TABLE OF CONTENTS · Dedication To my wife, Dotty, who was my strong support throughout my life, to...
245
Transcript of TABLE OF CONTENTS · Dedication To my wife, Dotty, who was my strong support throughout my life, to...
TABLE OF CONTENTS
Page
CHAPTER 1 – INTRODUCTION ……………………………. 1
CHAPTER 2 – ORGANIZATIONAL PRINCIPLES ……....... 9
CHAPTER 3 - ORGANIZATIONAL STRUCTURE ……….... 23
CHAPTER 4 - HEALTH & SAFETY…………………………. 48
CHAPTER 5 - EMPLOYEE DEVELOPMENT ……………… 93
CHAPTER 6 - COMMUNITY CITIZENSHIP……………….. 139
CHAPTER 7 - EMPLOYEE FAMILY VALUE………………. 149
CHAPTER 8 - PLANT TEAM EFFORT……………………… 156
CHAPTER 9 - ETHICAL RESPONSIBILITY………………... 169
CHAPTER 10 - FREE & OPEN COMMUNICATIONS……… 176
CHAPTER 11 - CONTINUOUS IMPROVEMENT…………... 187
Dedication To my wife, Dotty, who was my strong support throughout my life, to my good friend Jake Swanson, now deceased, who co-authored the Ultimate Force organization plan with me, and to the charter employees of Exxon’s Baton Rouge Plastics Plant, who executed the plan with excellence over the years.
CHAPTER 1
INTRODUCTION
The concepts for this manufacturing plant organization plan
presented in this book started to evolve from my employment by Esso
Standard Oil of Louisiana, on graduating from Notre Dame with a
Chemical Engineering degree in 1955, at its world’s largest
Refinery/Chemical complex in Baton Rouge, Louisiana. Over the next
eleven years, the company moved me through nine different
assignments starting as a technical service engineer on a refinery unit,
followed by refinery economics engineer, technical service group
head, ethanol plant supervisor, assistant technical service department
head, engineering department head, refinery blending and shipping
department head, assistant head of the mechanical division, head of
the chemical plant operating division responsible for the operation of
the chemical plant complex, consisting of about fifteen separate
production units. These multiple assignments obviously were
designed to prepare me ultimately for a Plant Manager job.
At that time the Refinery/Chemical plant complex had about
five thousand employees and was organized functionally with each
function responsible for a segment of the plant’s operation, or
2
management craft lines, many of which I experienced first hand. The
wage earners were also organized along craft lines with probably
about fifteen mechanical crafts and several operator levels as well as
many other non-management positions. The plant dated back to the
early century and had an independent union representing the non-
management employees. Over the years plant labor practices,
resulting from many contract negotiations, had been established and
vigorously defended. In fact, in my last assignment, for about a year,
I was a member of the negotiating team trying to hammer out a new
contract to replace the contract that had expired. My multiple
assignments and union negotiations exposed the many barriers to
organizational efficiency and employee morale and motivation.
In 1966 I was made the Project and Plant Manager for a new
high pressure polyethylene plant, Enjay Chemical’s (the US
subsidiary of Exxon Chemical, Exxon’s worldwide chemical
company), entry into the polyethylene business. This plant operated
at pressures up to 50,000 psi, produced molten polymer at 600 degrees
temperature, followed by pelletizing in extruders with whirling knife
blades operating at high speeds. In other words a technically complex
plant with many potential safety risks. Prior to that time all of
3
Exxon’s worldwide investments in chemicals had been sited in
Refinery/ Chemical plant complexes, using existing plant practices
and union contracts. With this initial entry into a totally new segment
of the chemical industry, Enjay’s plastics management argued that the
requirements of this new business mandated that the plant be made a
stand alone plant, free to adopt different practices from those in place
at existing complexes. After some debate, the new stand alone grass
roots plant was approved, and an idle parcel of a company owned tank
farm selected as the site.
In constructing this plan, we not only relied on the barriers to
effectiveness exposed during my years of training, but my assistant,
Jake Swanson, now deceased, and I visited many new plants in the
Gulf Coast area who provided considerable input on their
organizations and practices they found important in achieving plant
effectiveness. The organization plan presented herein is the result
with updated ideas that I believe improve an already world
competitive plan.
The plant over the years has been one of Exxon’s most
outstanding. A measure of its performance excellence has been
safety. Every manufacturing manager knows a plant with an
4
outstanding safety record is most likely to be outstanding in all other
areas of performance. The plant operated from startup for many years
without a lost time injury and consistently has been a leader in safety
among Exxon’s plants, which are also a leader in the industry. In
fact, Exxon recently issued a news release announcing that the plant
had been recognized by the NPRA (National Petroleum Refiner’s
Association) with an award of its Safety Excellence Award for the
third year in a row. Only two other plants in the history of the award
had been so recognized.
This plan was so successful that, at least while I was employed,
all of Exxon Chemical’s major new investments were built on grass
roots sites using this organization plan as a model. A polyethylene
plant in Belgium, a Saudia Arabian polyethylene plant, a major
ethylene plant in Baytown and a polyethylene plant in Mount Belvieu,
Texas, in the shadow of the large Baytown Refinery/Chemical
complex, representing over a billion dollars of investment, all were
grass roots and modeled after this organization plan. As a disclaimer,
I do not know if, after I retired, Exxon has continued to use this plan
in their new major investments, since I have not been privy to their
investment plans.
5
I remained at the Baton Rouge plant only three years, but over
the years had responsibility for the plant and the other major
polyethylene investments as Vice President of the US plastics
business, and later as Worldwide Plastics Vice President until I retired
in 1986.
I began to write this book after I retired because I believe that
the principles, human relations practices, plant organization structures
and management systems that make up this organization plan are
essential in establishing a world competitive workforce and should be
shared with all existing and future plant managers an essential
component in restoring America’s manufacturing competitiveness.
However, due to my wife’s Parkinson’s Disease, which
demanded my full attention in retirement, I was unable to complete it.
When she passed away recently, I was able to put the finishing
touches on it, including additions I believe improve the original plan.
My original plan was to seek a publisher, as I am fully
convinced of the value of the book’s contents in establishing a world
competitive workforce. However on reflection, I had concern about
my ability to convince both a publisher and my target market of the
value and timelessness of a 40 year old organization plan, even though
6
I remained convinced that the plan elements remain timeless, that only
the tools for their execution have changed. For example, in
developing documentation for the original plan we had to rely on
typewriters and white out. Today’s capabilities of information
technology, computer controls, enhanced electronic instruments and
sensors, automation, etc. present light year improvements in the tools
in use for the plan execution.
My doubts about proving the timeless validity of the plan were
put to rest this past summer, 2008, when I received a phone call from
one of the original employees of the plant. He said that a number of
the original employees of the plant, all of course recently retired, met
for breakfast regularly and, recognizing that 2008 represented the 40th
anniversary of the plant’s startup, on their own with no company
input, decided to try to contact all of the original plant employees and
hold a celebration of the anniversary. Apparently the company had
already held a celebration for current employees. He invited me to
come, which I of course accepted, since it would be an opportunity to
reunite with the plant’s charter members, many of whom I hadn’t seen
since I left the plant 39 years ago.
7
What makes this occasion more important to me was the
attendance at the event. Of the plant’s original 173 employees, 36
were known deceased; the organizers were unable to locate 42; and of
the 96 contacted, 81 attended; and with spouses, total attendance was
140. The fact that over 85% of those contacted attended after all these
years, convinces me of the timelessness of the principles, structures,
human relations practices, and management systems that comprise the
plan and its value for consideration as America tackles reconfiguring
its existing manufacturing plants and undertakes new plants associated
with the renewable energy program being undertaken by the country.
In fact, I’m convinced that unless American manufacturing embraces
most of this plan, it will not restore its former manufacturing world
supremacy.
Energized by this outpouring of tribute by plant employees,
who spent most of the forty years being celebrated on this occasion,
working under this organization plan and achieving truly world
competitive performance, becoming an Ultimate Force, I decided that
my belief that this plan is timeless has been confirmed. It is being
published online for ease of broad access.
The format for the book consists of the following:
8
Chapter 2 – Organizational Principles – lists guiding
organizational principles that underpin development of the plant’s
structures, human relations practices, and management systems.
Justification for each of the principles is provided.
Chapter 3 – Organizational Structures – Provides
organization structures that support all of the organizational principles
along with benefits of the proposed structures.
Chapters 4 thru 11 – Organizational Principles – Provides a
chapter for each of the organizational principles. Human relations
practices and management systems that mainly support the principle
are described.
9
CHAPTER 2
ORGANIZATIONAL PRINCIPLES
In developing a plant’s organizational structures, practices and
management systems, literally hundreds, if not thousands, of specific,
detailed decisions must be made. These decisions cannot be made in a
random, patternless fashion without creating a jumbled and confused
organization plan, and a resulting ineffective organization. To ensure
that all such decisions result in a coherent and consistent approach to
managing the plant’s operations, the initial effort should be
establishing Organizational Principles on which all organizational
decisions will be based.
Organizational Principles should be clear statements of
organizational purpose. As such they must form the foundation for
constructing the organization. They must be the glue that binds
together the many separate organizational decisions that are required.
They are the litmus test for all such decisions. If these principles are
to fulfill this objective, they must, then, be fundamental and
immutable in nature. They must be capable of standing the test of
time, for if an organization aborts any of its basic principles, it risks
the loss of credibility and the confidence of its several constituencies -
10
employees, customers, owners, suppliers, and the community.
Therefore, Organizational Principles should be carefully developed.
They must have the full and unswerving support and commitment of
all levels of leadership up to the highest levels of the corporation, for
the loss of high level corporate support at some future date could be
devastating to the plant organization. In fact, many corporations have
developed Corporate Organizational Principles and it is essential that
these be included in the plant’s Organizational Principles to ensure
corporate support.
Because the Organizational Principles are so fundamental in
establishing the organization’s structures, procedures, management
systems, and practices, they should be broadly promulgated. Their
understanding and acceptance should be a condition for employment.
They should be well documented and prominently displayed for all to
see. They should be regularly reviewed with all employees to ensure
their continued use in operating the plant.
In developing these principles, it is important to recognize that
each manufacturing plant serves five main constituencies. First, the
plant exists because the owners (corporate shareholders or private
investors have invested in a plant with the objective of providing a
11
reasonable rate of return to the owners for risking their capital).
Obviously, the plant, and the business of which it is a part, must meet
the owner’s profit and return objectives over time if the plant is to
continue in existence. Second, no plant can exist without customers.
The customer may be another division of the company, or another
company, or a governmental body, or an individual consumer, but
there must be a customer and the plant must serve the needs of its
customer or customers or it won’t survive. Third, the plant exists at
the pleasure of the community in which it operates. To receive the
support of the community, the plant must be a responsible citizen and
contribute to the well-being of the community. Fourth, the Ultimate
Force plant must share a strong relationship with its suppliers. The
plant and its suppliers are, in effect, mutually dependent on one
another. Therefore, the plant’s suppliers form a fourth constituency.
Fifth, the plants success is totally dependent on the performance and
support of the employees.
Following are my proposed Organizational Principles and
arguments in support of them. It should be recognized that I’ve only
summarized the key points supporting the establishment of each
12
principle in the following discussion. Specific implications of these
principles are the subject of later chapters in this book.
PRINCIPLE 1
The plant will be designed, constructed and operated in a way that
always gives the highest priority to the health, safety, security and
well-being of its employees and the community in which it operates.
Justification – Health, safety and security is the most important
Organizational Principle, for a number of reasons. Some of these
follow.
No enlightened management will intentionally risk the health
and well-being of a plant’s employees or the community in which it
operates for any reason. Concern for human health dictates nothing
less than the highest priority on health, safety and security and an all-
out effort to provide the necessary facilities, training, operating
procedures, management systems, and practices to minimize the risks
associated with a manufacturing operation.
Health, safety and security represent the one area in which all
plant employees, the plant and corporate leadership, and the
community should share common views, at least in principle.
Consequently, a properly developed health, safety and security
13
program is a strong morale builder for the organization. It
demonstrates the company’s concern for the people it employs and the
community in which it operates. No other activity is likely to create
as much commonality of interest and individual commitment.
Conversely, a poor health and safety program, and lack of security,
and the resulting poor performance in these areas, can be devastating
to plant and community morale. Safety is definitely a major factor in
the plant morale equation and therefore will have a significant impact
on all other aspects of the plant’s operation.
A broad-based, properly designed health and safety program
will afford the opportunity for employees’ families to get involved
through the off-the-job dimension of the program. Strong support of
the plant by employees’ families plays a major role in achieving the
Ultimate Force, and is itself one of the basic Organizational Principles
described later.
Good safety performance is also self-serving from a company
standpoint. Industrial accidents can be very costly in terms of
employees time away from the job because of injuries. Further, many
accidents result in serious and costly damage to plant equipment.
Workman’s compensation and insurance premiums are affected by
14
safety performance. In addition, liability and criminal lawsuits
resulting from plant accidents are becoming increasingly serious
threats and a major inducement for a sound safety program.
Further, the ingredients of a sound safety program are fully
consistent with leadership concepts that an effective organization will
use in managing the rest of its manufacturing activities.
Consequently, a soundly managed plant safety program is a logical
part of broader design rather than a special effort and is itself a key
ingredient in effective plant operations.
Most important is a total plant commitment to a safe operation,
with the Plant Team Leader playing the leading role.
PRINCIPLE 2
The plant’s employees are its most valued asset and the plant is
committed to providing each employee with the opportunity to
develop and perform in the plant environment to his/her maximum
capability and as a result, make a significant contribution to the
success of the plant, while achieving job satisfaction and maximum
career success.
Justification - The Ultimate Force demands the tapping of the
fullest capability of each employee, capability that today is being
15
underutilized in most plants. With rare exceptions employees want to
have the opportunity to develop to their maximum capability. Further,
they want to be able to utilize their developed skills in the workplace
to make a meaningful contribution to the success of their place of
employment. Satisfying these employee desires can translate into a
skilled, highly motivated, stable workforce capable of performing at
world class competitiveness.
PRINCIPLE 3
The plant is committed to being a responsible citizen of the
community in which it operates.
Justification - As each of us as individuals has an obligation to
be a responsible member of the community, so it is with the plant. I
use the word “community” here in the broadest sense to include the
country in which the plant operates as well as other political
subdivisions of the country down to the city or town in which the
plant is located. Unless all citizens, including corporate citizens,
make an effort to better their community, there will be no community
improvement. In fact, there will likely be a decline in the quality of
the community. This in itself is justification for the plant being a
responsible citizen.
16
Responsible citizenship is also more than just an ideal. It is
also self-serving for the plant. A plant that is viewed by the
community as being a responsible citizen is more likely to enjoy broad
community support and less likely, therefore, to face community
restrictions on its operations. Plants that are viewed as a negative
influence on the community clearly are inviting community reaction
against them, with the potential for costly community restrictions on
their operation.
A positive image in the community is also an important asset in
attracting and recruiting high quality employees. It is also important
in retaining high quality employees, since no employee enjoys
working for a company that is regarded as a pariah by the community.
Active participation by the plant in community affairs will
enable the plant to exert an influence in important areas, such as
taxation, infrastructure development, community improvements to
quality of life for plant employees, educational improvements, and so
on.
PRINCIPLE 4
The plant values the support of its employee’s families and intends by
its actions to earn and justify that support.
17
Justification - So often in today’s demanding workplace,
employees are torn between the requirements of their jobs and the
demands of their families. To the extent that an employee’s family
can come to understand the employee’s work environment and its
requirements, they’re more likely to become supportive of the
employee’s job. This, in turn, can reduce stress on the employee’s
personal life, enabling the employee to become more effective.
Consequently, it’s to the plant’s benefit to make a significant effort to
cultivate the support of its employees’ families.
In the event a plant encounters a unionization effort, the support
of the plant employees’ families can be a major factor in turning away
a union drive. Certainly this alone justifies a continuing effort to gain
and maintain that support for the plant.
A positive image of the plant by the families of plant employees
can be converted into a sizeable multiple of that image in the
community through friends, relatives and acquaintances of the
employee’s family. This can contribute significantly to the plant
being viewed as a valued corporate citizen of the community.
18
PRINCIPLE 5
The plant believes that its objectives can best be achieved through a
team effort by all plant employees and will give a high priority to the
development of a team spirit in the plant.
Justification - It doesn’t take any exceptional wisdom to
recognize that an organization that works together as a team will be
more effective than one in which there is a lack of cooperation
between employees, or worse, outright friction or dissension. An
organization characterized by a harmonious team effort will be able to
direct its energy to the effective operation of the plant rather than to
non-productive in-fighting between individuals or groups in the plant.
Further, team members in such an organization will enjoy much
greater job satisfaction, with the resulting positive effect on employee
morale.
In addition, bringing together the diverse backgrounds and
opinions of the various members of a team in seeking problem
solutions or ways to improve plant performance almost invariably
results in better answers and stronger support by team members for
whatever the team decision is.
19
PRINCIPLE 6
The plant expects all employees to always meet the highest ethical
standards in carrying out their plant responsibilities.
Justification - Gaining the full and unwavering trust of its
various constituencies is essential to a world class manufacturing
organization. Owners must be able to trust their plant employees to
properly employ and steward the resources entrusted to them. The
community, in which the plant is located, must be able to trust the
plant to always meet all regulatory requirements, and in other ways
operate in the community interest, if it is to be supportive of the plant.
Customers must have a strong sense of trust in the integrity of their
suppliers, or else they’ll seek supplies elsewhere. Plants must be
honest and fair with their suppliers. Plant supervision must be able to
trust its employees to be honest in reporting plant performance and in
using plant resources. Similarly, the plant employees must be able to
trust their supervisors to always be honest and fair with them, if they
are to be fully motivated to deliver their best performance. Trust can
only be earned by the plant and its employees if they are committed to
always subscribing to and operating in accord with the highest
standards of ethical behavior. This must span all aspects of the plant
20
operation, for if cheating is allowed in any area, trust will be
undermined in all areas.
PRINCIPLE 7
The plant is committed to free and open communications between the
plant and it’s customers, between the plant and other company
Business Unit groups outside the plant, between the plant and the
community, between the plant and its suppliers and between all plant
employees.
Justification - Communication failures are so often the root
cause of business problems or failures in business performance. If the
plant is to meet its objectives of satisfying the needs of its many
constituencies, clear, open, two-way communications between the
plant and those constituencies must be ongoing to ensure a clear
understanding by the plant of those needs, and a clear understanding
by those constituencies of the plant’s plans to meet their needs.
Further, the needs of the plant’s outside constituencies must be
communicated to all plant employees if they are to be able to
participate in a meaningful way in meeting those needs. Employees
views on how to improve plant performance are essential if there is to
be continuous improvement in plant performance, without which no
21
plant can remain competitive. In soliciting employee views on plant
improvement, care should be taken to encourage free and open
communication by employees, even when they may espouse
politically unpopular views. There should be no muzzling of
employees or reprisals, or else employees will be reluctant to speak
their mind, and an important source of ideas for plant improvement
will be lost.
PRINCIPLE 8
The Plant is committed to being a world leader in all aspects of its
operations and dedicated to continuous improvement to maintain this
position.
Justification - A plant must continuously improve its operation
if it expects to remain fully competitive with its industry, since
competition will continuously improve. One only has to consider how
much any product in use today has changed in the past ten years to
appreciate the importance of continuous improvement if a
manufacturer is to remain competitive. Further, there is a well
established principle, known as the experience curve, which states that
unit costs in constant currency are continuously reduced as a function
of cumulative production of a product. Therefore, continuous
22
improvement is the lifeblood of the plant if it is to remain competitive.
If the plant is not competitive in all aspects of its operation - product
quality, product performance, production technology, investment and
production costs, and workforce morale and performance - its future is
obviously imperiled.
23
CHAPTER 3
ORGANIZATIONAL STRUCTURE
In subsequent chapters I will provide recommendations for
organizational practices and management systems that support each of
the Organizational Principles. But before addressing the individual
principles, in this chapter I will outline organizational structural
concepts that I believe are desirable to facilitate meeting these
Organizational Principles.
Manufacturing plants obviously come in all sizes and shapes,
employing an almost limitless range of technologies producing every
available product in today’s marketplace. This diversity demands an
equal diversity in plant organization structures. In spite of these
differing organization structure needs, however, I believe that there
are certain common organizational structural concepts that should be
considered by all plants. These are:
1. Single Business Unit Focus
Before elaborating on this structural concept, let me first provide my
definition of a “Business Unit”. A “Business Unit” consists of all the
organization activities necessary to develop, produce and market a
product, or family of products, from the technology and hardware that
24
is specific to the production of those products. For example, a paint
plant that supplies many different paint grades and colors to a wide
variety of industrial and consumer customers would be part of a single
“Business Unit’ since the hardware and technology necessary to
produce the family of products is common. Plants that produce
pigments, solvents, etc., which are used in paint manufacture, would
be part of different “Business Units”, since the hardware and
technology for producing those products have little in common with
the paint business, other than being a raw material supplier to the paint
business. Similarly, a metal stamping plant producing parts for an
automobile assembly plant, and a plastics molding plant, also
producing parts for the same automobile assembly plant, would each
belong to different “Business Units”, even if the two plants were part
of the same company, since there is no commonality between the two
plant’s manufacturing hardware and technology base, even though the
two plants share the same customer.
In many companies and industries, the historical belief has been
that bigger is better. That belief certainly seemed to be true in my
industry, the petrochemical industry. Because of this prevailing
wisdom, companies developed large sites with many different
25
production units employing totally different technologies, producing
totally different products for totally different customers. Often the
only thing these producing plants had in common was that they shared
the same site. Although, in some instances, the product from some of
the site plants was used as a raw material by other plants in the
complex. The “bigger is better” mentality fed off the belief that
concentrating the management of plant functional activities in central
functional groups was the most efficient plant organization structure.
In this type of organization, the central functional groups typically
report to a site manager. The various central functional groups
provide their functional services to all the production units on the site.
As a result, contacts with “Business Unit” groups outside the site, like
marketing, product management, and research and development, tend
to be focused on the production functions, since that is where the
product is made. As a result only a narrow segment of the
manufacturing organization becomes knowledgeable of and
committed to the goals and objectives of the “Business Unit” and the
needs of the “Business Unit” customers.
It has been my experience that these large functional
manufacturing organizations tend to be unresponsive to the needs of
26
the businesses they supposedly serve. The focus of the functional
groups tend to be internal to the plant and aimed at fitting all the plant
production units into common functional practices, even though the
individual business needs of the production units might vary
substantially. Attempts to change functional practices often requires
agreement of all production units in the plant and is, therefore very
difficult to achieve without the expenditure of excessive
organizational energy.
As you no doubt by now have surmised, I believe the most
effective manufacturing plant is one which serves only a single
“Business Unit”. In such a plant, all plant employees are full time
employees of the “Business Unit”. The activities of the various
functions serve only the needs of the “Business Unit” and all
employees become intimately familiar with the strategies and goals of
the “Business Unit” and deeply involved in and focused on, the
success or failure of the business. Since their future opportunities tend
to be identified with the success of their “Business Unit”, they become
much more committed to that success. They share in the excitement
of making a business successful, an excitement that I believe is
missing in the large multi-unit site functional organizations.
27
A single “Business Unit” site also inherently results in a smaller
plant size, which as you will note is another of the common plant
structural concepts that I will recommend later in this chapter.
The common focus on a single “Business Unit” also facilitates
organizational team building, one of the key objectives in the Ultimate
Force plant.
2. Plant Size
In the Ultimate Force plant, close personal relationships between all
employees and the development of these relationships into a close-knit
team effort is essential in achieving the plant’s objectives. The larger
a plant work force, the more difficult it is to develop these concepts.
My goal for the Ultimate Force plant is fewer than 500 employees.
Obviously, this goal is unachievable in some types of organizations.
