Dwo Socio Technical System

8/3/2019 Dwo Socio Technical System

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What, Why & How

IntroductionSocio-Technical System project is an approach to understandcomplex organizational work design that recognizes the interactionbetween people and technology in workplaces in organizationaldevelopment.

The focus of this project is to understand interrelatedness of socialand technical aspects of an organization by exploring socio-technical design undertaken at Volvo's Uddevalla plant onSweden's west coast - a unique achievement in the history of carproduction and industrial production. The learnings from this project

would help us design organizations in which the relationshipsbetween socio and technical elements lead to the emergence ofproductivity and well being.

Issues & Challenges faced by Volvo ManagementThe demand for Volvo cars increased steadily during the first part ofthe 80s, whereby existing plants could not meet this demand


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What, Why & How

The Management needed to think beyond traditional assembly lineproduction. They needed to focus on Job enrichment and satisfaction.

How?

Management Decisions while designing plant

Social Decisions:The plant will focus on assembling a car by a small team of highly trainedcraftsmen, who have knowledge of parts and their operation roughlycomparable to a skilled car mechanic. Job will focus on improving workperformance and competency of the employees. Workshop provided

should be pleasant.

Technological Decisions:The work group members should carry out assembly work on severalproducts simultaneously. The larger components with their obviouspositions in the product would be brought to the place of assembly in kitting

fixture so as to focus on reduction in material handling time.


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Volvo Vision, Mission &Values Vision

The Volvo Groups vision is to be valued as the worlds leading supplier of

commercial transport solutions.

Volvo Groups mission

By creating value for our customers, we create value for our shareholders.We useour expertise to create transport-related products and services of superior quality,safety and environmental care for demanding customers in selected segments. Wework with energy, passion and respect for the individual.

Volvo Groups ValuesThe Volvo Group views its corporate culture as a unique asset, since it is difficult forcompetitors to copy. By applying and strengthening the expertise and culture wehave built up over the years, we can achieve our vision. Quality, safety andenvironmental care are the values that form the Volvo Groups common base and

are important components of our corporate culture. The values have a long traditionand permeate our organization, our products and our way of working. Our goal is tomaintain a leading position in these areas.


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Volvo Birth & Evolution

Visionary entrepreneurs, technical innovators, skilledemployees and committed owners have worked together tocreate great value during the Volvo Group's 80-year history.

The Volvo Group has its origin in 1927 when the first Volvo carrolled off the production line at the factory in Goteborg.

The first truck, Series 1, was presented in January 1928 and wasan immediate success - it quickly sold out. Volvo's trucks alsoattracted attention outside Sweden. The export of trucks to Europestarted in the 1930s.

From the very start, the company's two owners, Assar Gabrielssonand Gustaf Larson, decided to construct vehicles that were safe and

could withstand the harsh conditions posed by Sweden's coldclimate and the poor road conditions of that time. Since vehicles aredriven by people, the founders' view was that: "Safety is - and mustalways be - the basic principle in all design work." The focus onsafety, durability and quality has been part of the company'sdevelopment from the beginning.
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Marine engines have been part of the Group almost as longas trucks. Pentaverken, which was founded in 1907, wasacquired in 1935. As early as 1929, however, the legendaryU-21 outboard engine was introduced. Manufacturingcontinued until 1962.

The first bus, aptly-named B1, was launched in 1934, andaircraft engines were added to the growing range of productsat the beginning of the 1940s.

The Volvo Group, from its relatively modest beginnings in the1920s, has developed from a local industrial company to aglobal Group and one of the world's largest manufacturers ofheavy trucks, buses, construction equipment, marine enginesand engine components for the aircraft and aerospaceindustry.


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Mergers and Acquisitions In 1999, the Volvo Group sold Volvo Cars to the Ford Motor

Company.

The Group's position in the area of trucks was furtherconsolidated with the acquisition of Renault Trucks and MackTrucks in 2001, and our roots branched off to both Franceand the US. During 2006 and 2007 the Volvo Group acquiredthe Japanese truck manufacturer Nissan Diesel. Also in early2007, an agreement was reached regarding the acquisition ofIngersoll Rand's road development division.

Furthermore, the acquisition of 70% of the shares in Lingong,one of China's largest makers of wheel loaders, was finalized.The last ten years we have also undergone rapid growth inthe service area with, for example, financial solutionssupporting the sales of the manufacturing business units.


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Volvo Current BusinessScenario Volvo Group worldwide

The Volvo Group has an established and strong position in Europe, North America, andSouth America. Through the acquisitions of UD Trucks and Lingong and the cooperationwithin trucks and buses with India-based Eicher Motors the position has beenstrengthened in many markets in Asia.

