Greenfield of Dreams: Learnings from Navistar’s New Truck Plant
When you set out to build a truck plant, you need a budget and timeline to stick to. If you only have $250 million to spend (a modest amount by truck-plant standards) figure out where you can save. For instance, location-wise, a pancake-flat field is preferable to rolling hills (of which there are surprisingly many in Texas). Not having to level the site before construction starts can save $18 million right there. You also don’t need fancy bump-outs for restrooms and locker rooms—just make the structure a big, plain rectangle, and you’ll have money to use elsewhere. And put the air handlers on the ground, not the roof, or you’ll have to pay for a stronger roof.
Such were the pearls of plant-building wisdom that Mark Hernandez shared during his keynote at the Manufacturing Technology Show in Cleveland this week. Hernandez, the executive vice president for global manufacturing and logistics for commercial truck maker Navistar, oversaw the planning and construction of the company’s San Antonio diesel and electric truck plant, which opened in March 2022, on time (during a pandemic) and on budget. It is the first truck assembly plant constructed in the U.S. in nearly 30 years.
Other learnings that Hernandez shared:
Be pragmatic with technology investments. “San Antonio, when it was built, it was not all bells and whistles.” Hernandez and his team determined where the most critical spots were for automation and AI, and plan to build on that foundation as the plant flourishes and more investment is possible. The same principle applies to connectivity. “Do we need the paint shop connected to e-coat? Do we need them talking to each other? Because if we do, then we should do it. If we don’t, maybe we should just wait and not waste our time at that point.”
Proper prior planning prevents piss-poor performance (the 7 P’s). “You try to figure out what fails in your processes early,” Hernandez said. “So you can fix them before you spend money and realize that what you bought didn’t actually work the way you thought it would.”
Map out processes, STEM style. “People draw out processes on paper,” Hernandez said. “I take it to the extent, ‘Hey, let’s mark it up on the floor, let’s get some boxes, let’s put some tape down, let’s get a chassis, put it in there. So that we can prove that the process is going to work.’ It might cost me maybe a few thousand dollars to rent some space, to lay it all out. As opposed to if I make a [bad] decision, that’s a $100,000 mistake.”
Encourage your suppliers to co-locate, or locate your own plant’s site near a critical mass of suppliers. Twenty to 40% of Navistar’s conversion cost is inbound logistics, Hernandez said. “So it’s very important that we find a location or move suppliers closer to the location so that we’re not transporting parts over long distances.” Components come to San Antonio from spots including Nuevo Leon in northern Mexico and from the east through Houston. There are also many suppliers along the I-35 corridor that runs north from the Mexican border through San Antonio, all the way up to Minnesota.
Design the processes around your people. “It’s about being respectful,” he said. “Set up the process so the average person can do it—so they don’t need a guide, or to be bigger than me to put an axle on a vehicle. And be able to do it within the right cycle time—or if the cycle time isn’t right, then you adjust it accordingly.”
Good lighting means a lot. The San Antonio plant’s exterior is clad in between 2 and 3% translucent panels. “We can actually turn off the lights on bright days and have ambient light. People tend to do better in daylight in factories. If you’re working in a cave, it affects your emotions.”