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The Association of

Manufacturing
Excellence
Presents
1

People Powered Lean


Business is a Team Sport
March 14-15, 2007

Or

People are Better Than Materials!

Core Beliefs

Start with the end in mind! Take a Systems Approach

Be in the business of making hard things easynot 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 peoples vote counts more than ours.

Our Peoples 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

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

Army Basketball Team


1976-1977

Task Force 2-4 Cavalry Tactical Operations Center Team


Feb 21, 1991 - Northern Saudi Arabia

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 business
4. Understand how Senior Leaders evaluate
People investments
5. Learn from others like you
6. Take a Good Idea home with you
8

The Lean House without Waste

Session Feedback

Start with the end in mind!

10

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?

11

Agenda
March 14, 2007
8:00 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 Attitude
Making the Team: Right Fit; Finding Your Seat on the Bus
11:00 11:30
STIHL Case Study: Simon Nance
11:30 12:00
Lunch
12:00 1:00
Pre-Season Training
Building Your Depth Chart
Improving 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
Break
3:15 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

12

Agenda
March 15, 2007
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

Optional
1:00 6:00

Golf Outing

13

Today we will generate a lot


more questions than
answers
.and that is OK

14

Take a Blue Slip


Our Way to Communicate and
Facilitate Our Journey!

15

Take a Blue Slip


What do you want to learn today?

16

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:

17

Getting Out of the Box


Big Picture Thinking!

18

Measures of Performance

It is All About Business


Performance!
REQUIRED Level of Performance
Performance
Gap

Resources
Required

CURRENT Level of Performance


19

Business Metrics
If 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 plants physical production capacity


to our production process.

20

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.

21

Alternative Roles for Corporate Learning


1.

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

2.

Performance Improvement
Did the Leader receive improved job performance as a result of the
investment?
Business Metric: Overhead Cost to Improved Job Performance

3.

Human Capital Management


Do we have a system to provide the Managers with Right People in the
Right Numbers with the Right Skills at the Right Time?
Business Metric: Headcount to Productivity

4.

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

22

Team Sport
Value Stream
1.
2.
3.
4.
5.
6.
7.

Organizing for Success


Recruiting
Trying Out
Making the Team
Pre-Season Training
Playing to Win
Keeping Score
23

Business is a Team Sport!


Building High Performance Teams
1.
2.
3.
4.
5.

Organizing for Success: Aligning Production Process with


People
Recruiting: Finding the Right Athletes
Trying Out: Verifying Skills and Assessing Attitude
Making the Team: Best Player or Best Athlete: Right Fit?
Pre-Season Training:
a.
b.
c.

6.

Playing to Win:
a.
b.

7.

Learning Your Position and the Depth Chart


Developing Leaders at every Level
Current Workforce Skills Development: Building Benchstrength
Leaders emerge: Leader Performance Improvement: Identifying and
empowering leaders with the right behaviors
Teams play smart and hard: Continuous Improvement

Keeping Score: How do you know you are Winning?

24

Organizational Scheme
GM

1S

OM

OM

SS

SS

SS

1S

1S

GT

MU
NE

Vertical Dyad Linkage

GT
NE

OM
GM: General Manager
OM: Operations Manager
SS: Shift Supervisor
1S: 1st Line Supervisor
MU: Make Up Supervisor
GT: Go To Employee
E: Employee
NE: New Employee

Based Upon a Total Operational Headcount of 3060

10
30
60
160
100
500
1600
600

25

Building Pipelines

Adult
Education

Recruiting
Trying Out
Making the Team

Temp
Agencies
Community
Colleges

Generate
Labor
Reqs

College
Transfers
High Schools
Tech Schools
Other
Companies

Orient,
Screen
&
Identify
Candidates

Interview
&
Assess
Skills

Common
Skills
Training

1st Job
Skills
Development

Current
Employees
State Employment
Offices

Increase Cost

Hiring
Decision

Decrease Cost

Military

26

Life Cycle Skills


Development Program
Complex
Tasks

Employment
Skills

Supervisor
Development
Training

VI

Pre-Employment

Basic
Skills

Management
Skills

Intermediate
Skills

Supervisor
Practical
Application/
Evaluation
Mentor
Skills

Advanced
Skills

IV

Initial
Entry
Skills
Training

Basic
Training
Practical
Application
Coaching/
Evaluation

Skills
Evaluation

Intermediate
Training

II

Practical
Application
Coaching/
Evaluation

Soft Skills
Development

Advanced
Training

III

Practical
Application
Coaching/
Evaluation

Experienced Personnel

I
Competency Level

Career

27

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
Managers are Responsible as the
Primary Trainers of their Supervisors
Managers are responsible to tailor skill
development to each individual
supervisor and each operational area.
Leader Development Programs
mapped directly to Performance
Review System

