Detroit Diesel: An 80-Year Journey to Holistic Manufacturing

  • August 07, 2017
  • Feature
Detroit Diesel: An 80-Year Journey to Holistic Manufacturing
Detroit Diesel: An 80-Year Journey to Holistic Manufacturing

By Bill Lydon, Editor,

Too often - in today’s industrial environment - management, investors and executives are looking for the single “silver bullet” that will lead to company success. This is typically a foolish notion, ignoring the consistent efforts in planning and innovation that drive long-lasting success. Prior to the Manufacturing in America 2017 event in Detroit I had the opportunity to tour the Detroit Diesel manufacturing plant in Redford Township, Michigan at the invitation of Siemens Industrial.  Detroit Diesel has become an example of this kind of successful longevity, most recently by making significant improvements to enhance their manufacturing effort through the integration of Siemens automation products in their facility. But their story goes back far longer.

80 years ago, General Motors created the Detroit Diesel Division and began construction of the facility to compete in the commercial-truck industry. Like most manufacturers, during World War II the plant manufactured armaments.   Following the war, the business fell on hard times like many companies in the area. Yet this did not end Detroit Diesel’s story. In 1987, businessman Roger Penske purchased it for $50 million and invested to support new products.  Prior to the purchase, the diesel engine company had been losing $100 million annually as a subsidiary of General Motors. In 1988, however, the company earned $16 million, on sales of $840 million.  The story is that Roger Penske brought a passion for close personal contact with users of Detroit Diesel products, especially operators of big diesel-powered trucks, boats, generators, and construction equipment.   Still, over a decade later, Penske sold out in 2000 for about $500 million to the former DaimlerChrysler.  In 2005 Daimler began aggressive investments (the first totaling $275 million) to streamline efficiency, grow the product lineup, boost morale and improve productivity and quality. 

This capital launched Detroit Diesel’s new “HDEP” heavy-duty engines with 13L, 15L and 16L displacements, beginning in 2008.  Since 2005, this 3.2 million-sq.-ft. (297,280 sq.-m) plant has received $1.2 billion in investment by German-based Daimler.  The success of Detroit Diesel engines has given yielded about a third of the North American heavy-duty truck engine market.

This year the Detroit Diesel manufacturing plant is projecting production of 75,000 HDEP engines (248 per day), 30,000 DT12 transmissions (110 per day) and 240,000 axles (1,055 per day). Most of this output is for Freightliner.


The 5S of Detroit Diesel Success

How does one create a long-term manufacturing success story? John Townsend, Plant Project Manager attributes aggressive use of Japanese lean methods, especailly 5S.  5S is the popular Japanese workplace organization method that uses a list of five words: seiri, seiton, seiso, seiketsu, and shitsuke. Transliterated into Roman Script, they all start with the letter "S".  The words describe how to organize a work space for efficiency and effectiveness by identifying and storing the items used, maintaining the area and items, and sustaining the new order. Townsend noted that between 2010 to 2015 these methods resulted in a 42% improvement in hours per unit produced.  .

In addition to maintaining production, Detroit Diesel has to compete with automotive and other large manufacturers for talent. To do this, Detroit Diesel has put a lot of effort into building an atmosphere that benefits employees and attracts talent.  For example employees have access to increased vacation time, low-cost lease availability for Mercedes C-Class cars, a fitness club that costs only $5 a month, daycare on premesis, and an on-site doctor, which employees can bring their families to see for 30-40 minutes, with no co-pay, and prescription drugs are free.

The tour of Detroit Diesel left every impression of an efficiently run operation. The plant maintains a flexible production flow, using AVG’s to move the engines efficiently between workstations. 


Detroit Diesel makes extensive use of BLEICHERT Inc. AVG’s as the video illustrates.


Holistic Success Requires a Plan & Passion

Perhaps the most important factor in 80 years of operation is that Detroit Diesel is not resting on its laurels. John Townsend shared the organization’s plan, an aim to follow the path from, “great to world class” as a complete supplier of powertrain for NAFTA.   The plan is to leverage big data and Industry 4.0 technologies and concepts for data driven decision-making to increase production in the next five years.


Bill’s Thoughts & Observations

Certainly, the innovative product designs, production methods and processes were very interesting, yet it is the culture that Detroit Diesel has created, over 80 years of success, that is really quite impressive and thought provoking.  The major transition that the company initiated, first stimulated by Roger Penske and subsequently followed by Daimler, involved much more than an influx of investment money. It was an investment in a holistic attitude, creating productive value while still respecting people and the environment. Only time will tell if this can set them up for another 80 years.  


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