For example, a shipyard engaged in building an aircraft carrier, will of
necessity have many more than 500 employees. But I believe this
goal can be realized in many industries. For example, the single
“Business Unit” focus I have recommended will tend to limit plant
size. Further, in many plants, capacity is added by essentially
duplicating production lines. Where an expansion of this type would
result in exceeding a plant population of 500 employees, a new plant
28
site should be considered. Some will argue that starting a new grass
roots site is a more costly alternative to adding production lines in an
existing site. It has been my experience that most organizations
underestimate the true cost of incremental additions to existing plant
facilities, and that when all the costs have been included, the value of
maintaining a small organization will more than compensate for any
residual cost disadvantages in most cases. Smaller plants also
accommodate more readily to a flat organization structure, the
advantages of which are discussed in this chapter.
Small plants do require careful organizational structural
planning. Certain skills or functional activities that don’t require full
time effort, should be obtained from outside consultants or by
borrowing resources from other company plants. Similarly, some
facilities may not be supportable by a small plant. For example, a
small plant may not be able to justify its own steam and power
facilities and may have to purchase steam and electricity from a local
utility or from another local plant with spare steam and electricity.
Many opportunities exist for sharing of facilities and services with
other area plants if a little creativity is exercised.
29
Creative and careful planning can minimize many of the
disadvantages of a small plant, while retaining the many advantages.
3. Flat Structure
In this age of re-engineering the organization, it’s perhaps a “no
brainer” to recommend a flat organization structure. A flat
organization structure eliminates costly middle management,
facilitates rapid communication in the organization, encourages
involvement of all levels of the organization in key decisions, speeds
decision-making, etc. In an Ultimate Force plant of fewer than 500
employees, three levels of supervision should be achievable, including
shift supervision.
The concept of a self-directed workforce has received a lot of
notoriety over time. But such a concept is a hoax. There is no such
thing as a totally self-directed workforce. All company employees
except the CEO report to someone in the company, and even he
reports to the stockholders, and therefore receive some measure of
work direction. In the “so-called” self-directed workforce, the level of
supervision may be minimal but it exists.
My belief is that small work teams headed by a working Shift
Team Leader are far more desirable than individuals operating with
30
minimum supervision. In the Ultimate Force plant the Team Leader’s
responsibility is to be a teacher and facilitator to ensure that every
employee has the opportunity to realize his fullest potential. The
Team Leader should ensure that his team members have the
opportunity for full involvement in improving the plant’s operations.
The Team Leader should facilitate communication between team
members and upper levels of plant supervision. The Team Leader
must positively reinforce team members in their plant activities, and
not in any way restrict team members’ ability to contribute their
talents to the plant’s success. In my plants, I would certainly opt for
small working groups headed by a Team Leader, rather than lightly
supervised large work groups.
4. Team Leaders vs. Managers
In most plant organizations today, supervisors, or at least upper levels
of supervision, are titled “Managers”. There is typically a “Plant
Manager”, several “Department Managers” or “Division Managers”,
etc. and how often have you heard someone say: “Management did
this”, or, “Management did that”. The title of “Manager” and the
concept of “Management” unnecessarily differentiates between plant
employees and sets up an organization barrier. In the Ultimate Force
31
plant this barrier is counter to the concept of a plant team in which
every employee is part of the team and an important contributor to the
team’s success. While I confess I have always used the “Manager”
title in my organizations, my current belief is that the “Manager” title
should be eliminated. In its place, I would call plant supervisors
“Team Leaders” in support of the team concept. Thus, there would be
no “Plant Manager”, but rather a “Plant Team Leader”; there would be
no “Department Manager”, but a “Department Team Leader”; no
“Shift Foreman or Manager”, but a “Shift Team Leader”. In this book
I will use the Team Leader title for plant supervision.
5. Departmentalization
Conventional organization structures are often highly
departmentalized, leading to organizational barriers, not unlike job
classification barriers. For example, there frequently will be a
Maintenance Department, a Technical Service Department, an
Engineering Department, a Quality Control Department, a Safety
Department, an Accounting Department, etc. Each of these
departments tends to limit the work that it can do to that described by
its functional title, and worse, they tend to jealously guard against any
other department performing “their” work.
32
In the Ultimate Force plant, departmentalization should be
minimized. For example, I recommend combining all production-
related functions into one or more Production Departments, depending
on plant size. These Production Departments would be responsible
for operating, repairing, servicing, and physical improvements to the
equipment assigned to them, along with quality control for the product
produced. Technical and engineering activities related to the assigned
equipment should also be included, although engineering and
construction responsibility for major plant project additions should be
kept separate from the operating departments and report directly to the
Plant Team Leader to avoid distracting operating personnel from their
prime objective - operating the plant at a world competitive level.
Similarly, all administrative activities should be assigned to one or
more Administrative Department(s) rather than having separate
functional administrative departments.
The one exception is the Human Relations Department which
should be independent and report directly to the Plant Team Leader.
This Department has a significant role to play in the Ultimate Force
plant. It should be headed by a Team Leader who has significant
people skills. The role of the Department is to manage the hiring of
33
all employees. In doing so the Human Relations Team Leader should
be expected to acquire an in-depth knowledge of the candidate and
his/her family, a knowledge and relationship which he should nurture
after employment. The Human Relations Department should consist
of the Team Leader and the required Administrative Technicians to
carry out the Departments responsibilities which consist of
maintaining all employee records, scheduling vacations, keeping track
of overtime, absentees, etc. The Team Leaders role should be
primarily to interface continuously with the plant employees, using his
close relationship with employees to spot potential trouble spots and
bringing them to the Plant Team Leader for immediate response to
avoid the start of problems from building to major issues. I can’t
emphasize enough how important this effort is to insure that employee
concerns are addressed in a timely manner.
6. Job Classification
It has been my experience that most employees have the ability, with
proper training, to do far more than they are ever asked to do or
allowed to do in industrial manufacturing plants. The Ultimate Force
plant should aim to tap this vast unused potential. Providing a proper
job classification structure is an essential step in enabling employees
34
to experience broad assignments and achieve their full potential, while
also making a significant contribution to the plant’s success.
Perhaps the most important classification is the Plant Team, to
which all employees belong. But within this broad classification,
there are other sub-classifications. For non-professional employees, I
recommend only two classifications, one for production employees,
and one for administrative employees. Following are my descriptions
of these two classifications.
(a) Production Employees - I would title the
classification for production employees Production Technicians, but
other titles relating to a specific plant might be equally appropriate.
For example, employees in an aluminum smelting plant might be
called Aluminum Technicians. What’s important is that there be only
one classification for production workers encompassing all aspects of
plant production work. Thus, there are no classification barriers
limiting what employees can do in the Ultimate Force plant.
While there are no limits on what a Production Technician can
do, it is important that each Technician be assigned responsibility and
accountability for a defined part of the plant in order to ensure that no
part of the plant’s operation is left unattended. In the chemical
35
process industry, we called these assignments “posts”. Each “post”
prescribed the facilities to be operated by the Production Technician
assigned to that post. The post concept is definitely not intended to
limit what an employee can do, but rather to ensure that all plant
operations are properly manned.
Obviously, the number of posts required in a plant will be
determined by the size and complexity of the plant’s operations. For
purposes of discussion here, I would like to assume that a plant’s
operations encompass a large number of posts and that these posts
have a variety of features. Some may be highly technical requiring
considerable intellectual effort; some may be mainly manual: some
may be located outside in the heat and cold; some may be inside in the
comfort of air conditioning and warmth; some may be in a clean
environment; some in dirty and hot surroundings; and some may have
more than one of these features or other unique requirements.
A “post” assignment will require attaining the skills to operate
the assigned equipment safely and efficiently as well as servicing,
repairing and making physical improvements to the equipment as
necessary.
36
In a plant with complex, highly technical post assignments, I
believe an employee should spend from nine to twelve months in a
post assignment. This allows time for proper training, developing
proficiency in filling the post and hopefully contributing to
improvements to the post’s equipment and its operations. Further
over time each Production Technician should be required to become
certified (qualified) for three or four posts. This enables employees to
experience a broad cross-section of the plant’s operation, thereby
enhancing their personal development and their production skills. As
mentioned above, most plants will have post assignments that span a
variety of environmental as well as intellectual conditions. In
structuring each employee’s rotation through the three or four
prescribed posts, it is important that the rotation sequence exposes the
employee to a variety of plant operations. Further the rotation
sequence should ensure that all employees are exposed to roughly the
same range of plant environmental and intellectual conditions over the
course of the multi-year rotation. As mentioned earlier, I have
assumed for purposes of this discussion that the plant under
discussion has a large number of diverse posts. In such a case, its
obvious that no employee will be able to experience all plant post
37
assignments. Thus it will be necessary to have several post rotation
sequences. However, every effort should be made to ensure that each
sequence places equal demands on the Production Technicians, and
provides equal training opportunities. There should be no “cushy”
rotation sequences.
As noted earlier, a post requires that a Technician not only
operate the assigned equipment, but also must become proficient in
servicing, repairing, and making physical improvements to the
equipment, work that is typically defined as maintenance. I have
avoided the maintenance label in the Ultimate Force plant since world
competitiveness cannot be achieved by “maintaining” but only by
“improving”. Since in most plants, operating the equipment will
normally require the full attention of the Post Technician, the work
schedule should provide time for the Technician to experience repair,
service and improvement work without operating responsibility. In a
plant that operates around the clock, four shift teams are required to
operate the equipment and allow for time off. By adding an additional
shift team or teams, time can be built into the Production Technicians
schedule to also allow the Technicians to spend time on equipment
repair, service and improvement work. Normally, the work will be
38
done on the day shift. In this scheme, a Production Technician would
go through a complete shift rotation operating his/her post equipment,
followed by a multi-day assignment for repair, servicing, or
improvement of his/her post equipment The length of the day
assignment would be dictated by the type of shift rotation schedule
employed and the number of teams required for repair and service
work.
It may be argued that expecting Production Technicians to
handle equipment repair and servicing work, in addition to operating
the equipment, is asking too much. However, I’m convinced that 90-
95% of repair and servicing work on even complex equipment can be
easily learned and practiced by any employee who has the skills to
operate the equipment. To provide for the limited requirements for
highly specialized knowledge about complex equipment, the
organization structure should provide for Specialist Team Leaders
with the specialized skills required. These specialists can guide the
Production Technicians in areas that demand special knowledge.
The Production Technician concept, as outlined, provides a
number of important features that support the Ultimate Force plant’s
basic principles:
39
• It provides for broad training and development of
production employees in a broad cross section of the plant’s
operations. It brings broad exposure to all employees and provides
increased employee contribution to plant improvement.
• All employees receive the same training (or as
nearly the same training as possible) and therefore the same
development opportunities. No employee is able to monopolize a
preferred assignment endowed on him/her by some discriminatory
seniority system.
• Since all employees experience broad aspects of
the plant’s operation, there is greater appreciation of the demands of
each plant assignment, which minimizes territorial jealousies among
employees and improves teamwork.
• Because employees are broadly trained, they are
better able to assist one another as required.
• Since there is only one classification, there are no
organizational barriers restricting what employees can do. There are
no craft lines and no jurisdictional disputes, all of which is supportive
of the plant’s team spirit.
40
• All employees in this scheme work the same
schedule and therefore have the same time off. In plants where
employees do not have the same schedule, there is usually
considerable jockeying for preferred schedules, which tends to be
most disruptive to a team atmosphere.
• In a similar vein, traditional plants have a separate
maintenance organization which typically mainly works a straight day
schedule, which is preferred by most employees. In the Ultimate
Force plant concept, the preferred day work is equally shared by all
employees.
• Having broadly trained employees is a major plus
in handling plant emergencies.
• Employees broadly trained in a variety of jobs
increases the flexibility in balancing overtime assignments across the
plant, which makes it easier to ensure that all employees are treated
equally in access to extra compensation.
• Since all production employees are trained in
repairing and servicing equipment, breakdowns during the night and
on weekends can frequently be handled by the operating team without
41
the cost and delay involved in calling out maintenance employees,
which is typically required in traditional plants.
• Employees who repair and service the equipment
they operate have a greater appreciation of the impact of improperly
operating the equipment, leading to a better understanding of the
importance of following prescribed operating procedures.
• Broadly trained employees are more likely to be
qualified for plant promotional opportunities wherever they occur than
narrowly trained employees, thereby ensuring that the best qualified
employees are rewarded with promotional opportunities.
(b) Non-Professional Administrative Employees -
Just as there should be only one classification for non-professional
production employees, there should be only one classification for non-
professional administrative employees. We called this classification
Administrative Technician in my plants.
Administrative work in most plants includes secretarial and
other administrative work activities. As with production work,
administrative posts should be designed to ensure that someone is
assigned responsibility for all of the plant’s administrative work.
Here, as with production posts, the assignment of certain tasks to a
42
post should not in any way inhibit an employee from assisting fellow
team members in other posts as work loads require. Administrative
Technicians should be required to rotate through a number of these
posts over time (recommend three or four) and be required to spend
roughly a year in each post to allow time for proper training in the
post, as well as time for the Technician to make a meaningful
contribution in the post. The post rotation schedule should be
designed such that each Administrative Technician experiences
roughly the same variety of work, as well as the same levels of
intellectual and physical demands over the rotation cycle.
Advantages for this structure for administrative work in many
ways parallel those shown for the production classification structure:
They include:
• All Administrative Technicians receive training
and development in a broad cross section of the plant’s administrative
operations.
• All Administrative Technicians receive essentially
the same training and experience the same job exposure over the
rotation cycle. No employee is able to remain in a more favorable
43
jobs for more than one rotation period, and no employee can claim
he/she is being discriminated against in job assignments.
• Since all Administrative Technicians are broadly
trained, there is a greater appreciation of the demands of each
Administrative Technician post which improves teamwork among the
administrative workforce.
• Since there is only one administrative
classification, there are no classification barriers restricting what
employees can do.
• Since Administrative Technicians are broadly
trained, they can more readily assist one another during times of
uneven work loads, which occurs periodically in most plants.
• Overtime assignments can be more evenly
balanced among the more broadly trained employees.
• Employees with broad training and job experience
can more readily compete for any administrative promotional
opportunity, rather than being restricted to narrow functional
promotional opportunities.
7. Building Contracting Into Organization Structure
There are several reasons why contracting out work (or outsourcing)
44
should be considered in the Ultimate Force plant. The decision to
contract work, of course, impacts on the organization structure. Some
reasons for contracting out work might include the following:
(a) To provide specialized know-how that is required
by the plant on an intermittent basis. Contracting for this kind of
requirement frequently is less expensive than training plant employees
in a skill that is infrequently used.
(b) To provide manpower requirements that are
temporary in nature, like engineering or construction manpower for a
major project, or manpower for a major plant shutdown for repair and
modification work.
(c) To provide a cushion against laying off highly
trained plant employees in the event of reduced demand on the plant.
The plants heavy investment in employee training is a key concept in
the Ultimate Force plant. On such occasions, the reduction in
manpower dictated by a production cutback can be realized by
reducing contract employees, with plant employees handling the work
normally contracted. This is most workable if the contracted work is
typically the more routine or less demanding plant work. This type of
work can be more readily assimilated by plant employees without
45
extensive training. Some logical candidates for this kind of work
might include:
(i) Janitorial services
(ii) Ground maintenance
(iii) Warehousing
(iv) Unskilled labor jobs
(v) Routine repair and servicing work
(vi) Temporary or routine administrative work.
In the Ultimate Force plant concept, all employees are highly
trained to handle the plant’s demanding work assignments. Routine
non-skilled tasks can be contracted at much lower costs than using
highly skilled plant employees.
8. Team Leaders
As previously mentioned, the term Team Leader is recommended for
all supervisory positions and will be used in this book. The number of
such positions will be dictated by the size of the plant and it’s
complexity. Just as it is important for Production and Administrative
Technicians to be trained in and experience a broad range of plant
operations. Team Leaders over time should also rotate through
assignments that provide a broad range of experiences in the plant’s
46
operations. The advantages for this parallel those for the Technicians.
Such rotation should probably not be as frequent as that for
Technicians, given the greater complexity of the Team Leader
positions, but will be dictated by specific conditions in each plant.
For example, in a Business Unit that is rapidly expanding and thus
requiring additional Team Leaders for other plants, the Team Leader
rotation schedule might be accelerated, whereas, in a plant with a
fairly stable workforce, rotation might be less frequent. The one
exception to the concept of rotation for Team Leaders will be the
Specialist Team Leaders who are expected to develop in-depth skills
for their area of expertise, which can best be attained by remaining in
their position over an extended period of time and necessary
specialized training.
9. Professional Employees
Plant Professional employee requirements will typically include
engineers, scientists, business school graduates in fields such as
accounting, management, computing, etc. In minimizing
departmentalization in the Ultimate Force plant, I recommend
integrating Professional employees into the Production and
Administrative Departments, as opposed to setting up separate
47
functional Professional departments. Their reporting relationship
should be determined by specific plant conditions. For example, in a
highly technical plant requiring a large number of technical
professionals, the professionals might report to a Technical Team
Leader, who in turn reports to the responsible Production Department
Team Leader. Where few Technical professionals are required, they
might individually report to the Production Department Team Leader.
In a similar manner, business school professionals will be
assigned to the Administrative Department, and depending on plant
conditions, might report to an Administrative Group Team Leader, or
individually to the Administrative Department Team Leader.
All professional employees over time should be expected to
rotate through several plant assignments to gain broad experience in
the plant’s operations. Each plant should determine the frequency for
those rotational moves, as dictated by the specific characteristics of
the plant. Benefits for such rotational moves parallel those for
Production and Administrative Technicians.
48
CHAPTER 4
HEALTH & SAFETY
Organizational Principle 1 - The plant will be designed, constructed
and operated in a way that always gives the highest priority to the
health, safety and security of its employees and the community in
which it operates.
The health, safety and security of employees and the
community in which the plant operates should be the plant’s highest
priority. Plant safety, as I see it, falls in two categories:
1. Personal safety, which tends to be generic for all plants
and includes such things as proper wearing and use of personal
protective equipment, the use of scaffolding, proper use of hand tools,
etc. Personal safety items are spelled out in elaborate detail in OSHA
regulations.
2. Process safety, which includes safety practices specific to
each plant’s customized equipment and its operation, the plant’s
process.
I will discuss each of these categories.
1. Personal Safety - A list of all possible personal safety
items, as spelled out in OSHA regulations would occupy many pages,
49
and in fact plants are legally obligated to be in compliance with these
regulations. However, it is impractical to make all employees aware
of all the obscure safety regulations prescribed by OSHA. More
realistically there are a much more limited set of personal safety
practices that plant employees should be very familiar with, since they
are likely to be required to employ them regularly in their plant
assignments. Each individual plant will have specific personal safety
items that are more important in its operation, but which might be an
insignificant risk in another plant. For example, teaching employees
the proper use of emergency breathing equipment would be a high
priority in a plant that handles toxic gases, whereas such personal
safety equipment would likely have no value in a metal stamping
plant. So, each plant should tailor its personal safety program to those
items that are most relevant to its operation.
A plant’s personal safety program should be initiated shortly
after the arrival of new employees. All employees should be provided
with an employee safety handbook, which describes the plant’s major
personal safety regulations. I believe that such a handbook needs to
be succinct in describing these regulations. I have seen handbooks
describing the plant’s safety regulations in excruciating detail and fine
50
print in a thick book. I suspect that few employees read such a
document, let alone become familiar with its content. I think that the
key elements of an effective plant personnel safety program can be
described with considerably less verbosity, thereby making the
handbook more readable and more likely to be understood and used.
New employees should be given an orientation program on the
personal safety handbook during which a more expansive discussion
of the regulations can be provided as necessary. Further, this
orientation should include training in the application of the regulations
or use of protective equipment or tools as appropriate.
While each plant needs to develop its own set of most important
personal safety issues, some possible items to consider are as follows:
Use of Personal Safety Equipment
(a) Safety glasses - Areas where safety glasses are
required should be outlined. Most plants experience airborne
particulate matter and in some plants exposure to chemicals or other
potentially damaging materials occur. Plants with these types of
exposure should make the wearing of safety glasses mandatory.
(b) Hard hats - Plants with any exposure to falling
materials or with employee exposure to overhead obstructions, like
51
piping, should make wearing hard hats mandatory in areas of
exposure.
(c) Safety shoes - Requirements for wearing safety
shoes should be outlined. Any plant where there is a risk of a heavy
load being dropped on an employee’s foot should make safety shoes
mandatory for employees with such exposure.
(d) Other protective equipment - Any plant
requirements for the use of special protective equipment should be
included in the personal safety regulations. An example of such
requirement might be the use of face shields and/or rubber coated
protective clothing where an employee might be subject to splashing
of corrosive or other injurious materials.
(e) Respiratory equipment - Requirements for
respiratory protection and the areas where such protection is required
should be spelled out, including the types of protection to be used.
(f) Hearing protection - Areas in the plant where
hearing protection is required should be designated along with the
type of protection to be used, e.g. ear plugs, ear muffs, etc.
(g) Hand protection - Plant jobs that require the
wearing of gloves should be noted. The plant should provide
52
employees with the personal safety equipment outlined above when
required by the plant. A possible exception might be safety shoes,
where employees might be expected to at least pay part of the cost
since safety shoes replace other footwear that an employee would
otherwise be required to purchase.
(h) In-Plant Traffic Safety
Plant rules for vehicular traffic should be spelled out. These
rules should cover, if applicable:
• Trucks/automobiles
• Bicycles
• Fork lift trucks
In general, plant traffic safety rules should parallel those
generally applicable to the specific type of vehicle when operated
outside the plant, and can be obtained from local safety organizations
or state motor vehicle bureaus. Safety practices for fork lift trucks are
provided by their manufacturers. If the operation of fork lift trucks
will be commonly required of most Production Technicians, hands-on
training on their operation should be provided as part of the Skills
Training Program described in a later chapter on employee
development.
53
(i) Lifting Procedures
Proper methods for lifting heavy loads to avoid back injury
should be demonstrated as part of the personal safety orientation
program.
(j) Lockout/tagout Procedure
Procedures to lockout or tagout equipment before mechanical
work is performed on it should be described. Such procedures are
designed to prevent accidental startup or operation of equipment while
work is being performed.
(k) Work Permits
Procedures for preparing equipment for mechanical work and
certifying its readiness for work should be presented. In plants
handling flammable or explosive materials, there typically are two
types of work permits, a hot work permit necessary when the work
will involve exposure to an ignition source, like welding, and a cold
work permit for all other work. Work permits, like tagout procedures,
are designed to ensure that equipment has been placed in a state of
readiness so that mechanical work can be safely performed. While
there should be a general description of the work permit system under
“Personal Safety,” it should be noted that the details of preparing
54
equipment for mechanical work will be customized for each piece of
plant equipment, which should be spelled out in the “Process Safety”
procedures for the equipment.
(l) Confined Space/Vessel Entry
In plants with vessels, like tanks or drums, or other confined
spaces, special procedures should be developed to ensure that
employees entering these spaces can do so safely. These procedures
should ensure that acceptable oxygen levels exist and that there are no
toxic or flammable materials present.
The items described are typical of the kinds of issues that I feel
should be included in the Personal Safety program for the plant. I
want to emphasize that this is certainly not a complete list of issues to
be addressed in the plant Personal Safety program, but only an
example of the kinds of issues that should be addressed in such a
program. As previously stated, each plant needs to develop its own
list of key personnel safety issues to be included in its Personal Safety
program.
2. Process Safety - The systems for managing process
safety pervade and overlap with the systems for managing other
aspects of a plant’s operation, like costs, quality, throughput,
55
investments, etc. They are not stand alone systems. Therefore, a
description of a process safety management program will of necessity
also include procedures in these other areas of plant operation, all
aimed at providing plant employees with essential intellectual tools in
their pursuit of Ultimate Force performance.
In this chapter I will provide my perspective on the essential
content of a comprehensive process safety management program.
Since the management systems required for such a program include
features required in managing other areas of plant operation, the
details of some of these systems may be described in later chapters
relating to other of the Basic Principles, but their importance in an
overall process safety management program will be acknowledged in
this chapter.
A comprehensive process safety management program will
provide management systems and procedures for the following areas:
• Project development, design and construction
• Availability and accessibility of key process
information
• Development of process operating procedures
• Training
56
• Contractor process safety programs
• Work permit system
• Management of change
• Incident investigations
• Emergency planning and response
I will discuss each of these categories and provide detailed
recommendations for management systems and procedures that I think
are necessary for an effective program in each category.