28

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
29

Putting It All Together


When 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?
30

Human Capital Management


Success Principles
1.
2.
3.
4.
5.
6.
7.

Business Focus (People + Process + Material = Products)


Senior Leader Hands On Business with embedded Metrics and
Regular Reporting
Centralized Planning while Executing Program as close to the
work area as possible.
Managers are responsible and accountable for the performance
and development of their people
Be the P&L Responsible Managers best resource for support by
providing them the processes and programs to do better meet
their business objectives.
Do not be a part of the problem by putting HR mechanics ahead of
business support.
Constantly Link the Corporate Strategy to the Human Capital
Management Programbe proactive

31

Human Capital Management


Program Design Challenges
1.
2.
3.
4.
5.
6.
7.
8.

No silver bulletBig Problem with a lot of moving parts in a


dynamic business environment
Focused effort based upon real analysisnot a Good Idea of the
Day approach.
Recommendations must make good business sense
Design Executable Programs and be good Program Managers
(Cost, Schedule, Quality)
Be realistic in execution and eat the elephant one bite at a time.
Focus on PEOPLE first; then FTE.
Requires long range thinking People are multi-year projects-- if
fact Life Long Projects
Do not be a part of the Profit and Loss problem!

32

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
33

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

34

Workshop Participant
Snapshot
Take a Blue Slip

Title:
Company:
Type of Business:
#1 Challenge:

35

Organizing for Success


Theory and Application

36

People Powered Lean


Assumptions
Sound Business Model: Crisis?
Value Stream Map is Present

37

Business Process
Sales/Quoting

Sampling

Sequencing

Customer
Orders

Scheduling

Purchasing
Components

Receiving
Components

Planning

Pulling
Components

Assembly

Staging

Sterilizer

Finished Goods
Processing

Ship to
Distributor/Customer

38

Value Stream Map

How do we create value?

39

Value-Adding Activities
.transform materials and
information into products the customer pays for

Non-Value-Adding Activities
.consume resources, but dont
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

40

Team Sport: Defining Positions


Mold Maker &
Maintenance

Mold Setter

Mold/Part Designer
Sales Representative

Customer Order
and Materials

Material
Handler

Quality Control

Machine

Finished Products
and Satisfied Client

Machine Operator/
Packer

Process
Technician

Assembly Operator
Press Maintenance
Technician

41

Value Stream to Cell Map


Production Cells
Lips

Assemble/ Tack

Lug and
Beam Welder

Weld 1*

Weld 2*

Who is going to do it?

Weld 3

42

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)
43

Vertical Labor Planning


Senior
Management

P & L Responsible Leaders


IT/HR/
Accounting

Sales

Engineering

1st Line Supervisors


Production Workforce
Machine 1

Machine 2

Machine 3

Machine 4

Machine 5

44

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

45

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.)
46

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

47

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.

48

Lean Goals

Improve Quality
Eliminate Waste
Reduce Lead Time
Reduce Total Costs

Through Near Real Time Visibility over:

Process
Materials
Cost (People)
Equipment
49

People Powered Lean:


A SYSTEM to Align
People to Process obtaining
Employee Ownership
Process
Materials
Cost
Equipment
People

50

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
51

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

52

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
53

Goal Alignment

Led
Led
Led
Led

Leader
Communication

Organizational Goals

Cost
Schedule
Quality
Safety

Goal
Alignment

Awareness

Individual Goals

Compensation
Opportunities
Responsibility
Work
Environment
Recognition

Can only occur when there is a conversation


between the Leader and the Led about the Led!

