1 The Association of Manufacturing Excellence Presents…

1

The Association of Manufacturing

Excellence

Presents…

2

People Powered Lean

“Business is a Team Sport”

March 14-15, 2007

3

Or

People are Better Than Materials!

4

Core Beliefs• Start with the end in mind! …Take a Systems Approach

• Be in the business of making hard things easy…not easy things hard.

• 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…and our people’s vote counts more than ours.

• Our People’s “Vote” counts more than ours

• Every organization has a limited bandwidth for change

• Culture vs. Change and Leading

• Turf, Ego, and $$$ and the end of the day it is about…

5

Business is a Team Sport• Think Hard: Are we organized for success and doing

the right things?– Right Plays– Right Rules– Right Positions

• Work Hard: Are we executing the plays? – Putting the right people with the right skills in the game to run

the plays – Motivating them to produce and Win!

• Talk: Communicate– Everything is constantly changing– Providing Aggressive Leadership

6

Army Basketball Team 1976-1977

7

Task Force 2-4 Cavalry Tactical Operations Center TeamFeb 21, 1991 - Northern Saudi Arabia

8

Workshop Learning Objectives

1. Allow you to “see” People from a business perspective

2. Understand and Define the Lean Value Stream from a People Perspective

3. Link your People programs to the business4. Understand how Senior Leaders evaluate

People investments5. Learn from others like you6. Take a Good Idea home with you…

9

The Lean House without Waste

10

Session Feedback

Start with the end in mind!

11

Business Card Exchange

1. Position on the Team?

2. Type of Company? Manufacturing; Services; Other

3. Product?

4. Number of Employees?

5. Number of Locations?

12

AgendaMarch 14, 20078:00 – 8:20 Welcome

8:20 – 9:45 “Seeing the Big Picture”: Organizing for Success-- The Theory 9:45 – 10:00 Break 10:00 – 11:00 Recruiting: Finding the Right Athletes (Scenario Exercise)

Trying Out: Verifying Skills and AttitudeMaking the Team: Right Fit; Finding Your Seat on the Bus

11:00 – 11:30 STIHL Case Study: Simon Nance11:30 – 12:00 Lunch12:00 – 1:00 Pre-Season Training

Building Your Depth ChartImproving the Performance of Your Current Team.

1:00 – 3:00 Playing to Win Leaders Executing the Plays: Current Leader; Current Job (Scenario Exercise)Building Bench Strength: Future Leaders (Scenario Exercise)

3:00 – 3:15 Break3:15 – 4:00 Speeding the Lean Journey: Keith

Hornberger (Lead Sensei and 6 Sigma Black Belt)4:00 – 5:00 Keeping Score: Putting it All Together

Wrap Up and Closing

13

8:00 – 8:30 Welcome: Bruce Bolton, Operations Manager, Creative Memories

8:30 – 10:30 Creative Memories Plant Tour

10:30 – 11:00 Conference Wrap Up

11:00 – 12:00 Lunch

Optional1:00 – 6:00 Golf Outing

AgendaMarch 15, 2007

14

Today we will generate a lot more questions than

answers…

….and that is OK

15

Take a Blue Slip

Our Way to Communicate and Facilitate Our Journey!

16

Take a Blue Slip

What do you want to learn today?

17

Break-Out Product Information

1. Realistic Job Previews

2. Training Program Design

3. Electronic Performance Support Module Development

4. Learning Management Systems

5. Depth Charts to Manage “Right Person; Right Job.”

6. Deriving Job Descriptions from Value Stream Maps

7. Attrition Analysis

8. Building Human Capital Budget Request

9. Aging of the Workforce

10. Others:

Name:

Company:

18

Getting Out of the Box… Big Picture Thinking!

19

REQUIRED Level of Performance

CURRENT Level of Performance

PerformanceGap

Mea

sure

s of

Per

form

ance

…It is All About Business Performance!

ResourcesRequired

20

Business MetricsIf we completely align our Lean Journey with our People SYSTEMs we will:

– Improve Quality– Improve Production to Headcount Ratio thus Reducing Labor

Cost per product – Reduce Defects through focused Continuous Improvement– Reduce Lead Time to Increase Market Share – Increase production capacity and…– Improve PROFIT margin

…by optimizing the plant’s physical production capacity to our production process.

21

Business of People

The Mission:

Provide Leaders with right people in the right numbers, in the right skills, at the right time, at the right cost to meet business needs.

The Goal:

An agile, competent workforce capable to move at the speed of business.

22

Alternative Roles for Corporate Learning1. Training

Did the Learner accomplish the Learning Objectives efficiently?Business Metric: Time Invested vs. Skills Outcome

2. Performance ImprovementDid the Leader receive “improved job performance” as a result of

the investment?Business Metric: Overhead Cost to Improved Job Performance

3. Human Capital ManagementDo we have a system to provide the Manager’s with Right People

in the Right Numbers with the Right Skills at the Right Time?Business Metric: Headcount to Productivity

4. Organizational EffectivenessAre we organized, labor resourced and costed correctly to accomplished the business objectives? Business Metric: Full Time Equivalents vs. Profit Margin

23

Team SportValue Stream

1. Organizing for Success

2. Recruiting

3. Trying Out

4. Making the Team

5. Pre-Season Training

6. Playing to Win

7. Keeping Score

24

Business is a Team Sport! Building High Performance Teams

1. Organizing for Success: Aligning Production Process with People

2. Recruiting: Finding the Right Athletes3. Trying Out: Verifying Skills and Assessing Attitude4. Making the Team: Best Player or Best Athlete: Right Fit?5. Pre-Season Training:

a. Learning Your Position and the Depth Chart b. Developing Leaders at every Level c. Current Workforce Skills Development: Building Benchstrength

6. Playing to Win: a. Leaders emerge: Leader Performance Improvement: Identifying and

empowering leaders with the right behaviorsb. Teams play smart and hard: Continuous Improvement

7. Keeping Score: How do you know you are Winning?

25

SS

OM

1S

MU

NE

GM

OM OM

SSSS

1S 1S

GT GT

NE

Organizational Scheme

GM: General Manager 10OM: Operations Manager 30SS: Shift Supervisor 601S: 1st Line Supervisor 160MU: Make Up Supervisor 100GT: Go To Employee 500E: Employee 1600NE: New Employee 600

Vertical Dyad Linkage Based Upon a Total Operational Headcount of 3060

26

College Transfers

Adult Education

Current Employees

Community Colleges

High Schools CommonSkills

TrainingTech Schools

Orient,Screen

&Identify

Candidates

Building PipelinesRecruitingTrying Out

Making the Team

Military

State Employment Offices

Temp Agencies

Other Companies

Interview&

AssessSkills

GenerateLabor Req’s

HiringDecision

Increase Cost Decrease Cost

1st JobSkills

Development

27

Soft Skills Development

Career

Complex Tasks

Life Cycle Skills Development Program Management

Skills

Basic Skills

Intermediate Skills

SupervisorDevelopment

Training

Supervisor Practical

Application/Evaluation

Advanced Skills

Initial Entry

Skills Training

I

MentorSkills

V

Competency Level

Experienced Personnel

Employment Skills

Skills Evaluation

BasicTraining

Practical ApplicationCoaching/ Evaluation



III

II

IntermediateTraining

AdvancedTraining

IV

Pre-Employment VI

28

Leader Development Program

Current State

• Leader Development conducted informally or not at all.

• Usually best operators promoted to Supervisors

• Experience gained over time• Many training courses available

but not mapped to critical tasks.• Undocumented program that is

dependent on individual Management implementation

• On the Job Training is ad hoc with few Training Materials available on the Job Site.

Perfect State

• Systematic Approach to Leader Development

• Manager’s are Responsible as the Primary Trainers of their Supervisors

• Manager’s are responsible to tailor skill development to each individual supervisor and each operational area.

• Leader Development Programs mapped directly to Performance Review System

29

Bench Strength is Working the Blue Lines

Operations Manager

Current Shift Supervisor – Future Operations Manager

Current Shift Supervisor – Current Job

Current 1st Line Supervisor – Future Shift Supervisor

Current 1st Line Supervisor – Current Job

Current “Go To” Operator – Future 1st Line Supervisor

30

Putting It All TogetherWhen the CEO/CFO say…

“OK… we see all the pieces, we understand the problem, we know this critical to our business…”

“How much money do you need and when do you need it, and how will we know it made our business better?”

31

Human Capital ManagementSuccess Principles

1. Business Focus (People + Process + Material = Products)2. Senior Leader “Hands On” Business with embedded Metrics and

Regular Reporting3. Centralized Planning while Executing Program as close to the

work area as possible. 4. Managers are responsible and accountable for the performance

and development of their people…5. Be the P&L Responsible Managers best resource for support by

providing them the processes and programs to do better meet their business objectives.

6. Do not be a part of the problem by putting HR mechanics ahead of business support.

7. Constantly Link the Corporate Strategy to the Human Capital Management Program…be proactive

32

Human Capital ManagementProgram Design Challenges

1. No silver bullet…Big Problem with a lot of moving parts in a dynamic business environment

2. Focused effort based upon real analysis…not a “Good Idea of the Day” approach.

3. Recommendations must make good business sense

4. Design Executable Programs and be good Program Managers (Cost, Schedule, Quality)

5. Be realistic in execution and “eat the elephant” one bite at a time.

6. Focus on PEOPLE first; then FTE.

7. Requires long range thinking… People are multi-year projects-- if fact Life Long Projects

8. Do not be a part of the Profit and Loss problem!

33

What group represents the biggest risk for the future of your business?

(Rank Order with 1 the Highest Priority)

__ Hourly Workforce__ 1st Line Supervisors__ Plant Middle Management__ Plant Managers__ Executive Staff__ Administrative Support staff__ Temporary Workforce

34

Which part of the People Life Cycle requires the most urgent attention?

(Rank Order with 1 the Highest Priority)

__ Organizational Scheme

__ On Boarding (e.g. Acquiring New Employees)

__ Incumbent Production Workforce

__ Line Supervisors Performance Improvement

__ Executive Leadership Development Program

35

Workshop ParticipantSnapshot

“Take a Blue Slip”

• Title:

• Company:

• Type of Business:

• #1 Challenge:

36

Organizing for Success

Theory and Application

37

People Powered LeanAssumptions

• Sound Business Model: Crisis?

• Value Stream Map is Present

38

Business ProcessSales/Quoting

CustomerOrders

ReceivingComponents

Assembly

Finished GoodsProcessing

Sampling

Scheduling

Planning

Staging

Sequencing

PurchasingComponents

Pulling Components

Sterilizer

Ship toDistributor/Customer

39

Value Stream Map

SHIP

CUSTOMER

IDEAL STEEL

Plant 3

WAREHOUSE(CASTINGS

BUSHINGS & BOSSES)

BURN

LIP ASSEMBLY

BRAKEBEVEL BEAMS

LUG TACK

SIDE ASSEMBLYROUNDO

SIDE REINF.

DAYS5

LINE 1

LUG CONNECTION

LINE 2

LUG CONNECTION

LINE 1

TACK

LINE 2

TACK

LINE 1

WELD 1

LINE 2

WELD 1

LINE 1

WELD 2

LINE 2

WELD 2

LINE 1

WELD 3

LINE 2

WELD 3

BORE

ADAPTERS

DAYS5

FINAL ASSEMBLY/BLAST/ PAINTFIFO

BOSSES

DAYS10

POINTS

DAYS5

MISCELLANEOUSBUCKETS

Cycle Time Mins45

Production mins/shift Mins540

Operators Staff1

Cycle Time Mins90


Production shift Shfts1

Operators Staff1

Cycle Time Mins108



Operators Staff1

Cycle Time Mins108


Cycle Time Mins90



MRP

ProductionControlSTEEL SUPPLIER

BUCKETS DAYS11

SHROUDS

DAYS5

BUSHINGS

DAYS5

Cycle Time Mins50

Uptime (%) %95

Operators Staff2

Cycle Time Mins45


Cycle Time Mins90



Operators Staff2

Cycle Time Mins45



Operators Staff2

Cycle Time Mins45


Operators Staff2

Production shift Shfts1 Production

shift Shfts1


BARREL

ESCO SALES

FORECAST (30-60-90)

FAX/SALE ORDER

FLOOR SHOP SCHEDULER

OXOX

FORECAST (30-60-90)

PURCHASE ORDER

FORECAST (30-60-90)

FIRST SHIFT PROCESS03/23/04

PURCHASE ORDER

Operators Staff1

Operators Staff1


A10

A20

A30

A40

B10 B20 B30 B40 B50

C10 C20 C30 C40 C50

D10

F10 F20 F30

Frequency

PER DAY1

Frequency

PER WEEK1

Frequency

Per Week2

Frequency

Per Week1

Cycle Time Mins90



Operators Staff1

Cycle Time Mins90



Operators Staff1

Cycle Time Mins90



Operators Staff1

Cycle Time Mins108



Operators Staff1

Cycle Time Mins108



Operators Staff1

Cycle Time Mins108



Operators Staff1

Operators Staff1


5.00 DAYS

50.00 Mins

5.00 DAYS

108.00 Mins

0 DAYS

108.00 Mins

0 DAYS

Uptime (%) %98

108.00 Mins

10 DAYS

108.00 Mins

0 DAYS

108.00 Mins

0.50 DAYS

90.00 Mins

5.00 DAYS

45.00 Mins

0 DAYS

WIP

DAYS.5

PLATE STEEL

DAYS5

4

WKS

DAYS

2

DAYS

SHIFTS

9.25

SHIFTS

HRS

60

HRS

Mins

60

MINS

Secs

F40


Develop In-Line Boring Capability

Completed Parts from Ideal

Develop Kanban Replenishment

SystemDevelop Kanban Replenishment

System


System

Reduce Plate Inventory by 20%


System

Develop Misc. Flow Line

Add Welding Capability at Final

Assembly

Develop New Scheduling Tools for

Flow Lines

Frequency

Per Week1

WIP

DAYS.5

WIP

DAYS.5

Frequency

PER DAY1

Operators Staff3


WIP

DAYS.5

WIP

DAYS.5

0.50 DAYS

45.00 Mins

TOTALS

Non-Value Days26.00

Value-Added Mins770.00

Operators Staff25.00

T10

Shift Shfts11

Buckets Shfts5 Buckets Shfts5 Buckets Shfts5

Buckets Shfts11

Buckets Shfts11

Buckets Shfts5Buckets Shfts5

Buckets Shfts6Buckets Shfts6 Buckets Shfts6 Buckets Shfts6 Buckets Shfts6

Qty/Assy (pcs) Shfts11



2

Shfts

DAYS

LARGE BUCKETS

Operators Staff2


E10

2nd SHIFT ONLY

How do we create value?

