Not so long ago, nearly 500,000 square feet of valuable floor space was dedicated to warehousing and storage at Chrysler's auto assembly plant in Belvidere, Ill. At any given time, two-day's worth of the parts and inventory needed for production were staged at the line or stored in the plant. If that wasn't enough, anywhere from 85 to 140 trailers full of inventory sat in the yard, ready to be unloaded at a moment's notice.

Today, Belvidere is a picture of lean manufacturing and lean materials handling as it produces record numbers of Dodge Calibers, Jeep Compasses and Jeep Patriots. Manufacturing equipment sits in space once devoted to storage. Material is now aggregated into small lots at a nearby Integrated Logistics Center, or ILC, managed by a third-party logistics provider (syncreon, 248-377-4700, www.syncreon.com) or manufactured to sequence by Chrysler suppliers in nearby plants. Instead of two days of production materials, Chrysler now keeps no more than 2 hours worth in the plant.

The trailers coming through the gate—nearly one trailer every 60 seconds of every production day—no longer sit in the yard. As soon as those parts, components and modules are unloaded, they are delivered to the line by automatic guided vehicles (AGVs) (JBT Corp., 888-362-3628 , www.jbtc-agv.com) and tuggers, where they will be consumed and replenished in a matter of hours.

The change in the way materials are received, handled and delivered to the line are a reflection of Chrysler's new lean, corporate-wide approach to production, a transformation that began with the 3.2 million square foot Belvidere plant.

“What we're talking about is a complete makeover in the way we manufacture,” says Steven Brostek, director of production control operations. “Belvidere was the critical initial plant in our corporate plan to adopt a lean manufacturing profile.”

By all accounts, the makeover has been a success. The most important number may be this: In 2007, the plant topped a production record set in 1986, producing more than 335,300 vehicles. More importantly, it set that record using fewer employees in materials handling (228 across three shifts vs. 119 on one shift) while managing more parts (3,801 vs. 2,570) and receiving more trailers (443 vs. 111) than in the past.