54

Gallup Path to Business Success


Real Profit
Increase

Stock
Increase

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

People
Enter
Here

Engaged
Customers

Identify
Individual
Strengths

Engaged
Employees

The
Right Fit

Great
Leaders

55

Finding the Right Questions to


Assess Leader Performance
Project:
Human Sigma: Gallup conducts 30 years of research (70s, 80s, 90s)
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

56

Are my needs being met?


SA/A/D/SD Answers:
1.
2.
3.
4.
5.

Do I know what is expected of me?


Do I have the materials, equipment, and skills I need to do my work right?
Do I have the opportunity to do what I do best everyday?
In the last seven days, have I received recognition or praise for good work?
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

57

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

58

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

59

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
Im 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
60

Can we
prevent this
type of
waste from
happening?

61

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

62

Example
Employee Handbook
Welcome to Nordstrom
WERE GLAD TO HAVE YOU WITH OUR COMPANY
Our 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 Rule
Use 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

63

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 Managers
ability to lead them.

64

Vertical Dyad Linkage Theory


The 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 Employees Goals and Needs
The Organizations Goals and Needs as articulated by the
Supervisor
Requires continuous Goal Alignment within Developmental
Plans and continuous Feedback

65

Group Breakdown
Leader
Led(I)

Led(O) Led(M)

In Group:

High Trust
Good Communications
Let em Run Goal Setting
Low Task Definition Needs
High Relationship Needs

Out Group:

Low Trust
Stressful Communications
By the Numbers Goal Setting
High Task Definition Needs
Low Relationship Needs

66

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

67

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.
68

Organizational Scheme
Analysis
Current State

69

Org Chart

70

Organizational Scheme
GM

1S

Vertical Dyad Linkage

OM

OM

SS

SS

SS

1S

1S

GT

MU
NE

OM

GT
NE

GM: General Manager


OM: Operations Manager
SS: Shift Supervisor
1S: 1st Line Supervisor
MU: Make Up Supervisor
GT: Go To Employee
E: Employee
NE: New Employee

71

Organizational Scheme
GM

Self Motivated Tasks

1S

Directed Tasks

Vertical Dyad Linkage

OM

OM

SS

SS

SS

1S

1S

GT

MU
NE

OM

GT
NE

GM: General Manager


OM: Operations Manager
SS: Shift Supervisor
1S: 1st Line Supervisor
MU: Make Up Supervisor
GT: Go To Employee
E: Employee
NE: New Employee

72

Who gets to Play?


Matching Leaders to People to Jobs
1.
2.
3.
4.
5.
6.
7.
8.

Considerations
Past
Performance
Technical
Experience
Strengths and
Weaknesses
Work Area
Complexity
Leader-to-Led
Ratio
Lead Times
Crew Make-Up
Shifts

OM

PC

SS

PLANNING

1S

1S
GTM
NE

M1S
M

GTM
M

NE

73

PC

Example:
Running Your Business Chart

MPL
WF

PC

FF

MPL
GTM MUF GTM
WF

FF

PC

WF

GTM MUF GTM


M

PC

MPL
FF
GTM MUF GTM

MPO

PLANNING

MPL
WF

PC

FF
GTM MUF GTM
M

PC

MPL

WF

WF

Every Bubble has a Name!


linked to their Developmental Plan

MPL

GTM MUF GTM

FF
GTM MUF GTM
M

FF

74

Turnover
Fit with
Supervisor

Quality

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

75

Core Daily Business Activity


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

Job
Packages

Foreman

Materials

Products

People

Foreman Provide:
Clear Goal Definition
Materials and Equipment to accomplish the task
People with the Right Qualifications and Skills
Leadership: Organizational Energy and Momentum
76

Project Plans
and
Labor Estimates

Core Business
Data Element

Leader
Assigning
Charge #s &
Approving
Time

Assigning Work to Crew in Discrete Increments and


Measuring Goal Accomplishment

77

Planning & Execution


Job Packages

Worker Capabilities

Job Description
# Hours Planned
Materials Available
ERP Tools

Qualifications
Capacity
Skills
Physical Limitations

Foreman
Cost, Schedule,
Quality, Safety

78

Organizational Scheme
Does it Support the Core Daily Business Activity?
SDO

DP
PM
PSP

DW

SDO: Senior Director, Ops


DP: Director of Production
DW: Director of Warehousing
DM: Director of Maintenance
PM: Production Manager
PSP: Production Supervisor
TLMU: Teal Leader Make-Up
TL: Team Leader
SU: Set Up
BU: Back Up
CRA: Clean Room Assembler
NCRA: New Clean Room Assembler