40

Value-Adding Activities….transform materials and

information into products the customer pays for

Non-Value-Adding Activities….consume resources, but don’t

directly contribute to the product and/or the customer

Non-Value-Adding but Required….consume resources, but are required

by government regulation or company policy

41

Team Sport: Defining Positions

MachineCustomer Order and Materials

Finished Productsand Satisfied Client

Sales Representative

Material Handler

Process Technician

Machine Operator/Packer

Quality Control

Mold Maker &Maintenance

Press Maintenance Technician

Mold Setter

Assembly Operator

Mold/Part Designer

42

Value Stream to Cell Map

SHIP

CUSTOMER

IDEAL STEEL

Plant 3

WAREHOUSE(CASTINGS

BUSHINGS & BOSSES)

BURN

LIP ASSEMBLY

BRAKEBEVEL BEAMS

LUG TACK

SIDE ASSEMBLYROUNDO

SIDE REINF.

DAYS5

LINE 1

LUG CONNECTION

LINE 2

LUG CONNECTION

LINE 1

TACK

LINE 2

TACK

LINE 1

WELD 1

LINE 2

WELD 1

LINE 1

WELD 2

LINE 2

WELD 2

LINE 1

WELD 3

LINE 2

WELD 3

BORE

ADAPTERS

DAYS5


BOSSES

DAYS10

POINTS

DAYS5


Cycle Time Mins45

Production mins/shift

Mins540

Operators Staff1

Cycle Time Mins90


Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins108


Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins108


Mins540

Cycle Time Mins90


Mins540

Production shift

Shfts1

MRP


BUCKETS DAYS11

SHROUDS

DAYS5

BUSHINGS

DAYS5

Cycle Time Mins50

Uptime (%) %95

Operators Staff2

Cycle Time Mins45


Cycle Time Mins90


Production shift

Shfts1

Operators Staff2

Cycle Time Mins45


Mins540


Operators Staff2

Cycle Time Mins45


Operators Staff2

Production shift

Shfts1Production

shiftShfts1

Production shift

Shfts1

BARREL

ESCO SALES

FORECAST (30-60-90)

FAX/SALE ORDER


OXOX

FORECAST (30-60-90)

PURCHASE ORDER

FORECAST (30-60-90)


PURCHASE ORDER

Operators Staff1

Operators Staff1

Production shift

Shfts1

A10

A20

A30

A40

B10 B20 B30 B40 B50

C10 C20 C30 C40 C50

D10

F10 F20 F30

Frequency

PER DAY

1

Frequency

PER WEEK

1

Frequency

Per Week

2

Frequency

Per Week

1

Cycle Time Mins90


Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins90


Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins90


Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins108


Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins108


Mins540

Production shift

Shfts1

Operators Staff1

Cycle Time Mins108


Mins540

Production shift

Shfts1

Operators Staff1

Operators Staff1

Production shift

Shfts1

5.00 DAYS

50.00 Mins

5.00 DAYS

108.00 Mins

0 DAYS

108.00 Mins

0 DAYS

Uptime (%) %98

108.00 Mins

10 DAYS

108.00 Mins

0 DAYS

108.00 Mins

0.50 DAYS

90.00 Mins

5.00 DAYS

45.00 Mins

0 DAYS

WIP

DAYS.5

PLATE STEEL

DAYS5

4

WKS

DAYS

2

DAYS

SHIFTS

9.25

SHIFTS

HRS

60

HRS

Mins

60

MINS

Secs

F40


Mins540Develop In-Line Boring Capability




System


System



System



Assembly


Flow Lines

Frequency

Per Week

1

WIP

DAYS.5

WIP

DAYS.5

Frequency

PER DAY1

Operators Staff3

Production shift

Shfts1

WIP

DAYS.5

WIP

DAYS.5

0.50 DAYS

45.00 Mins

TOTALS

Non-Value Days26.00



T10

Shift Shfts11


Buckets Shfts11

Buckets Shfts11






2

Shfts

DAYS

LARGE BUCKETS

Operators Staff2

Production shift

Shfts1

E10

2nd SHIFT ONLY

Lips Assemble/ TackLug and

Beam WelderWeld 1* Weld 2* Weld 3

Production Cells

Who is going to do it?

43

Horizontal Labor Planning Considerations

• Job Complexity• Production Tempo• Level of Manual Labor• Level of Intellectual Labor• Quality Standards• Availability and Skill Set of Labor Pool• Availability of Leaders

(Leader to Led Ratio)

44

Vertical Labor Planning

Production Workforce

SeniorManagement

1st Line Supervisors

P & L Responsible Leaders

Machine 1 Machine 2 Machine 3 Machine 4 Machine 5

Sales EngineeringIT/HR/

Accounting

45

Creating the Conditions for Success

• Owner: Creating the Business Model (Profit and Loss)

• General Manager/Front Office: Runs the Business

• Head Coach: Decide the Game Plan (Players and the Plays)

• Coordinators: Call the Plays

• Coaches: Ensures the Players know how to run the Plays

• Leaders: Read the current situation and execute the Plays

• Players: Execute the Plays

46

Vertical Labor Planning Considerations• Span of Control (Leader to Led Ratio)• Physical Environment• Tempo• Hourly or Salaried• Complexity• Same Labor Categories or Mixed• IT/ERP System Granularity• Support Staff Availability (Production Control,

Planning, Quality Control, Engineering, Training, HR, etc.)

47

Business is a Team Sport• Think Hard: Is our business model sound, are we

organized for success and doing the right things?– Right Plays– Right Rules– Right Positions

• Work Hard: Are we executing the plays? – Putting the right people with the right skills in the game to run

the plays – Motivating them to Produce and Win!

• Talk: Communicate– Everything is constantly changing– Providing Aggressive Leadership

48

Business is a Team Sport Mission

Provide our leaders and teammates with the tools, skills, training, and procedures to

improve our production processes through continuously identifying and eliminating waste.

49

Lean Goals• Improve Quality• Eliminate Waste• Reduce Lead Time• Reduce Total Costs

• Process • Materials• Cost (People)• Equipment

Through Near Real Time Visibility over:

50

A SYSTEM to Align People to Process obtaining

Employee Ownership

ProcessProcess MaterialsMaterials CostCost EquipmentEquipment People

People Powered Lean:

51

Linkage to Business Outcome• Ownership is the Outcome• Engagement is the Behavior• Lean is the process• Lean training provides the skills at every level.

PPL System

Metrics + Process + Training + Resources =

Expected Business Outcomes

52

Business Goals• Create an atmosphere of ownership• Identify and close productivity gaps to increase

profitability• Create a condition that produces “First Time Quality”• Continuously improve our safety rates• Improve customer satisfaction through increased

responsiveness to critical customer concerns• Continuously identify and eliminate waste

53

Employee Ownership Requires Trust

• Leaders will provide:– Clear direction– Appropriate

Resources– Expert Advice– Feedback and

Coaching– Growth Opportunities– Reward and Praise– Fair Treatment

• Led will:– Treat the company

like their own– Hold each other

accountable for doing the right thing

– Give early warning of problems

– Have the courage to ask questions

54

Organizational Goals– Cost– Schedule– Quality– Safety

Individual Goals– Compensation– Opportunities– Responsibility– Work

Environment– Recognition

Communication

Leader Led

AwarenessGoal Alignment

LedLedLed

Goal Alignment

Can only occur when there is a conversation between the Leader and the Led about the Led!

55

Gallup Path to Business Success

EngagedEmployees

EngagedCustomers

TheRight Fit

Real ProfitIncrease

StockIncrease

PeopleEnterHere

Business Success Measures: Productivity, Profitability, Employee Retention Customer Satisfaction

IdentifyIndividualStrengths

Great Leaders

SustainableGrowth

56

Finding the Right Questions to Assess Leader Performance

Project: • Human Sigma: Gallup conducts 30 years of research (70’s, 80’s, 90’s)• Thousands of different questions • More than 1 million employees Task:• Identify the factors common to the most productive workplaces• Identify the best questions to measure these factors• Validated through meta-analysis

Result:• Q12 Survey

57

Are my needs being met?SA/A/D/SD Answers:

1. Do I know what is expected of me?2. Do I have the materials, equipment, and skills I need to do my work right?3. Do I have the opportunity to do what I do best everyday?4. In the last seven days, have I received recognition or praise for good work?5. Does my Supervisor, or someone at work, seem to care about me as a

person?6. Is there someone that encourages my development?7. At work, my opinions seem to count?8. The mission or purpose of my company makes me feel my job is important?9. My associates or fellow employees are committed to doing quality work?10. I have a best friend at work?11. In the last six months, someone at work has talked to me about my progress?12. This last year, I have had opportunities at work to learn and grow?13. Do I trust my leader?

Source: Gallup

58

Signs of Engaged Employees

• Psychologically committed to the company• Consistent levels of High Performance• Innovative and a drive for efficiency• Intentionally build supportive relationships• Clear about role outcomes expected• Passionate, high energy, and enthusiastic• Never run out of things to do• Loyal to workgroup and company• Broaden what they do and build on it• Positive constructive criticism

59

Signs of Not Engaged Employees

• Meeting the Basics• Confusion or inability to act with confidence• Low risk response• No real sense of achievement• Making up their own game• Not always committed• Show negativity but not underground

60

Signs of Actively Disengaged Employees

• Physically present but psychologically absent• “What can I take” rather than “what can I give”• Share unhappiness about work with peers• “I’m OK but everyone else is not”• Service prevention rather than service provision• Not productive but always has excuses• Inability to move from problem to solution• Normal reaction starts with resistance• Low commitment to company• Might sabotage or manipulate solutions• Isolation, low trust

61

Can we Can we prevent this prevent this

type of type of waste from waste from happening?happening?

62

Opportunity for Improvement• 25% of the working population are ignored by their

supervisor

– Actively Disengaged: 40% of them are in their workplace– 58% are Not Engaged – 2% are Engaged

Source: Gallup

63

Example

Employee HandbookWelcome to Nordstrom

WE’RE GLAD TO HAVE YOU WITH OUR COMPANYOur number one goal is to provide outstanding customer service.

Set both your personal and professional goals high.We have great confidence in your ability to achieve them.

So our employee handbook is very simple.We have only one rule.......

The other side of the card says:

One RuleUse good judgment in all situations.

Please feel free to ask your Department Manager, Store Manager,or Human Resource office any question at any time.

- From “The Speed of Trust,” By Stephen Covey and Rebecca Merrill

64

Business Performance Leading Indicators

1st Line Supervisors: – Responsible for producing “Customer Value”– Are held accountable for production requirements– They are responsible for getting “8 for 8” from the

hourly workforce– Usually in their first leadership position– Work all shifts– Blending of technical and people skills is required– Performance is directly related to their Manager’s

ability to lead them.

65

Vertical Dyad Linkage TheoryThe Linkage Power Depends On…

1. Leaders Managing Personal Relationships– Vertical Dyad: Leader Led x number of direct reports– Employee performance, productivity, and engagement

depends on their relationship with their IMMEDIATE Supervisor

2. Leader and Led continuously Creating Shared Goals.– The Employee’s Goals and Needs– The Organization’s Goals and Needs as articulated by the

Supervisor– Requires continuous Goal Alignment within Developmental

Plans and continuous Feedback

66

Group Breakdown

In Group: – High Trust

– Good Communications

– “Let ‘em Run” Goal Setting

– Low Task Definition Needs

– High Relationship Needs

Led(M)

Leader

Led(I) Led(O)

Out Group: – Low Trust

– Stressful Communications

– “By the Numbers” Goal Setting

– High Task Definition Needs

– Low Relationship Needs

67

High Performing Team Development Strategic Goal

• Increase the In-Group• Decrease the Out-Group

Facts:– Out Group is Actively Disengaged or Physically Present but

Psychologically Disruptive. Unhappy and Insist on sharing their unhappiness with others. Doing positive harm to the organization.

