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
Practical ApplicationCoaching/ Evaluation
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 mins/shift Mins540
Production shift Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift Mins540
Production shift Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift Mins540
Cycle Time Mins90
Production mins/shift Mins540
Production shift Shfts1
MRP
ProductionControlSTEEL SUPPLIER
BUCKETS DAYS11
SHROUDS
DAYS5
BUSHINGS
DAYS5
Cycle Time Mins50
Uptime (%) %95
Operators Staff2
Cycle Time Mins45
Production mins/shift Mins540
Cycle Time Mins90
Production mins/shift Mins540
Production shift Shfts1
Operators Staff2
Cycle Time Mins45
Production mins/shift Mins540
Production shift Shfts1
Operators Staff2
Cycle Time Mins45
Production mins/shift Mins540
Operators Staff2
Production shift Shfts1 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
Production shift Shfts1
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 mins/shift Mins540
Production shift Shfts1
Operators Staff1
Cycle Time Mins90
Production mins/shift Mins540
Production shift Shfts1
Operators Staff1
Cycle Time Mins90
Production mins/shift Mins540
Production shift Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift Mins540
Production shift Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift Mins540
Production shift Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift 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
Production mins/shift Mins540
Develop In-Line Boring Capability
Completed Parts from Ideal
Develop Kanban Replenishment
SystemDevelop Kanban Replenishment
System
Develop Kanban Replenishment
System
Reduce Plate Inventory by 20%
Develop Kanban Replenishment
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
Production shift Shfts1
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
Qty/Assy (pcs) Shfts11
Qty/Assy (pcs) Shfts11
2
Shfts
DAYS
LARGE BUCKETS
Operators Staff2
Production shift Shfts1
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
FINAL ASSEMBLY/BLAST/ PAINTFIFO
BOSSES
DAYS10
POINTS
DAYS5
MISCELLANEOUSBUCKETS
Cycle Time Mins45
Production mins/shift
Mins540
Operators Staff1
Cycle Time Mins90
Production mins/shift
Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift
Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift
Mins540
Cycle Time Mins90
Production mins/shift
Mins540
Production shift
Shfts1
MRP
ProductionControlSTEEL SUPPLIER
BUCKETS DAYS11
SHROUDS
DAYS5
BUSHINGS
DAYS5
Cycle Time Mins50
Uptime (%) %95
Operators Staff2
Cycle Time Mins45
Production mins/shift Mins540
Cycle Time Mins90
Production mins/shift Mins540
Production shift
Shfts1
Operators Staff2
Cycle Time Mins45
Production mins/shift
Mins540
Production shift Shfts1
Operators Staff2
Cycle Time Mins45
Production mins/shift Mins540
Operators Staff2
Production shift
Shfts1Production
shiftShfts1
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
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
Production mins/shift
Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins90
Production mins/shift
Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins90
Production mins/shift
Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift
Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift
Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift
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
Production mins/shift
Mins540Develop In-Line Boring Capability
Completed Parts from Ideal
Develop Kanban Replenishment
SystemDevelop Kanban Replenishment
System
Develop Kanban Replenishment
System
Reduce Plate Inventory by 20%
Develop Kanban Replenishment
System
Develop Misc. Flow Line
Add Welding Capability at Final
Assembly
Develop New Scheduling Tools for
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
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
Qty/Assy (pcs) Shfts11
Qty/Assy (pcs) 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
Organizational Scheme
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
Organizational Scheme
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
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
Organizational Scheme
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
Scope of Responsibilities
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
Scope of Responsibilities
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
FINAL ASSEMBLY/BLAST/ PAINTFIFO
BOSSES
DAYS10
POINTS
DAYS5
MISCELLANEOUSBUCKETS
Cycle Time Mins45
Production mins/shift Mins540
Operators Staff1
Cycle Time Mins90
Production mins/shift Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift Mins540
Production shift Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift Mins540
Cycle Time Mins90
Production mins/shift Mins540
Production shift
Shfts1
MRP
ProductionControlSTEEL SUPPLIER
BUCKETS DAYS11
SHROUDS
DAYS5
BUSHINGS
DAYS5
Cycle Time Mins50
Uptime (%) %95
Operators Staff2
Cycle Time Mins45
Production mins/shift Mins540
Cycle Time Mins90
Production mins/shift Mins540
Production shift Shfts1
Operators Staff2
Cycle Time Mins45
Production mins/shift Mins540
Production shift Shfts1
Operators Staff2
Cycle Time Mins45
Production mins/shift Mins540
Operators Staff2
Production shift Shfts1 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
Production shift Shfts1
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 mins/shift Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins90
Production mins/shift Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins90
Production mins/shift Mins540
Production shift
Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift Mins540
Production shift Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift Mins540
Production shift Shfts1
Operators Staff1
Cycle Time Mins108
Production mins/shift 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
Production mins/shift Mins540
Develop In-Line Boring Capability
Completed Parts from Ideal
Develop Kanban Replenishment
SystemDevelop Kanban Replenishment
System
Develop Kanban Replenishment
System
Reduce Plate Inventory by 20%
Develop Kanban Replenishment
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
Production shift Shfts1
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
Qty/Assy (pcs) Shfts11
Qty/Assy (pcs) Shfts11
2
Shfts
DAYS
LARGE BUCKETS
Operators Staff2
Production shift Shfts1
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
Practical Application/
Coaching Evaluation
Practical Application/
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
Organizational Goals– Cost– Schedule– Quality– Safety
Individual Goals– Compensation– Opportunities– Responsibility– Work
Environment– Recognition
Communication
Leader Led
AwarenessGoal
Alignment
Individual Development
Plans
Individual Development
Plans
Individual Development
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
IdentifyIndividualStrengths
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
Organizational Goals– Cost– Schedule– Quality– Safety
Individual Goals– Compensation– Opportunities– Responsibility– Work
Environment– Recognition
Communication
LeaderLed
AwarenessGoal
Alignment
Individual Development
Plans
Individual Development
Plans
Individual Development
Plans
ResourcesRequired
Performance Reviews
LedLedLed
Goal Alignment System
194
Gallup Path to Business SuccessOrganizing for Success
SustainableGrowth
EngagedEmployees
EngagedCustomers
TheRight Fit
IdentifyIndividualStrengths
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
Organizational Goals– Cost– Schedule– Quality– Safety
Individual Goals– Compensation– Opportunities– Responsibility– Work
Environment– Recognition
Communication
LeaderLed
AwarenessGoal
Alignment
Individual Development
Plans
Individual Development
Plans
Individual Development
Plans
ResourcesRequired
Performance Reviews
LedLedLed
Goal Alignment System
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.
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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.
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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
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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
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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.
236
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
- From “The Speed of Trust,” By Stephen Covey and Rebecca Merrill
Saying or Doing Leaders
238
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 ?
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
Training Structured Gemba
• 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
Training Structured Gemba
Structured Coaching
Senior Leader Involvement
Training Structured Gemba
Training Structured Gemba
Training Structured Gemba
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
247
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
Training Structured Gemba
Training Structured Gemba
Training Structured Gemba
Training Structured Gemba
Waste Elimination and Data Collection
Senior Leader Involvement
248
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.
- From “The Speed of Trust,” By Stephen Covey and Rebecca Merrill
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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!
253
Take a Blue Slip
• When was the last time you had a Goal Alignment Session with your direct reports?
254
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”
257
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%
261
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
262
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
271
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.
272
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
• Continuous Improvement– Q2 2007 – Q4 2010
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
• Continuous Improvement– Q3 2007 – Q4 2010
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
• Continuous Improvement– Q4 2009 – Q4 2010
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!