In the real world, new automation technology requires a new kind of employee, and Signicast Corp., an investment castings manufacturer based in Milwaukee, offers the perfect example of how to evolve from a plant mindset into a learning organization mindset. It’s no easy task, but the success of the company’s new Hartford, Wisconsin-based plant can be replicated at other companies.
Signicast identifies a problem and sees an opportunity.
The development of a new kind of plant employee began with a simple, but major, problem. In 1992, the company was landlocked in its Milwaukee facility; there was absolutely no more room for expansion. "If we wanted to continue to grow—and we very much wanted to—we’d have to buy some land and build," says Robert Schuemann, vice president of sales and administration, who was on the executive decision-making team for creating the Hartford facility. "We in management asked ourselves, ‘Why don’t we build what we’ve always wanted? As long as we can start from a blank sheet of paper, we can design the best facility in the world.’ And that’s what we tried to do."
Once the managers decided to build a new automated plant, they began talking to customers to learn how Signicast could improve its investment-castings service, which makes precise metal parts direct to customers’ blueprints, such as a kickstand for a Harley-Davidson motorcycle or a part for a John Deere tractor.
Customers’ principal concerns were long lead times, unreliable delivery dates and cost. Accordingly, the new plant would be designed to attack those concerns.
The strategy for cutting lead-time was to cut throughput-time (the time it takes to make a product from beginning to end). That, in turn, required converting production from batch processing (creating batches of product at intervals) to automated continuous-flow processing. "In a traditional shop, people spend most of their time trying to figure out what to do next," says Terry Lutz, Signicast’s president. "With a control system and continuous-flow manufacturing, we’re able to get the product to flow to the people. Everybody knows what to do, because that’s what comes next."
If an order starts on time, the process ensures it will ship on time, thus providing more reliable delivery dates, which customers had identified as a second need.
The basic strategy for meeting customers’ third requirement, cutting costs, was to eliminate labor. Here, Schuemann puts "eliminating labor" into perspective: "Since we were starting a new plant, we didn’t eliminate any jobs; we actually created jobs. Many people think technology eliminates jobs, but we’ve grown dramatically as we continue adapting technology to not only our Hartford facility, but also our Milwaukee facility."
Getting started meant getting workers’ input early and often.
A core group of five executives started planning the new facility to be built in Hartford, about 25 miles northwest of the existing Milwaukee facility. Every Signicast employee had an opportunity to contribute to the new facility. The core group would develop an idea and then put it out for evaluation, soliciting positive and negative reactions. "As soon as we had enough information on paper, like a blueprint or a chart or a new piece of equipment we designed, we asked for volunteers from every department at the Milwaukee facility," says Schuemann.
The volunteers would sit down, and the executives would explain to them how a piece of equipment or a cell was going to work. Then came time for employee suggestions. "Sometimes, those meetings went on for hours," says Schuemann. "Sometimes there were even multiple meetings to discuss one item. Employees would come up with suggestions; we’d implement them, and bring them back to [employees] for confirmation."
Employees even had the final word on whether the new plant project should go forward at all. Executives gave them all the information they’d need to decide—and some of it wasn’t good news. Because there was so much time and effort going into the project, the Milwaukee plant would have to tighten down and not buy some needed equipment. Supplies also would have to be kept to a minimum because of the big financial risk.
When Signicast put the decision to build the new facility to a vote, 247 of 250 employees (98.8 percent) voted to build. "That got a lot of people who were sitting on the fence really involved in helping that facility become reality," says Schuemann.
The decision wasn’t motivated by employees desiring to move to a new, automated facility either. In fact, only a handful of people, 20 to 25 out of the 250 at Milwaukee, moved to the Hartford facility. Clearly, people voted "yes" in the belief it would help the company.
An early decision was made to build the new plant as a small module, designated Hartford 1, that would handle a closely related product mix for which Signicast would develop business. If successful, Signicast would then build a second facility, Hartford 2, and develop a product mix for that module. Each module would be a stand-alone operation.
As the Hartford project progressed, Lutz and Schuemann kept Milwaukee personnel informed through quarterly meetings. They also gave progress reports on an as-needed basis.
HR staffs and trains a new kind of workforce.
taffing at Hartford had to contribute to the identified objectives of speed, low cost and flexibility. Manufacturing throughput-times were to be only three to five days vs. approximately 25 days at Milwaukee. Signicast would achieve low costs only if production was right the first time, every time. Indeed, the executive team resolved that no space would be allocated to rework. Accordingly, the executives recognized, early, that Hartford personnel would have to do more and have more responsibility than their counterparts at Milwaukee.