– Little movement from Out to In– More movement from In to Out due to Leaders breaking the Goal

Alignment Contract/Agreement

68

Middle Group The Key to Success

1. New Employees make a decision within first 48 - 72 hours from introduction to immediate supervisor.

2. Not Engaged Employees are those “…just putting in my time” but not actively doing harm. They can be influenced by Leaders.

Strategy:Focus on the Middle Group to move them into the In Group

as quickly as possible.

69

Organizational Scheme Analysis

Current State

70

Org Chart

71

SS

OM

1S

MU

NE

GM

OM OM

SSSS

1S 1S

GT GT

NE


GM: General ManagerOM: Operations ManagerSS: Shift Supervisor1S: 1st Line SupervisorMU: Make Up SupervisorGT: Go To EmployeeE: Employee NE: New Employee

Vertical Dyad Linkage

EE

72

SS

OM

1S

MU

NE

GM

OM OM

SSSS

1S 1S

GT GT

NE


GM: General ManagerOM: Operations ManagerSS: Shift Supervisor1S: 1st Line SupervisorMU: Make Up SupervisorGT: Go To EmployeeE: Employee NE: New Employee

Vertical Dyad Linkage

Directed Tasks

Self Motivated Tasks

EE

73

Who gets to Play?Matching Leaders to People to Jobs

Considerations1. Past

Performance 2. Technical

Experience3. Strengths and

Weaknesses4. Work Area

Complexity5. Leader-to-Led

Ratio6. Lead Times7. Crew Make-Up8. Shifts

PLANNING

M1S

M

PC SS

1S 1S

GTM GTM

M

OM

NE NE

74

MUF

M

PC MPL

WF FF

GTM GTM

M

PLANNING

MPO

MUF

M

PC MPL

WF FF

GTM GTM

M

MUF

M

PC MPL

WF FF

GTM GTM

M

MUF

M

PC MPL

WF FF

GTM GTM

M

MUF

M

PC MPL

WF FF

GTM GTM

M

MUF

M

PC MPL

WF FF

GTM GTM

M

Example: Running Your Business Chart

Every Bubble has a Name!…linked to their Developmental Plan

75

The Effects of Selection and Supervisor Training on Turnover

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunQua

lity/

Fit R

atin

g (4

-pt.

Scal

e) A

nnua

l Tu

rnov

er (a

s de

cim

al)

Overall Quality (Leading Indicator) Fit With Supervisor (Leading Indicator) Annualized Turnover (Lagging Indicator)

Quality

Fit withSupervisor

Turnover

Source: The Gabriel Institute (2006, June) www.thegabrielinstitute.com From Maximizing Human Capital

http://www.thegabrielinstitute.com/

76

Core Daily Business Activity

Foreman Provide:Clear Goal Definition Materials and Equipment to accomplish the task People with the Right Qualifications and Skills Leadership: Organizational Energy and Momentum

Success = Job Packages Completed within Cost, on Schedule, Safely, with no Re-Work

Foreman

JobPackages

Materials

People

Products

77

Core Business Data Element

Project Plansand

Labor Estimates

Assigning Work to Crew in Discrete Increments and Measuring Goal Accomplishment

LeaderAssigning

Charge #s &Approving

Time

78

Planning & Execution

• Job Packages– Job Description– # Hours Planned– Materials Available– ERP Tools

• Worker Capabilities– Qualifications– Capacity– Skills– Physical Limitations

ForemanCost, Schedule, Quality, Safety

79

DP

PSP

TLMU

SDO

DW DM

PMPM

PSP PSP

TL TL

CRA


SDO: Senior Director, OpsDP: Director of ProductionDW: Director of WarehousingDM: Director of MaintenancePM: Production ManagerPSP: Production SupervisorTLMU: Teal Leader Make-UpTL: Team LeaderSU: Set UpBU: Back UpCRA: Clean Room AssemblerNCRA: New Clean Room Assembler

NCRA

PSP

SU BU

CRANCRA

TL

Does it Support the Core Daily Business Activity?

80

1. Evaluate Responsibilities of each level2. Look for Common Themes that flow

from level to level3. Look for Unique Responsibilities on

each level4. Evaluate interactions between Levels

5. Evaluate Planning Horizons at each level6. Evaluate Communications Techniques at

each level (Message and Method)7. Remove echelons one at a time and re-

assess.

Analytical Methodology

81

Scope of Responsibilities

Team Leader:• Works on a Process• Planning Horizon 1 Day• Focuses on today and working with

People• Quality • Speed• Communicates Verbally to Team• Communicates Verbally and via

Data System to Supervisors and Managers

82


Supervisor:• Runs multiple Teams/Processes• Planning Horizon 1-2 Days• Focuses on near term• Allocates People across Teams to

increase speed• Monitors daily workflow• Communicates Verbally

83


Production Manager:• Manages the System• Planning Horizon: Up to 2 weeks• Develops Supervisors and Team Leaders• Levels the Lines, Maximizes Productivity• Monitors and determines headcount• Communicates Verbally and Electronically• Accesses and analyzes metrics to

manage Production Flow.• Maintains Situational Awareness

84

TASK VPO MO PS PSPC LOLeads X X X X X

Knows Customers & Suppliers (Understands the Value Stream)

X X X X X

Stewardship of Assets X X X X X

Communications X X X X X

Continuous Improvement X X X X X

Self Development X X X X X

Synthesis of the Asset X

Sync of Strategic Operations X

Balance Production with Costs X

Team Building X X X

Identify & Remove Barriers X X X

Development of the Workforce X X X X

Understands the Process X X X

Strategic Planning X

Knows Business Systems Tools X X

Expense Management X

Prioritization X X

Use the Computer X

Fix Today’s Problems X

Knows the Job X

Knows the People X

85

THINK Strategically…Continuous Improvement

“Changing the Conditions”

…ACT Tactically: “Day to Day” operations to meet

business objectives

1. Cost2. Schedule3. Quality4. Safety

86

Apollo 13

Houston… We Have a Problem! Example

87

Continuous ImprovementOver Time

Current State

FutureState

PerfectState

TIME

Success = Job Packages Completed within Cost, on Schedule, no Re-Work, Safely

88

Leader Lanes

Time

Current State

FutureState

PerfectState

Leader? Leader? Leader? Leader? Leader?

Leader?

Foreman

JobPackages

Materials

People

Products

89

Summary• Start with the end in mind…• Organization Charts show reporting relationships• Organizational Scheme describe how you run

your business and it changes by itself• Is there Waste in your organizational scheme?• Do your leaders know their lane and more

importantly does everyone else?• Are you Organized for Success?• You MUST get this right!

90

Break

91

The On Boarding ProgramRecruitingTrying Out

Making the Team

Getting the Right People on the Bus…

92

Our People’s Vote Counts More…• Create a system that enables both the company and

the applicant to make a “Win-Win” commitment… – First day should be a “commitment” day; not a “let’s see how

this goes day”

• It is Management’s responsibility to create an environment for our employees to be successful…– Not an environment that encourages them to fail

93

Are you forecasting your labor as you forecast your business?

Production needs drive labor requirements…

• How far out are you looking?• What skills will you require? Current or New?• Lead Time from labor requirement to

competency?• Who is responsible for managing it?• What models do you use? • What options do you have?

94

REQUIRED

CURRENT

Options:• Re-allocate Current Employees• Hire Experience • Hire New People• Work Overtime• Hire Temporary Labor• Outsource• Increase Productivity• Change the Process (Lean)• Increase Capacity (Automate)M

easu

res

of

Perf

orm

an

ceLabor Acquisition Options

Best Recruiting Pipelines?

ResourcesRequired

95

Four Keys to On Boarding Success

1. Identify the best candidates for jobs

2. Select the best candidate; then teach them what you expect from them and what they can expect from their leader

3. Provide technical training to build self-confidence and greater job proficiency as they grow (Career Path)

4. Leaders manage the process based upon predictive, production-based systems and reliable data

96

Focus on New Employees

97

College Transfers

Adult Education

Current Employees

Community Colleges

High Schools CommonSkills

TrainingTech Schools

Orient,Screen

&Identify

Candidates

Building PipelinesBusiness Metrics:

- Decrease Cost of Hiring- Reduce Attrition (pre- and post- hiring)- Reduce Hiring Cycle Time- Improve New Hire Integration - Improve New Hire Job Performance- Decrease New Hire Time to Competency

Military

State Employment Offices

Temp Agencies

Other Companies

Interview&

AssessSkills

GenerateLabor Req’s

HiringDecision

Increase Cost Decrease Cost

1st JobSkills

Development

98

Employee AcquisitionCreate a New Hire “Pull System”

– When Production needs people they “create an order”– Production demand “cues” the Employee Acquisition SYSTEM.– Reduce cost of Hiring by utilizing Subject Matter Experts to recruit,

identify, and evaluate the skills of applicants.

– Optimize the use of Government Provided Employee Services to Outsource as much as possible.

– Reduce hiring cycle time to improve responsiveness.– Reduce touch time to reduce cost.

99

ForecastBy Labor Category

Minimum: ___

Maximum: ___Generate

Labor Req’s

What is your Labor Forecast?What is your capacity to on board new employees?

100

ExampleHiring Forecast and Schedule

Month # Hires

July: 10

August: 5

Sept: 0

Oct: 10

Nov: 5

Dec: 0

Total: 30

101

Total Turnover Chart

102

Lean Enterprise Initiative

Continuous improvement in products and processes to provide customers with

superior quality, value and speed.

(Cultural Change)(Never Ending Journey)

(All Aspects of the Business)

103

Begin with the end in mind…

“Build more quality steel products faster to improve market share and increase profit.”

104

Lean Enterprise Goals• Improve Quality• Eliminate Waste• Reduce Lead Time• Reduce Total Costs

Through…• Near real time visibility over…

– Process– Materials– Cost– Equipment

And…

105

People

106

People Powered

Lean

Concept of Operations“A Systems Engineering Approach”

Phase 1Current State &

Good IdeasApril – June 2004

Phase 2Future State Design,Plan of Action with

ResourcesJune – July 2004

Phase 3Creation andDevelopment

July – August 2004Phase 4Pilot and Evaluation

August – October 2004

Phase 5Production and

Roll Out November 2004 – June 2005

Phase 6 – nContinuous Improvement

July 2005 – Present

107

Production Identifies

Requirement

HR PostsRequisition &Sends to OET

HR Receives

Applications

HR SchedulesInterviews

Welding TestHiring

Decision

Drug Screen and

Physical

Applicant Given Report

Date

HR AdminInprocessing

8 Hours of Video

OSHA Training

OJT Training

Hiring Process July 2004

Offer Sent

ProductionInterviews

Cycle Time: 10.3 WeeksCost: $2,008 per new hire (Labor costs only)

108

The Hiring Process“Opportunity for Improvement”

109

Production Identifies

Requirement

HR PostsRequisition &Sends to OET

OETScreening

HR Receives

Applications

HR SchedulesInterviews

InterviewsConducted;

Welding Test

Hiring Decision

Drug Screen and

Physical

Applicant Given Report

Date

HR AdminInprocessing

Plant Manager Meeting

Shift Supervisor

OSHA Training

Process/Quality

Training

Hiring Process August 2004

Offer;New Hire

Packet Sent

Cell Training

Structured Orientation and Training Process

Cycle Time: 5.8 Weeks - 43.7% reductionCost: $1,420 per new hire (Labor costs only) – 29.3% reduction

110

Policy Statement

Our company’s employees build to order, only producing those buckets they have orders for.

Therefore, we must have the capability to acquire employees quickly and move them between assembly lines and departments to support production needs.

A flexible workforce drives down credible delivery time and improves our business performance.

111

Scenario Exercise

Recruit Profiles

112

Establish Candidate Profiles

• Working at another company doing similar work

• Must have minimum Skills

• At least 18 years old and eligible to work in the United States

• Proven Positive Work Habits

• Willing to work at Flat Standard Starting Rate of $14/hr. or $11/hr for training pay

• Willing to work 2nd Shift only (no 1st shift hires)

• Reliable Transportation

113

Identify Recruiting Differentiators

• Working Condition– “My boss tells me what to do and then lets me do it.”

• Work Environment– Inside vs. Outside

• Pay and Benefits• Workforce Stability• Shift Schedule• Free and convenient parking• Overtime Opportunities

114

Potential Pipelines• Adult Education• Employment Agencies• Military• Community Colleges• High School Graduates• Technical School Graduates• College Transfers• College Graduates• Other Companies• State and Local Agencies• Current Employees

115

ExamplePipeline Capacity Analysis

2. Adult Education

1. Community Colleges

4. Tech Schools

3. Other Companies(VEC)

• Community Colleges (65 identified) – Tidewater (50)– Paul D. Camp (15)

• Adult Education (108 identified)– Norfolk Tech (12)– New Horizons (20)– Pruden (1)– Richmond Tech (75)

• Local Companies Laying Off Workers (50 Identified) – Information from Virginia Employment Commission

• Technical High Schools (56 identified)– New Horizons (20), Pruden (4), Norfolk Tech (10), Virginia

Beach (16), Chesapeake (6), Badger (0)

Total Identified as of 5/11/2005: 279

116

Example Orientation and Screening

• Conduct Initial Orientation by providing Realistic Job Preview to each interested person.

• Candidates passing minimal screening criteria are provided applications.

• Validates Pre-Requisite Experience as required and provides copy of skills assessment/test.

