People Powered Lean Integrating a Modernized Human Capital Management Program with the Lean Manufacturing Journey Virginia SHRM State Conference Virginia Beach, Virginia September 25-27, 2005

2 TMG Core Beliefs We are in the business of making hard things easy…not easy things hard. Start with the end in mind! Take a Systems Approach People are good and want to do the right thing It is the organizations responsibility to create an environment for its people to be successful Our employee’s “Vote” counts more than ours

3 SS OPS F LM M PM OPS SS FF LM M Organizational Map PM: Plant Manager OPS: Operations Manager SS: Shift Supervisor F: Foreman LM: Lead Mechanic M: Mechanic : Vertical Dyad Linkage

4 Linkage Power Depends On… 1. Creating a Shared Goal. –The Employee’s Goals and Needs –The Organization’s Goals and Needs as articulated by the Supervisor –Requires continuous Goal Alignment within context of Individual Developmental Plans 2. Leaders Managing Personal Relationships –Vertical Dyad: Leader Led x number of direct reports –Employee productivity and commitment depends on their relationship with their IMMEDIATE Supervisor

Begin with the end in mind… “Build more quality products faster to improve market share and increase profit.”

6 Lean Enterprise Goals Improve Quality Eliminate Waste Reduce Lead Time Reduce Total Costs Through… Near real time visibility over… –Process –Materials –Cost –Equipment And…

7 People

8 Small Manufacturing Shop Features Small Headcount requires more skills agility and situational flexibility Peaks and valleys in Production Requirements. Multiple Shifts Insufficient Support Staff… Lack of development programs Lack of resources

9 REQUIRED Level of Performance CURRENT Level of Performance Options: Re-allocate Current Employees Hire Experience Hire New People Work Overtime Hire Temporary Labor Outsource Increase Productivity Change the Process (Lean/Six Sigma) Increase Capacity (Automate) Performance Gap Measures of Performance Senior Management Team Labor Resource Strategy Development Resources Required

10 Business Metrics If we fully implement People Powered Lean we will: –Reduce Lead Time to Increase Market Share –Improve Production to Headcount Ratio to Reduce Labor Cost per product and… –Improve PROFIT margin …by optimizing the plant’s physical production to labor capacity.

11 Production Identifies Requirement HR Posts Requisition & Sends to OET HR Receives Applications HR Schedules Interviews Welding Test Hiring Decision Drug Screen and Physical Applicant Given Report Date HR Admin Inprocessing 8 Hours of Video OSHA Training OJT Training Hiring Process July 2004 Offer Sent Production Interviews Cycle Time: 10.3 Weeks Cost: $2,008 per new hire (Labor costs only)

12 The Hiring Process “Opportunity for Improvement”

13 People Powered Lean Policy Statement Our plant builds to order, only producing those products they have orders for. Therefore, we must have the capability to acquire employees quickly and move them between assembly lines to support production needs. A flexible workforce drives down credible delivery time and improves our bottom line profit.

14 People Powered Lean Mission Provide our production supervisors the right people in the right numbers in the right skills at the right time to improve business performance. The Goal: An agile, competent workforce capable to move at the speed of business.

15 Concept of Operations “A Systems Engineering Approach” Phase 1 Current State & Good Ideas Phase 2 Future State Design, Plan of Action with Resources Phase 3 Creation and Development Phase 4 Pilot and Evaluation Phase 5 Production and Roll Out Phase 6 – n Continuous Improvement People Powered Lean

16 Project Scope Enrich the Lean Manufacturing Continuous Improvement Process by developing and implementing a Human Capital Management Program called People Powered Lean… Featuring: 1.Improved Employee Acquisition Process 2.Modernized Orientation Program 3.Integrated Skills Development Program (starting with Welders) 4.Embedded PPL Skills Management System