Project Development, Design and Construction:
Process safety, and indeed the platform for plant performance
excellence starts at the project development stage, both for the initial
plant facility as well as for subsequent projects modifying or adding to
the plant. I believe that it is important for the Ultimate Force plant to
have project development and execution guidelines to ensure that all
important factors are considered in preparing the project development
and execution plan. My recommended guidelines identifying the
elements of an effective project development and execution plan, as
well as a discussion of these elements, follows. My focus will be
strictly on the plant facility aspect of a project. Clearly equally
57
important, if not more so, will be the relationship of the project to
corporate strategic plans, competitive studies, marketing plans, etc.
However, these areas are outside the scope of this book and will not
be discussed other than to recognize their importance in the final
decision to proceed with a project.
The first step in a project is approval to proceed with project
development. Different companies will have different approaches to
authorizing project development. Major projects will typically require
high level approval before project development can proceed, whereas
small projects will normally be approved for development at the local
plant level. In any event, once project development has been
authorized, the following steps should be taken:
- Project Philosophy
A project philosophy should be developed especially for major
projects. It should provide guidance to the project team for important
areas in the project design. It should be agreed to by the approving
authority for the project. A project philosophy should include:
(a) Criticality of Project Timing. This can affect
decisions made during the project execution and can affect project
cost so it is important to spell out the urgency of project completion.
58
(b) Technology Risk. If various technology options
are available to the project team, it is important to spell out the
company’s willingness to accept less developed technologies and thus
more risk.
(c) Safety Risk. If the project involves significant
risk, such as the use of toxic chemicals or flammable materials, should
alternatives be considered? If not, how far should the plant go in
providing extreme safety measures?
(d) Pre-Investment Guidelines. Should the design
provide facilities for future expansions, which increase costs for the
project?
(e) Return Hurdle. Project designs involve many
decisions on design options. These options may provide advantages,
but at added cost. The rate of return acceptable for these added costs
should be defined.
The project design philosophy may cover other areas deemed
important to the project. The items listed above are examples of items
to be covered in the design philosophy.
59
- Design Basis - The next step in project execution
typically will be the development of the design basis for the project.
A design basis team should be appointed to carry out this phase of the
project. The design basis should set the key parameters for the project
design. It should include such things as:
(a) Technology selection
(b) Site selection
(c) Plant throughput
(d) Major equipment requirements and size of
equipment
(e) Energy balances
(f) Material balances
(g) Design codes and standards to be employed
(h) Inventory levels
(i) Safe upper and lower limits for design conditions,
where applicable
(j) Block flow diagrams
(k) Special safety system requirements
(l) Anti-terror consideration, if applicable
60
The design basis should provide sufficiently detailed
information to permit the preparation of a cost estimate for the project
of sufficient accuracy to enable a decision to be made on whether to
continue with the project. The estimate could also be used for final
approval of funds for the project, although at this stage of
development the risk of a cost overrun will be considerably higher
than if appropriation is based on more advanced design information.
Probably two of the more critical elements of the design basis
are technology selection and site selection. Some factors to consider
in each of these areas are:
(a) Technology Selection
(i) Ease of operation
(ii) Inherent safety of operation
(iii) Risk of technology, i.e., proven versus unproven performance
(iv) Competitiveness of technology, e.g., operating costs, quality, investment cost, etc.
(v) Environmental risks
(b) Site Selection
(i) Adequate space, present and future
(ii) Utility availability
61
(iii) Transportation, raw material and finished product availability
(iv) Weather-related risks, e.g., hurricanes, earthquakes, winter elements, etc.
(v) Community or industry emergency assistance availability
(vi) Vulnerability to air traffic patterns
(vii) Vulnerability to road or rail traffic accidents
(viii) Distance from community populations and facilities (especially important for facilities handling flammable, toxic or explosive materials) (Important security consideration)
(ix) Proximity to other plants with hazardous operations (also an important security consideration
(x) Desire for single business unit site
- Project Execution Plan
The design basis should provide sufficient information to permit the
development of an overall project execution plan. The project
execution plan should address the following:
(a) Project management team resourcing and
composition
62
(b) Human resource plan for various phases of the
project - in-house or contractor
(c) Contractor selection plan if applicable
(d) Selection of engineering and construction
standards to be used - in-house or contractor standards. It is most
important, in my view, for each plant to have up-to-date engineering
and construction standards. In large companies, these are typically
maintained on a central basis to avoid duplication of effort and to
ensure inclusion of the broadest experiences in the company in setting
the standards. Such standards should not be viewed as handcuffs on
the project team, but should allow flexibility for deviations after
deliberate consideration by the project team. They should provide
guidance to ensure that safety, operability and reliability factors are
adequately built into a project’s design and construction. Having said
that, if a contractor is being used for design or construction, they will
typically have their own standards which their employees are familiar
with and trained to use. Asking a contractor to use a different set of
standards, which their employees are not used to using, will add to a
project’s cost. In such a case, my approach has been to have
knowledgeable company engineers compare the contractor standards
63
with company standards, mandating the use of company standards by
the contractor only where there is a significant difference between the
two.
(e) Funds appropriation - after design-basis or later in
project execution schedule.
(f) Process design - In my parlance, the process design
provides sufficient information for construction drawings to be
prepared, for equipment vendors to design and manufacture custom
equipment for the project and for the purchase of non-custom project
materials, like pipe, valves, standard electrical materials, etc.
(g) Examples of the kinds of information typically
included in the process design are as follows:
(i) Process flow diagrams, which show the flow
of materials through the plant from raw
material input to finished product output.
The diagram will usually include quantities
of material at each stage of the
manufacturing process along with operating
conditions at each stage.
(ii) Design energy and material balances.
64
(iii) Plot plan for the project showing major
equipment locations, and electrical
classification areas where special electrical
equipment design standards are required,
e.g., explosion proof motors.
(iv) Plot plan showing underground piping and
electrical conduit locations.
(v) Electrical one-line drawings.
(vi) Piping and instrumentation drawings with
design operating conditions.
(vii) Equipment process and mechanical design
specifications.
(viii) Piping and valve specifications.
(ix) Control systems, including computer
control, sensors and other advanced control
system specifications.
(h) Process design safety, hazard and operability
review - The process design, safety, hazard and operability review
should be carried out by experienced process design and operating
personnel, and focus on the safety of the process design, its
65
operability, adequacy of safety systems and the design to deal with
potential upsets or emergencies, etc. A check list of areas to be
considered in the review that are relevant to the specific project should
be prepared prior to the review.
(i) Mechanical design, which provides construction
drawings.
(j) Mechanical design safety and operability review.
To facilitate this, consideration should be given to preparing a
miniature model of the facility in the mechanical design stage. This
will also be of value in preparing the mechanical drawings. This
review should be carried out by experienced operating, mechanical
design, and mechanical field personnel and focus on the mechanical
design features of the plant, including such things as adequacy of
spacing in the plant layout to accommodate plant mechanical work as
well as operations, compliance of mechanical design with applicable
mechanical design codes and standards, etc.
(k) Construction
(l) Project quality assurance, including the following:
66
(i) Vendor inspection for customized
equipment to ensure compliance with design
specifications.
(ii) Onsite inspection and verification that
materials of construction meet design
specifications.
(iii) Continuous construction inspection by
company project team members to ensure
facilities are installed as designed.
(m) Pre-startup safety and operability review of
installed facilities. This review should be carried out near the end of
construction by experienced construction, design and operating
personnel and focus on ensuring that the plant has been built in
accordance with its process and mechanical design, and that there are
no serious omissions. A check list of areas to be considered in this
review should be prepared prior to the review.
(n) Startup
67
Availability and Accessibility of Key Process Information:
An effective process safety management program requires the ready
availability in the plant of key information concerning the design and
safe operation of the plant. Each plant should define the critical
process safety information specific to that plant, but the following
should be considered as a minimum:
(a) A description of hazardous materials employed in
the plant including their hazardous characteristics, procedures for
safely handling them, and emergency procedures for mishaps
concerning these materials.
(b) Block flow diagrams for the plant manufacturing
process, showing major equipment with limiting safe operating
conditions for each piece of equipment. Areas to be highlighted, as
appropriate, include safe upper and lower limits for temperatures,
pressures, speeds, vibration, etc.
(c) Plant design information, including the following:
(i) Engineering standards and design codes
employed in the plant design.
(ii) Equipment identification systems used in the
plant including piping, instrument wiring,
68
and electrical wiring systems, as well as
individual equipment items.
(iii) Materials of construction for all plant
equipment.
(iv) Single line drawings of all plant piping and
instrument systems.
(v) Single line electrical drawings.
(vi) Ventilation system design & operation.
(vii) Relief system design and design basis.
(viii) Safety systems employed in the plant, e.g.,
interlocks, hazard detection systems, over-
speed or vibration detection systems.
(ix) Plant operating and mechanical procedures
which will be discussed in more detail in a
later chapter.
It should be readily apparent that the above information is not
only of value in a properly managed process safety program, but is
inherently essential in managing other aspects of an Ultimate Force
plant.
69
The outline above begs the question of where and in what form
the above information should be available. As to the form in which
the information is available, I believe that with today’s computer
capability, all critical plant information should be available on a plant
wide computer system. Computer systems provide ready access to
information with properly placed monitors in the plant. Information
should be regularly updated, with updates accessible to each monitor
in the plant. Hard copy through computer printers can be made
available where a hard copy is needed or desired.
Development of Process Operating Procedures:
Process safety is addressed in process operating procedures, along
with other aspects of the plant operation. Since these procedures
represent standards of performance against which to judge
improvement in plant operations, their content and development will
be discussed in the chapter on Continuous Improvement.
Process Safety Training and Certification:
Safety is an inherent part of the training and post certification program
for Production Technicians. The overall training program for
70
Production Technicians is discussed in the chapter on Employee
Value and Development.
Development of Contractor Process Safety Program:
More and more manufacturing and other business functions are
resorting to contracting out some of their work. And, in fact, the
organizational structure plan for the Ultimate Force plant outlined
earlier, includes using contractors for a sizeable portion of the plant’s
work. It is, therefore, important for the plant to develop guidelines for
contractor safety performance as a part of the overall plant process
safety program.
The logic of ensuring safe contractor performance is the same
as that outlined for regular plant employees in establishing health,
safety and security as one of the plant’s Basic Principles. Laxity in
mandating the same safety performance for contractors as for plant
employees would undermine the plant’s commitment to this Principle.
Since the contractor’s responsibilities can be quite varied--from
narrowly focused specialty work to broad based responsibility
encompassing a wide scope of activities--the requirements for each
contractor’s safety program should be tailored to the contractor’s area
71
of responsibility. While allowing for considerable variance between
contractor safety programs because of the variance in the types of
work that might be contracted, the plant must insist that all contractors
meet the plant’s safety standards and should develop a specific
program for contractor safety performance. This program should
include the following:
(a) Contractor Selection - all too often contractor’s are
selected based on the lowest price bid. While business terms are
certainly important in contractor selection, my belief is that the
contractor selection process should in many ways parallel the intense
selection criteria used in hiring Ultimate Force plant employees.
Therefore, some additional factors that I believe should be considered
in contractor selection are as follows:
(i) Client performance references should be
obtained from the contractor and contact
made with these clients to determine their
experience with the contractor, including
such areas of performance as contractor
competence, reliability, integrity, safety
72
compliance and safety performance, among
others..
(ii) A review of contractor’s historical safety
performance statistics and any serious safety
incidents experienced by the contractor.
(iii) A review of contractor training programs
and qualification procedures for employees,
including specific safety training and
qualification programs.
(iv) Personal work history and references for key
contractor employees to be used on plant
jobs.
(b) After selection, the plant should provide the
contractor with the plant’s detailed work permit procedures including
such items as follows:
(i) Entry procedures for contractor employees
to enter various areas of the plant. One
approach might require contract employees
to log in on a sign-in board when entering
the plant. This ensures an up-to-date roster
73
of contractor employees in the plant in the
event of an emergency when it is important
to account for all employees in the plant.
(ii) Procedures for contractor employees to
secure approval for working on plant
equipment. Procedures for clearing plant
equipment for work normally will apply to
both contractor employees and regular plant
Technicians. I will discuss these procedures
later in this chapter.
(iii) Special safety risk areas of the plant
requiring special procedures or protective
equipment when working in these areas.
(iv) Contractor should be required to provide the
plant with its plans for communicating with
and training its employees in these
procedures.
(c) Provide contractor with the plant’s emergency
action plan for serious safety incidents. This plan will be discussed
later in this chapter. Plans for communicating this plan to contractor
74
employees and periodically testing contractor employee familiarity
with this plan should be developed.
(d) Maintain an ongoing safety performance analysis
on all contractors and set criteria by which to judge contractor safety
performance as a condition of continued use of the contractors.
(e) Ensure that contractor maintains individual
employee training and certification records and that contractor
employees are used only on jobs for which they are certified.
(f) Set up regular reviews of contractor safety
performance with contractors, highlighting areas where improvement
in performance is required. It is essential that contractors meet plant
safety performance standards, not only because of the risk involved if
these standards are violated, but also because tolerating violation of
the standards sends a message that the plant is not serious about its
commitment to health and safety.
The use of contractors can be a controversial issue if not
handled properly. In the Ultimate Force plant, contractors are to be
used largely in the lesser skill areas or for special capabilities. The
use of contractors in this type of work which can readily be picked up
by plant employees without much training provides a safety net for
75
regular plant employees since any required cutback in plant
production and thus a reduction in plant manpower can be met by
backing out contractor employees. Plant employees should regularly
be reminded of this if questions arise about the use of contractor
manpower in the plant.
Of course the use of contractor employees represents a special
challenge, since Ultimate Force performance standards can only be
met if contractor employees, especially those used by the plant on a
continuing basis, become committed to Ultimate Force concepts and
standards. Therefore, contractors should be encouraged to provide
their employees with as many Ultimate Force concepts as possible.
The plant, for its part, should include contract employees in many of
the plant communication programs and recognize contract employees
for their contribution to the plant and its success. As part of this
recognition the Plant Team Leader might want to periodically meet
with contract employees to brief them on the plant’s performance and
their role in achieving performance excellence where appropriate,
along with the business outlook for the plant and its implications on
their future employment by the plant. As an added incentive to these
employees, the plant might want to adopt a program to give special
76
consideration to dedicated contract employees in future hiring
programs by the plant.
Work Permit System:
Before mechanical work is performed on plant equipment it is
mandatory that the equipment be prepared so that the work can be
safely performed. To ensure that steps are taken to properly prepare
the equipment, the plant should develop a work permit system in
which the equipment is certified to be ready for mechanical work by a
responsible plant employee. Ideally in such a system, each piece of
plant equipment, each electrical circuit, each piping system will have a
procedure outlining the steps to be taken to allow mechanical work to
safely proceed. The work permit system should require the issuance
of a work permit for any non-routine job. The permit should specify
the equipment involved, the timing and duration of the permit, the
type of work to be done, any special requirements in performing the
work, the signature and time of the signature of the Technician or
Team Leader certifying readiness for the work, and the signature and
time of signature of the Technician or Team Leader certifying
completion of the work. A file should be maintained in the control
77
center for the affected operation for all active permits. Similarly, a
file of all completed permits should be retained for some period of
time to permit follow-up in the event of subsequent problems with the
work.
The work permit system should be tailored to the type of work
to be performed. For example, if welding or other work with the risk
of a heat source is to be performed, special preparations will probably
be required to recognize these conditions.
Some items to be considered in preparing the work permit
system include the following:
(a) Electrical circuit breakers supplying power to the
equipment undergoing mechanical work should either be locked in the
open position or have tags noting that the breaker is not to be closed
because of mechanical work.
(b) Vessels requiring entry for mechanical work
should be tested to be sure they have adequate oxygen for entry.
Further, if the vessel was in use with potentially hazardous materials,
gas testing must be done to ensure the vessel has been adequately
purged and freed of any such materials.
78
(c) Equipment that is connected to piping systems that
continue in operation during the mechanical work should have all
such piping disconnected from the equipment and blanked off. In
some cases it may be satisfactory to simply close a valve on the
connected piping and tag the valve noting that mechanical work is in
progress, but this approach should be carefully used.
(d) Where hot work (welding, burning, etc.) is
required, procedures should specify when special firefighting
equipment is to be deployed as a safety measure, especially if the
work is in proximity to other operating equipment while the work is
being done.
Management of Change (Safety):
Change is essential if there is to be any improvement in plant
operations, for without change there will be only maintenance of the
status quo, and ultimately a slide into non-competitiveness, and plant
failure. While change is essential in the Ultimate Force plant, change
does involve risks, and therefore, must be managed to minimize such
risk. Areas where change involves risk includes the following:
(a) Safety
79
(b) Operability
(c) Throughput
(d) Cost
(e) Product Quality
This chapter is focused on health and safety in the plant’s
operations and managing change does impact on the safety of the
plant which is why it is mentioned here. But because change
management is so pervasive across all plant operations, not just safety,
it will be discussed in some detail in the chapter on Continuous
Improvement.
Incident Investigations:
When a plant experiences a serious safety event, it is most important
to investigate the causes and ensure that corrective action is taken to
avoid a repeat of the experience. Investigations are also important in
communicating the causes and actions to be taken to reassure
employees and the community that the plant is dealing with these
events in a totally responsible manner, consistent with its Basic
Principle on safety and health. Further, since such events often trigger
government inquiries and legal actions, a thorough investigation of the
80
event is mandatory. Since such investigations are a logical part of the
plant’s continuous improvement program, procedures for conducting
the investigations are discussed in the chapter on Continuous
Improvement.
Emergency Planning and Response:
Emergencies are unplanned events with potentially severe
consequences. Consequently every plant should develop an
emergency response plan. The scope of the emergency plan should
recognize the potential severity of the result of a plant emergency
event and tailor the plant’s plan accordingly. For example, a plant in
which an emergency event has the potential to inflict serious injury
and damage to the plant, its personnel or the surrounding community
should have a highly sophisticated and comprehensive emergency
plan. On the other hand, a plant with little possibility of inflicting
serious damage or injury, should have a simple plan. The plan that I
will outline herein is aimed at a plant with considerable vulnerability
to a severe emergency. The plan should be scaled down for less
vulnerable plants.
• Likely Causes of a Plant Emergency
81
Plant emergencies can result from many different causes. Some
of the more likely are:
(a) Natural Causes - These include such things as
tornadoes, hurricanes, ice and snow storms, flooding from heavy
rains, etc. Natural causes frequently trigger subsequent events such as
a major plant shutdown and the unstable and vulnerable conditions of
the plant that result from such an unplanned event. These natural
causes may also isolate the plant making it difficult to relieve plant
operating personnel with all the consequences that involves.
(b) Plant Failures - These include such things as fires,
explosions, massive power failures, toxic or environmentally
hazardous releases, etc.
(c) Outside Events - While once unthinkable, more
and more today plants can run the risk of major emergencies caused
by acts of terrorism or civil disobedience.
• Goals of the Plant Emergency Plan
The plant Emergency Plan should be aimed at accomplishing
the following goals:
(a) Bring maximum available resources to respond to
and control the emergency as expeditiously as possible.
82
(b) Determine the status of all exposed personnel and
take steps to respond to their needs as quickly as possible.
(c) Communicate causes and scope of the emergency
to other non-plant organizations or personnel who may be involved in
responding to the emergency, like, community firefighters, local
police, homeland security organizations, other potentially affected
industrial plants, residential neighbors, etc.
(d) Communicate the emergency event to government
bodies who may be responsible for subsequent investigations so they
might initiate preparation for their involvement.
(e) Communicate status of the emergency and any
affected employees first to the immediate families of the employees
and then to the news media.
(f) Communicate the status of the emergency and its
impact on the plant’s production capabilities to other affected
company organizational units.
• Emergency Plan Content
The plant Emergency Plan should recognize the need to address
two broad areas: (a) facilities, and (b) procedures, as discussed in the
following.
83
(a) Emergency Plan Facilities - Emergency facilities
can be considered of two types, I believe. There are those emergency
facilities that are process specific and should be designed into the
various plant process facilities. For example, firewater piping, hose
locations and hydrants should be tailored to the needs of the
individual plant areas. The plant process design itself should
incorporate necessary relief facilities, alarms, electrical safety trips,
vents, flares, etc. These facilities are an inherent part of the plant’s
process operation and their use should be described as part of the
plant’s emergency operating procedures as discussed in a subsequent
chapter. The second type of emergency facility are those required to
accommodate the plant’s response to an overall plant emergency.
These types of facilities might include the following:
(i) Medical Treatment Facilities - Most plants
provide space for routine in-plant treatment of minor
medical problems. Typically, these provide first aid
supplies, possibly oxygen for heart attacks on the job,
blankets, stretchers, etc. Obviously if these facilities
survive the plant emergency, they are the logical location
for the initial screening of personnel injuries resulting
84
from the emergency. However, often these first aid
facilities are in close proximity to the plant’s operations
and are vulnerable to being disabled by the emergency.
In those cases, consideration should be given to
establishing a remote location for initial emergency
medical treatment. Whichever location is selected as the
emergency medical treatment center, the center should be
equipped with supplies to permit initial emergency
treatment prior to relocating the patient to a medical
center. The center should also be equipped with an
emergency medical manual with names and phone
numbers to be called to secure outside medical help. The
center must also have adequate communication
equipment for outside communication. The emergency
manual should also provide instructions for first aid
treatment for inhalation or contact with any special or
unusual plant materials. Finally, the plant might also
want to establish a location away from the immediate
plant operating area that is suitable as a landing site for
use by medical evacuation helicopters if needed.
85
(ii) Emergency Command Center - The plant
Emergency Plan should provide for a central control
point or Command Center, for use by the plant
emergency organization in managing a major emergency.
As with the emergency medical treatment facility,
careful consideration should be given to ensuring that the
site selected for the Command Center won’t be rendered
inoperable by a major plant emergency. This center
should house all the necessary information required for
dealing with a plant emergency. It should also contain all
the necessary communication equipment for making all
contacts both inside and outside the plant in responding
to the emergency. Some of the kinds of equipment to be
considered are: multiple telephone lines and telephones;
cellular phones; in-plant radio equipment for
communicating with plant operating personnel; external
emergency radio equipment for dealing with outside
emergency organizations; electrical generators; multiple
computer consoles with access to plant design and other
information required in handling the emergency.
86
(iii) Emergency Alarm System - Often in an
emergency, quick notification and action is critical in
minimizing injuries and damage. Therefore,
communicating the onset of the emergency at the earliest
moment is important. The use of a plant alarm system to
notify all personnel in the plant of the onset of the
emergency can be an effective way to communicate the
emergency. Plants with public address systems in the
plant might consider their use as an emergency alarm.
However, since such systems are located in operating
areas of the plant they are subject to being disabled by
the emergency. A remotely located alarm system similar
to alarms used in many communities to notify residents
of impending severe weather is a more fail-safe
approach.
(iv) Plant Status Board - In plants in which there
are a number of geographically dispersed operations, a
computer program depicting the condition of each of
these operations located in the Command Center can be
valuable. I have had first hand experience in a large plant
87
trying to keep multiple operations on stream during a
hurricane as the eye of the storm passed overhead. We
did not have a computer station in our Control Center and
struggled to stay on top of the plant’s condition. I would
not make that mistake again.
(v) Media Communication Center - A plant
facility, preferably one located at a safe distance from the
operating area of the plant, should be designated for
media communications, where plant representatives can
brief media representatives on the status of the
emergency. Trying to cover up unfavorable aspects of
the emergency will inevitably backfire, creating a
negative image for the plant in violation of the plant’s
Basic Principles. Locating this center at a remote
location has several advantages. It avoids exposing
media personnel to the emergency conditions. It also
keeps media personnel from interfering with actions
being take to control the emergency. Further, it allows
plant personnel to communicate with the next of kin of
employees affected by the emergency before allowing the
88
media access to such information, which will be
unavailable to them at the remote location. The condition
of personnel involved in the emergency should obviously
be made available to the media, but only after the
families of these employees have been informed.
