SALEM, Va. (March 1, 2000) — Yokohama Tire Corp. plans to build a 400,000-sq.-ft. distribution center next to its only solely owned U.S. manufacturing plant in Salem.
The facility will be built on a 7.5-acre plot of land the city will donate to YTC.
"This city (Salem) is a great place to do business," said Dan Hunter, vice president and general manager of consumer products for YTC.
Pending completion of the deal and approval by the state government, he said, YTC expects to finish the project in 24 to 30 months.
Mr. Hunter said the new facility will allow YTC to assemble large orders from the manufacturing plant for direct shipment to a single location,
The company currently is constructing another 400,000-sq.-ft. distribution center in Barrow County, Ga., that should be ready in about four months, he said.
YTC also is a partner with Continental General Tire Inc. and Toyo Tire (U.S.A.) in a joint venture called GTY which operates a commercial truck tire plant in Mt. Vernon, Ill.
In the last couple of years, YTC has added equipment within the Salem plant to increase capacity and broaden the number of tire lines manufactured there.
In January, YTC added a new Banbury mixer and five dual-cavity tire presses to increase light-truck tire production. It also added 17 dual-cavity tire presses to the plant in 1998.
YTC is expanding the production line for the Geolander H/T, its LT and sport-utility vehicle product, and eventually will manufacture all of that line´s tires for the North American market in Salem.
The tire maker also has shifted all production of its Avid H4/V4 performance tire line for North America to Salem and is adding new 40-, 45- and 50-series tires in 17-inch sizes for the "street-tuner market."
Equipment installation on these two production lines will be complete in 30 to 60 days, Mr. Hunter said, increasing overall plant capacity by about 10 to 12 percent. The Salem plant currently produces about 25,000 units per day according to Tire Business estimates.
Over 100 different SKUs are manufactured at Salem each day, Mr. Hunter said, and the plant currently supplies about 90 percent of all the consumer passenger and light truck tires YTC sells in the U.S.
"That is going to change," he said. YTC will trim production of smaller 13- and 14-inch low-priced blackwall tires in Salem to accommodate increased production of performance and LT tires, he said.
"We´ll be sourcing more of those (13- and 14-inch) tires to the North American market from our plant in the Philippines."
Mr. Hunter acknowledged that the percentage of Salem-produced units as part of Yokohama´s sales in the North American market will drop a bit, but it "won´t go below 80 percent."
The wide variety of SKUs produced in Salem leads to a large number of relatively small production runs compared with some other tire plants.
"It´s one of the most complex plants in the U.S.," said Jim Hawk, vice president of manufacturing for YTC. "We´re not a long-run OE (original equipment) plant."
Mohawk Rubber Co. Ltd. originally built a 250,000-sq.-ft. plant in Salem in 1968. Yokohama Rubber Co. Ltd. of Japan purchased Mohawk in 1989 and has expanded this plant in several phases to its current 940,000-sq.-ft. size.
Yokohama merged its North American operations and Mohawk to form YTC in 1992 and has invested about $310 million in the Salem plant including purchase of the original building, the expansions and equipment, Mr. Hunter said.
The plant employs 1,100 workers and runs on a 24-hour, 7-day schedule, except for one shift on Wednesdays when production is halted for on-going maintenance.
The plant´s centralized computer system allows Mr. Hawk and the management team to monitor each tire-making machine and operator and the production schedule on terminals scattered throughout the plant.
Since so many different SKUs are produced, a single tire-building machine may be refitted for different tire sizes several times in a day.
Each shift has a three-man changeover crew that moves throughout the plant to modify the tire-making machines to meet the production schedule. It takes an average of about 20 minutes to modify a machine, Mr. Hawk said.
Each tire-making station also has about 15-20 laminated cards—with a number and a bar code symbol printed on each—hanging near the machine. When an operator has a problem, he takes a card that relates to the problem and slides it under a scanner at the work station.
The scanner´s signal activates the pager of a supervisor who can quickly dispatch a repair technician to that work station to check out the problem.
Throughout the plant, machines and personnel are placed to be as flexible yet efficient as possible—a high priority in a plant with small production runs of individual SKUs.
Mr. Hunter said the plant is segmented according to "pipe groups" of similar tires and the key is to get flexibility between the various production areas.
In 1997, YTC installed a $15-million, four-roll calender manufactured by Mitsubishi Heavy Industries Ltd. The computer-controlled unit has laser technology to provide extremely accurate cutting of the sheet rubber to specific widths and thicknesses.
In addition to producing about 1.7 million vehicles annually, Mitsubishi is a major manufacturer of industrial machinery and has had a long-term relationship with Yokohama to design and build much of the machinery for its tire plants.
Dual-cavity presses allow the plant to use different molds on the same press, Mr. Hawk said, another way to produce short runs of a variety of SKUs.
However, because a mold has to cool before it can be changed, Mr. Hawk said it takes four to five hours to switch a tire press to a different SKU.
There are thousands of tire molds stacked on shelves about 30 feet high in a storage area for the 500 different SKUs which can be produced at Salem.
There is also a two-person compounding lab which works in conjunction with researchers in Japan to develop rubber compounds and products specifically for the North American market.
In November, YTC announced it would begin to produce Prodigy-brand tires for the California-based Tire Alliance Groupe in addition the Yokohama flag brand and Mohawk associate brand.