• Ensure application completion• Classifies Recruit• Provide Recruit with Hiring Process Information and

Tracking Sheet

Orient,Screen

&Identify

Candidates

117

ExampleCandidate Classifications

1. Hire Now: Exceeds All Criteria 2. Hire: Meets All Criteria3. Near Hire: Will meet All Criteria within 30 days with

self-directed development4. Far Hire: Will meet All Criteria within 120-180 days with

self-directed development5. No Hire: Will not meet minimum criteria for at least 6

months 6. Best Athlete 7. Has unique skills outside of current Job Search

Requirements

118

Realistic Job Previews

Link to full RJP

119

Interview or “Try Out”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 Tour2. Skills Assessment3. Attitude Assessment4. Hiring Decision5. New Teammate Skills Development Plan

120

New Teammate OrientationGoal: Create a “world class” first day.

– New Teammate Leaves after 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 go to work!

121

World Class 1st DayThursday’s 9:30 AM: Arrive at Plant• Met by Production Manager• Turn HR New Hire Packet to HR Rep • Issued Locker with Name on it• Issued Helmet with Name on it • Digital Picture taken • Issued Equipment • Check Employee provided PPE

9:45 AM: Plant Tour and Safety Training with Production Manager• OSHA Safety Training Checklist Completed and placed in Employee Training File

11:45 AM: Meet Plant Manager • Lunch• Introduction to company and general information about the corporation, history, products,

markets, and facilities• Expose the new employee to Culture, Values, what the company does, how the company makes

money, and where the employee fits in the bigger picture

122

World Class 1st DayThursday’s 1:00 PM: Quality Overview • Plant Tour with Quality Manager• General training on quality• Individual expectations, metrics, quality control, quality process

2:00 PM: Process Overview • Plant Tour with Continuous Improvement Manager; • Walks the Value Stream; Sees the Big Picture• Introduction to Lean Training. • Continuous Improvement Responsibilities

4:00 PM: Administrative Questions and Answers • Verification of In-processing with HR Manager

123

SHIP

CUSTOMER

IDEAL STEEL

Plant 3

WAREHOUSE(CASTINGS

BUSHINGS & BOSSES)

BURN

LIP ASSEMBLY

BRAKEBEVEL BEAMS

LUG TACK

SIDE ASSEMBLYROUNDO

SIDE REINF.

DAYS5

LINE 1

LUG CONNECTION

LINE 2

LUG CONNECTION

LINE 1

TACK

LINE 2

TACK

LINE 1

WELD 1

LINE 2

WELD 1

LINE 1

WELD 2

LINE 2

WELD 2

LINE 1

WELD 3

LINE 2

WELD 3

BORE

ADAPTERS

DAYS5


BOSSES

DAYS10

POINTS

DAYS5


Cycle Time Mins45


Operators Staff1

Cycle Time Mins90


Production shift

Shfts1

Operators Staff1

Cycle Time Mins108



Operators Staff1

Cycle Time Mins108


Cycle Time Mins90


Production shift

Shfts1

MRP


BUCKETS DAYS11

SHROUDS

DAYS5

BUSHINGS

DAYS5

Cycle Time Mins50

Uptime (%) %95

Operators Staff2

Cycle Time Mins45


Cycle Time Mins90



Operators Staff2

Cycle Time Mins45



Operators Staff2

Cycle Time Mins45


Operators Staff2

Production shift Shfts1 Production

shift Shfts1


BARREL

ESCO SALES

FORECAST (30-60-90)

FAX/SALE ORDER


OXOX

FORECAST (30-60-90)

PURCHASE ORDER

FORECAST (30-60-90)


PURCHASE ORDER

Operators Staff1

Operators Staff1


A10

A20

A30

A40

B10 B20 B30 B40 B50

C10 C20 C30 C40 C50

D10

F10 F20 F30

Frequency

PER DAY1

Frequency

PER WEEK1

Frequency

Per Week2

Frequency

Per Week1

Cycle Time Mins90


Production shift

Shfts1

Operators Staff1

Cycle Time Mins90


Production shift

Shfts1

Operators Staff1

Cycle Time Mins90


Production shift

Shfts1

Operators Staff1

Cycle Time Mins108



Operators Staff1

Cycle Time Mins108



Operators Staff1

Cycle Time Mins108



Operators Staff1

Operators Staff1


5.00 DAYS

50.00 Mins

5.00 DAYS

108.00 Mins

0 DAYS

108.00 Mins

0 DAYS

Uptime (%) %98

108.00 Mins

10 DAYS

108.00 Mins

0 DAYS

108.00 Mins

0.50 DAYS

90.00 Mins

5.00 DAYS

45.00 Mins

0 DAYS

WIP

DAYS.5

PLATE STEEL

DAYS5

4

WKS

DAYS

2

DAYS

SHIFTS

9.25

SHIFTS

HRS

60

HRS

Mins

60

MINS

Secs

F40


Develop In-Line Boring Capability




System


System



System



Assembly


Flow Lines

Frequency

Per Week1

WIP

DAYS.5

WIP

DAYS.5

Frequency

PER DAY1

Operators Staff3


WIP

DAYS.5

WIP

DAYS.5

0.50 DAYS

45.00 Mins

TOTALS

Non-Value Days26.00



T10

Shift Shfts11


Buckets Shfts11

Buckets Shfts11






2

Shfts

DAYS

LARGE BUCKETS

Operators Staff2


E10

2nd SHIFT ONLY

Value Stream Map to Tasks to Cell Map

Lips Assemble/ TackLug and

Beam WelderWeld 1 Weld 2 Weld 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

124

Common Skills TrainingGoal: Using Subject Matter Experts to bring all new

Welders to competency on all Common Tasks

Feature: Welding Trainer creates Individual Training Plan between interview and 1st training day.

Subject Areas:• Production Terms• Use a Ruler• Cranes Safety and Operations• Equipment/Tools Operations and Maintenance• Visual Inspection• OSHA (Job Focused)• Quality Assurance

125

Cell Training Goal: Improve “Time to Competency”

Features:– Common Skills developed during Common Welding

Training– Train “just in time and just enough” for 1st job requirements– Uses Team Leaders as trainers– 30-60-90 Feedback to assess performance and update

skills development record

126

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

– Measures Head Count to Production– Predictive Measures Focus

127

Focus on the ApplicantInterview and Test Schedule

– Pre-schedule appointment times to reduce cycle time.– Understand you company’s interview and test capacity. – Must support the Applicants Schedule NOT just making

things easy for the interviewers.– May require 2nd Shift/Weekend availability for interviews

and tests to support currently employed workers.

128

Example Common Skills Training

Trainer implements the tailored Individual Development Plan developed at the Interview and Skills Assessment.

Example Learner Based Training Lesson Outline:

1. Production Terms and Language 2. Use of Personal Protective Equipment (PPE)3. Reading Measurements to the 1/16” Detail4. Parts of a Weld and Weld Bead Placement5. Weld Quality6. Blueprints and Weld Symbols7. Welding Equipment/Maintenance; Use of Cranes and Rigging8. Quality Assurance

NOTE: A Web Based Platform so that New Hires can review and pre-train prior to Welding Skills Interview or Training. Can also be used as a post hiring support tool.

129

Example Cell Training

1st JobSkills

Development

Goal: Seamlessly integrate new Hire into the production line and reduce “Time to Competency”

Sequence List:1. New Team Mate meets with 1st Line Supervisors/Cell Trainers 2. 1st Line Supervisor uses Welder Skills Development Record to

develop Cell Training Program3. Supervisors use 30-60-90 day Feedback System to assess

performance and update skills development record.4. New Team Mate and 1st Line Supervisor conduct a Goal Alignment

session and agree on initial Career Path and Production Skills Training Plan.

130

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

– Measures Head Count to Production– Predictive Measures Focus

131

# Interested 104 97 +7

# of Apps Received 85 81 +4

# of Screened Candidates Scheduled for Test/Interview 65 59 +6

# Tested & Interviewed 58 53 +5

Test

Results

Fully Qualified 7 7 -

Qualified (Less than 2 weeks) 17 17 -

Minimally Qualified (2-4 weeks) 26 22 +4

Unqualified (More than 4 weeks) 8 7 +1

Awaiting Weld Test Results (Bend) 0 0 -

Applicant Flow

Applicant Flow: Page 1 of 2

Dec. 12 Nov. 7 Delta

132

# Failed Interview 13 12 +1

# that Voluntarily Withdrew 9 9 -

# Awaiting Hiring Decision or Offer Pending 0 1 -1

# of Active Applicants 5 6 -1

# Offered and Accepted Employment 34 31 +3

# of Offers Declined or Rescinded 3 3 -

# Started 32 30 +2

# Terminated 7 5 +2

Applicant Flow

Applicant Flow: Page 2 of 2

Dec. 12 Nov. 7 Delta

133

Hiring Cycle Times- All Cycle Times measured in Calendar Days -

Cycle Time Interval Days

Application Date to Test/Interview Date 18.55Test /Interview Date to Offer Date 5.05Offer Date to Acceptance 2.64Acceptance to Start Date 10.50Total Application Date to Start Date 42.41Changes since last Program Review -1.96

134

Hiring Cycle AttritionHiring Cycle Phase # Attrited

Pre-Application 19

App Date to Weld Test 21

Weld Test to Interview 8

Post-Interview 15

Drug Test 0

Offer Declined 2

Post-Hire (In-Training) 7

Total Hiring Cycle Attrition: 72 of 104 Candidates

135

Post-Hire Attrition AnalysisName

Termination Date

Termination ReasonDays on the Job(Liebherr Work

Days)

7/25/2005Discharged from Welding Training. Poor work habits

and slow progression given as primary reasons.10

10/4/2005

Unable to complete the Welding School within 7 weeks. Work Ethic was great so we offered him

positions in Assembly/Paint. He refused to work on 2nd Shift and thus was dismissed.

44

8/26/2005Discharged from Welding School. Dismissed for

‘cheating’ on his vertical Weld Test. Employee his test plate flat after receiving warning.

15

8/8/2005Discharged from Welding School. Poor work habits

and slow progression given as primary reasons.11

10/10/2005Unacceptable progress in Welding School and unwillingness to brake old habits. Needs more

experience than our training can provide.11

11/18/2005Discharged for falsifying application with regards to

educational background (HS Graduation).31

12/2/2005Discharged for falsifying application with regards to

educational background (HS Graduation).45

136

Successful Program ResultsMarch 2004/July 2006

– Labor Requirement to 1st Day (Lead Time):• 10.3 weeks / 1 week

– Cost per Hire:• $2,008 / $500

– 1st Year Attrition Rate: • 59% / 6 %

• Overall Attrition Rate reduced by 31%

– Production Efficiency: Labor Hours/Bucket• 29.42 / 23.98

137

Big Picture Goal

If you design and implement a good On Boarding Program you will put yourself out of the On Boarding

business…

For all the right reasons!

138

Take a Blue Slip!

What data to you regularly receive during your company’s on boarding process?

What is one way you could change your

“on boarding” process today?

If you changed the process, how do you know it would be better?

139

The Lie of Modern Manufacturing

Simon NanceManager, Training and Development

STIHLVirginia Beach, Virginia

140

Lunch and

Networking

141

Production Skills Development“Building the Depth Chart”

How to…Increase Productivity, Control Head Count, and Improve Capacity

142

Or…

If you have $1 dollar to spend…– Hire a new employee.– Invest in your current high

potential employee.

143

To answer this question…

If after my first 12 weeks on the job; I am the best person you have ever hired tell me the story of the next 12 years of my life…

144

The Depth Chart

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

145

146

Total Distribution by Job Title

12 142 6 9 5 8 13

30

7 9 145 3

5948

2030 35

7663

105

300

156

22 2643

11 10 7 12 196

33 34

8

49

90

0

50

100

150

200

250

300

350

Acct/F

inance

Assem

bly

/Secondary

Indirect -

Mate

rial

Assem

bly

/Secondary

Indirect -

Oth

er

Assem

bly

/Secondary

Indirect -

Assem

bly

/Secondary

Indirect -

Technic

ian

Corp

Adm

in

Corp

Mfg

Corp

Mold

Mfg

Engin

eering

Exec

HR

IT

ME

D Q

ualit

y -

Both

ME

D Q

ualit

y C

OR

PR

AT

E

Mold

Main

tenance

Mold

ing Indirect -

Mate

rials

Mgm

t

Mold

ing Indirect -

Oth

er

Mold

ing Indirect -

Setu

p

Mold

ing Indirect -

Superv

isio

n

Mold

ing Indirect -

Technic

ian

Mold

ing Indirect-

Superv

isio

n

Pro

duction A

ssem

bly

/Secondary

Pro

duction M

old

ing

Qualit

y

Qualit

y A

ssem

bly

Sale

s

Superv

isio

n

Toolin

g C

NC

- D

irect

Toolin

g D

esig

n E

ngin

eering -

Direct

Toolin

g E

DM

- D

irect

Toolin

g F

asT

rack -

Direct

Toolin

g G

rinder

- D

irect

Toolin

g M

ain

tenance -

Indirect

Toolin

g M

isc. -

Indirect

Toolin

g M

old

maker

- D

irect

Toolin

g O

ther

- D

irect

Toolin

g P

olis

her

- D

irect

Adm

in -

Mfg

38 Labor Categories

147

Aircraft Mechanic 1367

A/C MECHANIC 1367

Avionics/ Electronics 441

AAE&I TECH 192

AE&I MECH 249

Sheet Metal 114

A/C STRUC MECH 114

Armament 85

A/C ARMAMENT TECH 85

Technical Inspection 213

A/C TECHNICAL/ NDT INSPEC 213

Test Pilot 89

MAINT TEST PILOT 89

Maintenance Support 513

A/C COMPONENT PLATER 1

A/C REFININSHING SPEC 20

A/C SCHEDULER 12

A/C WELDER 5

AMSS ACFT ENG SHOP MECH 25

AMSS ACFT HYD SHOP MECH 10

AVIATION LIFE SUPPORT EQUIP TECH 37

COMPONENT CLEANER 8

ELECTRONIC INSTRUMENT TECH 5

FABRIC AND UPHOLSTERY TECH 1

MACHINIST 13

MATERIAL CLERK 34

MATERIAL INSPECTOR 3

MATERIAL SPECIALIST 166

P/C SPEC - ATTC 2

P/C CLERK 58

Other Support 137

A/C MONITOR 17

ACCOUNTING SPEC 6

ADMIN SPEC 21

COMPUTER OPERATOR 3

F AND M SPECIALIST 30

FLIGHT OPS SPEC 8

JANITOR 35

MESSENGER 1

PERSONNEL SPEC 8

PLANT AND FACILITIES MECH 2

PROGRAMMER 6

Maintenance Support (Cont.)