(vi) Mobile Emergency Equipment - Some
plants which span a broad geographic area, may want to
consider having their own mobile emergency equipment,
like an ambulance or other mobile vehicle equipped to
administer initial medical treatment; a firetruck with
ladders and other special firefighting equipment.
Obviously the use of non-plant emergency mobile
equipment is an alternative where readily available in a
timely manner.
(b) Emergency Plan Procedures - The Emergency Plan
must provide procedures for handling the emergency. The following
procedures are critical in controlling an emergency.
(i) Process Specific Procedures - These are
emergency procedures that respond to emergency
89
conditions in specific processes. They will be discussed
in a later chapter under process operating procedures.
(ii) General Plant Procedures - These are
procedures that relate to an overall plant emergency.
They include:
Emergency Organization Procedure - This
procedure should establish the organizational
structure for dealing with a plant wide emergency.
I don’t have a pat answer for this organization, but
believe it needs to be designed to meet each plant’s
specific needs. Some of the areas that should be
provided for include the following:
- Designation of overall responsibility for
directing the emergency activities, both on
an interim basis when many plant team
members might be unavailable (at night or
on weekends) and later after plant personnel
have had time to assemble at the plant
Command Center.
- Establishing responsibility for
90
communicating with outside organizations
or personnel who have an interest in and
potentially an involvement in the
emergency, e.g. local and state police, fire
departments, civil defense, regulatory
organizations, political leaders, such as the
mayor or governor, etc. Communication
directions, e.g., phone numbers, cell phone
numbers, pager numbers, radio call signs,
etc. should be maintained up-to-date as part
of this procedure.
- Establishing responsibility for handling
media communications. This procedure
should designate the individual responsible
for these communications and provide
guidelines for what is to be communicated
and when. The guidelines should not be
aimed at covering up what’s happening, but
rather allow for communicating when it is
timely. For example, as mentioned earlier, it
91
would be totally inappropriate to give the
name of an injured employee before his/her
family has been notified.
• Procedure for In-Plant Personnel Accounting - A
procedure should be established to permit a ready accounting for all
personnel in the plant. This need becomes critical in an emergency,
since employees who cannot be accounted for might be involved in
the emergency and require assistance. A system for recording all
personnel (employees, contractors, visitors) who enter the plant
should be established. Computer based systems might be the most
effective way to monitor personnel in the plant, but other simple
systems, like a “tag in” board where anyone entering the plant places a
tag on a board when entering and removes it when leaving, can be
equally effective. When an emergency occurs the plant alarm or some
other signal should alert all personnel in the plant to report to a
designated point. Since individually reporting in might be awkward,
some other system might be developed to streamline the reporting
procedure. In any event, the procedure must provide a check of
employees reporting in against those logged in.
92
• Special Forces Call Out Procedure - In most plants the
most effective way to deal with an emergency is to train operating
personnel in the handling of emergencies and, in fact, as will be noted
later, handling of emergencies related to an operating area is
mandatory as part of the post certification requirement for operating
personnel. However, in the event of a major plant-wide fire or
explosion plants may decide to provide specially trained groups of
employees to be called on to handle the emergency. Similarly, plants
may have teams specially trained to deal with significant
environmental releases or other unusual conditions. A procedure
outlining the personnel to be called for special conditions should be
maintained up-to-date, including their phone number or other means
of contacting them in an emergency.
• Emergency Plant Test Procedure - Since hopefully
emergencies are infrequent, the Emergency Plan will be called on
infrequently. To ensure that it can be effectively deployed in a real
emergency, it should be tested under simulated emergency conditions
on a regularly scheduled basis. An Emergency Plan Test Procedure
should be developed which outlines the testing frequency, the various
areas of the Emergency Plan to be tested, the organization for
93
observing the test, critiques to be held and with whom, any periodic
organizational training prior to the testing, etc.
93
CHAPTER 5
EMPLOYEE DEVELOPMENT
Organizational Principle 2 – The plant believes that the
plant’s employees are its most valued assets and are committed to
providing each employee with the opportunity to develop and perform
in the plant environment to his/her maximum capability.
The underlying theme of this book is that achievement of
Ultimate Force performance depends on a willingness to make a
major investment in the plant’s employees. The implications of this
principle for the plant are most significant. First, the plant must
recruit employees with the potential to perform at world class
competitiveness and be able to contribute in the Ultimate Force plant
organizational concept. Second, a major investment in training the
plant workforce is required to equip the plant’s employees to perform
at their ultimate capability. Third, the plant must eliminate
organizational structural barriers which restrict employee
development and contribution. This area has been addressed in the
chapter on organizational structure. Fourth, the organization’s
practices must treat all employees as equally important to the overall
plant’s success. Practices dealing with this area are covered in the
94
chapter on team building. Fifth, the plant must provide employees
with the necessary management systems to enable them to operate the
plant at peak performance. This area is dealt with mainly in the
chapter on continuous improvement. This chapter will deal with
recruiting, training, and other employee development issues.
Recruiting
The Ultimate Force starts with recruiting the right kind of people.
Plant employees will generally fall into three groups: 1)
Professionally trained employees, such as, engineers, accountants,
etc.; 2) Non-professional clerical and administrative employees, and
3) Non-professional production employees. Recruiting practices will
typically have some differences for the professional and non-
professional employees. My thoughts on an effective recruiting
program are as follows:
1. Professional Employees - The general mechanisms for
recruiting professional employees are well known: college campus
recruiting for new graduates; advertising in newspapers, technical,
business or industry journals, use of professional recruiters, etc. for
experienced employees. Typically the net for professional employees
95
is cast outside the local geographic area, whereas non-professional
recruitment tends to be locally focused.
After the initial screening at a college campus or review of
resumes received from advertising or professional recruiters, the next
step for those candidates of interest is a plant visit. In evaluating
resumes of prospective employees, I have found one of the best
predictive indicators of a professional candidate’s likely success is
his/her university grades, provided the candidate has attended a top
quality university. I would set a high grade hurdle standard in
selecting candidates for a plant visit. For the plant visit, one of the
plant’s employees at the candidate’s peer level should be selected to
host the prospect during his/her plant visit. Responsibilities of the
host should include: meeting the prospect at the airport if arriving by
plane, or at the candidate’s hotel on arrival if arriving by car,
entertaining the candidate during the evenings of the visit, meeting the
candidate for breakfast on the day of the plant interviews and guiding
the candidate through the plant interviews, assisting the candidate
with any personal needs during the visit, answering the candidates
questions about the plant and the company and providing an insight
on what the candidate might expect if he/she accepts employment at
96
the plant. The host should also provide an appraisal of the candidate
and a recommendation on offering employment to the candidate.
The in-plant recruiting process should include multiple
interviews with one or more of the plant’s top Team Leaders,
including the Plant Team Leader where possible. The candidate’s
future potential peers should also be in the interview lineup. The
interview process is obviously aimed at reaching a consensus on
whether to extend an offer of employment. Interviewers should be
trained in effective interviewing techniques.
The other key objective of the interview is selling the candidate
on the plant as a desirable employer should an offer be extended.
Some of the areas that should be covered during the visit by either the
host or the interviewers include: an overview of the company, its
operations, and its employee policies; a review of the company’s
salary policy and benefit plans; a review of the plant organization and
its operations; a review of the plant’s Basic Principles; a review of the
plant’s Employee Manual; a review of typical work assignments for a
new employee; the company’s Career Development Program. The
candidates should also be provided with information on the
desirability of the community as a place to live and raise a family.
97
If the candidate receives a favorable evaluation during the plant
visit, further screening should be undertaken, with the caveat that
legal guidance should be obtained on the screening procedures. A
background check should be made. Ideally, such a check should
reveal whether the candidate has a criminal record, has a history of
alcohol or drug abuse, has a satisfactory employment history if
previously employed, or has any other disqualifying characteristics in
his/her history. In addition, a pre-employment medical examination
should be required.
Once an offer has been extended, a plant professional employee
should be assigned responsibility for regular follow-up with the
candidate until a decision is made. This not only shows a strong
interest by the plant in the candidate, but also makes it convenient for
the candidate to get answers to any residual questions the candidate
might have.
Once an invitation has been extended, the plant should dedicate
itself to securing a positive decision by the candidate and fully expect
a positive result. If a candidate turns down the plant’s offer, it is
important to determine the candidate’s reason for rejecting the offer so
98
that improvements can be made in the recruiting process, where
warranted, aimed at increasing the plant’s recruiting success ratio.
2. Non-Professional Employees - Attracting potential non-
professional employees for both administrative and production
positions is most frequently done through advertising in local
newspapers, although recruiting trade school graduates or graduates of
government funded training programs is an alternative where such
programs are available. However, often these programs and their
instructors have an orientation toward union concepts and craft
differentiation, which as I have outlined in the chapter on
organizational structural concepts, is anathema in the Ultimate Force
plant. Therefore, care should be exercised in recruiting graduates of
these programs. Depending on the intellectual demands of the plant,
community and two year colleges should also be considered.
Some warn against recruiting candidates that are overqualified
for a job. And indeed there is a risk that employees might become
disenchanted because of a lack of challenge in the work situation. On
the other hand, in the Ultimate Force plant, the expectation is that
there will be little turnover and in essence, lifetime employment.
With technology advancing so rapidly, it is impossible to predict what
99
tomorrow’s demands will be on manufacturing employees. Therefore,
I think it is important to err on the side of hiring employees with the
ability to grow into more demanding future assignments if dictated by
future technology developments.
In recruiting a plant’s workforce, the natural inclination is to
hire experienced employees where possible. However, often these
employees have developed work habits that are incompatible with
Ultimate Force plant practices. I have found that this is even more of
a problem with transfers from other in-house company plants that
have not experienced the Ultimate Force concepts. Somehow these
employees seem to feel that what was acceptable in their old plant
should be acceptable in their new plant environment. My
recommendation is to avoid company transfers at the non-
professional, non-supervisory level, opting instead to recruit highly
trainable new employees and investing in their training and
development in Ultimate Force plant concepts.
Once potential candidates for employment have been selected
from job applications (applicants should be required to submit a
company job application form designed to provide basic information
about the employee) they should be scheduled for testing designed to
100
determine their trainability to handle the job requirements in the
Ultimate Force plant. Legal assistance should be used in constructing
the qualification testing program.
Candidates who successfully pass the testing screening should
be scheduled for plant interviews. The in-plant interviewers should
include Administrative and Production Technicians, future peers of
the candidate, as well as various plant Team Leaders. In this way
employees at the Technician level are involved in selecting their
future fellow team members. All in-plant interviewers should be
trained in effective interviewing techniques. The interview process
should be designed to not only assess the candidates suitability for
employment, but to also indoctrinate the candidate in the company,
the plant, and the Ultimate Force concepts. Areas to be covered
should include the following:
(a) A description of the company and its operations.
(b) Company benefit plans and pay practices.
(c) The plant’s Basic Principles.
(d) A review of the Employee Manual.
(e) Employee growth and development.
101
This indoctrination should be aimed at ensuring that the
candidate has a complete understanding of the company and the plant
and its concepts and buys into the Ultimate Force plant concepts since
these concepts differ significantly from concepts followed by the
more traditional manufacturing plants.
Candidates who survive the interview process should be given a
background check designed to identify any disqualifying information
about the candidate, such as a history of drug or alcohol abuse, a
criminal record, a questionable work history, etc. The usual legal
caveats apply to the background checking procedure, but you should
obtain all the background information you are legally allowed to
obtain. Even with this information you won’t bat 100% in the
selection process, but your record will be much worse without it.
Finally, candidates who pass the background check should be
given a pre-employment medical exam before an offer is extended to
ensure that the candidate does not have a disqualifying medical
conditions.
Once an offer has been extended, responsibility for follow-up
with the candidate should be assigned to a plant employee. Plant
Technicians should be among those assigned follow-up responsibility.
102
The candidate should be regularly contacted to answer any questions
he/she might have in considering the employment offer, and to
demonstrate the plant’s sincere interest in the candidate.
As with professional employees, candidates who reject an
employment offer should be contacted to determine their reasons for
the rejection. This follow-up is aimed at determining how the
recruiting process can be improved to increase its success rate.
The key player in the recruiting process is the Human Relations
Team Leader. He must take this opportunity to get to thoroughly
know each employee that is hired, as well as his family status and,
where possible, even meet the family. He must at this time form a
bond with the employees so that he has their trust at later times. It is
this trust that will enable him to have the employees tell him when
something starts to go awry in the employee area so that it can be
addressed quickly and remedied. The Human Relations Manager is
the Plant Team Leader’s greatest asset in keeping a hand on how
things are going with the employees. Even though the Plant Team
Leader should try to contact each employee in the plant each day, and
from time to time they will let him know when there is trouble
brewing, they are far more likely to talk to the Human Relations Team
103
Leader in whom they have confidence and whom they know will
bring the Plant Team Leader up to date so the situation can be
corrected.
Training
Ultimate Force plant performance depends on developing a highly
trained and skilled workforce. Therefore, a thorough training program
is critical to the success of the plant. The training program that I have
used and propose is extensive and will represent a significant
investment in the plant’s employees. But I’m convinced that this is
the most important investment the plant can make in its pursuit of
world class competitiveness. The intensity and complexity of the
training will vary with the technical complexity of the plant, but I’m
convinced that all phases outlined below are appropriate; only the
depth and breadth of training in each phase will vary. An outline of
my proposed training program for the three groups of plant employees
(Production Technicians, Administrative Technicians, and
Professionals) for a high technology plant follows:
1. Production Technicians - I recommend a multi-stage
training program for new Production Technicians. Following are the
training stages that I recommend:
104
(a) Orientation
(b) Personal Safety Training
(c) Basic Training
(d) Mechanical Skills Training
(e) Post Training
(f) Post Certification
My thoughts on the training content for each of these stages
follows.
(a) Orientation - Orientation training for new
employees should be started the first day of their employment. Some
typical subjects to be covered, as applicable, include the following:
(i) Corporate Organization - Explain the
company and its operations and how the plant fits in to the
corporation. This should have been covered during the
recruiting process, but a review on employment is worthwhile.
(ii) Plant Organization - Describe the plant
organization, noting in particular, parts of the organization
where the new employees will likely work in their initial
assignments.
105
(iii) Introduce Key Plant Team Leaders. In
particular, the Plant Team Leader should be available and give
a welcoming address to the new group. This welcome should
be very positive and upbeat. I used to give what I called my
Marine Corps speech, emphasizing that our new employees
were a very select group chosen from many applicants. I
emphasized that we expected this new group to become
important contributing members of the plant team, “a team
from which we expected performance that was the best in the
world at what we were doing.” I believe that maintaining this
belief and expectation of the plant employees at all times and
repeating it regularly contribute to the attainment of Ultimate
Force performance. At this meeting, the Plant Team Leader
should also review the plant’s organizational principles,
emphasizing his intention to ensure they are fundamental to the
plant’s operation.
(iv) Review the Employee Manual. My
description of the Employee Manual and some thoughts on its
contents follows, although each plant will have to tailor its
contents to that plant’s particular operation.
106
Employee Manual - A description of working
conditions in the Ultimate Force plant should be applied to all
employees. I think this is best done in the form of an Employee
Manual. In a union represented plant, the Union Contract is in
essence the Employee Manual for union employees. In the
Ultimate Force plant it is fully expected that employees will
find a union superfluous. Still employees should have a
commitment by the company on plant working conditions and
employee practices which an Employee Manual provides.
Since there is minimal differentiation between professional and
non-professional employee (pay levels are a notable exception)
the Employee Manual should be applicable to both groups.
Areas to be addressed in the Employee Manual should include
the following as a minimum:
- A description of the plant’s Basic Principles
- A description of the plant’s organization structure
- A description of the Post concept for
Administrative Technicians and Production
Technicians, including requirements for
certification as a condition of employment
107
- Training requirements for various employee
groups
- Plant pay practices including guidelines for
establishing pay levels for the various employee
groups, noting especially that all employees are
salaried employees. I recommend against
including specific salary numbers as these will
change over time forcing an update of the manual
to keep it current. Instead, the specific numbers
should be provided in a separate addendum to the
manual whenever a pay change occurs. Shift
premiums should be included here. In addition,
overtime pay practices should be spelled out
including special premiums for occasions like
unscheduled holiday work. I think that shift
premiums and overtime pay must follow local area
practices as a minimum.
- Rules for selection for overtime work including the
plant’s approach to requiring employees to work
overtime. I recommend against making overtime
108
work mandatory except in emergencies, but
employees who turn down overtime work should
be charged with the hours turned down in
maintaining the employee’s overtime history
which is used in balancing overtime work among
all eligible employees. The goal of the plant
should be to balance overtime work for all non-
exempt employees over time.
- Work schedules for various employee groups
including lunch schedules.
- Vacation Selection Procedures. My proposal for
vacation selection procedures is included in the
chapter on Teamwork.
- Procedures For Time Off and Pay Implications.
Examples of occasions where an employee may
require time off are: jury duty, death in the family,
serious illness in the family. I would be fairly
liberal in allowing time off and compensating for
it, although historical records of time off should be
regularly checked for abuse.
109
- Procedures to be followed when employees are
sick, including pay implications. I recommend full
pay from day one for short time illnesses, although
illnesses requiring physician treatment should
require a note from the physician to excuse the
absence. Here also, regular review of employee
sickness absences should be made to detect abuses.
- Employee Performance Reviews. My
recommendations are included later in this chapter.
- Layoff Procedures. This is the only occasion in
which I would use seniority as a basis for
selection. My attitude is that all non-professional
employees must meet quantifiable certification
requirements as a condition of employment, and
therefore are judged to be acceptable performers.
Since all employees are acceptable performers, I
favor using company seniority in selecting
employees for a force reduction should that ever
become necessary. While professional employees
are subject to less quantifiable standards, I believe
110
unsatisfactory performance by professional
employees should be dealt with in an ongoing
manner, not just on the occasion of a general force
reduction. Therefore, I would also use seniority as
the basis for selection in a professional force
reduction. Hopefully, the organizational approach
taken in the Ultimate Force plant will prevent the
necessity for a force reduction, but rules to be
followed if such occasion arises should be made
clear in the Employee Manual.
- Discipline. The plant’s approach to discipline
should be clearly outlined. Disciplinary offenses
that absolutely cannot be tolerated and will result
in immediate termination should be listed. These
might include: a violation of the company’s ethics
policy; willful violation of plant safety procedures
that could have serious implications for the plant’s
integrity. My thoughts on plant discipline are
outlined later in this chapter.
111
- Company Benefit Plans. These should be spelled
out and should be the same for all employees.
- A listing of company-provided personal items, like
uniforms, safety shields, safety glasses, hard hats,
etc.
- Work break practices for plant where these are
appropriate.
- Procedures for requesting a review of plant
working conditions by Senior Plant Team Leaders
should be outlined.
Other orientation items might include the following:
- Review procedure to be followed for employee
personal matters, e.g., filing for benefits, securing
personal safety gear, obtaining in-plant meals
when working unscheduled overtime, etc.
- Assign lockers if provided.
- Handle Human Resource Department matters, such
as signing up the new employees for benefit plans,
issuing plant badges, etc.
112
A hard copy Orientation package should be provided at the
conclusion of the orientation program for future reference.
(b) Personal Safety - All employees should be given
personal safety training early in their employment. The plant should
provide each employee with a Personal Safety Manual which outlines
the plant’s personal safety program. This manual should deal with
safety items of a general nature as differentiated from safety practices
that are related to specific jobs and equipment, which I will refer to as
Process Safety. Suggestions for personal safety program content is
included in the chapter on Safety.
(c) Basic Training - The ability of Plant Technicians
to achieve world class job performance demands that employees have
basic intellectual skills that form the foundation for subsequent
training in specific plant jobs. These may differ from plant to plant
but might include such skills as mathematics, simple statistical
concepts, electricity, chemistry, reading mechanical drawings, etc.
Ideally, new employees will have developed these skills in their
schooling, but the failure of the U.S. school system in teaching many
of these skills is well known and highly publicized. Therefore, the
degree to which these skills have been developed will vary throughout
113
the country and each plant will have to assess the level of
development in new recruits. Since in some areas of the country it
may be impossible to recruit employees with the requisite skills, the
goal of the recruiting program should be to recruit employees who are
trainable in these skills, and plans should be made to provide such
training. Training should be specific to the skills required to carry out
the plant’s operation and provide employees with the requisite
intellectual tools to develop to their full potential as part of the plant
team.
In addition to training in basic intellectual skills, basic training
of new employees should also include training in the operation of
equipment of a generic nature that is employed in the plant since
many new employees will never have experienced a manufacturing
operation. Examples of generic types of equipment used in many
plants might include:
- Sensors
- Pumps
- Heat Exchangers
- Instruments
- Valves
114
- Conveyors
- Compressors
- Electrical Switchgear
- Computers
(d) Mechanical Skills - Just as basic intellectual skills
are required to equip Production Technicians to perform their jobs
effectively, basic general mechanical skills are also required to enable
Technicians to perform the full range of activities expected of them in
the Ultimate Force plant. It is important to provide training in all skill
areas in which an employee might be expected to perform, not only to
ensure that they perform effectively and safely, but also to ensure that
employees fully understand that their jobs encompass both operational
and mechanical activities.
General mechanical skills training might include the following:
- Use of hand tools.
- Use of power tools.
- Erecting scaffolding.
- Use of ladders.
- Operating plant motorized equipment, like trucks, forklifts, cranes, cherry pickers, etc.
115
- Routine mechanical activities, like opening pipeline flanges and retightening them, disconnecting electric motors, etc.
- Use of hoists and rigging equipment.
- Use of burning and welding equipment.
Obviously this training should be specific to the skills required
in the plant’s operation.
(e) Post Training - A training manual should be
prepared for each operating post in the plant. This manual should
provide a detailed description of the operation of the equipment that is
the responsibility of the post. This description should be aimed at
providing the Technician a thorough understanding of the post
equipment, the theory involved in the operation of the equipment, its
relationship to equipment upstream and downstream of it in the
plant’s operation, relationships between post equipment operating
conditions. In other words, it should provide an intellectual
understanding of the post equipment, how it works, and its role in the
overall plant production scheme. As with all plant manuals, care must
be taken to keep descriptions simple. Diagrams, flow charts, graphs,
etc., should be employed where helpful.
116
The training manual should also provide step-by-step detailed
procedures on how to operate the post equipment during start-up, shut
down, routine operation, and emergency operating conditions.
Similarly, the manual should contain detailed mechanical procedures
for servicing and repairing post equipment or instructions on where to
access these procedures. I will comment further on operating and
mechanical procedures in the chapter on continuous improvement.
Lastly, the training manual should include a list of questions
with detailed answers that a properly qualified post technician should
know. Answers to selected questions from this list will be required in
a written examination as part of the certification procedure described
next in this section. It should also list the hands on skills that a
Technician will be required to demonstrate during post certification
testing. For example, actual startup or shutdown of a given piece of
equipment might be required; or actual mechanical servicing of a
piece of equipment could be a requirement.
The training manual provides the source document for post
training. Actual training should include classroom training followed
by hands on training in the field or on the factory floor. Classroom
instructors should follow up their classroom instruction with field
117
demonstrations. In addition, allowing a Technician-in-Training to
work alongside a Technician who is certified in the post, is normally
the most effective way to provide hands on experience with a
qualified overseer able to prevent serious mistakes during the learning
period. Training time for post qualification should be specified so that
the Technician-in-Training knows when he will be tested for
certification. In a technically complex plant, post training time might
require several weeks. In my plants we usually allowed four weeks
for post training. Since in the Ultimate Force plant, failure to become
certified in the standard sequence of posts makes termination
mandatory, I recommend that additional training time be allowed if a
Technician fails his/her first certification testing. In my plant we
allowed an additional two weeks. Failure the second time resulted in
termination.
Selection and training of classroom instructors is most
important to ensure effective post training. Typically, in my
experience, Shift Team Leaders or experienced Technicians can be
trained to provide effective post training. Since preparing the post
training manual and maintaining it up to date is so critical to ensuring
effective post training, I recommend that responsibility for each
118
manual be assigned to a single individual, who might also be the
classroom instructor for that post.
