. "Those are the kinds of things we want to continue to explore, because we believe people are the key part of our manufacturing strategy."