PAINT, FABRIC & UPHOL MECH 1

QDR TECH 10

RECORDS SPEC 47

SERVICE ATTENDANT 33

TECH PUBS TECH 14

TEST CELL TECH 3

WEIGHT AND BALANCE TECH 4

X RAY TECH 1

Labor Categories

148

Skill Paths1. Aircraft Mechanic2. Avionics/Electronics3. Sheet Metal4. Armament Mechanic5. Technical Inspection6. Test Pilot7. Maintenance Support

a. AMSS (Hydraulics, Machinist, etc.)b. Specialized Mechanicsc. Records Clerks/Production Controld. Supply and Logistics

8. Other Supporta. Human Resourcesb. Information Technologyc. Financed. Administratione. Environment Health and Servicesf. Trainingg. Facility Support (Monitors, Service Attendants, Janitors)

42 Labor Categories

8 Skill Paths

149

Training Management System• Allow Supervisors to get a real-time oversight of the

training status of each of their workers. • Coordinated effort between IT, HR, the Training Staff,

and Production Leaders. • The goal is to create a system where all the training

and job experience of each employee is retained and accessible to Supervisors and Managers for better job matching.

150

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

MentorSkills

V

Competency Level

Experienced Personnel

Employment Skills

Skills Evaluation

BasicTraining

Practical Application/

Coaching Evaluation


Coaching Evaluation


Coaching Evaluation

III

II

IntermediateTraining

AdvancedTraining

IV

Pre-Employment

“A Guide”

151

Right Person/Right Job Move the Employee in the Right Direction

High QuantityLow Quality

Qu

anti

ty o

f W

ork

Quality of Work

Low QuantityHigh Quality

Low QuantityLow Quality

High QuantityHigh Quality

New Person

Go To Person

What is our plan to move our people along the correct developmental path?

152

Strategic Objectives 1. Training is NOT about INDIVIDUAL CHOICE. We Care! 2. Job Performance and Training are Seamless3. Train on the Same Equipment, with the Same People,

Under the Same Conditions, to the Same Standard on the Job Site

4. Reduce Time and Effort Between Subject Matter Experts and Users

5. Get the Most Value from Training/Education Dollars6. People drive Skills Based Requirements

You can be perfectly trained and absolutely unproductive!

153

People Focused Training1. Every employee is on a Career Path2. The Career Path is agreed to by the employee and the supervisor

based upon needs of the company, the potential of the individual and the employee desires and aspirations

3. The Career Path drives skills required:a. To Meet required training, certifications, licensing for current job. b. To Improve Productivity on Current Job c. To Meet minimum competency level for Future Jobd. To provide for Employee Driven Self-Development Training and Education

4. Training does not exist unless a Manager creates an “order”5. The Manager then selects the most appropriate delivery method

based upon their specific operational circumstance.6. The Training is delivered via the most resource efficient and

effective method.7. The Training is evaluated and recorded8. The Employee’s Skills Record and Career Path Map is updated.

154




Communication

Leader Led

AwarenessGoal

Alignment

Individual Development

Plans


Plans


Plans

ResourcesRequired

Performance Reviews

LedLedLed

Goal Alignment System

155

Developmental Plans• Everyone has them!

• Consider education, experience, training

• Aligns Team Mate potential with organizational needs

• Focused on the Mission Essential Tasks derived directly from the Value Stream Map

• Provides measurable outcomes to monitor individual progress.

• Are the “White Space” between Performance Reviews

• Drive Training and Development budgeting and resources requirements based upon People NOT Program Focus

156

Training Program Overview

Skill Paths

1. Mechanic

2. Assembly

3.Sheet Metal

4. Material Handler

5.Technical Inspection

6. Maintenance

7. Production Control

Common SkillsTraining

What every employee needs to know

CellTraining

Skills to do 1st Job

Intermediate SkillsTraining

Skills to do second and third job

Employee Skill Path

Lead/Advanced Skills Training

Skills to Teach Others the Job

Master MechanicMentor

Tech Specialist

Hiri

ng

On

Bo

ard

ing

157

Production Skills Training Guidelines

• Leaders are responsible for the training of their subordinates.

• Training programs must be based on the tempo of operations and the resources available to train.

• The majority of the training must occur on the job in conjunction with production work.

• Lengthy training events that take the employee away from the worksite cannot be considered.

• Movement from Process to Process must be closely monitored and linked to Skill Path tracking. A Skills inventory must accompany each transfer – just like a tool box.

• There must be a clear articulation of what skills the employee has when the transfer is made.

158

Effort vs. Competency in Learning• “I know” skill:

– Exchange of Information

• “I can do” skill: – Performance based Instruction

– Skills transfer

– Subject Matter Experts observe and validate competency

• “I can adopt and apply” skill:– The actual performance requirement

– Linked to Skills Based Performance Assessments

159

Skills Transfer

Subject Matter Experts Standardized Work

Training Audience

Training System

Those Who Have the Information

Those Who Need the Information

160

Common Training• Skills required by every person regardless of Process • May be hiring pre-requisites• A Skills Demonstration Checklist validates performance

prior to arrival in production area• 1st Line Supervisor verifies

161

Basic Skills Training• Those Baseline Skills required by the specific process or

production area• Trainer creates Individual Training Plan between interview

skills assessment and during Common Training• Train “just in time and just enough” for 1st job

requirements• Use Production Subject Matter Experts as trainers• 30-60-90 Feedback to assess performance and update

skills development record

162

Basic Skills Training Outline• Cell Specific Terms• Cell Specific Procedures and Job Instructions• Material Handling Equipment Safety and

Operations• Tools Operations and Maintenance• OSHA (Job Focused)• Lean for Hourly Workers; Identifying Waste and

Continuous Improvement• Quality Assurance

163

Intermediate Training• Training to develop Competency. • Focused on creating agile workforce• Training based on normal workplace opportunities • Under the direction of the 1st Line Supervisor who is

“Recognizing Teachable Moments”• 1st Line Supervisor recording increased skills proficiency

by process.

164

Advanced Training• Training to develop Masters • Training based on normal workplace

opportunities and focused coaching events • Under the direction of the current Master • 1st Line Supervisor recording increased skills

proficiency by process• Requires movement across processes

165

“If I only have one guy show up for work I want

to be able to build an entire bucket”

Dick Dale

Operations Manager

Strategic Goal

166

Churn

Sucking Cost Invisibly!

167

ChurnDefinition: Percentage of Workforce scheduled to work that

day are present to perform the work in the assigned areas.

• Scheduled: The reaction time to prepare on “On Boarding” Plan to accelerate the transition time to competency of new teammate. Usually caused by external churn factors; Promotion, Transfer, Expansion, or Downsizing Initiatives

• Unscheduled: The Leaders confidence level that the teammates they planned to work that day actually showed up to work. Usually caused by internal churn factors; sickness, vacation, and absenteeism.

Unmanaged Churn Reduces Trust!

168

Causes• Individual Induced:

– Sick– Appointment– Work Schedule– Lifestyle– Apathy– Vacation– Don’t Like My Boss– Looking for New Job– Family Crisis

• Organization Induced:– Promoted– Re-assigned– Training– Personnel Policies– Required Meetings– Additional Duties– Business Travel– Process Changes– Transferred

169

ChurnGood News - Bad News

• Bad News: – Reactively; Taken Individually or “One at a Time” – Crisis of the Day approach– Just get through…– “Do No Harm” is measure of success

• Good News:– Proactively; Taken Systematically– Opportunity to Change Culture– Increases Informal Communication Networks– Builds Trust– Every “Churn” is a Developmental Opportunity– Lean Training Opportunity: Understanding the Value Stream

both Horizontally and Vertically.

170

Transition Acceleration

Current Job Future JobTime

QualityLevel of Effort

Current State: How long from assignment to competency?

171

Leading and Lagging Indicators

• Leading: – Scheduled vs. Unscheduled Churn Data– Benchstrength Depth– Engagement Levels

• Lagging:– Cost, Schedule, Quality, Safety– Workforce Attrition– Increased Absenteeism

172

Churn ImpactDo the Math!

• Increased Cost• Behind Schedule• Reduced Quality• Increased Safety Risk/Incidents• Increased Leader Job Redundancy• Decreases Confidence in Senior Leadership

173

Churn Happens!Churn Impact Reduction Strategy

Every Teammate who is not performing their normal work in their normal area requires an “On Boarding” event.

On Boarding:Start: Identifying “Churn”Stop: Teammate Competent in New JobMetric: Time to Competency

Best Case: MinutesWorst Case: Never

174

Early Interventions

• Better Job Matching• Leverage Developmental Opportunities• Increase reaction time where possible• Understand Churn caused internally and

externally• Information System informed “Depth Chart”

175

Scheduled Churn Pipelines

• Work Overtime• Dual Task• Assign from within the same Process• Assign from within the Company• Temp Labor

Key Questions:What is the Volume of each Pipeline?What is the Lead Time of each Pipeline?What is the organizational Cause and Effect?

176

Considerations:• Expected Competency Level• Distribution of Labor within organization• Expected assignment of new employees• Work Area Complexity• Availability of High Performers as resources during

“On-Boarding” period• Match-Up with Leader

Each Pipeline has a different Mean Lead Time

177

Working the Sums• Ramp Up Schedule by Area

– Future State Requirement (Available)

• Baseline Current State– Current State (Available)

• Pipeline Volume– How many in each pipeline? (Available)

• Define Expected Competency Level at First Hour– Time and Resources Required Pre-Assignment

• Define On-Boarding Plan – Focus in reduce “Time to Competency”

180

Leader ChurnDefinition: Percentage of Leaders assigned to work that

day are present to perform the work in the assigned areas.

• Scheduled: The reaction time to prepare on “On Boarding” Plan to accelerate the transition time to competency of new leaders. Usually caused by external churn factors; Promotion, Transfer, Expansion, or Downsizing Initiatives

• Unscheduled: The Leaders Leader confidence level that the Leaders they planned to work that day actually showed up to work. Usually caused by internal churn factors; sickness, vacation, and absenteeism.

Unmanaged Leader Churn Reduces Trust!

181

Early Interventions• Better Leader Job Matching• Leverage Developmental Opportunities• Increase reaction time where possible• Understand Churn caused internally and

externally• Information System informed “Depth Chart”

182

The Leader Development Challenge

“Playing to Win!”

183

If People are Hard! Leaders are Harder!!

• Everyone is at a different place developmentally

• Everyone must take responsibility for their own Development; It is a High Performance Behavior

• Everyone will not always meet our standards

• We must set behaviorally defined high standards

• Create a “Top Down Culture” of continuous improvement and communications

• Bell Curves are unacceptable

184

Business Performance Leading Indicators

1st Line Supervisors: – Responsible for producing “Customer Value”– Are held accountable for production requirements

derived directly from the Value Stream– They are responsible for getting “8 for 8” from the

hourly workforce– Usually in their first leadership position– Work all three shifts– Blending of technical and people skills is required– Performance is directly related to their Manager’s

ability to lead them.

185

Agenda• The Theory• Improving Current Leader Performance• Building Future Leaders

186

The Leading Indicator of Future Business Performance…

…the strength of the Leader to Led Linkage.