(f) Post Certification - Before an employee is assigned
to a post, he/she must be required to demonstrate the capability to
discharge the responsibilities of the post effectively and safely. I call
this demonstration post certification.
Post certification is a most serious matter, since as previously
mentioned, certification for a specified minimum number of posts is
required as a condition of employment. Since the determination of an
employee’s ability to properly perform a post assignment involves a
degree of subjective judgment, the decision to pass or fail an
employee in the certification test is open to charges of arbitrariness or
even discrimination. In an effort to allay such concerns, I recommend
that a post certification team conduct the certification testing, rather
than a single individual, to provide multiple inputs to the certification
decision, thereby reducing the chances of discrimination. I
recommend that the certification team membership should include the
employee’s Shift Team Leader, other Production Technicians certified
to operate the post, or other qualified personnel. I recommend at least
a two person team, although three is preferable.
119
Certification testing should consist of a written test followed by
a hands on demonstration of job knowledge in the field or on the
factory floor. The written exam should be based on the question
library included in the post training manual. A minimum acceptable
score for passing this segment of certification testing should be
established and communicated to all employees. The certification
team should each review the written test and agree on a test score.
The hands on testing should be conducted by the certification
team. The testing should demonstrate the employee’s job knowledge.
Areas such as starting up or shutting down equipment, quality control
procedures, emergency procedures, mechanical repair or service
procedures, etc. should be considered in the hands on testing. It may
not be practical to actually carry out some of these activities, but the
Technician should be required to provide a hands on demonstration of
his knowledge to carry them out. The certification team should meet
in advance of the hands on testing to decide on the specific areas to be
included in this part of the test. Following the testing, the certification
team must decide if the candidate is qualified for certification. I
recommend that the certification team must reach a unanimous
decision. If there is not a unanimous decision, a new certification
120
team should be appointed and the employee retested. Further, if an
employee fails certification testing, he should be allowed additional
qualification time as outlined above in the section on post training.
Post certification is an important event in an employee’s career
and should be recognized as such. We provided post qualification
certificates signed by the Plant Team Leader in recognition of these
occasions.
The post certification procedure I’ve outlined might seem like
overkill. However, employees who are trained and certified in the
manner outlined should be capable of world class job performance,
meeting the goals of the Ultimate Force plant. In my experience,
lesser training results in lesser results.
2. Administrative Technicians - The stages of training for
the Administrative Technicians should be similar to those for the
Production Technicians, including the following:
(a) Orientation
(b) Personal Safety Training
(c) Basic Training
(d) Post Training
(e) Post Certification
121
The recommended content for the programs for each of these
training stages is as follows:
(a) Orientation - The orientation training for the
Administrative Technicians should parallel that for the Production
Technicians, and, in fact, it may make sense to join both groups, along
with the Professionals, in a common Orientation Program, if they
arrive for employment at the same time.
(b) Personal Safety Training - Contents of this stage of
training was covered in the chapter on safety. Many of the personal
safety items will apply to all groups, although some will be specific to
each group, e.g., safety glasses will not normally be required for
office work, while they normally should be worn at all times out in the
plant or factory.
(c) Basic Training - As with Production Technicians,
Administrative Technicians must have basic intellectual skills that
serve as a foundation for their training in plant jobs. Many new
employees will have developed these skills in their schooling, but
many may be deficient, and the plant must provide training as
necessary to bring these skills up to acceptable levels. It should be
remembered that the goal of the recruiting program should be to
122
recruit outstanding people who are trainable to become strong
contributors to the Ultimate Force plant, not a lesser individual who
might possess some of the requisite skills, but not possess the prospect
of becoming an outstanding plant team member. Some of the basic
skills that might be required as a foundation for administrative plant
training are:
- Mathematics
- Basic Computer Operations
- Simple Statistics
- Operation of Generic Office Equipment
(d) Post Training - As with Production Posts, each
Administrative Technician post should have a training manual
prepared for the post. It should define the duties of the post. It should
provide instructions for operating the office equipment assigned to the
post, including startup, shutdown, and normal operations, as well as
repair and service procedures for the equipment. Operating
procedures and management systems for the post should be detailed,;
e.g., for a cost accounting post, the source of cost accounting inputs
should be identified, timing of expected availability of inputs noted,
when results are expected, report formats for results, computer
123
programs applicable to these reports and their development, etc. The
manual should also contain a list of questions and answers which a
qualified Technician in the post would be expected to know for post
certification.
Training for Administrative Technician posts might be best
accomplished by working alongside a Technician certified to fill the
post. However, this training should be supplemented by classroom
training when this is deemed to be more effective.
Because certification for all posts in an Administrative
Technician rotation sequence is mandatory for continued employment,
Technicians should be allowed a reasonable amount of time for
training before certification testing. Each plant should decide on the
length of training time that is appropriate and make Technicians aware
of what’s expected of them.
(e) Post Certification - Post certification procedures
should parallel those outlined for Production Technicians. The
Certification Team should consist of at least two persons, one being
the Technicians Team Leader, and the other being a qualified peer
Technician or other qualified person.
124
Testing should consist of a written exam with exam questions
derived from the list of questions included in the post training manual.
As in Production Technician certification, a minimum acceptable
score for this test should be established. I recommend that it be the
same minimum as that for Production Technician certification. The
Certification Team should jointly select the questions for the exam,
review the results and decide on a test score.
The Certification Team should also conduct the hands on phase
of the certification testing. This might consist of demonstrating
operation and repair of equipment assigned to the post, demonstration
of the use of computer programs used in the post, etc. The
Certification Team should decide in advance on the content of this
hands on phase of testing and on completion jointly decide if the
employee demonstrated competency to fill the post. A unanimous
decision by the team should be required. If a unanimous decision
cannot be reached, a new Certification Team should be appointed and
testing repeated. If an Administrative Technician fails certification
testing on the first try, additional time for training should be allowed.
This time should be clearly defined so the Technician knows the
125
deadline for his final testing. Failure to become certified on the
second try, should result in termination.
On completion of post certification, I recommend that
Administrative Technicians be awarded a qualification certificate for
the post signed by the Plant Team Leader in recognition of the
significance of post certification. You will note that I recommend that
training content and certification requirements for Administrative and
Production Technicians parallel one another. This is consistent with
building an Ultimate Force team in which all employees are expected
to meet similar standards of performance and can be expected to be
treated consistently and fairly.
3. Professional Employees - New professional employees
should receive basically the same orientation and personal safety
training as that provided to Production and Administrative
Technicians. Where possible this training should be provided with
these other groups for efficiency purposes.
The training approach for professional employees will likely
vary widely depending on the kind of plant and corporation in which
they are employed. For example, a corporation with only a single
plant may have a professional training program that is narrowly
126
focused on that plant, whereas large corporations with many plants
may have broader corporate training programs available for
professional employees. In all cases, however, professional
employees should be expected to bring the requisite intellectual skills
in their particular field to the job.
In my plants, professionals employed into an established plant
were initially assigned to an area of the plant and given small jobs or
projects designed to introduce them to their assigned area. New
professionals should be expected to take the initiative in their own
training and avail themselves of the wealth of personal training
material including such things as: plant engineering drawings,
mechanical catalogs for plant equipment, manuals describing the plant
technology, reports of plant technical studies, the Production
Technician post training manuals, etc. Further, the rotational plan for
professional employees, described in the chapter on Structures, will
provide a breadth of training across the plant’s operation.
Similarly administrative professionals will have available to
them such training materials as Administrative Technician post
training manuals, administrative procedures manuals, special reports
on previous administrative studies, etc. Their rotation through various
127
assignments over time will provide them with broad exposure to all of
the plant’s administrative operations.
Off the job training by other company resources may also be
available in larger companies. Non company external training
resources might include seminars on special topics provided by
technical or professional organizations, courses at local universities or
community colleges, courses provided by consultants, etc.
Professional employees should be encouraged to avail themselves of
these training opportunities.
An individually tailored training plan should be prepared for
each professional employee in conjunction with the employee’s career
development plan. A career development plan should be prepared for
each employee at some reasonable time after employment and
updated annually or at some reasonable time interval. Updating the
plan at the time of an employee’s performance review makes sense,
since the development plan can be directed at any noted shortcomings
in the employee’s performance. The development plan should be
mutually agreed to by the employee and his/her Team Leader.
4. Other Technician Training - In addition to the formal
post training, Technician training and development can be enriched by
128
special assignments outside the post structure. These assignments for
Production Technicians might include some of the following:
(a) Surveys, such as listing and labeling various items
of plant equipment, electrical systems, piping systems, etc.
(b) Special studies to determine the cause of plant
problems and the development of corrective action.
(c) Planning for plant mechanical work during a
scheduled plant shutdown.
(d) Conducting classroom post training of fellow team
members.
(e) Serving as temporary replacement for Shift Team
Leaders during their absence.
Special assignments for Administrative Technicians might
include:
(a) Special studies to determine causes of problems in
administrative procedures and developing remedial action plans.
(b) Serving as temporary replacements for Team
Leaders during their absence.
(c) Conducting post classroom training.
(d) Conducting administrative surveys.
129
(e) Updating training manuals or administrative
procedures manuals.
5. Training Records - Since employee training in the
Ultimate Force plant is so extensive and ongoing throughout an
employee’s career, it is important to maintain excellent training
records. I recommend that these be maintained centrally in the plant
by the Human Resources Department. Employee training experience
should be documented in a personal file maintained on each
employee. In addition, since all Technicians must follow a post
rotation schedule, a master plan should be maintained showing the
timing and post assignments over time for each employee. Further, a
master history of Technician special assignments should be
maintained to ensure that all employees have an equal opportunity
over time to share in these assignments.
6. Other Employee Development Activities - In addition
to recruiting capable people and providing them with extensive
training, several other activities relate to and can enhance employee
development. Some that I recommend and my thoughts on how they
should be accomplished are as follows:
130
(a) Employee Evaluations - In developing employees
to achieve their fullest potential, it is important for them to know how
well they are doing and how they can improve their performance.
Therefore, I believe all employees should have regularly scheduled
performance reviews. If done well such reviews can contribute
significantly to an employee’s development over his/her career. If
done poorly, they can be destructive and demoralizing. Obviously,
performance reviews should be done well.
My views on effectively conducting an employee performance
review are:
(i) The review should be conducted by the
employee’s immediate Team Leader. However, in the interest
of providing an employee with multiple inputs on his/her
performance, as well as guarding against biased or prejudiced
opinions, the Team Leader should seek other opinions on the
employee’s performance from others in the organization who
are familiar with the employee’s performance. This will provide
the employee with broad-based feedback.
(ii) The review should be constructive and focus
only on areas where an employee has the capability to improve.
131
It doesn’t do any good to tell an employee that his/her short
physical stature detracts from his/her ability to project a
commanding presence in oral presentations. Employees have
little control over physical characteristics.
(iii) I found that using an objective list of
performance criteria as a check-list for the review was most
helpful. Prior to the review, I asked the employee to rate
himself/herself on each of the criteria, as did I, using the
multiple inputs from others in the organization. In this way I
felt we dealt with objective, rather than ambiguous subjective
issues. In most cases, I found good agreement between myself
and the employee on areas needing improvement and we were
able to jointly formulate an improvement plan. In identifying
areas for improvement, it’s important for the Team Leader to be
able to provide the employee with specific examples of how
his/her performance could have been improved.
(iv) The employee review should also address
the employee’s career development. The discussions should
focus on the employee’s career desires and expectations.
Where the company has multiple plants or plans for additional
132
plants, the employee’s geographical mobility should be
determined. The discussions should also ensure that the
employee’s career expectations are not unduly optimistic,
although care should be taken to not dim the employee’s job
enthusiasm and motivation. Where possible, a likely tentative
plan for future development activities should be prepared.
These might include special training, specific assignments
either in the plant or at other plants to develop the employee’s
career interests, career moves to broaden an employee’s
experience, etc. While it is usually difficult during these
reviews to make specific commitments on future assignments,
at least these discussions provide plant Team Leaders with
guidance in career development planning for the plant work
force.
(v) A written documentation of the review
should be prepared and signed by both the employee and Team
Leader, with any areas of disagreement noted.
(vi) Performance reviews should normally be
held annually, but the frequency can certainly be varied
depending on special circumstances.
133
The employee performance review tends to be an absolute
assessment of performance. An assessment of an employee’s
performance relative to other employees can best be determined by
ranking employees in a peer group against one another. Rankings can
provide a broad organizational consensus on the relative performance
of an employee in a group, since many people can be included as
rankers and the multiple rankings consolidated into a final ranking.
Rankings not only provide an important input on the organization’s
views of an employee’s performance, but are extremely valuable in
the selection of employees for promotion.
In my plant we ranked employees in the following groups:
Production Technicians, Administrative Technicians, Shift Team
Leaders, and Professionals. The basis for the ranking should be
defined for the ranking. I recommend that the ranking be based on
demonstrated performance, rather than some vague criteria, like
ultimate future potential in the organization. In the interest of having
as much input as possible, I also recommend that all employees
participate in the rankings, with each employee ranking all other
employees in their peer group and those at lower levels in the
organization. In conducting the rankings, it should be made clear that
134
the employee doing the ranking should have first hand knowledge of
the performance of the employee being ranked.
(b) Employee Advancement - Employees should be
selected for promotion based on their demonstrated performance
determined as objectively as possible. The employee rankings
outlined above can be of great value in ensuring objectivity in
promotional selection, and it should be made known in the
organization that each employee’s input through the ranking system
plays an important role in promotional selection. However, highly
ranked employees may not have the necessary experience for a
promotional opportunity and therefore may not qualify to fill an
opening. Proper replacement development planning can help to
ensure that the highest ranked employee is qualified when a
promotional opportunity occurs.
(c) Replacement Development Planning - An
important element of maintaining ultimate plant performance is
providing for continuity of fully qualified, top-performing, personnel
in all key plant jobs. This includes planning for the replacement of
personnel who move to other corporate or plant positions, as well as
those who retire or unfortunately choose to move to other companies.
135
An effective tool for ensuring continuity is replacement
planning. I recommend that on an annual basis, all key plant positions
be identified. The replacement plan should list personnel who are
either qualified for, or have been identified as logical replacement
candidates for each position. Those positions without properly
developed replacements should be noted and personnel identified for
development to fill the positions. The employee review development
plans should be used as input, and development plans prepared for
those positions without qualified replacements.
(d) Employee Compensation - One of the most
important ways to recognize employee value and development is
through an effective compensation program. Obviously, if a plant is
to be cost competitive in its field, it cannot have compensation
practices that are significantly out of line with its competition.
However, recognition can be given to plant work force effectiveness
vis-a-vis its competition in arriving at an appropriate compensation
package for the plant, while retaining cost competitiveness.
In my plants, non-professional salaries were based on local
competitive pay for comparable work. We and other local plants
regularly participated in salary surveys to develop the range of local
136
non-professional salaries for comparable work. In the Ultimate Force
plant we felt that our employees were operating at a higher level of
effectiveness than the average of local competition and we recognized
that performance with a premium salary level.
Our salary program for Technicians provided an entry level
salary. That salary was increased for each new post certification, up
to a maximum after three post certifications. The maximum
Technician salary level was increased approximately each year,
depending on economic conditions, to reflect increases in the cost of
living. Outstanding Technicians who advanced to higher level
positions in the company naturally received promotional salary
increases reflecting their new level of responsibility.
At the Technician level we provided no merit salary
differentiation. Since all Technicians were required to meet the same
objective standards of performance through the post certification
requirements as a condition of employment, we felt that all
Technicians should receive the same salary treatment. I have had
experience with a merit salary program for non-professional
employees, and have avoided it for the following reasons: A) It was
impossible to provide large differentials in salary between the top and
137
bottom performers, without either increasing the average salary level
excessively while maintaining reasonably competitive salaries for the
lower performers, or paying the lower performers substantially below
the area salary for comparable work in order to accommodate the
higher pay for the top performers. As a result the program provided
little differentiation in salary, and the ill feelings it created offset any
benefits; B) It was difficult to convince the workforce that there was
a difference in performance level between employees, since the
employees in their peer group were all performing the same kind of
work. Consequently, it was difficult to convince employees that the
program was being objectively administered, and there frequently
were disenchanted employees; C) Invariably the employees
exchanged salary information and those getting the least - those that
were the poorest performers - became even more de-motivated since
they figured they had little to lose.
For professionals competitive salaries tend to be more reflective
of national salary levels rather than local levels, although some
differentiation exists for high cost geographical areas. In most large
companies, competitive surveys of professional pay are conducted on
a national level. There are also consulting organizations who can
138
provide guidance on competitive professional pay practices, including
appropriate salary recognition for professional job structural content.
Unlike Technicians jobs, most professional jobs lack the
objective standards of performance typical of the Technician job post
concept. Hence the opportunity for differentiation in job performance
between employees is greater. Thus merit salary differentiation for
professional employees is more defensible and, in my experience,
more readily accepted. Even so, I think that salary differentiation in
early years of employment for employees with equivalent schooling
and experience should be minimized.
Lastly, while I have always been constrained by corporate
policy, I believe that the concept of team effort by the Ultimate Force
plant employees suggest that all members of the team should share in
any special rewards for the plant’s performance. Therefore, some
method of providing stock options or bonuses to all employees should
be considered. One approach might be to provide these special
compensation awards as a percent of each employee’s base salary (ex
overtime). Certainly this recognition of all plant employees reinforces
the importance of the plant team and the importance of each team
member’s contribution to the plant’s success.
139
CHAPTER 6
COMMUNITY CITIZENSHIP
Organizational Principle 3 – The plant is committed to being
a responsible citizen of the community in which we operate.
Being recognized by the community in which the plant operates
as a responsible corporate citizen is essential to achieving Ultimate
Force status as noted in the chapter describing the value of each of the
Basic Principles. Therefore, the plant should develop management
systems and practices aimed at achieving responsible citizenship and
being recognized for such by target groups in the community. The
size of the community and its various governmental substructures will
influence the plant’s community program. For instance, a plant
employing 200 people in New York City is unlikely to have much
interaction or influence on city governmental or top community
leaders. But it may be possible in such a situation to develop relations
with neighborhood leaders who, in turn, are influential at the city
level. The plant’s program will have to be tailored to such conditions.
On the other hand, a plant employing 200 people in a small or
mid-sized community can probably have a significant influence in the
140
community. In such a situation, a program targeting the following
key community groups should be developed.
1. Local government leaders, such as the Mayor, City
Council, Functional City Department Managers, Planning
Commission Members, etc.
2. State government leaders, such as the Governor,
Legislators, State Department Managers, etc.
3. Non-governmental civic leaders, such as officers in civic
organizations, local newspaper publishers, other known community
leaders, etc.
4. Other plants in the community.
5. Community citizens who are neighbors of the plant and
might be directly affected by the plant’s operation.
6. Remaining citizens in the community.
Programs to develop an understanding of the plant’s operation
and its efforts to be a responsible community citizen might include the
following for the different groups.
Local Government Leaders
• Schedule periodic one-on-one meetings between key
plant personnel and target government leaders to
141
establish a personal relationship which can lead to an
understanding of the plant’s operations and plans by
these leaders, and hopefully, a feeling of mutual trust
between the local government leaders and plant
employees. Such meetings should normally have a
meaningful agenda for discussion, such as plans to be
announced for expanding the plant, hiring plans, etc.
Special attention should be given to scheduling meetings
with new incumbents when a turnover of government
leaders occurs.
• Schedule plant visits for groups of government leaders to
provide them with a briefing of the plant’s operation.
Topics that might be included in these briefings could
include the following:
• A description of the plant’s training efforts to
ensure employee development and personal
growth, and to ensure the plant is operated in a
safe manner by fully qualified employees. The
intent here should be to convince local leaders that
142
the plant is a highly desirable place to work and
therefore an important asset to the community.
• A description of the plant’s environmental controls
aimed at protecting the community.
• Future growth plans for the plant and resulting
investment and hiring outlooks.
• Emergency response plans in the event of a plant
or natural emergency aimed at reassuring local
government leaders of the plant’s preparedness to
deal with such events.
• The plant’s security controls should be included in
this discussion.
• A constructive discussion of local governmental
regulations and practices that impact on the plant’s
ability to grow and to be a fully competitive factor
in the world marketplace for its products.
• A tour of the plant facilities should obviously also
be included in these visits.
• Offer plant volunteer representatives for various
community commissions, study groups, etc. The plant’s
143
willingness to participate in these activities can be made
known to governmental leaders whenever the opportunity
presents itself.
• Maintain close surveillance of pending community
spending and regulatory plans to ensure that the plant can
input to these plans in an effort to influence the direction
of such plans during these visits. Often the effectiveness
of such input can be increased if an industry consensus of
all plants in the community can be presented.
State Government Leaders
Because individual states are so different from one another with
regard to geography, the makeup of the state’s constituency, the
historical culture of the state, etc., the approach to state leaders by an
individual plant is more difficult than with local governments. While
relations with a state legislator from a plant’s local community can
often be handled in the same way that relations with local government
officials is handled, I have found that relationships with state level
officials can best be handled by a small group representing multiple
plants. However, this representative group must be able to convey a
consensus of the plants represented. The larger the represented group,
144
the more difficult it becomes to get a consensus. The principle goal of
the plant’s efforts at the State level, in my experience, should be to
ensure that regulation and legislation at the State level is supportive
of, not injurious to, the plant’s operation. The plant should be
prepared to develop factual information to be presented to State
officials in support of this goal.
Non-Governmental Civic Leaders and Organizations
An organized plan should be developed to ensure that the plant
has representation in all influential civic organizations, such as
Rotary, Kiwanis, etc. Employees should be allowed time off to
participate in the activities of these organizations and over time
employees from all levels of the plant team should be included in this
plan. The goal of this participation should be to ensure that the plant,
through its employees, becomes well known to community leaders as
a responsible and important asset to the community. As a result of
this, hopefully they will be supportive of the plant when their support
is requested.
Similar to the plan for local government leaders, a plan to invite
key civic leaders, and influential news media personnel for periodic
plant visits and briefings should be developed. The agenda for these
145
visits should be essentially the same as that for the government group.
In fact, both groups might be combined for these visits if it seems
appropriate.
In today’s environment, there are literally hundreds of non-
governmental charitable and non-profit organizations seeking
contribution funds and often volunteer human resources to assist them
in their mission. As worthwhile as many of these organizations are,
allowing direct access for them to solicit contributions from
employees would be an almost impossible distraction for the plant
team members. Also, direct contributions by the company must
obviously be contained at a reasonable level.
With regard to solicitations of individual employees, we found
the most effective approach was to support a once a year solicitation
by United Way. We provided plant team members to the United Way
organization and formed solicitation teams in the plant to contact each
employee to determine their willingness to contribute, including
allowing them to contribute over the year through payroll deduction.
Participation was entirely voluntary. Since this was the only in-plant
solicitation allowed, charitable organizations who wanted the support
146
of our employees were encouraged to join United Way as the only
way to gain direct access to our employees.
The corporation will also be approached by many local
organizations for contributions, some charitable, and some aimed at
support for other community activities, such as, cultural activities,
hospital drives, community drug or alcohol programs, etc. The list of
these requests can seem almost endless, so the plant must make a
decision on which of these requests to support. Our approach was to
prepare an annual contributions budget once a year detailing our
contribution plan for the coming year. Organizations soliciting
contributions were required to submit a written request by a specified
date late in the year to enable us to make our decisions. Obviously
not everyone was happy with our decisions, but hopefully they
believed that their request received a fair hearing. Also this approach
allowed us to vary the organizations receiving contributions from
year-to-year as appropriate.
Other Plants in the Community
An effective way to interact with other plants in the community
is to establish a Plant Team Leaders Council with representatives from
147
all the plants in the area. This group can enhance the influence the
plants have in the community and assist one another by:
• Formulating an industry position on pending local and
state issues and legislation, and organizing a joint
lobbying effort in support of the plant’s position.
• Working with the community to develop a homeland
security plan that integrates all of the plants emergency
response capabilities with that of the community to deal
with potential emergencies in any of the plants, or natural
disasters such as hurricanes, tornadoes, snow
emergencies, etc.
