1. Business Improvement Techniques Training at NMHG A Business Case William Kerr HRM

2. Contents NMHG – The Company The actual, no messing about, very scary, Business Scenario late 2008-early 2009! The Plan, why Training? The Delivery The Outcomes Thought for Today Some additional slides about HRM, RoI, Benefits of NTA & DMAIC, which you will probably not read but really ought to!

3. Overview of NACCO NACCO Industries, Inc. is an operating holding company with subsidiaries in the following principal industries: lift trucks, small appliances, specialty retail and mining. In 2010, total revenues were $2.7 billion and net income was $79.5 million.

4. NMHG Organisation NMHG designs, engineers, manufactures and sells Materials handling equipment under the Hyster® and Yale® brand names. Lift trucks and component parts are manufactured in 10 countries worldwide including, the United States, Northern Ireland, Scotland, the Netherlands, China, Italy, Japan, Mexico, the Philippines and Brazil.

5. Craigavon Market Areas Europe, Middle East and Africa 95% Americas 3% Asia Pacific 2%

6. Craigavon Plant Plant opened1981 Head count652 2011 output 15,000 Current Day rate 63 Days to build truck4 Takt Time per truck9(mins) Shift pattern3

7. 7 The Actual Business Scenario

8. 8 Total Market 2005 - 2010

9. The Plan, Why Training? Textbook response –Cut Quickly –Cut deep - especially Labour and T&D Our Response –Identify & Engage Stakeholders (Board, Unite, Employees, DEL,INI) –Reduce costs sensibly –Invest in T&D –Maintain and enhance skills for the Recovery –Focus T&D on Business Objectives e.g. Flexibility, Continuous Improvement (B-I.T) –RoI Methodology (Phillips)

10. The Delivery Business Improvement Techniques –DEL funded and delivered by SRC –Very high credibility with both Management and Employees –Compatible with our drive for Quality and Effectivity –Practical project aspect of the programme gave an immediate (and continuing) Return on Investment –Employees gained skills which compliment our Culture of Continuous Improvement and Team Work –Settled on a standard, robust DMAIC problem solving model (define, measure, analyse, improve, control) We then ‘rolled out’ the skills acquired to other Employees

11. The Delivery We initially trained 45 Employees who gained a recognised NVQ Level 2 Model is routinely utilised as an analytical approach ensuring fixes are made permanent – activities not restricted to ‘Shop floor’ 30 x Improvement projects e.g.. Yard storage of NxGen frames – 13 minutes for ‘move man’ to locate & transport frame, now down to 4 minutes. £11k annual savings

12. Poor storage of frames No FIFO 12

13. Good FIFO 13

14. Good FIFO 14

15. The Delivery. Business Improvement Teams

17. The Outcomes >130 Craigavon Employees qualified NVQ, ILM, etc Recruited over 170 people in 2011(this would have been an unmanageable number had we taken the “text book” response) Significant Intangible benefits – morale, loyalty, trust, cross functional awareness Retain key staff Able to respond to unprecedented ramp up in production

18. The Outcomes Won 3 Regional Training Awards Which show the outstanding effects and benefits as a direct result of training. Large Employer category Now is the Time category Individual category Won 2 National Training Awards Presented to entries that are exemplars of excellence. Large Employer category Now is the Time category

19. The Outcomes January 2010 30 trucks per day January 2012 90 trucks per day > 50% Reduction in NCR’s/100 trucks versus 2009 Improved Conversion Cost control Inventory Absolute Financial Variance back to <1% HRM kept his job

20. Thought for Today Apologies to Radio Ulster

27. Conclusion DEL Aim To promote learning and skills To prepare people for work To support the economy NMHG delivery >30% (and growing) of our Workforce gained an ‘applied’ Qualification Achieving an Empowered Culture of Learning and Development – ‘Employability’ Increased Workforce by 170 this year and ‘day-rate’ levels (Export) up by 200% in 2 years

28. Additional slides not included in presentation References. Phillips’ Return on Investment Model: Jack Phillips ‘How to measure training’ Ulrich HR Multiple Role Model: Dave Ulrich ‘Human Resource Champions’ Benefits of National Training Awards DMAIC Model available on request

29. Phillips ‘Return on Investment’ Methodology 1.Reaction and Planned Action of the participants to the training 2.Learning gains in skills and knowledge achieved by the participants 3.On-the-job Application applied and practiced 4.Business Impact outcomes of training in terms of Company Goals 5.Return on Investment Conservative, adjusted Conversion (monetary value) Isolate (can we trace that to the Training intervention) The model also recognises that there should be intangibles benefits that will be presented along with the RoI calculation. 29

30. Phillips ‘Return on Investment’ Methodology 30 Converting data to monetary value Tabulating program Costs Isolating the effects of training Calculating the return on investment Identifying intangible benefits Evaluation instruments Evaluation purposes Evaluation design Evaluation levels Collecting Post-program Data Significant Influences Policy Statement Procedures & Guidelines Staff skills Management support Technical support Organisational Culture

31. Phillips ‘Return on Investment’ Methodology i.Develop Objectives of Training ii.Develop evaluation Plans and Baseline Data iii.Collect Data during Training iv.Collect Follow-up Data after Training v.Isolate the Effects of Training vi.Convert data to Monetary Value

32. Isolation of Effects of Training ParticipantAnnual Improvement Value Basis for value Confidence factor Isolation factor Adjusted value A£135k Faster production of product drawings 40%80%£43k B£9.24k Reduction in overtime 100%50%£4.62k Phillips ‘Return on Investment’ Methodology

33. Ulrich Model Processes Future/Strategic Focus People Management of Strategic Human Resources Management of Transformation and Change Management of firm infrastructure Management of Employee Contribution Day-to-Day/Operational Focus

34. Ulrich Model Processes Future/Strategic Focus People Strategic Partner – Aligning H R & Business Strategy Change agent – Managing transformation and Change: Ensuring capacity for Change. Administrative Expert – regenerating organisation processes Employee Champion – listening and responding; providing resources to Employees Day-to-Day/Operational Focus

35. What are the benefits of being an NTA winner? NACCO HR Vice president visit to Craigavon on a fact finding mission based on such achievements/awards Training provider CforC, Case study on our Problem solving training European Six sigma magazine highlighted our 17% improvement in truck reliability through our award winning training programme External interest in our company, starting a benchmarking exercises/ networking Meetings Good Promotion for our organisation through DEL, press releases NTA helped towards us gaining a higher level IiP Award NTA is good supporting evidence, towards EFQM assessments 35

36. What are the benefits of being an NTA winner? Enhanced partnerships with Local colleges European Lectures visit Craigavon (benchmark) Celebrated NTA awards with Employees(Tee shirts, pens with logo) Enhanced reputation with our Company Union & Employees NTA’s have given our Employees a positive lift and reason to celebrate after such a difficult year for the company 12 months on, the NTA learning framework continues, to help guide us for future training programmes 36

37. HR Display NTA Awards