187

The Gallup Path to Business Success

In-Group/EngagedEmployees

EngagedCustomers

TheRight Fit


Real ProfitIncrease

Great Leaders

StockIncrease

PeopleEnterHere

Business Success Measures: - Productivity, - Profitability, - Employee Retention - Customer Satisfaction

SustainableGrowth

188

Opportunity for Improvement

• 25% of the working population are ignored by their supervisor

– Actively Disengaged: 40% of them are in their workplace– 58% are Not Engaged– 2% are Engaged

Source: Gallup

189

Core Business Data Element

Assigning Work to Crew in Discrete Increments and Measuring Goal Accomplishment

LeaderAssigning

Charge #s &Approving

Time

Project Plansand

Labor Estimates

190

The 1st Line Supervisor Challenge

1st LineSupervisor

Orders

Materials

People

1st Line Supervisors Provide: Clear Goal Definition derived from Work Packages or Orders Materials and Equipment to accomplish the task People with the Right Qualifications and Skills Leadership: Planning, Organizational Energy and Momentum

Success = Orders Completed within Cost, on Schedule, Safely, with no Re-Work

Products

Machines

191

The Rubber Meets the Road

“Go To”Operators

Machines

Materials

New Folks

Training and

Qualifications

Work Packages/

OrdersEquipment and Tools

Products

Success = Orders Completed within Cost, on Schedule, Safely, with no Re-Work

192

1st Line Supervisor Challenge

“Go To”Operators

Materials

New Guys

Create an situation for the Go To Operators to be successful by ensuring all factors are present at the same time or….THEY BECOME PROBLEM SOLVERS

Training and

Qualifications

Products1st Line Supervisor = PROBLEM SOLVERS

Success = Orders Completed withinCost, on Schedule, Safely, with no Re-Work

Work Packages/

OrdersEquipment and Tools

Machines

193




Communication

LeaderLed

AwarenessGoal

Alignment


Plans


Plans


Plans

ResourcesRequired

Performance Reviews

LedLedLed


194

Gallup Path to Business SuccessOrganizing for Success

SustainableGrowth

EngagedEmployees

EngagedCustomers

TheRight Fit


Real ProfitIncrease

Great Leaders

StockIncrease

PeopleEnterHere

Business Success Measures: - Productivity, - Profitability, - Employee Retention - Customer Satisfaction

195

Employee Ownership Requires Trust

• Leaders will provide:– Clear direction– Appropriate Resources– Expert Advice– Feedback and

Coaching– Growth Opportunities– Reward and Praise– Fair Treatment

• Led will:– Treat the company like

their own– Hold each other

accountable for doing the right thing

– Give early warning of problems

– Have the courage to ask questions

196

SS

OM

1S

MU

NE

GM

OM OM

SSSS

1S 1S

GT GT

NE

Organizational Scheme“Leader is a BIG Word”

GM: General Manager 10OM: Operations Manager 30SS: Shift Supervisor 601S: 1st Line Supervisor 160MU: Make Up Supervisor 100GT: Go To Employee 500E: Employee 1600NE: New Employee 600

Vertical Dyad Linkage Based Upon a Total Operational Headcount of 3060

197

Leader Development Program

Current State

• Leader Development conducted informally or not at all.

• Usually best operators promoted to Supervisors

• Experience gained over time• Many training courses available but

not mapped to critical tasks.• Undocumented program that is

dependent on individual Management• On the Job Training is ad hoc with few

Training Materials available on the Job Site.

Perfect State

• Systematic Approach to Leader Development

• Manager’s are the Primary Trainers with the right tools kit to develop their Supervisors

• Manager’s are responsible to tailor skill development to each individual Supervisor and each operational area.

• New Supervisors are methodically created so their First day is a High Performance Day top reduce time to competency

• Leader Development Programs synchronized and integrated directly with the Performance Review System

198

Behavior Focus

• Skills and Attitudes are extremely difficult to describe, measure, or observe.

• Behaviors are observable actions that can be replicated.

• We KNOW how the Best Performers Behave!

• Behaviors change Leads Culture change!

199

Defining the Current State1. Go find the High Performers2. Find out what they do and don’t do everyday3. Write it down 4. Agree on the Mission Essential Task List and High

Performance Behaviors5. Ensure Alignment with Business Goals and Value Stream6. Compare all the Leaders behaviors to the High Performer

behaviors7. Manager’s and Supervisors Conduct Goal Alignment

Sessions to validate current behaviors and identify improvement areas.

8. Analyze to define, defend, and distribute Performance Improvement resources

9. All Leader’s Continuously Improving Systematically

200

Scenario Exercise

201

Observable BehaviorExample

Technically Competent:

– High: 9/10 times when asked a question gives the right answer immediately and work continues.

– Developmental: 5/10 times gives the right answer and tells the person they will get back with them with the right answer causing waste.

– Dysfunctional: Gives the person the wrong answer causing positive harm to the organization.

202

Tell me about the best 1st Line Supervisor you know…

Take a Blue Slip

203

High Performer 1st Line Supervisor

Mission Essential Tasks

1. Demonstrates Leadership 2. Understands Manufacturing Process 3. Seeks Continuous Improvement 4. Plans Work 5. Communicates up the Chain 6. Communicates to Subordinates 7. Builds Teams 8. Technically Competent 9. Uses Technology 10. Develops Crew

See Hand Out

204

Develops Subordinates• Recognizes Teachable moments: Constantly stopping and

talking to subordinates with tips and best practices• When asks who is responsible for the training of their

people says “Me!”• Realizes the “best training” occurs on the job when highly

skilled people work with less skilled people: Matches novices with experts by design

• Uses normal work flow as training opportunities• Has scheduled and record of formal counseling/feedback

sessions with subordinates outside of normal job interface• Knows the Leadership Pipeline - their replacement; future

leaders

205

• Managers are the Primary Supervisor Trainers, Assessors, and Developers

• Focuses on single value-added behaviors, techniques and procedures key to each Supervisor’s Success

• Events will occur on the job site (If any, classroom should be reserved for only the most high value requirements)

• Focus will be to provide Managers with tools to more effectively train Supervisors (Performance Support System)

• Focus on sharing High Performer “Best Practices” with others• Ensure we get feedback directly from the Supervisors• We are ALL about helping our leaders be better at their work

Designing Leader Development SystemsSenior Leader Guidance

206




Communication

LeaderLed

AwarenessGoal

Alignment


Plans


Plans


Plans

ResourcesRequired

Performance Reviews

LedLedLed


207

Developmental Plans• Everyone has them!

• Consider education, experience, training

• Aligns Leader potential with organizational needs

• Focus on the High Performer Mission Essential Task List

• Provide measurable outcomes to monitor individual progress.

• Are the “White Space” between Performance Reviews

• Drive Training and Development budgeting and resources requirements based upon People NOT Program Focus

208

Program Objective Move Employee to the Left

Task

TechnicalCompetence

When asked a question are able to give the correct answer 90% allowing work to continue

When asked a question answer correctly 50% and will get the right answer to the person as soon as possible. Still causes work slow down

Ignore, guess or give the wrong answer to get rid of the questioner.

HIGH:All Leaders should be High Performing and displaying the behavior traits in this column. Developmental Plan to focus on sustaining performance

DEVELOPMENTAL Leaders displaying the behavior traits in this column should be involved in a defined developmental plan. Focus on moving them to the left

DYSFUNCTIONALAll Managers displaying the behavior traits in this column are creating harm in the organization. Behavior needs to be changed ASAP or the manager needs to leave.

209

Initial Assessment Reassessment

Send to Established

Training Course

Knows How to do the task – needs On the Job Help

Does Not Know How to do the Task

Knows the Job but has

trouble “putting it all Together”

Knows their area but needs to

Understand entire Value

Stream

Task Coach – High Performing

Supervisor/ Manager

Task Coach – High Performing

Support Staff

Spend the Day with High

Performing Supervisor at their Job Site

ID Developmental Positions either

up or down stream

ID Support Shadowing Opportunity

Supervisor Developmental Strategy Matrix

210

Building the Tool Kit

Mission Essential

Task

Subject Matter Experts

Customized Courses

Commercial Off The ShelfCourses

AccessProcedures,

Manuals,References

Tips andBest

Practices

CoachesOn the Job

DevelopmentalAssignments

Scenarios

GoalAlignmentSession

IndependentStudy

Medium Cost

Low Cost

High Cost

EPSMs

** Electronic Performance Support Modules

211

Managers or

First Line Supervisor

Who is First?

Get the Managers on the right page first, then have them

develop the First Line Supervisors

212

Building Future Leaders

Developing Bench Strength

213

Leader Churn

214

2nd Squadron 4th Cavalry Squadron Staff - March 22, 1991

215

2nd Squadron 4th Cavalry Squadron Staff - January 1, 1991

216

Foreman Scheduled Churn Overview

Sep 2003: 69 Foreman

Aug 2004: 61 Foreman– 8 Foreman rated in 2003 but not in 2004 (Transferred, Promoted, Demoted, Retired)– 8 Foremen rated in 2004 but not in 2003 (New)– 16/61 = 26% Churn Rate

Jun 2005: 45 Foreman– 15 Foremen rated in 2004 but not in 2005 (Transferred, Promoted, Demoted,

Retired)– 1 Foremen rated in 2005 but not in 2004 (New)– 16/45 = 35% Leader Churn Rate

Jan 2006: 33 Foreman– 14 Foremen rated in 2005 but not in 2006 (Transferred, Promoted, Demoted,

Retired) – 4 Foremen rated in Jan 2006 but not in 2005 (New or returned from on loan)– 18/33 = 54% Leader Churn Rate

217

Foreman Internal (Unscheduled)

Churn Data

Total Foreman = 33

# of General Foreman Changes = 19 (58%)

# of Area Changes = 9 (27%)

Both General Foreman & Area = 7 (21%)

218

Why Dream Teams Fail…• Lack of Trust

• How do you build Trust?– Do what you say you are going to do– See the Big Picture– Continuous Goal Alignment– Communication– By playing the Game…Operations

• Paradox: Trust by Nature Builds Slowly…We don’t have the time!

219

Transition Acceleration

Current Job Future JobTime

QualityLevel of Effort

Current State: How long from assignment to competency?

220

Leader Lead Time

• Example Goal: Ensure Leaders come to competency with 4 weeks of 1st Day on the Job.

• Factors:– Hiring Cycle Time: Job Requisition to 1st Day– Skills Requirements– Minimum Training Requirement– Coach/Mentor Availability– Hourly Labor Hiring– Job Flow/Production Schedule– Team Dynamics

221

Working the Blue LinesOperations Manager

Current Shift Supervisor – Future Operations Manager

Current Shift Supervisor – Current Job

Current 1st Line Supervisor – Future Shift Supervisor

Current 1st Line Supervisor – Current Job

Current “Go To” Operator – Future 1st Line Supervisor

222

Leadership Pipelines

1. Former Leaders

2. Transfers with Area Experience

3. Transfers without Area Experience

4. Pre-identified Emerging Potential Leaders (Succession Plan)

5. High Performing Mechanics/Employees

6. Product of the Hiring Process (Announcing Position, etc.)

Each Pipeline has a different mean Lead Time

223

Developmental Phases

1. Do the right things2. Do the right things right

3. Do the right things better, faster and more effectively4. Are we doing the right things? Re-defining the right

things 5. Prepare for next career path position

It is our Choice on when to place the New Leaders 1st Work Day…

} Prior to 1st Day on Job

224

“Bull Pen” “Warm Up” “Throwing Ks”

“I Know” “I Can Do” “I Can Apply”

Competency Check

START: Individual Development Plan

• Required Common Training Courses

• Designated Training Courses depending on assignment

• Orientation to AOR• Work with High

Performer NOT in assigned area

• Assigned to Manager • Coach performs 1st Skill

Assessment• Orientation to Work Flow

in 1st 30 days• Orientation to Job Site

and Support Activities (PC, Planning, etc.)

• Rehearses 1st Day and Chalk Talks 1st Week with Manager and Coach

• KEY EVENT:Leader First Day with

Crew in Charge!• 90 Day Coaching Event• 30-60-90 Day Skills

Assessment (Coach, Self, Manager)

• Integrated with Performance Review Process

Normal Developmental

Process

Competency Check

New Leader On Boarding Program OVERVIEW

Gaining Manager Involvement

225

Scenario Exercise

A Leaders Perfect 1st Day

226

Foreman Warm Up Scenario

Scripting a High PerformanceFirst Day on the Job

First Day is a Performance Day not a let’s see how it goes day

227

1st Day Preparation “Warm Up”1. Task: Plan Work – Conduct an analysis of the current jobs; current “checkbook” and

schedule status; and who is working the jobs;– Warm Up Event: Works with Coach to “catch the bubble”, develops Work Plan, develop “Hot

Jobs” List– Supporting Tasks: Understand Work Packages, Network with Key Players, Technically

Competent– 1st Day Event: Issue Job Assignment for each mechanic at Start Up.

2. Task: Lead by Example – Conduct 1st Day Start up Briefing with Crew; communicate personal style, establish ground rules, and goals.

– Warm Up Event: Prepares first day speech and rehearses it with the Coach.– Supporting Tasks: Live the Values of the Company; Demonstrate Ownership of Work (Quality),

Understand Union Contract, Gives Clear Direction to Subordinates.– 1st Day Event: Give 10 minute Start Up Briefing to entire crew.

3. Task: Job Assignment (Match Jobs to People) – Conduct 1 on 1 assignment sessions with every mechanic on crew

– Warm Up Event: Coach creates “role playing scenario” with own crew and rehearses/observes 1 on 1 session and provides feedback.

– Supporting Tasks: Crew Development and Performance and Set Expectations and Provide Feedback (Pulls available personnel data and personal background information on entire crew prior to first day.)

– 1st Day Event: Interact 1 on 1 with every mechanic on crew during first day to Assign Jobs, Set Expectations and Provide Feedback.

228

1st Day Preparation “Warm Up”4. Task: Network with Key Players – Interface with Planning and PC

– Warm Up Event: Coordinates/pre-briefs 1st Week Work Plan with Planning and PC under the direction of the Coach.