• Sharing non-confidential and non-competitive
information with one another. Obviously, any
information exchanged must meet anti-trust guidelines.
Information on such things as wage rates, benefit plans,
likely future demands on the local contract labor pool,
etc.might be areas for exchange.
Local Citizen Neighbors
Consideration might be given to inviting plant neighbors to a
plant open house to educate them on the plant’s operation. This might
148
be especially appropriate if the plant could be viewed as a potential
hazard or in some way an undesirable neighbor. As an alternative, a
letter describing the plant’s operation and instructions on how to
contact the plant should there be any complaints about the plant’s
operations, might be sent to residential neighbors.
Remaining Community Residents
An ongoing active program of periodic releases to local
newspapers, TV stations and radio stations describing important plant
events, such as, new plant investments, additional employment
planned, significant safety or environmental achievements, etc. should
be developed to present a positive plant image to the community at
large.
149
CHAPTER 7
EMPLOYEE FAMILY VALUE
Organizational Principle 4 - The plant values the support of
its employee’s families and intends by its actions to earn and justify
that support.
It is my conviction that most responsible Americans and,
therefore employees in American industry, value the happiness,
security and well-being of their families above all else. While a
plant’s workforce will almost always have some members who have
not yet started a family, most employees will typically be married.
Therefore, a plant that recognizes the importance of its employees’
families and dedicates itself to seeking the support of these families
will reap significant rewards in the motivation and dedication of its
employees.
As discussed in the Chapter introducing the plant’s Basic
Principles, the support of the employees’ families is important in ways
other than motivating employees. In a non-union plant, strong support
by the employees, families for the plant and its practices can be
instrumental in turning away a union’s bid to organize the plant.
150
Further, if employees’ families are strongly supportive of the
plant, they can be a very positive advocate for the plant in the
community among relatives, neighbors, acquaintances, and others.
Some of the practices that I found helpful in seeking the respect
and support of employees’ families are:
1. Plant Open Houses - Periodically inviting employees’
families to the plant to an open house provides an opportunity for the
families to tour the plant, have the plant operation explained to them,
and see where their husbands or wives, fathers or mothers, brothers or
sisters or other relatives work. An open house also provides an
excellent opportunity for the plant to detail its efforts to provide a
safe, clean, and healthy work environment for its employees. Open
houses also permit employees’ families to meet the employee’s fellow
team members and their families. Open houses should be repeated
periodically. Occasions for repeat open houses might be a major
change in the plant facilities, or the addition of a significant number of
new employees.
2. Other Social Events - While a plant open house has
certain social elements, its primary focus is on the plant. The
Ultimate Force plant should also sponsor other types of social
151
activities aimed at gaining the good will and support of employees’
families. Some social activities that we found worthwhile and some
of their features were:
(a) Plant Christmas party - Each year we held a plant
Christmas party. Before the party we selected a variety of toys of
modest value to be given to employees’ children at the party. The
employees were able to pick the toys they wanted for their children
from the pre-selected toy list. Plant team members then purchased the
toys, wrapped them, and tagged them with the child’s name for whom
the toy was intended. One of the plant team members was selected to
play Santa Claus and pass out the gifts to the children. Santa’s
identity was kept secret and part of the fun at the party was trying to
guess who was behind the Santa whiskers. The Christmas party was
always our most successful event.
(b) Picnics - Summer picnics were also a big hit.
They provided a great opportunity for employees’ families to socialize
and for the children to participate in games and receive prizes. Of
course, the good outdoor cooking was the picnic favorite. Most parts
of the country have their own special local foods, and providing these
152
special dishes on the menu along with the more traditional picnic fare
can add to the picnic’s fun.
(c) Special celebrity dinners - When special occasions
provide the opportunity, a celebratory dinner for employees and their
spouses (or dates) is an excellent way to give recognition to the plant
team members for meritorious performance. Such a dinner also gives
recognition to the value the plant places on the employee’s spouse as
an important supporter of the plant. Occasions for such a dinner
might be recognition for achieving the top safety performance in the
company, or establishing significant new production or quality
performance records. The occasion for the dinner should truly be a
significant event. At such dinners avoid long-winded speakers.
(d) Shift or department parties - Social events for
smaller plant groups are also popular in developing spousal rapport
with an employee’s fellow team members and their families.
Typically, at our plants, these get-togethers were held at an
employee’s home, with the plant buying the chicken or meat, and each
employee bringing a covered dish. In this way employees and their
spouses contribute something to the party’s success.
153
Obviously there are many other social opportunities that can be
considered in involving employees’ families in plant activities as a
way to gain their support. As a side benefit, plant team members from
all levels of the organization and from all departments should be
recruited to form special planning teams for these events. Employee
involvement in these teams is supportive of the plant’s effort to build
a strong plant team spirit.
3. Letters to Homes - In the chapter on team building, I
mention writing letters to employees at their homes as a way of
recognizing the employee as an important member of the plant team.
Wherever it makes sense, the spouse should also be included as an
addressee. This lends support to the concept that employees’ family
members are highly valued participants in the plant’s affairs.
4. Off-the Job Safety Programs - Off-the-job safety
programs involving employees’ family members are another way to
show the plant’s interest in employees’ families well-being. Some
programs that we used in our off-the-job safety activities included:
defensive driving courses for employees and their driving age family
members; providing subscriptions to a family safety magazine, which
I think we obtained from the National Safety Council; a safety poster
154
contest in which employees’ children were invited to submit posters
on a family safety topic of their choice. I suggest giving special prizes
for the best posters, but believe that all children who submit an entry
in the contest should be recognized with an award. I also suggest that
a Plant Safety Council, with broad-based membership, be established
with responsibility for developing and administering the off-the-job
safety program within a prescribed budget.
5. Recognize Family Events - Special family events should
receive recognition by the plant team leaders and team members.
Obviously, family deaths or serious illnesses should trigger special
assistance to the employee’s family as appropriate. Certainly visits to
funeral homes and hospitals are a must. On these occasions flowers
or other memorial contributions should be made on behalf of the
plant. Guidelines should be developed for such occasions to ensure
that all employees receive equal treatment. Positive family events,
such as, graduations, special honors for family members, marriages,
etc. should be recognized by plant team leaders with congratulatory
notes or cards to the honored family member. The honoree should
also be recognized in the plant daily bulletin, discussed in the chapter
on communications.
155
6. Home Visits by Plant Team Leaders - As part of an
overall family support program, I recommend each new employee be
offered the opportunity to have a home visit by plant team leaders to
explain the plant’s benefit programs and the plant’s guiding basic
principles to the employee and spouse. I suggest that the visit team
include the employee’s immediate team leader and his department
team leader. These visits provide an early opportunity for an
employee’s team leaders to get to meet the employee’s family and
provide helpful information on the plant and the company to the
family. The visits also establish a precedent for home visits by plant
team leaders in the event that future home visits become desirable in
defending against union organizing activities.
156
CHAPTER 8
PLANT TEAM EFFORT
Organizational Principle 5 - The plant believes that its
objectives can best be achieved through a team effort by all plant
employees and will give high priority to the development of a team
attitude in the plant.
Development of a plant-wide team spirit is essential to the
achievement of the goals of the Ultimate Force plant. Practices that
support the development of the plant team concept are many and
varied, and, I suppose, could be categorized in a number of different
ways. I have chosen three categories of team-building practices as a
way of organizing this chapter. They are:
1. Those practices that provide positive reinforcement of the
importance of each employee to the team effort.
2. Those practices that ensure equal treatment of team
members.
3. Other practices and structures that support the team
concept.
In this chapter I will review my recommended practices that I
think are most supportive of the categories outlined. These are the
157
practices that I think most directly affect the Team-Building basic
principle, although many of the practices outlined in other chapters
also lend support to the team concept but seem to me to be more
closely aligned with another principle.
1. Practices that reinforce the importance of each
individual employee as a team member. It is easy for an employee
in any organization to develop a feeling that he/she is unimportant to
the organization’s success, thus leading to withdrawal from the overall
team effort, and likely demotivation and even job dissatisfaction.
Constant reinforcement of the importance of each individual as a
contributing member of the team is a must in the Ultimate Force plant.
Some of the practices that I found most useful to accomplish this are
as follows:
A. Plant Team Leader Welcome - On the day of
arrival of each new team member in the plant, the Plant Team Leader
should personally welcome these new members. He should highlight
the plant’s commitment to the Basic Principles and the practices they
espouse. He should assure these new employees of his ready
availability to them at any time and his willingness to discuss any
issue with them as their Plant Team Leader. Since the goal of the
158
Ultimate Force plant is to be the best in the world at what it does, the
Plant Team Leader should tell the new employees on day one, that he
expects his plant work force to be the best, and that nothing else is
acceptable. I call this the U.S. Marine motivator; that is, constantly
reminding the troops that they are the best and nothing else is
acceptable.
B. Introduce new employees to the workforce - The
plant newsletter or its equivalent should introduce all new employees
and provide a brief biographical background on each new employee.
A personal history data sheet on each employee should be made
available to plant team leaders so that they can quickly get familiar
with the new team members and their background.
C. Use name tags to facilitate integration of new
employees into the plant team - In a stable organization all employees
get to know one another and the use of name tags may be superfluous.
However, when new employees are brought into the team, name tags
should be worn by all employees. This enables new employees to
become acquainted more quickly with the older team members, but
also allows the existing employees to get to know the new employees
by name more easily.
159
D. Send birthday and Christmas cards to employees -
I found that sending birthday and Christmas cards to each employee
signed by the Plant Team Leader with a handwritten note where
appropriate, reinforced the importance of each employee as an
important individual member of the team - not just another number in
the plant workforce.
E. Letters to the home - In a similar vein, as the Plant
Team Leader, I frequently sent letters to employee’s homes. I always
addressed each employee by his/her first name, and where the letter
was intended also for the spouse, the spouse’s first name was also
used. Further, while the letters themselves, if they were directed to all
employees, were xeroxed, I signed each letter individually - there
were no xeroxed signatures - and often included a handwritten
personal note. The messages to the homes covered a wide variety of
topics. Topics might include such things as an announcement of a
plant expansion, changes in benefit plans, an expression of
appreciation after a difficult operating period which required heavy
overtime by plant employees, etc. I feel that it is important to send
such letters regularly as a continuing recognition of each individual’s
importance to the team. It also ensures that a precedent has been
160
established for letters to employee’s homes in case it ever becomes
necessary to communicate to employee’s homes to counter union
activities. With this precedent, letters in response to a union’s
activities will hopefully be viewed as normal practice rather than a
reaction forced by the union.
F. Plant visits by team leaders - All plant team
leaders from the top down should make it a priority every day they’re
in the plant to visit the plant with the express purpose of making direct
contact with every employee in the plant that reports to them. The
contact should include an informal discussion about both plant and
personal items. Such contacts are an inherent part of the Shift Team
Leader’s responsibility, but require special effort by Department and
Plant Team Leaders. Shift Team Leaders should make an effort to
keep higher level Team Leaders appraised of either job-related or
personal items that might be discussed during these visits. In my
view, these visits represent the ultimate open door policy. For a Plant
Team Leader to simply announce that his door is always open to any
employee is not enough. Most employees are going to be reluctant to
make a special visit to a Team Leader’s office. Thus the only way to
ensure that contacts occur between employees and Team Leaders on a
161
regular basis is for Team Leaders to seek out employees. From my
perspective as a former Plant Team Leader, this plant visit should be
the highest priority activity each day, and is probably the most
significant factor in developing a plant team spirit that involves every
plant team member.
2. Practices that ensure equal treatment of team
members - If each employee is to feel like an important team
member, there must not only be positive reinforcement of his/her
importance as a team member, but practices that treat some team
members differently from others must be avoided. That is not to
suggest obviously, that all employees will receive equal pay -
compensation will have to meet competitive practices at each level in
the organization if the plant is to attract qualified employees - but in
essentially all other areas, differences in plant practices for different
groups of plant employees can be avoided. Practices that I think
support the concept of equal treatment for all employees include the
following:
A. Employee Manual - An Employee Manual,
described in Chapter 5, enumerates plant working practices that
162
should apply to both Professional and Non-Professional employees,
all operate by the same rules.
B. First Name Basis - All employees in the Ultimate
Force plant should be on a first name basis with each other, from the
Plant Team Leader down to the newest team member. This
encourages informality in plant relationships, hopefully leading to
more open communication between employees at different levels in
the organization.
C. All Employees are Salaried - All employees in the
Ultimate Force plant should be on salary. There are no wage
employees. Employees subject to overtime compensation under the
federal wage guidelines will still be paid overtime, but there will be
no other salary versus wage distinctions.
D. Benefits - Benefit plan guidelines for all
employees should be the same in the Ultimate Force plant, with no
differentiation between employee groups. These benefits will
typically follow corporate benefit practices which should be set to be
competitive with those of the corporation’s main competition.
E. Time Clocks - There are no time clocks in the
Ultimate Force plant. Employees subject to overtime pay will have to
163
submit time cards for the time worked to permit overtime pay
calculation, but punching a time clock is to be avoided as a demeaning
practice.
F. Parking - There should be no reserved parking for
any plant employees, with parking being on a first come-first served
basis. Reserved parking should be available for visitors only.
G. Shift Schedules - In plants where rotating shifts are
required for operating the plant, production employees should all have
the same shift schedule, designed to provide all employees with equal
access to the various shifts and days off. My proposal for the job
structure for production employees and the accompanying shift
schedule are outlined in an earlier chapter on organization structures.
The shift practices proposed will ensure that all employees equally
share in favorable time off to spend with their families or engage in
other activities. A system which allows employees to select off days
or shift schedules based on seniority, which is typical in traditional
plants, denies favorable time off for younger employees at a time in
their life when they most need it, that is, while they can share time
with their children. In the Ultimate Force plant seniority is not used to
select jobs, schedules or time off.
164
H. Vacation Scheduling - Typically in most plants
there is a limit on the number of employees that can be spared for
vacation at any one time. As with shift schedules, favorable vacation
time off should be rotated among all employees. One approach to
accomplish this is to group employees into several groups. In the first
year for vacation selection, the position of the group in the seriatum
for vacation selection should be established by lottery. The group that
selects first in the first year would select last the next year. In this
way, at least in some years, each employee will have access to a
desirable vacation selection. Further, all employees get equal access
to vacation selection.
I. Dress Code - The most desirable dress code is one
in which all employees wear a standard uniform, with uniforms
provided by the plant as part of the employee benefit package. As a
minimum, the plant dress code should be informal, since all
employees, regardless of their job, can wear informal dress. Coats
and ties should definitely be out since all employees cannot wear the
more formal type of dress.
J. In-Plant Feeding - In today’s world, providing
regular food service in a manufacturing plant is expensive and
165
unlikely to be widely used by employees unless subsidized by the
company. Further, employees in plants with continuous operations
usually cannot use a plant cafeteria since they must remain on the job.
My recommendation is that employee lunchrooms or equivalent
facilities be provided throughout the plant. Vending machines can be
provided, but should be equally available in all lunch rooms. For
production employees, who are not provided scheduled time off for
meals, it will be necessary that they bring their meals or purchase
them from vending machines if available. Employees who have
scheduled lunch periods should be allowed to leave the plant provided
the scheduled time for lunch is not abused. All employees should be
expected to honor the scheduled time off for lunch. I would allow
employees to decide on the length of time for lunch, but would insist
that all employees adhere to whatever lunch time the majority of
employees select.
K. Office Size - In many traditional plants (and I
confess in all of the plants for which I was responsible) office size
increases with status in the organization. In the early eighties, the
large chemical company, Union Carbide, built a new corporate office
building in Danbury, Connecticut. In light of subsequent downsizing
166
of the company, I suspect that the new office turned out to be a
colossal mistake. However, the design basis for the office was
unique, and I think, represents a model to be considered in all new
plant office buildings. In the Carbide office, all employees were
provided with the same size office, from the CEO down. Provisions
were made for an ample number of conference rooms to accommodate
group meetings since the offices were too small for large group
meetings. This concept certainly embraces the principle of treating all
employees equally, by providing all employees whose work location
is principally in an office, with an office of equal size.
Although production employees typically do not work in an
office environment, I would provide a standard office in the plant for
each shift team to house the team member’s personal work records, as
a location for team members to receive their company mail, and as a
repository for production documents used by team members in the
pursuit of their jobs.
L. Company Mail - All employees will regularly
receive company mail in the Ultimate Force plant and therefore every
employee should have his/her own personal mailbox, either the old
fashioned receptacle for hard copy or an eMail mailbox, or both.
167
3. Other practices that support the team concept - Some
other practices that I found supportive of the team concept included
the following:
A. Plant office location - The location of the plant
office facilities in the plant geography is important in supporting the
plant team concept. The plant office should be located as close to the
production facilities as possible, rather than at some remote location.
With the office adjacent to production facilities, production
employees have easy access to the office and the office functions, and
office employees similarly have easy access to production facilities
which is important in carrying out most technical and administrative
tasks. Further, locating office facilities adjacent to production
facilities encourages close working relationships between production
and office employees.
B. Off-the-job activities - The plant should sponsor
off-the-job activities that are team-oriented, such as participation in
industrial leagues or other organizations that provide softball,
basketball, bowling, etc. activities. These activities generally provide
for participation by all plant groups and all levels in the organization,
168
thus providing an integrating activity bringing together employees
whose jobs might not call for close working relationships in the plant.
C. Shift Schedule - In plants that operate around the
clock, a 40 hour shift schedule requires the use of a shift breaker
concept to maintain the 40 hour schedule. This results in a constantly
changing composition of the shift team. To avoid the shift breaker
requirement and allow a shift team to work together and experience
the same shift rotation schedule together requires the use of a 42 hour
shift schedule, or a scheduled 5% overtime. There are several
schedules that keep the crew composition constant, and I think that the
plant’s employees should be allowed to choose the schedule that best
suits their needs, but would insist on the shift team shifting together,
i.e., a 42 hour schedule. Keeping the team members together builds a
team spirit and justifies the small overtime premium in my view.
169
CHAPTER 9
ETHICAL RESPONSIBILITY
Organizational Principle 6 – The plant expects all employees
to always meet the highest ethical and honesty standards in carrying
out their plant responsibilities.
This Basic Principal unequivocally stating the plant’s intention
to always meet the highest standards for ethical and honest behavior is
an essential foundation for all of the other Principles. For if the plant
tolerates dishonesty in any area of its operation, the credibility of its
commitment to the Basic Principles is seriously undermined. Even
one incident by one individual has the potential to seriously damage
the plant’s reputation. For example, if an employee covers up a
performance failure that creates environmental damage to the
community, and this cover-up subsequently becomes known, the
plant’s reputation as a responsible citizen of the community will
certainly be discredited. Therefore, the plant must be dedicated to
extreme vigilance in preventing any ethical lapse by any employee.
To provide a vehicle for communicating the plant’s ethics
expectations, the plant should develop an ethics policy statement that
is reviewed with new employees during their orientation program and
170
periodically thereafter throughout their careers. The policy should
provide a general statement on expectations that employees will
always conform to the highest ethical standards. However, since
individual perspectives can often lead to differing views of acceptable
behavior, it is important that the policy also provide specific standards
for the ethics issues that plant employees are most likely to encounter.
Areas that need to be dealt with include the following:
A. Compliance with Government Regulations -
Employees should be made to understand that the plant expects
complete compliance with all government regulations and the proper
submission of all required government reports. They should be
provided a listing of the regulatory areas applicable to the plant’s
operation, such as OSHA safety rules, environmental regulations, etc.,
and told that the specific regulations will be addressed as part of their
training programs.
B. Recording and Reporting Plant Operating Data
- Proper reporting and recording of information concerning the plant’s
operation is essential in understanding the plant’s performance and
stewarding its performance to its various constituencies. Any attempt
171
to provide other than an honest recording of the plant’s performance
clearly is a violation of the plant’s ethics policy.
C. Product Shipping Specifications - Product
shipments must meet established specification guidelines. There may
be occasions where industrial customers for intermediate materials
that are further processed in their operation, can accept a waiver of
certain specifications. However, guidelines for securing specification
waivers from customers should be developed and rigidly applied.
D. Theft - Theft of plant tools or materials is a self-
evident egregious ethical violation. Employees should be told that
periodically, inspection of employee lunch boxes and automobiles,
where these are allowed in the plant, will be made on a random basis
by security personnel to check for theft, and provisions for following
through on these inspections should be developed. In addition, the
plant’s operations should be carefully reviewed for vulnerability to
theft of plant materials or products through collusion by plant
employees with outside contractors or shipping agents, and audit
procedures established to guard against theft through these channels.
E. Relations with Plant Suppliers - Control of the
purchase of materials and services will vary from plant to plant.
172
Because of the potential for ethical abuse, special attention should be
given to the purchasing process. To ensure that both plant employees
and suppliers operate in a completely ethical and fair manner,
purchasing guidelines and approval procedures should be developed.
Where possible, purchasing specifications should be developed for
each purchase and multiple proposals solicited from approved
suppliers. The list of approved suppliers should be regularly updated
to ensure equal opportunity for all reliable suppliers to solicit plant
business. Bid evaluations should be prepared according to purchasing
guidelines for selecting successful bidders. All unsuccessful bidders
should be appraised of the results of the bidding and the reasons they
were not selected.
In an effort to obtain the plant’s business, sales people from
outside suppliers will rightfully try to influence the plant’s purchasing
decision-makers, and it is in the plant’s interest to insure that these
decision-makers remain open to new suppliers who can potentially
provide improved offerings. However, to avoid excesses, strict
guidelines should be developed for acceptable relations between plant
employees and sales people. The following are areas to be
considered: 1) Should sales people be allowed to buy employees
173
meals? 2) Should they be allowed to take employees and wives to
recreation events? 3) Should they be allowed to buy employees gifts?
4) Etc.? Clearly all of these actions are aimed at influencing an
employee’s purchasing decision and can impact on the integrity of the
decision. My own feeling is that the less that is allowed, the better.
Perhaps allowing a sales person to buy a modest lunch for an
employee in order to discuss a proposal or present his company’s
capabilities or credentials is acceptable, but there is considerable risk
in doing more. All employees who are purchasing decision-makers
should be fully informed of the purchasing guidelines and made to
understand that any violation of the guidelines will be an ethics
violation subject to termination. Similarly, these guidelines should be
reviewed with all suppliers and potential suppliers. They should be
told that any violation will cause their company to be blacklisted as a
plant supplier.
F. Antitrust Compliance - Vulnerability to antitrust
violations will depend to a large extent on the plant’s involvement in
product supply and pricing decisions. In most plants, antitrust risk
will be small, but where vulnerability exists, antitrust guidelines must
174
be clearly communicated to affected employees, along with a clear
statement of the plant’s commitment to antitrust compliance.
G. Investigations - Periodically, plants will need to
conduct investigations of critical events that have occurred, such as a
major accident, a fire, an ethics violation, etc. Any employee
involved in such an event able to provide information on what
happened, is expected to be honest and forthcoming with such
information. Any cover-up should be regarded as an ethics violation.
The policy should finally state that any willful violation of the
ethics policy will subject an employee to immediate termination of
employment and the revocation of any accrued rights. For the policy
to be meaningful, it must be consistently administered for all
employees, regardless of plant position.
In communicating the policy to employees, the message should
be that Plant Leadership believes that essentially all of the plant’s
employees are completely honest and fully support a policy that
demands that all employees and the company always function at the
highest standards of ethical behavior. This policy, however,
recognizes that in society today, as always, there will be a few people
willing to violate the norms of ethical behavior for personal gain, and
175
its intent is to caution these people against such behavior, and warn
them of the consequences if they violate the policy, thereby
undermining the reputation of integrity that the Ultimate Force plant is
committed to.
176
CHAPTER 10
FREE AND OPEN COMMUNICATIONS
Organizational Principle 7 – The plant believes that free and
open communication between the plant and its customers, the plant
and other company Business Unit groups, the plant and the
community, the plant and its suppliers, and all plant employees is
essential in achieving our objective of world class competitiveness.
A 1993 finding by the National Study of the Changing
Workforce showed open communications to be the most important
factor in determining a potential employee’s selection of a workplace.