DM

PM

PSP
TL

PSP

PSP

TL

TL
TLMU

SU
NCRA

CRA

BU
NCRA

CRA

79

Analytical Methodology
1. Evaluate Responsibilities of each level
2. Look for Common Themes that flow
from level to level
3. Look for Unique Responsibilities on
each level
4. Evaluate interactions between Levels

5. Evaluate Planning Horizons at each level


6. Evaluate Communications Techniques at
each level (Message and Method)
7. Remove echelons one at a time and reassess.

80

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

81

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

82

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

83

TASK

VPO

MO

PS

PSPC

LO

Leads

Knows Customers & Suppliers (Understands the


Value Stream)

Stewardship of Assets

Communications

Continuous Improvement

Self Development

Synthesis of the Asset

Sync of Strategic Operations

Balance Production with Costs

Team Building

Identify & Remove Barriers

Development of the Workforce

Understands the Process

Strategic Planning

Knows Business Systems Tools

Expense Management

Prioritization

Use the Computer

Fix Todays Problems

Knows the Job

Knows the People

84

THINK Strategically
Continuous Improvement
Changing the Conditions
1.
2.
3.
4.

Cost
Schedule
Quality
Safety

ACT Tactically:
Day to Day operations to meet
business objectives

85

Apollo 13
Houston We Have a Problem!
Example

86

Continuous Improvement
Over Time
Success = Job Packages Completed within Cost,
on Schedule, no Re-Work, Safely

TIME
Current
State

Future
State

Perfect
State
87

Leader Lanes
Current
State

Leader? Leader?

Future
State

Leader? Leader?

Perfect
State

Leader?

Time

Leader?

Job
Packages

Foreman

Materials

Products

People

88

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!
89

Break

90

The On Boarding Program


Recruiting
Trying Out
Making the Team
Getting the Right People on the Bus

91

Our Peoples 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 lets see how
this goes day

It is Managements responsibility to create an


environment for our employees to be successful
Not an environment that encourages them to fail

92

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?
93

Labor Acquisition Options


Measures of Performance

Best Recruiting Pipelines?

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

CURRENT

94

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
95

Focus on New Employees

96

Building Pipelines

Adult
Education

Business Metrics:

Temp
Agencies

- 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

Community
Colleges

Generate
Labor
Reqs

College
Transfers
High Schools
Tech Schools
Other
Companies

Orient,
Screen
&
Identify
Candidates

Interview
&
Assess
Skills

Common
Skills
Training

1st Job
Skills
Development

Current
Employees
State Employment
Offices

Increase Cost

Hiring
Decision

Decrease Cost

Military

97

Employee Acquisition
Create 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.

98

Forecast
By Labor Category
Generate
Labor
Reqs

Minimum: ___
Maximum: ___

What is your Labor Forecast?


What is your capacity to on board new employees?
99

Example
Hiring Forecast and Schedule
Month
# Hires
July:
10
August: 5
Sept:
0
Oct:
10
Nov:
5
Dec:
0
Total:
30
100

Total Turnover Chart

101

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)

102

Begin with the end in mind


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

103

Lean Enterprise Goals

Improve Quality
Eliminate Waste
Reduce Lead Time
Reduce Total Costs

Through
Near real time visibility over

Process
Materials
Cost
Equipment
And

104

People

105

Concept of Operations
A Systems Engineering Approach
Phase 1
Current State &
Good Ideas
Phase 6 n
Continuous
Improvement
July 2005 Present