– Supporting Tasks: Innovate, Understand Work Packages, Communicate Laterally, Network with Key Players, Technically Competent, Understand the Manufacturing Process

– 1st Day Event: Before end of 1st Day update Key Players on “Hot Jobs” List

5. Task: Communicate Up the Chain – Pre-Brief Supervisor prior to 1st Day and Out-Brief at end of day.

– Warm Up Event: Meet with Supervisor to receive Supervisor guidance and direction with Coach. Conduct and analysis and back-brief Supervisor on 1st Day Plan.

– Supporting Tasks: None – 1st Day Event: At end of first day report progress to Supervisor.

6. Task: Administer Time and Accounting System – Pay crew– Warm Up Event: Pay Coaches Crew– Supporting Tasks: Use the Computer– 1st Day Event: Successfully Pay Crew

7. Task: Job Assignment and Give Clear Directions to Subordinates, Setting Expectations

– Warm Up Event: Complete focused Training and practice preparing Job Assignment Sheets– Supporting Tasks: Give Clear Directions to Subordinates– 1st Day Event: Issue Job Assignments and have a face-to-face conversation at the job about

setting goals and stretch goals.

229

1st Day Preparation “Warm Up”

8. Task: Understands How to Train– Warm Up Event: Work with expert Coach on how to identifying teachable moments within the

crew and understanding how to coach his/her crew to improve individual and crew performance

– Supporting Tasks: Crew Development and Performance– 1st Day Event: Within 1st week conduct a goal alignment session with each hourly and then

prepare an individual training plan.

9. Task: Crew Development and Performance – Preview/Prepare Hourly Annual Performance Feedback Form

– Warm Up Event: MPL/Foreman will go over the Hourly Performance Feedback Form – Supporting Tasks: Lead By Example, Network With Key Players, MOS Feedback– Prior to first day Foreman will contact SER and review employees attendance record – 1st Day Event: Within 1st Week go over the Hourly Performance Feedback form

individually with each employee and discuss expectations

10. Task: Adhere to the Spirit and Intent of Union Contracts – Warm Up Event: Review Union Contract Articles with Coach or MPL– Supporting Task: Lead by Example– 1st Day Event: N/A

230

1st Day Preparation “Warm Up”

11. Task: Demonstrate Technical Competence• Warm Up Event: Review Leader Playbook• Supporting Task: Refer to and Explain Procedures, Interpret Work Packages,

Interpret and Explain Drawings• 1st Day Event: N/A

12. Task: Innovate: Understand the Value Stream• Warm Up Event: Walk the Value Stream, Meet other Foreman in Area and

visit like work centers. Review the Performance Improvement Process• Supporting Task: Network with Key Players, Communicate Laterally, Integrate

Job into Shipbuilding Process• First Day Event: N/A

231

Performance Improvement Plan

Candidate Name: Plan Developed By:Current Position: Reviewed By:

Task Training / Event Bull PenWarm

UpThe Heat “K” Remarks

Recognizes Teachable Moments

•During the normal course of daily activities recognizes “Teachable Moments” and takes advantage of them. •Uses data to inform and update internal capabilities and limitations map.•Sets conditions to make training important on the job.•Realizes the “best training” occurs on the job when highly skilled people work with less skilled people

Coaching: □ X □

- Spend time with teachable moment expert as he/she points out opportunities

□ X □

- Walk area, identify teachable moments and take action □ X □

- Analyze teachable moments to determine if systemic issues exist □ X □

- Share lessons learned with all crews and other MPLs □ X □

- LDP primer □ X □

□ □ □

□ □ □

□ □ □

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Break

233

Building Lean Leaders

234

Hypothesis

If we transform our current Leaders into Lean Leaders with new responsibilities and behaviors;

we will eliminate waste and improve business performance measured in “line of sight” savings.

Outcome Metric:

WASTE Identification and Elimination

Process Metric:

Improving Leader Behaviors

235

1st Line Supervisors“We have Leaders who are busier than ever but

don’t seem to be making any progress.”

Expected Outcomes:• Increase our leader's ability to solve more day-to-day

problems correctly the first time.• Increasing our capacity to identify and eliminate Day-to-Day

Waste.• Increasing our capability to identify and eliminate Systemic

Waste to reduce the number of day-to-day problems.• Aligning our command, control, and communications

structure from General Manager to 1st Line Supervisor to clearly define "line of sight" accountability, responsibility, and authority.

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Common Current State Issues• Operational Responsibilities have exploded yet no clear

articulation of those roles and responsibilities• Leader’s can’t see the process through the data haze• Lots of stick if you mess up the data; very little carrot to

be out in the patch• Cultural bias for solving today’s problems right now – not

necessarily in priority order based upon biggest bang.• “5 Year Old Soccer” Crisis Management Culture creating

waste in the Leadership Bandwidth

237

ACTIVITIES RESULTS

I called the customer. I made the sale.

I did the research, I wrote the report. I got the grant.

I took the class. I learned how to give an effective presentation.

I stayed on my diet. I lost 13 pounds.

I tried. “Do or not do; there is no try.”-Master Yoda


Saying or Doing Leaders

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What Triggers Cultural Change?…changed Behaviors!

• Target Leader Training:– Stop Doing a bunch of things not adding value– Start doing new things to add value

• Senior Leader Training:– Setting the conditions for Target Leaders to succeed– Not forcing non-value added behaviors

• Coaching to attain high performance

239

1st Line Supervisor

2007

OperationsManager

ShiftSupervisor

SupportLeaders

The ElephantSystemic Culture Change

2008 ? 2009 ? 2010 ?

SeniorExecutives

2011 ?

http://www.fluid2006.com/ripples.jpg

240

1st Line Supervisor Commitment“Win-Win” Terms

• If the Senior Leaders support the changes to become Lean Leaders then…– I will change my behavior to reflect the Lean

Leader Behaviors taught to me in the Training Program

– I will identify and eliminate waste in my area of responsibility

– I will improve my business performance

241

Senior Leader Commitment “Win-Win” Terms

• If the 1st Line Supervisors change their behaviors to become Lean Leaders then…– The Senior’s will create a better condition for the 1st

Line Supervisor by also identifying and eliminating waste from their position in the organization.

– The Senior’s will present their proposal for the 1st Line Supervisors for their approval.

– Once approved the Senior’s will report out to the 1st Line Supervisors on the same program management.

242

“End State”• Increased Trust between the Leader and

the Led

• Increased Trust, increases SPEED and decreases COST!

243

Lean LeaderMission Essential Tasks

1. Knows their Process2. Knows their Customers and Suppliers (SIPOC)3. Identifies Day to Day and Systemic Waste4. Prioritization5. Eliminates Waste & Improves Business

Performance6. Engages Team Mates

244

Creating the Lean Leaders System

Training Structured Gemba

Structured Coaching

“What’s Different” Development

Senior Leader Involvement

245

Training and Gemba Outline

• What do I need to Change?• Examples:

– SIPOC out of Desk Drawer on onto Desk Top– Creating a Stable Process– Knowing how to Identify waste– Attacking waste in Priority order

• Tools required to make the Change


• How do I make the Change?– 10 Meter Circle with Lean Sensei and Leader– Structured Scenario– Model the Behaviors– Defined Outcomes for each Attribute

• Ensure the Leader can use the tools• Link the Outcomes of each session to follow on sessions – build the

correct mind map

Tell Me Show Me

246

Senior Leader Involvement Structure


Structured Coaching





Define “What’s

Different”

Vet the Training and

Gemba

“What’s Different” Development

Walk the Gemba

Walk the Gemba

Walk the Gemba

Walk the Gemba

Senior Leader Level Waste

Identification Senior Leader Level Waste Identification

and Elimination Senior Leader Level Waste Identification

and Elimination Senior Leader Level Waste Identification

and Elimination

Senior Leader Level Waste Elimination

Goal: Build the Trust •Contracts between Senior Leaders and Process Supervisors

•You work your lane and I will support you by doing the same in mine

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Coaching Structure

Coaching (Steps 1 - 4)

Coaching(Steps 5 – 7)

Coaching(Steps 8 – 11)

• Individual Post Coaching Sessions

• Leaders Coaching Results Presentation to VPO

• Leaders (2 levels up) out brief with Coached Leader

• Coaching Process Continuous Improvement discussions

• Goal Alignment Session

• Coaching Matching/Line-Up and Resource Session

• Line-Up and Resource Review Approval

• Coaching Group Kick Off Meeting

• Individual Coaching Event Focus Sessions

• Attribute Focused Coaching

• Vice President Gemba





Waste Elimination and Data Collection


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Keys to Success• TRUST

– Character and Competency– Speed and Cost– Communication and Commitment

• Buy In:– 1st Line Supervisors: Willing to change.– 1st Line Supervisors Leaders : Accept responsibility to lead the change (Culture and

Change)– Senior Executive Team:

• Engagement and Management Rigor via the Coaching Process• Demonstrate our Commitment to the PS.

• Execution Flexibility– Recognize Opportunities – Avoid Minefields

• Document 1st then Train and Coach• Hard Core Program Management Measuring:

– Cost– Schedule– Quality– Return on Investment

249

Golden Rule of Leadership

Treat your subordinates how you would like to be treated.

…1 at a time!

they

250

The Organization Takes on the Personality of it’s Leaders!

251

Quick Look IdeaIn order to “Get Better,” you might consider doing one of the following:

• Go talk to your direct reports, to your customers, to members of your team, or members of your family. Ask three simple questions:

1. What is one thing we are now doing that you think we should continue doing?

2. What is one thing we are now doing that you think we should stop doing?

3. What is one thing we are not now doing that you think we should start doing?

• The next time you make a mistake, rather than agonizing over it, reframe it as feedback. Identify the learnings from it and ways you can improve your approach to get different results the next time.


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Take a Blue Slip

• Where is your challenge?– New Leaders– Current Leaders

• What is your new leaders time to competency?• Is that acceptable?• Do your subordinates Trust You with the biggest

decision you will ever make about them... Who they work for and who works for them!

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Take a Blue Slip

• When was the last time you had a Goal Alignment Session with your direct reports?

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Closing“I can’t control what they do on the field but I

can control who does it…”

Joe Gibbs, Washington Redskins

“…And never give that away”

Joe Barto

255

Keith Hornberger

Lean Sensei

256

Keeping Score

“Putting it all Together”

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When the CEO/CFO says…

OK… we see all the pieces, we understand the problem, we know this is critical to our business…

“How much money do you need and when do you need it, and how will we know it made our business better?”

258

Running the BusinessIncome Statement:• Revenue:• Costs:

– Direct and Indirect Labor Costs– Direct and Indirect Materials Costs– Facility and Operational Costs– Production Systems– Information Systems– Inventory

Line of Sight Cost/Benefit Impact

259

Waste Targets

1. Labor Costs

2. Production

3. Systems

260

Labor CostsWhat % of your revenue is associated with

labor?

• Direct Labor = 15%• Indirect Labor = 10% • Total Labor = 25%

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Labor Cost Analysis

2006 Expected Revenue = $220 MillionProjected Labor Cost (25%) = $55 Million

Direct Labor• Total Direct Labor = $33 Million• Direct Labor Headcount = 1000 • Annual Cost Per Full Time Equivalent = $33,000

Indirect Labor• Total Direct Labor = $22 Million• Direct Labor Headcount = 500 • Annual Cost Per Full Time Equivalent = $44,000

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Human Capital Management Program Components

1. On Boarding

2. Current Workforce

3. Leader Development

4. Building Benchstrength

5. Executive Development

Where do we start?

263

Start where you get the biggest bang for the buck!

CFO Speak:

Return on Investment

264

Human Capital Managers #1 Goal

Strategic Goals: Improve Our Business Performance by:• Increasing Available Direct Labor • Decreasing Overhead Labor

Tactical Goals:• Be Courageous• Put your money where your mouth is…• Become “Guerilla Budgeters” to demonstrate value • Obligate the $$$ before they you lose it!

265

Budgeting• Know the Budget Cycles• Timing is critical to access to resources• Keep the Years Straight

– Implementation Year– Budgeting Year– Planning Year– Programming Year

• New Start or Next Year?

266

The Numbers

Cost/Benefit - Present Value (attach details as necessary)

Non-Recurring Indirect Cost

Recurring Indirect Cost

Total Indirect Cost

Non-Recurring Indirect Benefit

Recurring Indirect Benefit

Total Indirect Benefit

Net Indirect (Cost)/Benefit

Net Direct (Cost)/Benefit

267

ROI Examples

1. On Boarding

2. Production Skills

3. Employee Engagement

268

EXAMPLE #1

On Boarding

Return on Investment Analysis

269

1. Reduce Hiring Process Cost

2. Reduce Attrition Cost

Hiring Process

InitialTraining

ProbationaryPeriod

First YearSubsequent

Years….

Process Retention

270

New Hire Release Breakout

Calendar Days

NumberReleased

Total Hired Total Released Total Released in first 120 Days:

Total Released 120-365 Days

Total Released 365(+) Days:

482 225 131 50 31

Percent of Total Hired 27% 10.4% 6%

0

20

40

60

80

100

120

Quit 30 18 13

Released 97 3

Released for Cause 4 29 18

120 Days 120- 365 Days More than 365 Days

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Attrition Reduction Savings

Replacement Costs: $13,899 – $747 hiring cost (wages for hiring staff)– $4,452 in Training Costs.