The basic requirements for new hires at Milwaukee are a high school diploma and a good work ethic. No specific experience is sought because Signicast provides all necessary training. For the 135 new employees at Hartford, HR sought the same basic requirements plus: a team orientation, good trainability, good communication skills, and a willingness to do varied jobs over a 12-hour shift. HR also advised Hartford applicants of the nontraditional plant culture to be established there.
Jeanne Schaeffer, personnel supervisor for both Signicast facilities, screened applicants to find those willing to try a new kind of plant culture. "We asked them how they felt about cross training," she says. "We told them upfront they’d be trained to do a variety of jobs. We asked them for their definition of teamwork to find out what they feel it’s like to be part of a team."
Schaeffer also researched the experience of other regional companies that had already implemented team staffing or 12-hour shifts because the Hartford plant would be a seven-day-a-week, 24-hours-a-day operation. Signicast belongs to a regional association of employers, Management Resources Association (MRA), that facilitates experience-sharing between its member companies.
Through MRA, Schaeffer was able to learn some tricks of the trade for alternative-scheduling policies and procedures. For instance, originally Signicast was paying employees eight hours’ wages for vacation days. MRA members advised sweetening the pay to 12 hours, because employees at Hartford are all on 12-hour shifts.
As the Hartford 1 facility was being built, Signicast executives asked for volunteers to transfer there. With Hartford only about 25 miles away, some Hartford-area residents working in the Milwaukee facility volunteered for transfers because the new facility would be closer to home for them. Others volunteered merely because of the challenge.
As equipment was being built in place or installed, HR went to its list of would-be transferees for assistance and also hired new employees from the Hartford area. As these future production and maintenance staffers worked together with the vendors’ people to help build and install the equipment and get it operational, they became very knowledgeable in the machinery they would later use.
In the case of three major equipment sets, Signicast employees even went offsite to the vendors’ training facilities. The vendors and their equipment were: Munck Automation Technology in Newport News, Virginia, which furnished a large automated storage-and-retrieval system that was the backbone of the plant’s automation system; FANUC Robotics North America in Auburn Hills, Michigan, which made the robots for the automated dipping cells; and Allen-Bradley Co./Rockwell Automation in Milwaukee, which made the programmable logic controllers enabling the plant’s equipment to function as a system. Training times at the vendors’ schools varied from a few days to a week.
Looking at the plan for 12-hour shifts quickly brought into focus the need for cross training. Executives decided that no person at Hartford would operate the same job for more than four to six hours, after which he or she would move elsewhere in the plant to work. This would make jobs more interesting, teach employees new skills and reduce injuries. In other words, Hartford was structured so that people would move to the work rather than having the work moved to the people.
Signicast creates a team-based and knowledge-based plant.
At Hartford 1, operating since 1993 (Hartford 2 is currently under construction), a team consists of everyone on a given 12-hour shift. There are two day-teams (6 a.m. to 6 p.m.) and two night-teams (6 p.m. to 6 a.m.), and each team has its own supervisor.
These Hartford teams have a large degree of both input and impact: Many policies and procedures are put to a vote as to what team members want. Because the supervisor runs the entire plant, he or she has neither the time nor the inclination to do any straw boss-type supervision. Accordingly, workers have to be both motivated and trained to do their jobs not only well but independently.
Manufacturing is organized into four cells: wax, dip, melt/rough/clean, and finishing. Every cell has a master technician, the expert for that cell’s operations, who stays within the cell. All other employees have the same title of technician. The technicians operate equipment, inspection devices and other aspects of the plant, while machines do the heavy grunt work.
The four master technicians in each team are very important. Although the supervisors have their managerial function, it’s the four master technicians who look after the details of making the plant run. They also do most of the job training and analyze how well an employee is doing his or her job.
Clearly, the effectiveness of this arrangement depends on people having multiple skills. The right kind of people must be in place, or the system doesn’t work. Signicast managers identify these people by their willingness to work in this nontraditional environment. As Schuemann put it, they look for "people with the philosophy of working as a team. We need 25 brains, not just 50 hands. They have to think and not just perform the functions ¼ Some people don’t like the responsibility and moving around. They want to come in and just do their jobs for eight hours and leave. Well, ours is 12 hours, and you’re going to do at least two jobs and sometimes, four jobs as you go through the [shift]. We’re moving people to the work, and if job diversity is their philosophy, the people love it."
At Hartford, cross training is done on the job, alongside actual production rather than in separate classes. While some training is done by supervisors, most is handled by the master technicians, who all attend four eight-hour leadership classes upon attaining their positions.