Phase 5
Production and
Roll Out
November 2004 June 2005

April June 2004

People
Powered
Lean
Phase 4
Pilot and
Evaluation
August October 2004

Phase 2
Future State Design,
Plan of Action with
Resources
June July 2004

Phase 3
Creation and
Development
July August 2004

106

Hiring Process
July 2004
Production
Identifies
Requirement

HR Posts
Requisition &
Sends to OET

HR
Receives
Applications

Welding Test

Hiring
Decision

Drug Screen
and
Physical

HR Admin
Inprocessing

8 Hours of
Video
OSHA Training

OJT
Training

HR
Schedules
Interviews

Production
Interviews

Offer Sent

Applicant
Given Report
Date

Cycle Time: 10.3 Weeks


Cost: $2,008 per new hire
(Labor costs only)
107

The Hiring Process


Opportunity for Improvement

108

Hiring Process
August 2004
Production
Identifies
Requirement

HR Posts
Requisition &
Sends to OET

Interviews
Conducted;
Welding Test

Hiring
Decision

HR Admin
Inprocessing

Plant
Manager
Meeting

OET
Screening

HR
Receives
Applications

HR
Schedules
Interviews

Drug Screen
and
Physical

Offer;
New Hire
Packet Sent

Applicant
Given Report
Date

Process/
Quality
Training

Cell Training

Shift
Supervisor
OSHA Training

Structured Orientation and Training Process


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

109

Policy Statement
Our companys 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.

110

Scenario Exercise
Recruit Profiles

111

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

112

Identify Recruiting Differentiators

Working Condition

Work Environment

My boss tells me what to do and then lets me do it.


Inside vs. Outside

Pay and Benefits


Workforce Stability
Shift Schedule
Free and convenient parking
Overtime Opportunities
113

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
114

Example
Pipeline Capacity Analysis

1. Community
Colleges
2. Adult
Education

Tidewater (50)
Paul D. Camp (15)

Adult Education (108 identified)

3. Other
Companies
(VEC)

4. Tech
Schools

Community Colleges (65 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

115

Example
Orientation and Screening

Orient,
Screen
&
Identify
Candidates

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

116

Example
Candidate Classifications
1.
2.
3.
4.
5.
6.
7.

Hire Now: Exceeds All Criteria


Hire: Meets All Criteria
Near Hire: Will meet All Criteria within 30 days with
self-directed development
Far Hire: Will meet All Criteria within 120-180 days with
self-directed development
No Hire: Will not meet minimum criteria for at least 6
months
Best Athlete
Has unique skills outside of current Job Search
Requirements
117

Realistic Job Previews

Link to full RJP

118

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.
2.
3.
4.
5.

Plant Tour
Skills Assessment
Attitude Assessment
Hiring Decision
New Teammate Skills Development Plan

119

New Teammate Orientation


Goal: Create a world class first day.
New Teammate Leaves after first day thinking:

Wow! These guys really know what they are doing.


Ive 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.
Lets go to work!

120

World Class 1st Day


Thursdays
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

121

World Class 1st Day


Thursdays
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

122

Value Stream Map to Tasks to Cell Map


Cells
Tasks

Lips

Assemble/ Tack

Lug and
Beam Welder

Weld 1

Weld 2

Weld 3

Fit Materials
Welding
Quality Assurance
Use a Ruler
Read Blueprint
Bevel
Operate Brake

Value Stream Map

Operate Saw
Operate Glibert
Operate Lathe
Burn Table
Operate T1
Operate T2

123

Common Skills Training


Goal: 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

124

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

125

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

126

Focus on the Applicant


Interview and Test Schedule
Pre-schedule appointment times to reduce cycle time.
Understand you companys 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.

127

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.
2.
3.
4.
5.
6.
7.
8.

Production Terms and Language


Use of Personal Protective Equipment (PPE)
Reading Measurements to the 1/16 Detail
Parts of a Weld and Weld Bead Placement
Weld Quality
Blueprints and Weld Symbols
Welding Equipment/Maintenance; Use of Cranes and Rigging
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.

128

Example
Cell Training
Goal: Seamlessly integrate new Hire into the production line and
reduce Time to Competency

Sequence List:
1.
2.

1st Job
Skills
Development

3.
4.

New Team Mate meets with 1st Line Supervisors/Cell Trainers


1st Line Supervisor uses Welder Skills Development Record to
develop Cell Training Program
Supervisors use 30-60-90 day Feedback System to assess
performance and update skills development record.
New Team Mate and 1st Line Supervisor conduct a Goal Alignment
session and agree on initial Career Path and Production Skills
Training Plan.