17 Acquisition of New Team Mates Goal: Create a New Hire “Pull System” –When Production needs people they “create an order” –Production demand “cues” the PPL system. –Maximize our best source of New Hires (Pipelines) –Optimize use of Government Employee Services to Outsource as much as possible –Reduces cost of Hiring by utilizing Subject Matter Experts to recruit, identify, and evaluate skills of recruits

18 College Transfers Adult Education Current Employees Community Colleges High Schools Common Skills Training Tech Schools Initially Orient, Screen & Identify Candidates Life Cycle Skills Development Building Pipelines Business Focus: - Reduce Turnover - Improve New Hire Job Match - Focus on actual job skills - Reduce Cycle Time Military State Employment Offices Temp Agencies Other Companies Interview & Skill Test Generate Labor Req’s Hiring Decision Increase CostDecrease Cost

Realistic Job Preview Link to full RJP

20 Welding Skills Assessment (Interview) Goal: Create a situation where the employee and the company can determine if the new employee has the skills and attitudes to be successful Features: 1.Plant Tour (Informal Discussion) 2.Scenario Based Welding Skills Assessment 3.Job Based Attitude Assessment 4.Hiring Decision 5.New Teammate Skills Development Plan NOTE: HR is not involved other than scheduling

21 New Teammate Orientation Goal: Create a “world class” first day. –New Employee Leaves after his first day thinking: Wow! These guys really know what they are doing. I’ve talked to the Plant Manager and my Boss. I understand what we do here and how I fit in. I know the how to work safely. OSHA Training (Plant Focused) I know what I need to do to be successful in this company I have a hard hat and a locker with my name on it I know I will get paid. I know what I need to do tomorrow. Let’s get with it!

22 Value Stream Map to Tasks List LipsAssemble/ Tack Lug and Beam Welder Weld 1Weld 2Weld 3 Fit Materials Welding Quality Assurance Use a Ruler Read Blueprint Bevel Operate Brake Operate Saw Operate Glibert Operate Lathe Burn Table Operate T1 Operate T2 Tasks Cells Value Stream Map

23 Right Person/Right Job Move the Employee in the Right Direction High Quantity Low Quality Quantity of Work Quality of Work Low Quantity High Quality Low Quantity Low Quality High Quantity High Quality New Person Go To Person What is our plan to move our people along the correct developmental path?

24 Welding Common Skills Training Goal: Using Subject Matter Experts bring all new Welders to competency on all Common Tasks Welding Trainer implements the tailored Individual Development Plan developed at the Welding Skills Interview. Computer Assisted Instruction Lesson Outline: 1.Personal Protective Equipment (PPE) 2.Reading Measurements to the 1/16” Detail 3.Parts of a Weld and Weld Bead Placement 4.Weld Quality 5.Blueprints and Weld Symbols 6.Welding Equipment/Maintenance 7.Quality Assurance 8.Product Terms and Language NOTE: Web Based so can be reviewed and pre-trained prior to Welding Skills Interview or Training. Also, post hiring support tool.

25 Cell Training Goal: Improve Welder “Time to Competency” Features: –Common Skills developed during Common Welding Training –Train “just in time and just enough” for 1 st job requirements –Uses 1 st Line Supervisors as Trainers – Feedback to assess performance and update skills development record

26 Soft Skills Development Employee Career Complex Tasks Life Cycle Skills Development Program Management Skills Basic Skills Intermediate Skills Leader Development Training Leader Skills Training Advanced Skills Initial Entry Skills Training I Mentor Skills V Competency Level Experienced Personnel Employment Skills Skills Evaluation Basic Training Practical Application/ Coaching Evaluation III II Intermediate Training Advanced Training IV Pre-Employment “A Guide”

27 Example Lifecycle Skills Development Program Pre-HireInitialIntermediateAdvancedMentor Welder Machine Operator or Other Skill Basic TABE KMSS Weld Test TABE KMSS Orientation Common Welding Training Common ESCO Training Orientation Common ESCO Training Bucket 101 Cell MFP 101 Cell Bucket 101 Cell MFP 101 Cell Master Bucket Welder Master MFP Welder Master Bucket Machinist Master MFP Machinist Master Bucket Builder Master MFP Builder Master ESCO Builder Skills Test