A customer offering at the forefront

Volvo Group offers its customers complete, efficient transport solutions. Products withreliability, durability, good drivability, favorable fuel efficiency and high environmentalperformance are combined with services such as financing, insurance, various servicecontracts, accessories and spare parts that support the core products. Our customers areactive in more than 180 countries worldwide, mainly in Europe, Asia and North America.Group sales of products and services are conducted through wholly owned and

independent dealers. We have around 90,000 employees and production in 19 countries. Moving the world

Without the products and services of the Volvo Group there can be no modern society likewe know it. Like a blood flow, their trucks, buses, engines, construction equipment andaircraft components are involved in many of the functions that most of us rely on everyday.

Presence on all continentsThe Volvo Group has an established and strong position in Europe, North America, and


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Volvo Leadership & Strategy

LEADERSHIP They clearly define their key leadership values and

that give then at Volvo Group significant strength. Itmeans that they know what their goals are and what

we must do to achieve them. They use a leadership program known as The

Leadership Pipeline to identify value and developtheir leaders and to guide them throughout their

careers. They guide their leaders growth through exposure to

broad and deep work experience, with developmentprograms and through other alternatives, likecoaching and being a teacher in the organization.


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Volvo Leadership & Strategy

STRATEGYTheir products and services play a vital role in everyday lifein modern society. Their trucks, buses, engines, constructionequipment and air craft components are involved in many ofthe functions on which most of us rely. While their products

and services are closely linked to growth and societaldevelopment, they also contribute to climate change. As oneof the largest manufacturers of commercial vehicles, they aredetermined to take the global lead towards safe andsustainable transport solutions.

Responsible business is good business Assuming responsibility Code of Conduct Transparency


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Volvo HRM Practices

Guided by the 'Volvo Way,' the company had made consciousefforts to implement job enrichment concepts such as job rotation,

job enlargement and employee work groups in its manufacturingfacilities and has obtained positive results.

Volvo was inspired to build a new facility keeping this work designas a basis. This reiterated the company's belief that industry neededto adapt itself to the people's requirements and not vice-versa.

Analysts appreciated Volvo for its constant emphasis on learningfrom experiences and implementing the lessons so learnt in its new

initiatives. This contributed significantly to the development ofhuman-centric production systems. These systems brought to lifeseveral theories and concepts, which had earlier only beenenunciated in textbooks but rarely practiced with the kind ofseriousness with which Volvo did.


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Volvo Uddevalla Plant

One episode that I myself experienced during a visit toVolvos Uddevalla plant in the spring of 1993 demonstratesclearly the advanced customer orientation of the Uddevallaproduction model. Far from being disturbed by an intrusiveobserver, the members of an assembly team casually asked

if I was a customer wanting to take part in the teamsassembly of my car. What I continued to observe at the plantfurther demonstrated the human orientation of the work beingdone. In a typical example, a group of nine workersassembled a car from beginning to end. They conferred witheach other while working, resulting in the completion of the

entire car before the morning coffee break. This team like allothers in the plant had no supervisor. And the first levelmanager of this and the seven other teams in the productworkshop was on vacation; the groups could clearly managetheir own work.

-- ke Sandberg (Professor, Faculty of Social Sciences,

Uppsala University)


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The plant in Uddevalla is special because it is aCopernican revolution in car assembly.

Cars are built one at a time by small teams of highlyskilled men, than by many workers each assembling

individual parts on a car. Important to know is that the plant was a highly viable

economic operation, productivity was very good andon a steep learning curve, capital costs, as expressedin basic investments and tool changes, were very low,

quality and customization (and therefore the price ofthe Uddevalla cars) was very high, and the socialrecord of the plant, as expressed in, for instance,strains, stress and illnesses, was among the best inthe world


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Innovative Process in Uddevalla plant The Uddevalla model is similar to that of lean production in

its efforts to achieve customer orientation, quick delivery, aswell as worker involvement and learning. However, themeans to achieve the ends are different.

An important background to the whole project was the labormarket situation in Sweden at the time with almost fullemployment which meant recruitment problems for industry.

From 700 workers on a line to 9 in a group-The development of the plant grew from the original idea of a

factory where each of approximately 700 persons contributedtheir task in a job cycle of two minutes, to the final idea of afactory where 48 small, parallel stationary teams assemblewhole cars with a job cycle of around two hours. The lowhorizontal division of labor, corresponded to a decentralizedorganization.


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So Whats New? A Visit to the Factory

This question can be answered by taking the role of a first timevisitor to the Uddevalla factory: The first impression concerns thevisible part of the work environment, which is very light andspacious.