$168 per training day multiplied by 26.5 training days

– $1,950 in wages that were not productive hours. Based on an estimate of 37.5 days on the job learning what to do. Assumption that new employee was only 50% productive during this initial period.

– $6750 in replacement costs Cost rolls up benefits, testing costs (drug, physical, skills) Workers Compensation, COBRA, and lost productivity during transition.

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Example Analysis

$10,000 ~ Estimated new hire costs (training, overhead, and HR admin costs, etc.)

$5,000,000 ~ 500 new hires per year

$2,000,000 Walk Out Cost ~ 40% New Hire Attrition Rate

$250,000 ~ for every 5% Reduction of New Hire Attrition Rate

273

ROI AnalysisROI Model based upon a combination of:

– Overall Retention Rate– Earlier Attrition Time

Overall Attrition Example:– $250,000 cost savings through a 5% reduction– 12 weeks = Average weeks to attrition

Earlier Attrition Time: – If we can move the time to release earlier by 2 weeks due to better

pre-hiring assessment, job awareness, and initial training then…– $1,000,000 ~ $1,000 per week per employee x 2 weeks x 500

employees

Total Potential Annual Savings: $1,250,000

274

Manufacturing Turnover Cost Breakout

Manufacturing

Turn-over rate

Voluntary Quits

Retire-ment Fired

Replace-ment Costs

Annual Costs for

100 Worker Site

Annual Costs for

1000 Worker

Site

Annual Costs for

10000 Worker Site

Turnover 17.0% 14.0% 2.0% 1.0% $14,000 $238,000 $2,380,000 $23,800,000

Voluntary Quits 17.0% 14.0% 2.0% 1.0% $14,000 $196,000 $1,960,000 $19,600,000

Retirements 17.0% 14.0% 2.0% 1.0% $14,000 $28,000 $280,000 $2,800,000

Fired 17.0% 14.0% 2.0% 1.0% $14,000 $14,000 $140,000 $1,400,000

TOTAL $476,000 $4,760,000 $47,600,000

82.4% of Turnover Costs are in the Voluntary Quits Category11.8% of Turnover Costs are in the Retirement Category5.8% of Turnover Costs are in the Fired Category

275

EXAMPLE #2

Production Skills Program

Return on Investment Analysis

276

Understand the Cost of Training

0 10 20 30 40 50

Admin Labor & Other

Classroom InstructionTime

Materials

Instructor ContactTime

Student Labor

%

Overwhelming Cost of Training is Student Labor

277

Production Skills Development Goals

• Decrease the cost of training by reducing the time to train.

• Decrease time to competency (Improve the quality of training)

• Decrease Risk (Safety, Litigation, etc.) • Align training capacity with Human Resources

Labor Resource and Hiring Plan

278

Current OJT Assumption• 64 Hours OJT per year for Four Years

– Anecdotal reports from 1st Line Supervisors– 2080 hours per year – 64 hours represents 3% of the

time for OJT– Non-Structured OJT much less efficient

• Burdened Labor rate of $18.00 per hour

279

Current and Future State• Current

– 161.5 Hours Skills Training– 40 hours initial Training– 64 hours of OJT each year for Four Years– Total of 457.5 Hours x $18/Hour = $8,235

• Future– 137 Hours of Skills Training (15% Reduction)– 40 hours initial Training– 40 hours of SOJT Following Initial Training– 40 hours Intermediate Training– 40 hours of SOJT Following Intermediate Training– Total of 297 Hours = $5346

• 35% Reduction

280

By Year Savings2003 2004 2005 2006 2007 2008

Total Savings Hours

8632.5 -300 13560 25560 12160 7680

Total Savings Dollars

$155,385 -$5,400 $244,080 $460,080 $218,880 $138,240

Hours returned to Production 2004 – 2008: 48,630 Hours Savings 2004 – 2008: $875,340

Note: 2003 Numbers on this chart represents savings that would have been realized this year if the program had already been implemented. 2003 numbers have not been included in any future ROI predictions.

281

Intervention Estimated Costs

• 1 ea Primary Level 1 Instructor– $50,000

• 1 ea Scenario Evaluator (Part Time)– $25,000

• 10 (+2) Computer Lab – $30,000

• 5 Scenario Work Areas– $50,000

• Courseware Design and Implementation– $234,000

• Metrics, Data Capture and Evaluation– $84,000

• Program Management– $112,000

• Automated Support Tool/IT Support– $5,000

• 1st year Labor Costs– 40 hours x 100 New Hires x $20/Hour– $80,000

Total Costs of Intervention:$670,000

Recurring cost:• Instructors• IT Support• Materials

282

Return on Investment

$1,207,261: Total Projected Savings

$670,000: Total Intervention Costs

$537,261: 2006 Savings

Break Even: Q3/2005

283

Other Tangible Benefits

• Aligned Training with actual Job Requirements• Production Skills Training will be aligned with

production needs• Embedded competency evaluation process

throughout• Complete review and updating of body of knowledge• Can be transferred to other areas as a Performance

Support Tool for employees• Can be transferred to local Technical Schools

284

EXAMPLE #3

Employee Engagement

Leader Development ProgramReturn on Investment

285

Employee Engagement• Difficult to measure outright BUT…

• It is NOT what they say but what they DO! • There are industry standard measures to reflect improved

employee commitment – less process waste– decreased turnover– decreased safety incidents– decreased maintenance expense– fewer grievances– decreased absenteeism– reduced error rates, etc

• We can calculate a cost for each one of these.

286

Company Baseline

Number of Employees 3000

Average Hourly Rate (Loaded) $40

Hours Worked per Year 2080

Salary per Individual $83,200

Workforce Salary $249,600,000

Total FTE Savings 51.8

Total Savings in Dollars $4,308,000

How can I get to this kind of Savings?

287

Reduce Grievances(Union Shop)

Grievance

Grievance Hours lost (e.g. 30 hours due to other workers making up, management time, lost employee productivity) 30

Loss for each Grievance $1,200

Average number of grievances per year Company Wide 100

Annual Grievance Cost for the company per year $120,000

Estimate of Intervention Effects (Percent Reduction in Grievances) 50%

Intervention Savings $60,000

FTE Savings 0.7

288

W2 Turnover AnalysisAverageMonthly

Headcount

Total W2’sissued

ChurnAnnual Turnover

Rate

2003

Hourly 176 352 176 100%

Salaried 73 72 (1) 1.4%

2004

Hourly 189 334 145 76.7%

Salaried 82 87 5 6.1%

2005

Hourly 257 451 216 75.5%

Salaried 91 97 6 6.6%

289

Reduce Voluntary TurnoverTurnover

Turnover Cost (Percent of Salary - 15% - 200%) 15%

Turnover Rate 25%

Individual Turnover Cost $12,480

Total Workforce Turnover Costs $9,360,000

Employee Turnover due to voluntary separation 80%

Cost for Employee Turnover due to voluntary separation $7,488,000

Estimate of Intervention Effects (Percent Reduction in Voluntary Turnover) 25%

Intervention Savings $1,872,000

FTE Savings 22.5

290

Reduce AbsenteeismAbsenteeism

Absenteeism Hours lost (e.g. 12 hours due to other workers making up, management time, lost employee productivity) 12

Loss for each day an employee lays out $480

Average number of lay outs per employee per year 5

Annual Absenteeism Cost per Employee per year $2,400

Number of Company wide lay outs per year 15,000

Annual Absenteeism Cost for Company per year $7,200,000

Estimate of Intervention Effects (Percent Reduction in Absenteeism) 33%

Intervention Savings $2,376,000

FTE Savings 28.6

291

THINK Strategically….

…ACT Tactically

2007-2010PPL Strategy

2006 PPL Program

Project Management and

Measuring Business Impact

292

Strategy Development“A Systems Engineering Approach”

• What is the current process and cost? (Current State Map)

• What does the perfect system look like? (Perfect State Map)

• How do we get from here to there? Plan of Action and Milestones with Resources Required and Return on Investment Prediction

• What does the future system(s) look like and how will we measure progress? Future State Map(s)

293

PPL Strategy Development Must Do’s

• Choose early programs wisely. Early failure hurts credibility and damages morale.

• Choose a Program core to the business to gain and maintain senior leader focus.

• Define metrics to measure progress and sign up for goal accomplishment.

• Develop detailed Plans of Action and Milestones.• COMMUNICATE the PLAN!• Execute, execute, execute…

294

PPL Strategy Must Not Do’s

• Try to make us a training company• Break the bank• Make unrealistic promises• Have a negative impact on production

295

Strategy

Supporting Documents• Planning Years: 2008-2009

– A “year by year” plan of how to move from current state to future state.

– Accounts that most Human Capital Programs require multi-year implementation to determine Pay Back/Return on Investment

• Budget Year Proposals: 2007– A more detailed “Budget Year” plan in order to justify and

defend resource requirements.– Includes a business review of the current programs as related

to performance outcomes– Included New Start Proposals

• Action Year Programs: 2006– Detailed Plan of Action and milestones for current year

activities and events

296

Human Capital Management Strategy

2006-2009

An Example

297

Strategic Initiatives

1. On Boarding2. Leader Development3. Productivity Improvements4. Team Building: Application of Lean Concepts

to Cell Manufacturing

298

1. On Boarding

• Requisition Review• Realistic Job Preview

Creation• Math and Reading Test• Orientation Update• Common Skills Training

Program Development• Word Class First Day

Creation• Structured OJT, 30-60-90

Evaluation• 180 Day Evaluation

• Analysis– Complete Aug 2005

• Design– Complete Sep 2005

• Development– Complete Oct 2005

• Test– Complete Dec 2005

• Roll Out– Q1-Q3 2006

• Continuous Improvement– Q4 2006 – Q4 2010

Components Timeline

299

2. Leader Development

• Identification of Leader Levels

• Leader Developmental Plans

• First Line Supervisor Training

• Manager Training• Succession Planning

• Analysis– Complete Dec 2005

• Design– Q1 2006

• Development– Q2-Q3 2006

• Test– Q4 2006

• Roll Out– Q1 2007


Components Timeline

300

3. Production Skills Improvements

• Depth Chart• External Training

Courses• Formal Cross Training• Automated Tracking -

skills to job• Hip Pocket Training• Skills Assessment of

Current Workforce

• Analysis– Q2 2006

• Design– Q3 2006

• Development– Q4 2006

• Test– Q1 2007

• Roll Out– Q2 2007


Components Timeline

301

4. Team Building: Application of Lean Concepts to Cell Manufacturing

• Production Teams/Cells• Team Based Operations• Cross Functional Teams

• Analysis– Q3 2007

• Design– Q4 2007 – Q1 2008

• Development– Q2-Q3 2008

• Test– Q4 2008 – Q1 2009

• Roll Out– Q2-Q3 2009


Components Timeline

302

Human Capital Management StrategyQ2/2005 – Q4/2008

Q2/2005 On Boarding Roll Out Q1/2006

Q3/2005 Leader Development Roll Out Q1/2007

Q2/2006 Production Skills Improvements Roll Out Q2/2007

Q3/2007 Team Building TBD

303

The Bottom Line…• To Win and Win Big is the Business of People.

You must play the game.• To play you must know the rules.• Understanding and applying ROI Evaluation

Analysis is a core skill to play the game.• Skills, Knowledge, and a detailed Plan =

Courage• Turf, Ego, and Money and at the end of the

day…

304

End of Day 1“Whew”

305

Welcome to Day 2

306

Creative Memories

Overview and Plant Tour

Bruce BoultonOperations Manager

307

Plant Tour Feedback

Your “Gift” to Creative Memories

308

Let’s Wrap It Up

Review Workshop Outcomes

Blue Slips…

309

What Did You Want To Learn From This Work

Shop?

310

Human Capital Challenges• No silver bullet…Big Problem with a lot of moving parts in

a dynamic business environment• The commitment is to provide some real analysis to focus

our efforts…not a “Good Idea of the Day” approach• The recommendations must make good business sense • We must be realistic and “eat the elephant” one bite at a

time.• We must create a SYSTEM to:

– Better communicate with our primary clients: the Production Managers

– Synchronize and integrate our Projects and Programs with the normal business operations.

– Give the Managers predictable yet responsive support

311

Human Capital Managers Goals

• Be the Plant Managers best resource for support• Shift our focus to becoming Human Capital

Planning and Support experts while maintaining the “HR Administrative Mechanics”

• Link the Corporate Strategy to the Human Capital Management Program

• Must be long range thinkers… People are multi-year projects-- in fact Life Long Projects

• Do not be a part of the problem!

312

Human Capital ManagementSuccess Principles

1. Business Focus (People, Process, Equipment + Material = Products)

2. Centralized planning as a team, but execute as close to the floor as possible

3. Senior Leaders must personally engage ensuring business affect

4. P&L Managers must be the focus of our efforts5. The organization provides the P&L Managers with a robust

performance improvement “toolkit”6. Leaders must be empowered to ensure responsibility

and accountability for the performance and development of their team.

313

Business of People

The Mission:

Provide Leaders with right people in the right numbers, in the right skills, at the right time, at the right cost to meet business needs.

The Goal:

An agile, competent workforce capable to move at the speed of business.

314

Thanks… and Good Luck!