Whenever available, the master technicians are eager to train as many people as possible because it increases their flexibility and gives them more people to draw on. "The more people who are trained, the more jobs [people] can do, the better they do those jobs, and the better off we are, so we’re very proactive on it," says Schuemann.
Schaeffer says Hartford’s empowered, cross-trained employees have a huge impact on the plant’s well-oiled operations. "Because we have more people who can do all the jobs, it’s easier to say ‘OK, today there’s a lot of work in the sandblast [area], we need more people over there to keep the product moving.’ Our flow through the plant is so much smoother."
Changing the Milwaukee workforce to match the Hartford workforce.
It was easier to develop a learning culture at Hartford, of course, because the company set it up from the beginning to be a facility of cross-trained, team-oriented, empowered employees. Now Signicast is slowly but surely developing its Milwaukee employees into a like-minded workforce. "There’s [employee] reluctance to go ahead with cross training because that’s not what people are used to," says Schuemann. "Managers realized that because of the structure, the policies and the procedures we had implemented over the years, we had trained these employees to come in and do one specific job."
To overcome that reluctance, Signicast has kept nudging employees toward training by changing the way employees are evaluated. The company set up a new pay structure to allow employees to get more money by learning more jobs. Today, employees are adapting and accepting the cross training because they’ve seen that it’s beneficial to learn more.
This new learning incentive comes in the form of the company’s programs Pay-for-Knowledge and Pay-for-Performance, created at Hartford and introduced at the Milwaukee plant in January of this year.
The Pay-for-Knowledge program is embodied in a D through A technician rating. Let’s say a new hire starts off as a Technician D, the lowest rating. As that worker learns additional jobs and more difficult jobs, he or she would move up through Technician C, then Technician B, and finally, to Technician A, with his or her salary rising accordingly.
The Pay-for-Performance program is expressed through Levels 1 through 5, with Level 5 signifying outstanding proficiency, and Level 3 signifying average proficiency. Returning to that starting technician, his or her full initial rating would be Technician D, Level 1. As that technician becomes more proficient, his or her rating would become D2, then D3 and so on, to reflect becoming more proficient at that one job.
This approach addresses the problem of a technician who wants to do only his or her job and doesn’t care to cross train. HR still rewards the technician for outstanding performance until such time as he or she realizes how income is being limited by not getting cross trained.
"When we kicked this off at Milwaukee, for the first three months, [performance] reviews were done the old way and the new way," says Schaeffer. "That way employees could see what an increase in pay cross training would mean for them."
Indeed, the dual approaches of paying for knowledge and paying for performance have proven to be effective motivators for Milwaukee employees to accept cross training. "At Hartford, the empowerment is there because it was there from the beginning," says Schaeffer. "At Milwaukee, it takes awhile for them to take on the empowerment, to know they can do it and to know they’ll be able to make a change and see it happen. But little by little it’s happening."
To facilitate the culture change at Milwaukee and to enhance what already existed at Hartford, Signicast brought in instructors from a local technical college to give 10-week team-building courses for two hours a week at each facility. The course covered habits, problem solving, team-building, diversity and other issues affecting how workers relate to their co-workers and work, and how they can solve problems as a team.
A strong work/life balance has added the finishing touch to this new kind of plant culture. For instance, the original team-manning schedule at Hartford called for three days on and three days off. The employees complained it meant sometimes having to work a portion of five straight weekends. Fortuitously, other plants in the area were using around-the-clock schedules also, and a local seminar enabled Schaeffer to learn about other schedule arrangements. Managers picked an alternative they deemed appropriate for their needs, and it was put to an employee vote. Now, every other weekend is a three-day weekend off.
Another example of Signicast’s family-friendly HR policies is the way work is scheduled around holidays. Schaeffer explains: "We shut down the whole plant the night before, at midnight, so that people who would work the night shift can be home, sleeping, and able to spend the day with their families, rather than just get off at 6 a.m., go home and be tired."
Can Signicast’s example be applied at any company? Executives there think so, as long as a company hires the right people, cross trains them and really lets them make a difference. Also crucial is a company’s total commitment, says Schuemann. "You can’t do this as some kind of fad. You really need buy-in of the management team, so you have the commitment to allow the people the time to learn on the job and to provide that training for them. And if you’re not going to do that, then don’t even get started, because the people will see right through the cross training, right away."
In the end, Signicast was able to build a new kind of workforce along with a new kind of facility because its executives realized that technology could only take the company so far—it’s people who are the real investment.
Workforce, January 1998, Vol. 77, No. 1, pp. 101-106.