People Powered Lean

Integrating a Modernized Human Capital Management Program with

the Lean Manufacturing Journey

Virginia SHRM State Conference

Virginia Beach, Virginia

September 25-27, 2005

2

TMG Core Beliefs

• We are in the business of making hard things easy…not easy things hard.

• Start with the end in mind!• Take a Systems Approach• People are good and want to do the right thing • It is the organizations responsibility to create an

environment for its people to be successful• Our employee’s “Vote” counts more than ours

3

SS

OPS

F

LM

M

PM

OPS OPS

SSSS

F F

LM LM

M

Organizational Map

PM: Plant ManagerOPS: Operations ManagerSS: Shift SupervisorF: ForemanLM: Lead MechanicM: Mechanic : Vertical Dyad Linkage

4

Linkage Power Depends On…

1. Creating a Shared Goal.– The Employee’s Goals and Needs

– The Organization’s Goals and Needs as articulated by the Supervisor

– Requires continuous Goal Alignment within context of Individual Developmental Plans

2. Leaders Managing Personal Relationships– Vertical Dyad: Leader Led x number of direct reports

– Employee productivity and commitment depends on their relationship with their IMMEDIATE Supervisor

Begin with the end in mind…

“Build more quality products faster to improve market share and increase profit.”

6

Lean Enterprise Goals• Improve Quality• Eliminate Waste• Reduce Lead Time• Reduce Total Costs

Through…• Near real time visibility over…

– Process– Materials– Cost– Equipment

And…

7

People

8

Small Manufacturing Shop Features

• Small Headcount requires more skills agility and situational flexibility

• Peaks and valleys in Production Requirements.

• Multiple Shifts• Insufficient Support Staff…• Lack of development programs• Lack of resources

9

REQUIRED Level of Performance

CURRENT Level of Performance

Options:• Re-allocate Current Employees• Hire Experience • Hire New People• Work Overtime• Hire Temporary Labor• Outsource• Increase Productivity• Change the Process (Lean/Six Sigma)• Increase Capacity (Automate)

Performance

Gap

Measu

res

of

Perf

orm

an

ceSenior Management Team

Labor Resource Strategy Development

ResourcesRequired

10

Business Metrics

If we fully implement People Powered Lean we will:– Reduce Lead Time to Increase Market Share

– Improve Production to Headcount Ratio to Reduce Labor Cost per product and…

– Improve PROFIT margin

…by optimizing the plant’s physical production to labor capacity.

11

Production Identifies

Requirement

HR PostsRequisition &Sends to OET

HR Receives

Applications

HR SchedulesInterviews

Welding TestHiring

Decision

Drug Screen and

Physical

Applicant Given Report

Date

HR AdminInprocessing

8 Hours of Video

OSHA Training

OJT Training

Hiring Process July 2004

Offer Sent

ProductionInterviews

Cycle Time: 10.3 WeeksCost: $2,008 per new hire (Labor costs only)

12

The Hiring Process“Opportunity for Improvement”

13

People Powered Lean Policy Statement

Our plant builds to order, only producing those products they have orders for.

Therefore, we must have the capability to acquire employees quickly and move them between assembly lines to support production needs.

A flexible workforce drives down credible delivery time and improves our bottom line profit.

14

People Powered Lean Mission

Provide our production supervisors the right people in the right numbers in the right skills at the right time to improve business performance.

The Goal:

An agile, competent workforce capable to move at the speed of business.

15

Concept of Operations“A Systems Engineering Approach”

Phase 1Current State &

Good Ideas

Phase 2Future State Design,Plan of Action with

Resources

Phase 3Creation andDevelopment

Phase 4Pilot and Evaluation

Phase 5Production and

Roll Out

Phase 6 – nContinuous

Improvement People Powered

Lean

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Project ScopeEnrich the Lean Manufacturing Continuous Improvement

Process by developing and implementing a Human Capital Management Program called People Powered Lean…

Featuring:1. Improved Employee Acquisition Process2. Modernized Orientation Program3. Integrated Skills Development Program (starting

with Welders)4. Embedded PPL Skills Management System

17

Acquisition of New Team Mates

Goal: Create a New Hire “Pull System”

– When Production needs people they “create an order”– Production demand “cues” the PPL system.– Maximize our best source of New Hires (Pipelines)– Optimize use of Government Employee Services to Outsource

as much as possible – Reduces cost of Hiring by utilizing Subject Matter Experts to

recruit, identify, and evaluate skills of recruits

18

College Transfers

Adult Education

Current Employees

Community Colleges

High SchoolsCommon

SkillsTraining

Tech Schools

InitiallyOrient,Screen

&Identify

Candidates

Life CycleSkills

Development

Building PipelinesBusiness Focus:

- Reduce Turnover- Improve New Hire Job Match- Focus on actual job skills- Reduce Cycle Time

Military

State Employment Offices

Temp Agencies

Other Companies

Interview&

Skill Test

GenerateLabor Req’s

HiringDecision

Increase Cost Decrease Cost

Realistic Job Preview

Link to full RJP

20

Welding Skills Assessment(Interview)

Goal: Create a situation where the employee and the company can determine if the new employee has the skills and attitudes to be successful

Features:1. Plant Tour (Informal Discussion)2. Scenario Based Welding Skills Assessment3. Job Based Attitude Assessment4. Hiring Decision5. New Teammate Skills Development Plan

NOTE: HR is not involved other than scheduling

21

New Teammate Orientation

Goal: Create a “world class” first day.– New Employee Leaves after his first day thinking:

• Wow! These guys really know what they are doing.• I’ve talked to the Plant Manager and my Boss.• I understand what we do here and how I fit in.• I know the how to work safely. OSHA Training (Plant Focused)• I know what I need to do to be successful in this company• I have a hard hat and a locker with my name on it • I know I will get paid.• I know what I need to do tomorrow.• Let’s get with it!

22

SHIP

CUSTOMER

IDEAL STEEL

Plant 3

WAREHOUSE(CASTINGS

BUSHINGS & BOSSES)

BURN

LIP ASSEMBLY

BRAKEBEVEL BEAMS

LUG TACK

SIDE ASSEMBLYROUNDO

SIDE REINF.

DAYS5

LINE 1

LUG CONNECTION

LINE 2

LUG CONNECTION

LINE 1

TACK

LINE 2

TACK

LINE 1

WELD 1

LINE 2

WELD 1

LINE 1

WELD 2

LINE 2

WELD 2

LINE 1

WELD 3

LINE 2

WELD 3

BORE

ADAPTERS

DAYS5

FINAL ASSEMBLY/BLAST/ PAINTFIFO

BOSSES

DAYS10

POINTS

DAYS5

MISCELLANEOUSBUCKETS

Cycle Time Mins45

Production mins/shift Mins540

Operators Staff1

Cycle Time Mins90

Production mins/shift Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins108

Production mins/shift Mins540

Production shift Shfts1

Operators Staff1

Cycle Time Mins108

Production mins/shift Mins540

Cycle Time Mins90

Production mins/shift Mins540

Production shift

Shfts1

MRP

ProductionControlSTEEL SUPPLIER

BUCKETS DAYS11

SHROUDS

DAYS5

BUSHINGS

DAYS5

Cycle Time Mins50

Uptime (%) %95

Operators Staff2

Cycle Time Mins45

Production mins/shift Mins540

Cycle Time Mins90

Production mins/shift Mins540

Production shift Shfts1

Operators Staff2

Cycle Time Mins45

Production mins/shift Mins540

Production shift Shfts1

Operators Staff2

Cycle Time Mins45

Production mins/shift Mins540

Operators Staff2

Production shift Shfts1 Production

shift Shfts1

Production shift Shfts1

BARREL

ESCO SALES

FORECAST (30-60-90)

FAX/SALE ORDER

FLOOR SHOP SCHEDULER

OXOX

FORECAST (30-60-90)

PURCHASE ORDER

FORECAST (30-60-90)