PPL Management System Goal: Develop Data Driven Systems to Manage the Process Features: –Monthly Reports and Management Meetings –Specific Metrics Reported: Cycle Time (Responsiveness) Touch Time (Cost) In Process Flow Turnover Absenteeism –Aligns PPL with Labor Resource Planning –Measures Head Count to Production –Predictive Measures Focus

29 The Depth Chart Visual Employee Management Tool –Employee Name and Picture –Skills they have demonstrated –Cell they are assigned too and qualified to work in. –Cell they are cross-trained in (Self Motivated Training) –Backed up by Web Based Tracking System Keith Teegarten

30 Production Identifies Requirement HR Posts Requisition & Sends to OET OET Screening HR Receives Applications HR Schedules Interviews Conducted; Welding Test Hiring Decision Drug Screen and Physical Applicant Given Report Date HR Admin Inprocessing Plant Manager Meeting Shift Supervisor OSHA Training Process/ Quality Training Hiring Process September 2004 Offer; New Hire Packet Sent Cell Training Structured Orientation and Training Process Cycle Time: 5.8 Weeks % reduction Cost: $1,420 per new hire (Labor costs only) – 29.3% reduction

31 WELDING SKILLS “End to End” Human Capital Management Step 3 Interview/ Employee Hire Step 4 Orientation Step 2 Pre Hire/ Recruit/ Assess Step 1 Generate Labor Requirement Step 5 World Class First Day

32 Final Assembly Skills Machinist Skills After the Welders… Welding Skills Blast & Paint Skills Sales & Scheduling Skills Team Leader Skills

“If I only have one guy show up for work I want to be able to build an entire bucket” Dick Dale Operations Manager ESCO Covington Strategic Goal

34 Human Capital Management Program Success Features 1.Matching Candidates Expectations with Work Realities 2.Matching the Person to the Job 3.Matching the Task to the Person 4.Providing Training, Coaching, and Feedback 5.Providing Career Advancement and Growth Opportunities 6.Making Employees Feel Valued and Recognized 7.Reducing Stress from Work/Life Imbalance and Overwork 8.Inspiring Trust and Confidence in Senior Leaders

35 Human Capital Management Challenges No silver bullet…People are a complex problem with a lot of moving parts in a dynamic business environment Our commitment is to provide some real analysis to focus our efforts…not a “Good Idea of the Day” approach. Our recommendations must make good business sense We must be realistic and “eat the elephant” one bite at a time. We must be long range thinkers… People are multi-year projects-- if fact Life Long Projects We must create a SYSTEM to: –Accomplish Big Goals and Objectives –Synchronize and integrate our Projects and Programs with the normal business operations. –Better communicate with our primary clients: the Line Managers –Give the Line Managers predictable yet responsive support Do not be a part of the problem!

Golden Rule of Leadership Treat your subordinates how you would like to be treated. …1 at a time! …and it can not occur without a conversation between the Leader and the Led about them with them! they

37 Discussion & Questions Joe Barto Training Modernization Group

Training Goals Decrease the cost of training by reducing the time to train— Decrease time to competency (improve the quality of training) – provide an early success Decrease HR Risk (Safety, Litigation, etc.) Empower the most effective and efficient training environment possible… and Expert and a Novice on the job. Improve support to 1 st Line Supervisors…the responsible person Align training capacity with Human Resources Labor Resource and Hiring Plan

39 High Performance Organizations Mission First– People Always Organizational Goals –Revenue –Productivity –Compliance –Market Share –Readiness Individual Goals –Compensation –Opportunities –Responsibility –Work Environment –Recognition Communication Leader Led Awareness Goal Alignment Individual Development Plans Individual Development Plans Individual Development Plans Resources Required