I’m convinced that good communication with the plant’s employees,
as well as its several other constituencies, is essential in achieving the
objectives of the Ultimate Force plant. Good communication is
always one of the most difficult challenges in any plant. Therefore,
communication activities demand special attention if they are to hit
their mark. So, while communication is an inherent ingredient in all
plant activities, I believe there are a number of specific
communication practices that can contribute to communication
success. I’m sure my list is incomplete, so readers should build on the
suggestions I will offer in this chapter.
177
A. In-Plant Communications
1. Bulletin Boards - While perhaps the most
simplistic communication device, well-placed bulletin boards in
strategic locations can provide a focal point for written
communications to plant employees. They can also provide a
convenient vehicle for employees to communicate with one another
on such items as requesting car pool partners, offering personal
property for sale, etc.
2. Daily Bulletins - One of the most timely and
effective communication devices is the use of the printed Daily
Bulletin which can be distributed throughout the plant or posted on
bulletin boards or employee e-mails. The content of the Daily
Bulletin can cover the broadest range of topics, all designed to foster
the Basic Principle of free and open communications. Examples of
topics that might be included are:
(a) News about employees or their families,
such as births, deaths, special awards to employee’s children, unique
on or off the job accomplishments by employees, etc. In all items
relating to employees, care must be exercised to ensure consistency in
178
recognition to avoid hard feelings by employees who might not be
recognized with inconsistent practices.
(b) Special news about new customers or other
marketing developments for the plant’s products.
(c) Company developments of interest to
employees.
(d) New information on plant operating plans.
(e) Safety information.
(f) Information on significant plant events.
(g) Notifying plant employees of upcoming
plant visitors.
(h) Community activities of interest to
employees.
(i) etc.
3. Employee In-Plant mail - Each plant employee
should have his/her personal mail box for hard copy company in-plant
mail. Employees with access to company/plant computer networks
should also be assigned e-mail addresses to facilitate communication
within the network.
179
4. Plant Communication Hardware - Hardware for in-
plant communication will likely vary depending on the individual
plant. For example, in plants in which production employees are
geographically dispersed over a wide area, two-way radios should be
considered for each production technician. In plants that are
geographically concentrated in a single building, a plant loudspeaker
system might be sufficient.
Employees should be given reasonable access to
telephones for their personal use, but such use needs to be monitored
to avoid abuse. Cell phones should be allowed but on the job use
should be restricted.
Video and audio cassette recordings and in-plant
computer systems should also be considered for plant
communications. Important information which might be difficult to
communicate through the daily bulletin might more suitably be
conveyed by Plant Team Leaders through one of these three
mechanisms. This type of communication is especially suitable for
employees working the night shifts.
5. Plant Performance Reviews With Employees -
Ultimate Force plant success depends on employee commitment and
180
full involvement in achieving world competitive performance. To
achieve such commitment, I believe regular meetings should be held
with employees to review plant strategies when these change, to set
plant performance goals, to review progress against performance
goals, and to solicit employee input on changes required to achieve or
enhance such goals. The frequency of these meetings should vary.
For instance, a review of key strategies might only be held annually if
there is no change in them. On the other hand, a review of actual
performance against goals might be held monthly. Depending on the
subject, various Team Leaders might be suitable for conducting the
review.
6. Business Performance and Profitability Reviews
With Employees - Employee’s career opportunities and job security
are tied to the success of the Business Unit served by the plant.
Consequently, I believe that meetings with employees to openly
review the performance of the Business Unit are essential in making
employees feel involved in the business and committed to its success.
Such meetings should include cost and profitability information,
market status, key areas of technology development and
competitiveness, etc. These reviews should emphasize areas where
181
the plant’s employees can influence results. In companies with
multiple Business Units, an overview of the company’s overall
financial and business performance should also be discussed, as the
overall strength of financial results for the company will ultimately
affect each of its Business Units. The frequency of these reviews can
vary, but I believe quarterly reviews might normally be appropriate.
The reviews should probably be handled by a senior plant Team
Leader.
7. Review of Basic Principles With Employees -
Since the Basic Principles form the foundation for the plant’s
operating practices, employees should be periodically reminded of the
Principles. At such meetings, employee inputs should be solicited to
identify practices or management systems that they feel fail to support
the Principles. As in all such meetings frank input from employees,
even if critical, will be a valuable factor in improving the plant’s
performance. The Technician on the floor is often most
knowledgeable about what needs fixing in the plant’s operation.
8. Pay and Benefit Reviews - The plant should
establish standards for its pay and benefits plans and conduct regular
surveys to ensure compliance with these standards. For example, the
182
plant’s pay standard for Production Technicians might specify that
Production Technicians salaries will be set as a percent of the average
of salaries for Technicians in other local plants, with the specific
plants to be included in the comparison named. The standards being
employed should be communicated to employees, as well as the
results of the periodic surveys of competitive practices. Such
communications might take place in employee meetings or through
written letters to employees. I favor a meeting. We found that
scheduling visits by plant Team Leaders to the homes of new
employees to review the plant pay and benefit practices with
employee’s spouses and other family members, as appropriate, was
well received and reinforced our commitment to making our
employee’s family an important member of our team.
9. In-Plant Visits - The most effective form of
communication, I’m convinced, is one-on-one contact between plant
Team Leaders and plant teammates and such communications should
receive the highest priority in the Ultimate Force plant. In-plant visits
are discussed more thoroughly in the chapter on team building.
10. Employee Personal Events - Plant shift Team
Leaders and others in the plant should be conditioned to communicate
183
personal events in the lives of plant employees throughout the
organization in a timely manner. This will enable plant Team Leaders
to acknowledge these events during plant visits with employees, or to
respond quickly to employee’s personal or family needs when
appropriate.
11. Employee Relations Meetings With Employees - I
would like to highlight a special kind of employee meeting. I called
these Employee Relations meetings in my plant. These meetings were
designed to obtain employee feedback on all aspects of their jobs,
including comments on working conditions, workload, training
adequacy, adequacy of physical tools, procedures, management
systems, etc. Nothing was off limits. The goals of the meetings were
to: (a) convince employees of the plant’s interest in providing a work
environment that will allow employees to achieve Ultimate Force
plant performance; and, (b) address all concerns employees have
about their jobs and working conditions. In a new plant where there
are many opportunities for unproven practices to go awry, I found it
desirable to hold such meetings frequently. In fact, we asked each
shift Team Leader to meet with his team bi-weekly, to specifically
discuss employee concerns about the work environment and practices.
184
Issues raised in these meetings were reviewed in a similar bi-weekly
meeting by top plant Team Leaders. In all cases the Technician who
raised the issue received feedback on the action planned, or if no
action was planned, an explanation for the reason no action was
planned. We also periodically held meetings in which top Team
Leaders, met directly with all plant employees to discuss their
concerns about employee relations’ practices in the plant. In these
meetings we fostered an atmosphere where employees felt free to air
their concerns without fear of retribution. In these meetings I felt we
were able to surface concerns that, if left unaddressed, could have
been very disruptive to plant operations.
B. Communications with the Community
Good communication with the community in which the plant is
located is essential if the plant is to be understood and respected by
the community and its leaders. Some ideas for communication in the
community are presented in the chapter on Community Involvement.
C. Communication with Other Business Unit Groups
The plant is only one component of a Business Unit. Therefore,
good communication with other groups in the Business Unit is
essential in forming an effective business team. The chapter on
185
Continuous Improvement outlines some suggested formal
communication systems between Business Unit groups. However,
informal contacts between the plant and other Business Unit groups
should be encouraged. Where there are multiple plants in a Business
Unit visits by employees to these other plants and vice versa should be
encouraged. In fact, visits to other company plants not in the Business
Unit should also be encouraged in the interest of seeking out new
ideas for improving the plant’s management systems. Plant
employees should be made aware that an attitude of If it’s not
invented here, it’s not worthwhile, is totally unacceptable in a plant
committed to continuous change and continuous improvement.
Outside ideas are vital in an Ultimate Force plant.
D. Customer Communications
Understanding the plant’s customer needs and satisfying those
needs is obviously a fundamental requirement in an Ultimate Force
plant. Customer constituencies for a plant can range from millions of
individual consumers for a consumer product to a single large
industrial customer for an intermediate industrial product. Further,
the marketing approach to customers will vary widely from market to
market and company to company. Each plant should work closely
186
with its Business Unit marketing arm to determine the most effective
way for the plant to relate to and communicate with its customer base.
For industrial customers, I think it is essential for the plant to have
direct customer contact, at least with its larger and more important
customers. Where possible, joint meetings between key plant
personnel and customer plant personnel aimed at understanding fully
how to best serve the customer should be encouraged. These
meetings should consider customer needs in areas like the following:
1. Packaging requirements;
2. Key quality requirements;
3. Product requirements to satisfy unique customer
processing technology;
4. Evolving future customer product needs and how
to best satisfy these needs;
5. Possible joint development programs;
6. Establishing plant-to-plant communication systems
and contacts; and
7. Arranging for visits by key plant personnel with
their customer counterparts.
187
CHAPTER 11
CONTINUOUS IMPROVEMENT
Organizational Principle 8 - The plant is committed to being a
world leader in all aspects of its operations and dedicated to
continuous improvement to maintain this position.
A key principle - perhaps the most important for achieving
world competitiveness - is the belief that there is one best way to carry
out each of the thousands of plant activities, and that the plant is
dedicated to the constant pursuit of each of one best ways. It is this
constant pursuit of a better way that will be the basis of continuous
improvement in the plant’s operations, leading to achieving world
competitiveness.
Continuous improvement necessitates continuous change. To
deal with continuous change in an orderly manner, a change
management system should be adopted to provide a disciplined
approach to change. As I see it, the elements of a change
management system are as follows:
1. Identification and codification of current best knowledge
about how to carry out each plant operation - Typically, this will take
the form of a procedure or specification for a given operation. The
188
procedure or specification is not a bureaucratic straight-jacket on the
organization, but rather represents the organization’s consensus on the
current best knowledge of the best way to carry out an operation, and
everyone in the organization engaged in that operation should be
expected to follow that procedure or specification to the best of
his/her ability. A specification or procedure represents a base line
against which to measure the impact of change.
Manufacturing procedures and specifications can be categorized
in a number of different ways, but for purposes of this book I will
discuss four categories of procedures.
(a) Operating procedures and specifications
(b) Mechanical procedures and specifications
(c) Engineering procedures and specifications
(d) Administrative procedures and specifications
2. Development of systems that identify the need for
change - Recognizing the need for change is essential if the plant is to
pursue improvements in its operations. Too often, the easy way out is
to be complacent, to resist change, and to be satisfied with the status
quo, which inevitably will result in the plant becoming non-
competitive. The Ultimate Force plant must aggressively seek out
189
opportunities for improvement. Management systems that can
provide important guidance on the need for change include the
following:
(a) Deviation analysis of the cause of failure of
existing specifications or procedures to provide the expected result;
(b) Competitive analysis, both of product and process,
to determine the leading competitive performance targets;
(c) Joint planning with customers to identify their
unsatisfied needs;
(d) Joint planning with marketing and marketing
technical service groups to identify areas needing improvement;
(e) Joint planning with company research groups to
define manufacturing technology needs and to ensure rapid
deployment of technology developments in the plant;
(f) Joint planning with raw and intermediate material
suppliers to guide them in supplying needed improvements in their
products; and
(g) Joint planning with equipment suppliers to define
needed improvements in their equipment.
I will discuss each of these areas in this chapter.
190
3. Systems for initiating, testing, evaluating and
incorporating changes in the plant’s operations - I will review my
thoughts on these areas of change management, outlining steps
required for an effective change management program.
Comments on each of these three are as follows:
1. Identify and codify current best knowledge in each of the
procedure and specification categories
Operating Procedures and Specifications:
As mentioned in the introduction to this chapter, current
best knowledge can take the form of a specification for materials,
intermediate parts, or equipment used in the manufacturing process, or
for the products produced by the operation. Specifications can take
the form of measurable characteristics, e.g., a dimension of a part with
specified allowable tolerance; or materials of construction; or product
properties; or specified manufacturing conditions, etc. Specifications
should be provided and maintained up to date for all manufacturing
equipment, production materials, and products.
Current best knowledge should also be captured in plant
operating procedures. To meet this requirement, operating procedures
should be written for each plant process system. Typically, plant
191
process systems consist of three types: a) Utility systems serving
many parts of the plant; b) Auxiliary process production systems; c)
Main process production systems. Examples of these types of process
systems follows:
(a) Utility Systems
• Steam systems
• Water supply systems
• Cooling water systems
• Compressed air systems
• Inert gas systems
• Electrical systems
• Fire water systems
(b) Auxiliary Production Systems
• Raw material or parts supply systems
• Intermediate parts or materials
production systems
• Environmental control systems for
main production processes
• By-product handling systems
192
• Off-specification product handling
systems
(c) Main Product Production Systems
• Assembly lines
• Final product production equipment, e.g.
polymer molding equipment, metal
stamping equipment, etc.
• Products produced from chemical reactions
• Metal production from ore reduction
processes
• Products produced from separation
processes
Process operating procedures should be produced for
each of these systems.
General Guidelines for Process Operating
Procedures:
My thoughts on the general guidelines that should be
used in preparing process operating procedures are as follows:
(a) Operating procedures need to be succinct
statements of what is to be done - the why and how to be covered in
193
the post training manuals, but not in the procedure. In effect, the
operating procedure should be the equivalent of a check-list outlining
the steps to be taken and the conditions to be achieved. I believe a
hard copy of the procedure should be used (as noted later these should
be computer generated) for startup and shutdown phases of the plant
operation and that the time of each step of the procedure recorded on
the hard copy along with the initials of the Technician executing the
step. This will emphasize to Technicians the importance of following
each step in the procedure. Also documented times will allow
reconstruction of the startup or shutdown events to assist in the
assessment of any deviations that might occur during these phases.
This approach also provides communication between Post
Technicians when the startup or shutdown spans more than one shift.
(b) Operating procedures should be written for each
complete process system and maintained up-to-date. These should be
computerized and available on plant computers located at strategic
locations in the plant.
(c) A procedure should be prepared for each plant
process system. Post training manuals should contain a copy of the
operating procedures for each process system for which the post has
194
any execution responsibility. These procedures should be available in
stand alone form as computer printouts for use in executing the
procedures. Where total responsibility for executing a system
procedure resides in a single post, implementation of the procedure
and its record keeping will be the single responsibility of the
Technician responsible for the post. Where a system procedure spans
more than one post, the entire procedure should be included in the
training manuals for each post involved in the procedure, and the
specific steps required of the post highlighted. Responsibility for
coordinating the implementation and record keeping of the overall
procedure should be vested in one of the Technicians involved in the
procedure, or a shift Team Leader, to ensure the orderly and complete
implementation of the procedure.
(d) The procedures for each process system should be
accompanied by a process flow diagram for that system. Such a
diagram should show not just major items of equipment, but also
every item that is involved in operating the process, such as, switches,
circuit breakers, valves, instruments, computers, alarms, piping
systems, electrical systems, etc. As previously mentioned, the plant
should develop a nomenclature system that provides a specific unique
195
designation for every item shown on the process flow diagram and
mentioned in the procedure. Actual plant facilities should be labeled
with these designations to assist Technicians in executing these
process procedures.
Process operations experience a number of different
phases at different times, each of which requires specific procedures
for that phase. These phases are:
• Initial startup - initial startup of the plant following
construction.
• Normal operations - process operations under
stable normal production conditions.
• Temporary operations - operations under
temporary conditions, such as, operating test
facilities, or adjusted operations because of a
temporary outage of some plant facilities.
• Emergency shutdown of operations - operation or
shutdown of the plant under emergency conditions,
such as, failure of a major plant facility, fire,
explosion, natural disaster, etc.
196
• Normal shutdown - an orderly shutdown for either
a temporary outage or a more extended downtime
which may be occasioned by a need to reduce
production for inventory control, or to permit
major repairs to or inspection of plant equipment.
• Plant startup following a downtime - operational
steps to bring the plant back online following a
downtime.
Some areas to be addressed in the procedures for each of these
phases follows:
Initial startup
Procedures for the initial startup of the plant following
construction should deal with the following:
• Pre-startup inspection of the plant facilities to
ensure compliance with design conditions.
• Testing of individual components of the process,
where possible. Examples of the testing to be done
include: pressure testing of vessels and piping
subject to operating under pressure; testing for
tightness for equipment not subject to pressure
197
operations; using the startup procedure steps for
individual items of equipment, test these items for
operability, alarm setting, safety device
operability, proper lubrication, ability to achieve
normal operating conditions, etc.
• Ensure that all process equipment has been flushed
or cleansed of all construction contamination.
• Ensure that all plant equipment, electrical circuits,
piping systems, etc. have been properly labeled
using the plant’s nomenclature system.
• Ensure that a master plan for sequential startup of
the various plant process systems is in place.
Typically, the plant utility systems will be the first
process systems to be actuated, followed by
process auxiliary systems and lastly, the main
production systems.
• For each process system provide the detailed
operating steps to be followed in bringing that
system online and achieving the desired operating
conditions for each piece of equipment.
198
Normal Operations
Once plant startup procedures have been completed, the
plant should have reached normal operating conditions for production.
For plants that produce only a single product without variation,
operating condition targets should remain constant. Procedures
should be developed for maintaining these key target operating
conditions. In plants that produce multiple products by varying plant
operating conditions, normal operating condition targets will change
based on the type of product being produced. In this case, procedures
for maintaining key target operating conditions may vary depending
on the plant’s production schedule. In any event detailed procedures
for controlling plant operating targets must be developed and
maintained. Some other factors to be considered in establishing
procedures for normal operations include:
• Statistical process control should be considered in
establishing and controlling plant operating targets.
• Sampling and quality control steps should be
spelled out as part of the operating procedures.
199
• Requirements for operating records, computer and
manual, for monitoring plant operations should be
outlined in the procedures.
• In my experience, normal operations are seldom
normal, and frequently some adjustments to
normal conditions are required. On these
occasions, special procedures should be provided
for these adjustments. In my plant, these were
typically provided by written daily orders from the
responsible Team Leader.
Temporary Operations
Temporary operations are significant adjustments to
normal operating conditions. Some of the reasons for temporary
operations might be:
• Changes to plant equipment or procedures are
being made for test purposes.
• Some part of the plant is out of service obviating a
change in operation.
Since temporary operations can occur for many different
reasons, operating procedures must be made to address the specific
200
reason for the temporary operation. These modifications to normal
operating procedures should be spelled out in written form for use by
plant Technicians, and follow the format of the normal operating
procedures.
Emergency Procedures
Procedures should be developed for dealing with plant
emergencies. Examples of the conditions that could create a plant
emergency include the following: Failure of a major piece of plant
equipment; fire or explosion in the process; loss of control of plant
equipment leading to emergency conditions; power failure, or other
utility failure; external factors, such as a tornado, hurricane, snow
storm, etc. The plant should attempt to define the various types of
emergencies the plant could reasonably expect to face, and develop
emergency procedures for each of these conditions. Procedures
should include the following:
• Detailed emergency steps to be taken, including
whether to continue to operate or shutdown, with
the appropriate steps for the choice selected.
• Provide instructions of personnel to be called on or
used in dealing with the emergency, such as, a
201
plant fire squad, if used, or other emergency
specialists.
• Note whether overall plant emergency response
system needs to be activated, and the steps to be
taken if it is activated.
• While plant emergencies are a time of great stress
and discord, computerized procedures should be
developed and accessible to plant technicians.
When conditions allow, these procedures help
Technicians to ensure that no important step has
been overlooked. Further, to the extent possible,
steps taken and the time should be documented, to
help in the reconstruction of the causes and events
of the emergency.
Normal Shutdown Procedures
Normal plant shutdowns are usually of two types:
(a) Limited duration shutdown to repair
equipment, conduct a scheduled inspection or to make
equipment modifications, with the expectation that the plant
will be out of service for only a short duration.
202
(b) An extended downtime for major plant
modifications, major repairs or inspection of equipment, or an
extended shutdown for inventory correction.
For a limited duration shutdown, the shutdown
procedures should keep the plant in readiness for a rapid restart, once
the purpose of the downtime has been satisfied. For example,
equipment that requires heat during operation may be kept hot during
the downtime; steam boilers may be kept warm maintaining steam
pressure, etc. The shutdown procedures should attempt to deal with
the alternative scenarios, and provide procedural guidance to facilitate
a rapid restart, thereby minimizing plant downtime.
For an extended downtime, shutdown procedures should
identify the steps to be taken to prepare the plant for an extended
outage. Typically these procedures should outline steps necessary to
prepare and protect equipment during an extended outage against
corrosion or other damaging conditions. Further if equipment is
subject to mechanical work during the downtime, procedure steps to
prepare the equipment for such work should be provided.
Startup Procedures Following a Normal Shutdown
203
A detailed procedure should be prepared for startup
following a normal shutdown. This procedure will differ from the
procedure for the initial startup of the plant following construction
primarily in that some of the checks against design conditions can be
avoided. However, in other respects most of the specific steps
included in the initial startup procedures should be included and will
be required following an extended outage. Such things as pressure
testing, testing individual pieces of equipment, alarm testing, etc. will
probably be required, since conditions may have deteriorated during a
prolonged outage. On the other hand, procedures for restarting after a
limited duration downtime, will be more limited. However, since
causes for a limited duration downtime can be quite varied, I’d opt for
checking each step in the startup procedure, recognizing that many of
the steps will be unnecessary since the plant was retained in readiness
for a rapid restart when it was shut down. By following the detailed
procedure, even in the case of a limited duration shutdown, the plant
can reduce the risk that an important startup step has been overlooked,
without unduly delaying the startup.
Mechanical Procedures and Specifications
204
An effective mechanical management system will consist
of the following:
(a) Inventory
An inventory of all mechanical equipment items
and systems should be developed. This inventory will
include such items as piping systems, electrical circuits,
computer systems, instruments, alarms, vent and relief
systems, circuit breakers, valves, pumps, compressors,
production machinery, controllers, etc. with each
identified in accord with the plant’s nomenclature
system.
(b) Record for Each Mechanical Inventory Item
A record should be developed and maintained for
each mechanical inventory item. This record should
consist of the following:
(i) Design specifications for the item.
(ii) Manufacturer’s catalogs and design
drawings for each item, where applicable.
(iii) A parts listing for the item including the
manufacturer’s part number along with the plant’s storehouse
205
identification number for the part. Acceptable part substitutes,
where applicable, and the substitute’s plant storehouse
identification number should be included.
(iv) A listing of all required tests and
inspections, frequency of inspections, and detailed step-by-step
procedures for conducting these tests and inspections should be
included for each item. Test and inspection requirements
should follow all applicable industry codes, manufacturer’s
recommendations, company and industry experience. Any
special equipment required for the tests should be identified.
Criteria for judging the results of tests and inspections in
establishing suitability for continued operation should be listed.
(v) A history of inspections and tests conducted
on the item, including dates, findings, corrective steps taken,
etc. should be maintained.
(vi) A step-by-step procedure should be
maintained for disassembling and making repairs to the item
when failures occur. These procedures should represent best
knowledge on how to make repairs and should provide
guidance in planning for the repair, including such items as,
206
manpower required, special skills required, tools required for
the repairs, spare parts required, etc.
(vii) A repair history should be maintained for
each item. This history should note the date of the failure,
cause of the failure if known, repairs made as a result of the
failure, changes made as a result of the failure analysis, etc.
(viii) The record for the item should include a
separate change history including changes made as a result of
inspection or test findings, deviation analysis of failures of the
equipment, technology improvement changes, etc. Changes
should be made in accordance with the plant’s change
management system which I will describe later in this chapter.
(c) Overall Schedule for Testing and Inspection
The plant should develop a master schedule for the
testing and inspection of all plant mechanical items. Ideally this
schedule will identify the responsible Technician or other
employee/employees responsible for conducting the testing and will
include a notification procedure when the test is due and an auditing
component to ensure the test is conducted in a timely fashion. The
207
notification should include a hard copy of the test procedure and
identify any special tools or other items required to conduct the test.