FIRST SHIFT PROCESS03/23/04

PURCHASE ORDER

Operators Staff1

Operators Staff1

Production shift Shfts1

A10

A20

A30

A40

B10 B20 B30 B40 B50

C10 C20 C30 C40 C50

D10

F10 F20 F30

Frequency

PER DAY1

Frequency

PER WEEK1

Frequency

Per Week2

Frequency

Per Week1

Cycle Time Mins90

Production mins/shift Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins90

Production mins/shift Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins90

Production mins/shift Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins108

Production mins/shift Mins540

Production shift Shfts1

Operators Staff1

Cycle Time Mins108

Production mins/shift Mins540

Production shift Shfts1

Operators Staff1

Cycle Time Mins108

Production mins/shift Mins540

Production shift Shfts1

Operators Staff1

Operators Staff1

Production shift Shfts1

5.00 DAYS

50.00 Mins

5.00 DAYS

108.00 Mins

0 DAYS

108.00 Mins

0 DAYS

Uptime (%) %98

108.00 Mins

10 DAYS

108.00 Mins

0 DAYS

108.00 Mins

0.50 DAYS

90.00 Mins

5.00 DAYS

45.00 Mins

0 DAYS

WIP

DAYS.5

PLATE STEEL

DAYS5

4

WKS

DAYS

2

DAYS

SHIFTS

9.25

SHIFTS

HRS

60

HRS

Mins

60

MINS

Secs

F40

Production mins/shift Mins540

Develop In-Line Boring Capability

Completed Parts from Ideal

Develop Kanban Replenishment

SystemDevelop Kanban Replenishment

System

Develop Kanban Replenishment

System

Reduce Plate Inventory by 20%

Develop Kanban Replenishment

System

Develop Misc. Flow Line

Add Welding Capability at Final

Assembly

Develop New Scheduling Tools for

Flow Lines

Frequency

Per Week1

WIP

DAYS.5

WIP

DAYS.5

Frequency

PER DAY1

Operators Staff3

Production shift Shfts1

WIP

DAYS.5

WIP

DAYS.5

0.50 DAYS

45.00 Mins

TOTALS

Non-Value Days26.00

Value-Added Mins770.00

Operators Staff25.00

T10

Shift Shfts11

Buckets Shfts5 Buckets Shfts5 Buckets Shfts5

Buckets Shfts11

Buckets Shfts11

Buckets Shfts5Buckets Shfts5

Buckets Shfts6Buckets Shfts6 Buckets Shfts6 Buckets Shfts6 Buckets Shfts6

Qty/Assy (pcs) Shfts11

Qty/Assy (pcs) Shfts11

Qty/Assy (pcs) Shfts11

2

Shfts

DAYS

LARGE BUCKETS

Operators Staff2

Production shift Shfts1

E10

2nd SHIFT ONLY

Value Stream Map toTasks List

Lips Assemble/ TackLug and Beam

WelderWeld 1 Weld 2 Weld 3

Fit Materials

Welding

Quality Assurance

Use a Ruler

Read Blueprint

Bevel

Operate Brake

Operate Saw

Operate Glibert

Operate Lathe

Burn Table

Operate T1

Operate T2

Tasks

Cells

Value Stream Map

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Right Person/Right Job Move the Employee in the Right Direction

High QuantityLow Quality

Quantity of Work

Quality of Work

Low QuantityHigh Quality

Low QuantityLow Quality

High QuantityHigh Quality

New Person

Go To Person

What is our plan to move our people along the correct developmental path?

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Welding Common Skills Training

Goal: Using Subject Matter Experts bring all new Welders to competency on all Common Tasks

Welding Trainer implements the tailored Individual Development Plan developed at the Welding Skills Interview.

Computer Assisted Instruction Lesson Outline:1. Personal Protective Equipment (PPE)2. Reading Measurements to the 1/16” Detail3. Parts of a Weld and Weld Bead Placement4. Weld Quality5. Blueprints and Weld Symbols6. Welding Equipment/Maintenance7. Quality Assurance8. Product Terms and Language

NOTE: Web Based so can be reviewed and pre-trained prior to Welding Skills Interview or Training. Also, post hiring support tool.

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Cell Training

Goal: Improve Welder “Time to Competency”

Features:– Common Skills developed during Common Welding Training– Train “just in time and just enough” for 1st job requirements– Uses 1st Line Supervisors as Trainers– 30-60-90 Feedback to assess performance and update skills

development record

26

Soft Skills Development

Employee Career

Complex Tasks

Life Cycle Skills Development Program

ManagementSkills

Basic Skills

Intermediate Skills

Leader Development

Training

Leader Skills

Training

Advanced Skills

Initial Entry

Skills Training

I

MentorSkills

V

Competency Level

Experienced Personnel

Employment Skills

Skills Evaluation

BasicTraining

Practical Application/

Coaching Evaluation

Practical Application/

Coaching Evaluation

Practical Application/

Coaching Evaluation

III

II

IntermediateTraining

AdvancedTraining

IV

Pre-Employment

“A Guide”

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ExampleLifecycle Skills Development Program