This does not differ so much from any other modern factory, thoughother things appear that do differ from what can be seen in other carplants:

It is quiet,

The cars being assembled stand still, side by side, during theassembly,

People are working together in small groups and theycommunicate frequently,

Nothing seems to go on in a hurry,

The car stands at the same place for a long period of time,equaling several hours,

And the factory is small compared to most other car plants.


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The next impression concerns the technical equipment:

That is the absence of an assembly line. The flow of cars isinstead extremely parallelized in the product shops,

Sets of materials are individually packed for each body(small details and larger components are placed in a strict

order on shelves and stands). Automatic guided vehicles are also used to transport thecomplete cars from the product shop,

The car remains at the same place during its entireassembly,

People are moving around the body, performing theirdifferent tasks in the assembly work while the car stands still.

The same persons do all their work in a small assemblyarea,

Many hand machines are in use, but there are a few big,

complex machines.


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A first time visitor is not immediately aware of the fundamentalstructure of organization of the assembly process. However, oncediscussed with the people working there, much can be learned. It isdifficult, however, to interpret the impressions from such discussionswhen using a set of mental tools applicable for analysis of atraditional line factory.

Thus, a first conclusion now can be drawn. The real innovation isthe way in which human learning and human knowledge is used asa starting point for developing new principles of productiontechniques.

Human knowledge, i.e. personal knowledge and ability of theindividual worker, is a fundamental underlying prerequisite for the

production technique developed in the Uddevalla factory. This makes the Reflective Production System very flexible and

resistant to disturbances that in traditional productions sites wouldcause severe problems.

Result: Thus, the combination of competence and a technicalsystem built to meet human abilities generates goal achievement.


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Volvo Case Analysis

Issues & Challenges faced by Volvo Management

Increase in demand:The demand for Volvo cars increased steadily during the first part of the80s, whereby existing plants could not meet this demand without great changes. To meetcustomer demand management needs to focus on building new plant.

High Employment Level in the market:With an unemployment level mostly below 3 percent,

Labor force participation was high. Therefore, tough working conditions may be seen as selectivedisadvantages like employee turnover and absenteeism will increase. Management needs to

think beyond traditional assembly line production. They need to focus on Job enrichment andsatisfaction.

Customized Product Variation:With the demanding market, Product variation increased andthe dependency on foreign sales contributed to the need for adaptation to different customerdemands.

Metal workers union :The metal workers union in Sweden had for several years argued andworked for the creation of good work for its members, so management have to take their


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Volvo Case Analysis

Management Decision


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Volvo Case Analysis

Managements Key Social Decisions while designing plant

Beyond Traditional Assembly lines:Rather than having many workers who, in task cycles of one to two minutes, assemble aminute part of a car, plant will focus on assembling a car by a small team of highly trained craftsmen, who have knowledge ofparts and their operation roughly comparable to a skilled car mechanic.

Defining Operational Goals: Plant goals would be High Profitability, High Productivity and more flexibility with the customizationdemands.

Employee Job enrichment and satisfaction:Job will focus on improving work performance and competency of the employees.

Good Working environment:Workshop provided should be pleasant. Customer Centric:Focus on short delivery times to customers with the scope of customizations.

Active cooperation of Union in designing decisions:Active cooperation between Volvo management and engineers, unions(both local and national) and researchers.

Managements Key Technological Decisions while designing plant

Parallel flow pattern and autonomous group work :The work group members should carry out assembly work on severalproducts simultaneously .In fact this would be an organic flow pattern characterized by successively decreased mechanization,increased parallelization and maintained or expanded sorting capacity from the beginning of the process to the finished product.

This would also be independent of the work status and variation of other work groups.

Pre structured materials feeding to individual products: The larger components with their obvious positions in the productwould be brought to the place of assembly in kitting fixture so as to focus on reduction in material handling time.

Naturally grouped assembly work:This presupposes that the traditional disintegration is broken and professional skills arecreated (the characteristics of a skill are: natural rhythm, holistic view, functional grouping and result orientation). The skillsinvolve a number of tasks being combined in work functions.

A final assembly-oriented product structure:This would lead to more efficient information handling, where the product and thework derive from an assembly-oriented product structure and where they would be described by using a number of predefined

interrelated charts. Defined Materials and production control:It would be based on the principle that products that would be similar for assembly

ur oses would also rinci all similar. This would reduce number of variants in the final assembl .


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Volvo Case Analysis

Management Reflective Production SystemMethodology


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Volvo Case Analysis

Results achieved by the Plant :

Conclusison : After analysis we can conclude that Socio-

technical theory helps in exploiting Work Design, JobEnrichment, Job Enlargement and Job Rotation concepts,which enhances the job satisfaction level of the employeesand also motivates them to perform and analyze task in moreefficient way.


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Dwo Socio Technical System

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