Yorozu staying afloat during difficult times
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What I discovered is Yorozu is a highly technical, highly efficient company that is successfully staying afloat during these tough economic times.
For anyone who doesn’t know about the company, I’ll start with the basics. Yorozu manufactures auto parts, mainly front and rear-end suspensions, for Nissan, Honda, General Motors and Saturn, just to name a few. Nissan provides roughly 70 percent of Yorozu’s business and the Nissan facility in Smyrna is one of the biggest customers.
Yorozu’s mission is simple: To build the highest quality automotive parts in the world. Jack says employees receive quarterly bonuses if they reach certain quality standards, which basically comes down to limiting the number of defects which are shipped. “We’ve made such big quality gains over the past three years, it’s hard to keep getting better but we have,” said Jack.
Perhaps the most monumental challenge facing Yorozu is soaring costs that are beyond the company’s control. Steel and gasoline, for example, continue to cost more and more, but Jack says passing that extra expense on to customers is out of the question.
“At the same time we’re experiencing multi-million dollar cost increases, our customers are wanting price breaks,” said Jack. “They aren’t going to pay more. That’s why we have to find ways to reduce our costs internally so we can survive.”
To accomplish this, Yorozu demands efficiency from its employees. The employees are timed by stopwatch, along with the machines, to determine the best ways to increase productivity.
The finished product goes out the door at an extremely fast pace, yet standards are not compromised. Only one day’s worth of steel is kept in stock and the finished product only stays in house for one day before its shipped.
“With the lines we’re adding, by this time next year we won’t have any space left so we have to move inventory,” said Jack. “On most of our lines, we go from raw material to finished goods in about five days. And that’s world class. There are a couple lines where we can go from raw material to finished goods in seven hours if we need to, but we don’t like to cut it that close.”
Yorozu’s most commonly produced parts are for the Nissan Altima, Nissan Maxima and Honda Odyssey. Yorozu manufactures around 370,000 parts a year for the Altima, which is scheduled for a major design change next year.
Change is a major part of the auto industry and Yorozu is constantly adjusting. When new vehicles become popular, it can completely alter the workload.
“This plant is almost like a Rubix Cube when new models come in and old stuff phases out,” said Jack. “We move lines all over the place to make sure we’re working as smart as possible.”
Sophisticated computer equipment is used to test tolerances, and even not-so-sophisticated methods are used. Salt is sprayed on parts in one test to help determine how they may corrode over time.
“People just walking around on the floor might not understand how tight our tolerances are, but it’s a very precise business,” said Jack.
The company currently has a 2.1 percent turnover rate and that is measured month by month. It typically takes two to three weeks of training to get a new employee up to speed on production lines.
For Yorozu management officials, the job also means a good deal of frequent flyer miles. Jack has made four trips to Japan in the past year and has an upcoming trip to South Korea.
“When we’re launching a new product, we’re over there all the time,” he said.
With the departure of Carrier, Yorozu now holds the title of Warren County’s top employer and we’re certainly lucky to have such a company here. With soaring costs, Jack says the company is still managing to stay profitable during tough times. He says that’s promising news for when the economy takes a turn for the better.