Pre-Hire Initial Intermediate Advanced Mentor

We

lde

rM

ac

hin

e O

per

ato

r o

r O

the

r S

kill

Basic

TABE

KMSS

WeldTest

TABE

KMSS

Orientation

CommonWeldingTraining

CommonESCO

Training

Orientation

CommonESCO

Training

Bucket 101

Cell Cell

Cell Cell

MFP 101

Cell Cell

Cell Cell

Bucket 101

Cell Cell

Cell Cell

MFP 101

Cell Cell

Cell Cell

MasterBucket Welder

MasterMFP

Welder

MasterBucket

Machinist

MasterMFP

Machinist

MasterBucket Builder

Master MFP

Builder

MasterESCO Builder

SkillsTest

PPL Management System Goal: Develop Data Driven Systems to Manage the Process

Features:– Monthly Reports and Management Meetings– Specific Metrics Reported:

• Cycle Time (Responsiveness)• Touch Time (Cost)• In Process Flow• Turnover• Absenteeism

– Aligns PPL with Labor Resource Planning– Measures Head Count to Production– Predictive Measures Focus

29

The Depth Chart

Visual Employee Management Tool– Employee Name and Picture

– Skills they have demonstrated

– Cell they are assigned too and qualified to work in.

– Cell they are cross-trained in (Self Motivated Training)

– Backed up by Web Based Tracking System

Keith Teegarten

30

Production Identifies

Requirement

HR PostsRequisition &Sends to OET

OETScreening

HR Receives

Applications

HR SchedulesInterviews

InterviewsConducted;

Welding Test

Hiring Decision

Drug Screen and

Physical

Applicant Given Report

Date

HR AdminInprocessing

Plant Manager Meeting

Shift Supervisor

OSHA Training

Process/Quality

Training

Hiring Process September 2004

Offer;New Hire

Packet Sent

Cell Training

Structured Orientation and Training Process

Cycle Time: 5.8 Weeks - 43.7% reductionCost: $1,420 per new hire (Labor costs only) – 29.3% reduction

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Step 6Common Weld

Training

Step 8Next Training

Path/AdvancedSkill

Step 9Employee Evaluation

Step 7Cell

Training

WELDINGSKILLS

“End to End”Human Capital Management

Step 3 Interview/Employee

Hire

Step 4Orientation

Step 2Pre Hire/Recruit/Assess

Step 1Generate

Labor Requirement

Step 5World Class

First Day

32

FinalAssembly

Skills

MachinistSkills

After the Welders…

WeldingSkills

Blast & PaintSkills

Sales &Scheduling

Skills

Team LeaderSkills

“If I only have one guy show up for work I want to be

able to build an entire bucket”

Dick Dale

Operations Manager

ESCO Covington

Strategic Goal

34

Human Capital Management ProgramSuccess Features

1. Matching Candidates Expectations with Work Realities2. Matching the Person to the Job3. Matching the Task to the Person4. Providing Training, Coaching, and Feedback5. Providing Career Advancement and Growth Opportunities6. Making Employees Feel Valued and Recognized7. Reducing Stress from Work/Life Imbalance and Overwork8. Inspiring Trust and Confidence in Senior Leaders

35

Human Capital ManagementChallenges

• No silver bullet…People are a complex problem with a lot of moving parts in a dynamic business environment

• Our commitment is to provide some real analysis to focus our efforts…not a “Good Idea of the Day” approach.

• Our recommendations must make good business sense • We must be realistic and “eat the elephant” one bite at a time.• We must be long range thinkers… People are multi-year projects-- if fact Life Long

Projects• We must create a SYSTEM to:

– Accomplish Big Goals and Objectives – Synchronize and integrate our Projects and Programs with the normal business

operations. – Better communicate with our primary clients: the Line Managers– Give the Line Managers predictable yet responsive support

• Do not be a part of the problem!

Golden Rule of Leadership

Treat your subordinates how you would like to be treated.

…1 at a time!

…and it can not occur without a conversation between the Leader and the Led about them with them!

they

37

Discussion&

Questions

Joe Barto Training Modernization Group

757-218-8444Jbarto@tmgva.com

Training Goals• Decrease the cost of training by reducing the time

to train—• Decrease time to competency (improve the

quality of training) – provide an early success• Decrease HR Risk (Safety, Litigation, etc.) • Empower the most effective and efficient training

environment possible… and Expert and a Novice on the job.

• Improve support to 1st Line Supervisors…the responsible person

• Align training capacity with Human Resources Labor Resource and Hiring Plan

39

High Performance Organizations Mission First– People Always

Organizational Goals– Revenue

– Productivity

– Compliance

– Market Share

– Readiness

Individual Goals– Compensation

– Opportunities

– Responsibility

– Work Environment

– Recognition

Communication

Leader LedLedLedLed

AwarenessGoal

Alignment

Individual Development

Plans

Individual Development

Plans

Individual Development

Plans

ResourcesRequired