(d) Computerization
The entire mechanical management system should be
computerized to the maximum extent possible. Directions for the use
of the computer program to access various elements of the
management system should be included in each post training manual
along with hard copies of inspection and test procedures that occur on
a frequent basis in the post.
(e) Planning Mechanical Work
One of the most important keys in the successful and
effective execution of a plant’s mechanical work is planning of the
work. Mechanical work can typically be broken down into four types:
(i) Scheduled tests and inspections
(ii) Failure repairs
(iii) Betterments
(iv) New construction
Each of the above is subject to differing degrees of
predictability and urgency as outlined as follows:
(i) Scheduled tests and inspections are
reasonably predictable in terms of timing and with properly
208
developed procedures should be predictable in terms of
manpower, equipment, and time to conduct the tests or
inspections. Correcting findings of the tests and inspections is
less predictable, but with good procedures for making repairs,
the required manpower, materials, and timing for correction
should be subject to reasonably accurate planning.
(ii) Failure repairs are the least predictable of all
of the above, in that they occur usually without warning.
Typically they are also the most urgent in that failures usually
affect plant production. But with well defined repair
procedures, the manpower, equipment, materials and repair
time should be plannable with reasonable accuracy. The value
of having well articulated repair procedures not only makes for
efficient repairs, but also minimizes downtime for the repairs.
(iii) Betterments are typically predictable in
terms of manpower, materials, and time required to do the
work. However, in most cases betterments do not demand
immediate completion. In fact, they usually require design
work and the purchase of specific materials for the work.
Further, often betterments are small jobs, capable of being
209
performed by the plant work force or regular contract
employees. Typically, plant repair work will demand priority
attention from the plant work force, with betterments scheduled
as plant workforce manpower is available. Plants should
develop a mechanical work priority system to determine the
order in which betterments are to be performed.
(iv) New construction work of any magnitude
normally does not fall within the capability of the plant
workforce. In fact, in my experience trying to maintain a
workforce capable of carrying out major construction work is a
mistake. With a large construction workforce on the plant rolls,
plants will typically maintain a large backlog of work to ensure
that work is always available to keep the workforce busy. As a
result, projects are delayed to maintain a backlog, whereas if
contract forces are used for the work, completion can be
expedited, and the contract forces released when the work is
complete. Therefore, in the Ultimate Force plant, major
construction should be handled by contract construction forces.
As noted in the description of the various types of plant
mechanical work, demands for manpower, job timing, materials and
210
equipment to carry out this work can be highly variable. To manage
these variable demands requires careful planning of the work and its
execution, which I’ve found can best be handled by a plant
mechanical planning function. Depending on the type of plant, its
size and complexity, the function can be centralized for the plant, or
decentralized with various operating departments doing their own
planning. These plant variables will also impact the size and
organizational level of manpower required by the function. But
without question the mechanical planning function should be a part of
the Ultimate Force organization. Procedures for involving the
operating organizations in prioritizing and scheduling plant
mechanical work must be developed.
Engineering Procedures and Specifications
Engineering procedures and specifications are aimed at
providing the current best knowledge on how to design and construct
a plant, as well as the current best knowledge on what materials and
equipment to employ in the plant. In large companies often there are
company-wide engineering procedures and specifications which the
plant can adapt to its own situation. In smaller plants or companies
211
without company-wide procedures, the plant should establish its own
procedures and specs. In doing so, the following may be helpful:
(a) All engineering contractors have their own set of
design procedures and specs. The plant may want to purchase the use
of these procedures from one of their primary contractors and modify
them to meet the plant’s needs.
(b) There are many industry organizations that provide
codes and design practices that can be adopted by the plant. Some of
these are:
American Society of Mechanical Engineers (ASTM)
American Society of Testing Materials (ASTM)
American National Standards Institute (ANSI)
National Electrical Code
Occupational Safety and Health Administration (OSHA)
National Fire Code
(c) There are also codes mandated by various
governmental bodies that must be included in the plant’s design
procedures.
(d) Manufacturers of various types of equipment may
have standards for their industry that should be adopted by the plant.
212
(e) Plant procedures should reflect the experience of
the plant and use those design standards and equipment specifications
that have best served the plant over time.
(f) The plant may want to use some of the best design
features of their material and equipment suppliers in establishing plant
design procedures.
In any event, while the goal of the plant’s engineering
procedures and specifications is to use best knowledge, often there are
options that are essentially equivalent and are accepted industry-wide.
Therefore, where a project is being handled by an outside contractor,
my approach has been to allow the contractor to use his own
procedures and specifications, modified only on an exception basis to
require the plant’s procedures, with which they are familiar, thereby
increasing their productivity without jeopardizing the quality of the
design.
Engineering procedures and specifications should cover
all aspects of the plant’s design. A laundry list of these procedures
would be extensive and is probably not warranted here, as each plant
will be able to define those areas where design procedures and
specifications are required.
213
Administrative Procedures
Plant administrative procedures can generally be placed
in one of three categories:
- Preparation of plant reports that track plant
performance and provide input to management systems used in
controlling plant operations.
- Procedures for dealing with outside (non-plant)
organizations, e.g., purchasing procedures, payables procedures,
shipping procedures, billing procedures, government reporting
procedures, corporate reporting procedures, etc.
- Procedures associated with employee
administration, e.g., benefit plan procedures, payroll procedures,
vacation scheduling, etc.
(a) Plant administration procedures for performance
reporting should have the following characteristics:
• Report format and content should be detailed and
computerized.
• Sources of report input should be detailed (how
supplied, by whom, timing of input, input content).
214
• Timing of report - when scheduled and frequency
of report.
• Details of report distribution should be provided.
(b) Procedures for dealing with outside organizations
should be described and any standardized paperwork formatted. To
the maximum extent possible these procedures and paperwork should
be computerized. Where relevant, these procedures should provide
for follow-up monitoring of these activities to ensure satisfactory
completion, e.g., periodic status reports on outstanding purchase
orders.
As with performance reporting procedures, sources of
inputs to reports, timing of reports and their distribution should be
described in the procedures.
(c) Procedures for employee administration should
describe the activity in detail and assign responsibility for the activity
or its components. Procedures for any reports associated with these
activities should contain the characteristics shown above for plant
reporting procedures.
Execution for all of these procedures typically will fall
within the responsibility of the various plant Administrative
215
Technician Posts and will be assigned to those posts and become part
of the post responsibility.
Examples of the above procedures that I believe are
required in an Ultimate Force plant include the following:
(a) Plant Performance Reporting Procedures (reports
should show performance for the current reporting period as well as
year-to-date performance, and a comparison of actual performance
with target performance, where this exists). Areas to be reported
should be detailed. They may include the following:
• Raw material and intermediate material utilization
• Production manpower utilization
• Mechanical manpower utilization
• Plant losses of production materials
• Plant service factor, including details of causes of
outages
• Off-specification production
• Production costs, including detailed breakdown of
cost components
• Overtime, with breakdown into logical categories
• Utility utilization
216
• Plant production, with detailed breakdown into
logical categories
• Plant safety performance, broken down into logical
groupings
• Environmental performance focused on logical
areas for the plant
(b) Procedures for dealing with outside organizations
may include the following:
Purchasing Procedures for:
• Parts and mechanical supplies
• Office supplies
• Raw materials and process supplies
• Construction materials
• Packaging supplies
• Other services
• Tracking procedures for all open orders
Shipping Procedures for:
• Routing
• Shipper selection
• Shipping papers
217
• Tracking
• Etc.
Accounting Procedures for:
• Billing
• Receivable tracking and follow-up
• Payables
• Reporting procedures to meet corporate
requirement
• Reporting procedures to meet government
reporting requirements
(c) Employee Administrative Procedures for the
following should be considered:
• Employment records
• Medical records
• Benefit plan administrative procedures
• Vacation scheduling
• Overtime scheduling
• Training records and scheduling
• Post rotation scheduling and qualification
• Payroll procedures
218
• Absentee records
• Personnel records
• Employee evaluation and ranking
2. Development of Systems to Identify the Need For
Change
As I’ve stated before, change is the lifeblood of the
Ultimate Force plant, for without change there cannot be any
improvement, and without improvement, the plant cannot remain
competitive. The need for change cannot be left to chance. Rather,
management systems to guide the plant in recognizing the need for
change must be developed. My thoughts on some of these systems
follow:
(a) Competitive Analysis
The Ultimate Force plant must continue to change to
keep pace with competitive developments in the global marketplace.
Therefore, understanding competitors and competitive trends and
improvements is essential.
Making assessments of a competitor’s processes and
products can provide guidance on competitor-dictated change needs.
219
Some of the kinds of activities that can provide these competitive
assessments include the following:
(i) Monitoring patent literature for competitive
technology patent developments.
(ii) Following trade magazine literature for
reported competitive developments.
(iii) Obtaining competitive marketing literature
describing their products.
(iv) Obtaining samples of competitor’s products
for analysis and testing.
(v) Obtaining comments from sales reps who
call on competitors. Note: It should be recognized that sales
reps who confide competitor’s developments to you are likely
to talk to competitors about you. So be careful.
(vi) Competitors presentations at trade
association meetings or table talk at these meetings might be
revealing.
(vii) Plant manpower can often be gauged by
counting cars in a competitor’s plant parking lot.
220
(viii) Investment announcements by competitors
should be monitored.
(ix) Contractor input on competitor’s
investments and operations should be considered. However,
the same caveat applies to contractors as to sales reps.
(x) Publicly available competition tax records
should be pursued.
(xi) Wage and benefit surveys commonly
conducted with other plants can provide input on a competitors
employment costs.
(b) Customer Input on Need For Change
Customers, perhaps better than anyone, can recognize the
need for change in a manufacture’s products. Tapping this valuable
input on the need for product change can be a valuable asset.
A manufacturing plant’s customers can number in the
thousands for consumer products, to a very limited number, even a
single customer, for industrial products, machinery, or intermediate
raw materials. Obviously mechanisms for obtaining customer input
will vary for this wide range of operations.
221
Customers for consumer products express their approval
of a product in several ways:
(a) Sales levels, good sales growth and a high market
share reflect a favorable assessment of a product by consumers,
whereas the reverse market conditions reflect poor product acceptance
and the need for change. Monitoring market performance is an
important gauge on the need for change.
(b) Customers also register their dissatisfaction with
products by returning unacceptable products to product vendors.
Mechanisms for tracking product returns should be employed as an
indicator of the need for change.
(c) Many manufacturers of consumer products employ
consumer panels comprised of unbiased consumers in the company’s
target market group to evaluate the company’s products, frequently
alongside competitive products. This can provide valuable input on
customer satisfaction and an indication of the need for change.
Customer input on the need for change in industrial products often
will take a different course. Some ideas for this input are:
(i) As with consumer products, changes in sales
or market share can signal the degree of customer satisfaction
222
with a product with poor acceptance indicating the need for
change.
(ii) Where achievable, the most desirable and
effective way to achieve customer input on the need for product
change or for new products, is to form a planning alliance with
the customer in which the customer’s needs are specifically
spelled out, and, where possible, the customer agrees to test
development models of new products. Unfortunately, there are
some obstacles to forming such alliances, such as:
• The customer is frequently reluctant to share
his needs with the supplier for fear of
revealing some of his proprietary
technology.
• Customers don’t want to go to the expense
of testing a product unless there is a
competitive incentive for them.
On the other hand, suppliers want to be able to market
successful new products as broadly and quickly as possible and are
reluctant to give an alliance customer any kind of exclusivity.
223
Having said this, however, there frequently is a middle
ground with industrial customers that will provide a workable alliance
without either partner to the alliance forced to make untenable
concessions. Certainly, the value of customer guidance on the need
for product change warrants an effort to form joint planning alliances
with key customers.
Just as product returns reflect dissatisfaction by consumer
product customers, industrial product returns or complaints provide
important measures of industrial product customer’s satisfaction level
with the Ultimate Force plant’s products. It is essential that the plant
establish a tracking system for following product returns and
complaints and equally important to ensure that each of these product
failures is satisfactorily resolved with the customer. Resolution of the
product problem will often lead to defining the need for change.
(d) Joint Planning by Business Unit Marketing,
Technology/Research and Manufacturing Functions on Manufacturing
Technology.
In my experience, a Business Unit will be headed by an
overall Team Leader with staff, and with marketing, research and
manufacturing functions as part of the Business Unit. It is within this
224
organizational framework that I propose a Business Unit planning
team for technology comprised of representatives from each of the
functions, headed by the Business Unit Team Leader or staff member.
These teams will bring a total organizational focus on programs
leading to technology (both process and product) improvements for
the Business Unit. These planning teams should define the
technology needs of the Business Unit based on inputs from
customers, competitive assessments, manufacturing deviation analysis
(defined later in this chapter), etc. The planning teams should
establish a prioritization of the programs and propose a budget for the
programs for corporate review and approval. The planning activity
needs to be ongoing with a regular review of the program’s progress,
with program changes made by the planning team as dictated by
program progress. Implementation of program results across all
functions of the Business Unit should also be the responsibility of the
planning team.
(e) Joint Planning With Suppliers
Just as customer input is valued in guiding improvements
in the Ultimate Force plant, providing planning guidance to the plant’s
equipment and raw material suppliers on improvements need in their
225
products can be beneficial to the Ultimate Force plant. However, in
outlining product improvement needs to suppliers, care must be
exercised to protect the plant’s proprietary technology through legally
binding secrecy agreements or by providing guidance with minimal
exposure of the plant’s technology.
(f) Deviation Analysis
Deviation analysis is the plant’s self analysis system to
establish the need for change. It is based on the belief that there
should be a procedure, operating target, or specification for every
aspect of the plant’s operation that reflects current best knowledge on
how to operate the plant. Deviations from these standards indicate
that the so-called best knowledge is not being achieved and therefore
a change of some kind is required - new facilities, new procedures,
new targets to reflect achievability, etc. I call this system to identify
deviations, analyze their causes, and make corrective changes
Deviation Analysis. It is the ultimate approach to controlling plant
operating details which I believe is essential in achieving Ultimate
Force performance.
You may wonder if the intensive effort required by
deviation analysis is justified. I believe there are several reasons that
226
support the effort required to provide this important management
system:
(i) A deviation represents an operational feature
that is out of targeted control and therefore has the potential of
causing an operational inefficiency, or worse. Operating
inefficiency, obviously, is inconsistent with Ultimate Force
plant objectives.
(ii) Deviation analysis provides a significant
input to the plant on the need for change. It has the potential, I
believe, of providing the plant’s most important guidance on
the need for change. In fact, I’m convinced that the opportunity
for significant continuous improvement will be missed if the
plant does not employ some form of deviation analysis.
(iii) While most deviations don’t rise to the level
of a catastrophe, frequently a small deviation might be the
precursor of a major problem if not corrected. For example, a
small leak in a pipe might be indicative of broad corrosion in
the entire piping system which could result in a major discharge
of a corrosive or toxic material if not corrected; or a minor
vibration deviation in a piece of machinery that exceeds the
227
target level, could ultimately, if not corrected, lead to a major
wreck of the machinery.
Thus, it is my belief that a plant without a deviation
analysis management system can never achieve Ultimate Force status.
My view of a deviation analysis system consists of the
following:
• Deviation Identification - Deviations can occur in
an almost endless number of situations. Where a
deviation occurs in a plant operating variable that
is recorded by a computer or in some other
fashion, the record of the deviation should provide
the input to the management system. For those
deviations that are not automatically recorded, a
deviation reporting system needs to be developed.
The deviation reporting format, whether in hard
copy or entered into a computer, should name the
incident, the deviation that occurred, the time of
the deviation, steps taken to regain control or
correct the deviation if corrected, and personnel
involved. Listing the time will permit
228
reconstructing other plant variables that might
have contributed to the deviation. Listing the
personnel involved will facilitate subsequent
reconstruction of the deviation. When initiating
the deviation reporting system, the number of
reports will probably initially be overwhelming.
Therefore, I’d recommend that initial deviation
identification reports be limited to the more major
deviations. Subsequently as deviations are
corrected, the types of deviations reported can be
expanded.
• Deviation Analysis - Deviations can span a broad
range of failures, from an alarm signaling a high
temperature, to a fire and explosion that burns
down the plant. For major events, like fires, etc.
Special incident investigation teams will be
required, which I will comment on later in this
section. For normal day-to-day deviations, I
recommend establishing Deviation Analysis
Teams, or DATs for various parts of the plant, e.g.,
229
Production Dept. A, Production Dept. B,
Administrative Dept. A, Administrative Dept. B,
etc., will each have one or more DATs. I suggest
that a DAT be led by someone with full time
problem solving capability to analyze the
deviations and take corrective action. In my plant
the DAT leader would normally be an engineer. I
would add one or more Technicians and possibly a
Shift Team Leader, who are working in the
affected part of the plant, to the team. Normally
the Technicians and Team Leaders will have other
full time responsibilities, but their input on the
causes and solutions for the deviations should be
sought by the DAT leader. If required,
Technicians or Shift Team Leaders, can
temporarily be relieved from their normal
assignment to work full time on the DAT. I also
recommend that Technician members of the DAT
be rotated from time to time so that all Technicians
over time experience a DAT assignment, and an
230
opportunity to contribute to improvements in the
plant’s operation.
• Corrective Action -The DAT should develop their
recommendations on how to correct the deviation.
This might consist of changes in facilities,
procedures, specifications, operating targets, etc.
The recommended changes should be handled in
accordance with the plant’s Management of
Change Procedure which I will describe later in
this chapter.
• Major Deviations - Those involving fires,
explosions, injuries or deaths - require the
establishment of a special DAT with broad
investigative capabilities since these incidents and
their causes if not corrected can potentially have a
serious impact on employee and community health
and well-being and may result in government
investigations and legal consequences. Because
major deviations are so serious and responsibly
evaluating their cause and taking remedial action is
231
so important, the plant should develop a standing
procedure for conducting such investigations. My
thoughts on such a procedure follow:
(i) Handling the emergency itself is of course
the highest priority and steps for this are outlined in the section
on Emergency Planning.
(ii) Once the emergency is secured, it is most
important to preserve the site and all information relating to the
incident for subsequent evaluation by the investigating DAT to
be appointed.
(iii) As quickly as possible a special DAT should
be appointed. Consideration should be given to the following
in establishing the team:
• The Team Leader should be someone with
considerable background in the plant’s operation
whose judgement and integrity is highly respected.
The Team Leader should not be someone
responsible for the area in which the emergency
occurred.
232
• The team should include personnel knowledgeable
in the following areas as appropriate:
Plant engineering
Plant mechanical procedures
Environmental standards for the plant
Safety practices applicable to the plant
The plant’s technology
Plant Technicians or Shift Team Leaders
knowledgeable about the affected area. Team
members should not have had any involvement in
the emergency.
Once the DAT is formed, the initial investigation should
be aimed at determining the facts surrounding the incident, including
such things as:
• Visit and examine the site in detail
• Photograph the site in detail
• Obtain all sources of potentially useful information
such as, latest equipment and engineering
drawings, operating logs, recorded information,
latest operating and mechanical procedures, any
233
special operating instructions at the time of the
incident, design information, names of employees
involved, their experience, job history and
qualification history, etc.
• Interview all witnesses to the incident. Witnesses
should be interviewed privately so that their
comments are not influenced by others. It is
important that the DAT conduct itself in a way that
reflects a desire to determine what happened so
that corrective steps can be taken to avoid a repeat
of the incident, rather than give the impression that
the investigation is a witch hunt to place blame.
• Maintain a thorough and accurate record of the
investigation.
• Once the cause of the incident has been
determined, the corrective steps for preventing
future recurrence of the incident is usually
straightforward. If not, additional expertise should
be brought in to address the necessary corrective
steps.
234
• Finally, a comprehensive report on the
investigation findings concerning the incident
together with the DAT’s recommendations for
corrective action should be prepared. The report
should be reviewed with top plant and corporate
Team Leaders for their approval and follow-up on
the recommendations. In addition, the report
findings should be reviewed with all affected plant
employees, as well as with other company plants
for which the findings have relevance. Also, where
the findings reveal significant new information that
is potentially of value to the other plants in the
industry, consideration should be given to sharing
non-confidential findings of the investigation with
others in the industry.
Managing Change
Since changes are so essential in the Ultimate Force
plant, procedures must be developed to encourage change, but with
the recognition that change needs to be controlled to ensure that the
anticipated impact of the change is evaluated before the change is
235
made. Further the change procedure must provide a proper evaluation
of the results of change before the change becomes permanent.
There are three main categories of change: 1) Facility
changes; 2) Procedures changes; and (3) Changes in raw materials,
operating supplies, and suppliers of intermediate parts. These changes
have the potential to affect the following areas of the plant’s
operation:
(a) Safety
(b) Operability
(c) Throughput
(d) Cost
(e) Product Quality
The plant change procedure needs to evaluate the impact
of the change on each of these areas of plant operation.
Since change must be encouraged, the change
management procedure should not be unduly burdensome on the
organization. However, to ensure that changes are given careful
thought before being initiated, the plant should develop an approval
system for changes. The system should allow approval of change at
the lowest organizational level that is prudent for the type of change
236
being made. Obviously a change in facilities costing millions of
dollars will require approval at a much higher level than the rerouting
of some electrical wiring in the plant. Similarly, a change that
potentially has serious safety risk must be approved only after careful
evaluation and at the highest appropriate organizational level. The
approval system should be designed to reflect these differing change
conditions.
The change procedure should require that the following
are adequately addressed:
Facilities Changes
(a) Changes must meet all plant design and
construction standards.
(b) Inspection and startup procedures for the changed
facilities must be developed.
(c) Operating procedures for the new facilities must be
provided.
(d) The training manual for all operating posts
affected by the change needs to be updated.
(e) Spare parts requirements for the changed facilities
need to be determined and ordered.
237
(f) Plant engineering drawings for the changed
facilities need to be provided.
(g) Post training for employees in posts or other
positions affected by the changes needs to be conducted.
(h) Mechanical procedures for the new facilities need
to be provided.
(i) A plan for evaluating the new facilities needs to be
developed.
Procedure Changes
(a) Procedure changes provide considerably more
flexibility than facilities changes, since the latter require physical
change to the plant’s hardware and often the expenditure of
considerable sums of money. Procedure changes, on the other hand,
require only a change in the way the plant is operated and can be less
of a permanent commitment to the change. Consequently, it is usually
practical to use the concept of an experimental procedure change for
evaluation purposes before the change is made permanent. I
recommend that the Management of Change Procedure for the
Ultimate Force plant provide for the use of experimental change
procedures.
238
(b) Procedure changes like facilities changes should be
covered by a change approval system.
(c) Experimental operating and mechanical procedures
should be developed for testing the change. If the change in
procedures is adopted after the experimental test, they should be
incorporated into the permanent plant operating and mechanical
procedure system. Further, they should be incorporated into the post
training manual for all posts impacted by the change.
(d) Employees in posts affected by the change must be
trained in the experimental and the permanent changed procedures.
(e) A plan to evaluate the impact of the changed
procedures needs to be developed.
Changes in Raw Materials. Operating Supplies, or
Intermediate Parts Suppliers
Changes in the above items can occur for any number of
reasons and should be managed carefully. Areas to be addressed
when these changes are made include:
(a) Specifications for the new materials must be
clearly defined and systems for monitoring the new supplies
established.
239
(b) If the new materials in any way impact operating
procedures, new procedures must be developed and Technicians
trained in the new procedures.
(c) If necessary, post training manuals need to be
modified.
(d) Ideally, the use of the new material should be put
through an experimental period of operations with a well-developed
plan for evaluating the impact of the change on the key plant
variables.
A Beginning - Not The Last Chapter
It is fitting that this book end with a chapter on
continuous improvement for without continuous improvement the
Ultimate Force plant will not survive. Thus, there is no last chapter in
a book on the Ultimate Force plant. The plant must continue to
improve and change to meet future challenges. Technology will
change; markets will change; products will require improvement or
replacement; competition will become more competitive. And the
Ultimate Force organization must be able to deal with all of these
future uncertainties. This book represents only some beginning
240
thoughts on what’s required to achieve Ultimate Force status. Much
more will be required to maintain that ideal.