129

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

130

Applicant Flow
Dec. 12

97

+7

85

81

+4

65

59

+6

58

53

+5

Qualified (Less than 2 weeks)

17

17

Minimally Qualified (2-4 weeks)

26

22

+4

Unqualified (More than 4 weeks)

+1

Awaiting Weld Test Results (Bend)

# of Apps Received
# of Screened Candidates Scheduled for
Test/Interview
# Tested & Interviewed
Fully Qualified

Results

Delta

104

# Interested

Test

Nov. 7

Applicant Flow: Page 1 of 2

131

Applicant Flow
Dec. 12

Nov. 7

Delta

13

12

+1

# that Voluntarily Withdrew

# Awaiting Hiring Decision or Offer Pending

-1

# of Active Applicants

-1

34

31

+3

32

30

+2

+2

# Failed Interview

# Offered and Accepted Employment


# of Offers Declined or Rescinded
# Started
# Terminated

Applicant Flow: Page 2 of 2

132

Hiring Cycle Times


- All Cycle Times measured in Calendar Days -

Cycle Time Interval


Application Date to
Test/Interview Date

Days

18.55

Test /Interview Date to


Offer Date

5.05

Offer Date to
Acceptance

2.64

Acceptance to Start
Date

10.50

Total Application Date


to Start Date

42.41

Changes since last


Program Review

-1.96
133

Hiring Cycle Attrition


Hiring Cycle Phase

# Attrited

Pre-Application

19

App Date to Weld Test

21

Weld Test to Interview

Post-Interview

15

Drug Test

Offer Declined

Post-Hire (In-Training)

Total Hiring Cycle Attrition:

72 of 104 Candidates

134

Post-Hire Attrition Analysis


Name

Termination
Date

Termination Reason

Days on the Job


(Liebherr Work
Days)

7/25/2005

Discharged 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

8/26/2005

Discharged from Welding School. Dismissed for


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

15

8/8/2005

Discharged from Welding School. Poor work habits


and slow progression given as primary reasons.

11

10/10/2005

Unacceptable progress in Welding School and


unwillingness to brake old habits. Needs more
experience than our training can provide.

11

11/18/2005

Discharged for falsifying application with regards to


educational background (HS Graduation).

31

12/2/2005

Discharged for falsifying application with regards to


educational background (HS Graduation).

45

135

Successful Program Results


March 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

136

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!

137

Take a Blue Slip!


What data to you regularly receive during your
companys 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?
138

The Lie of Modern


Manufacturing
Simon Nance
Manager, Training and Development
STIHL
Virginia Beach, Virginia
139

Lunch
and
Networking

140

Production Skills Development


Building the Depth Chart
How to
Increase Productivity,
Control Head Count,
and Improve Capacity
141

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

142

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

143

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

144

145

Total Distribution by Job Title


38 Labor Categories

146

Maintenance Support (Cont.)


PAINT, FABRIC & UPHOL
MECH

Labor Categories
513

QDR TECH

10

RECORDS SPEC

47

SERVICE ATTENDANT

33

Aircraft Mechanic

1367

Maintenance Support

A/C MECHANIC

1367

A/C COMPONENT PLATER

A/C REFININSHING SPEC

20

TECH PUBS TECH

14

12

TEST CELL TECH

WEIGHT AND BALANCE TECH

4
1

Avionics/ Electronics

441

A/C SCHEDULER

AAE&I TECH

192

A/C WELDER

AE&I MECH

249

AMSS ACFT ENG SHOP


MECH

25

X RAY TECH

AMSS ACFT HYD SHOP


MECH

10

Other Support

137

A/C MONITOR

17

Sheet Metal

114

A/C STRUC MECH

114

AVIATION LIFE SUPPORT


EQUIP TECH

37

Armament

85

COMPONENT CLEANER

A/C ARMAMENT TECH

85

ELECTRONIC INSTRUMENT
TECH

FABRIC AND UPHOLSTERY


TECH

Technical Inspection
A/C TECHNICAL/ NDT
INSPEC

213
213

Test Pilot

89

MAINT TEST PILOT

89

ACCOUNTING SPEC

ADMIN SPEC

21

COMPUTER OPERATOR

F AND M SPECIALIST

30

FLIGHT OPS SPEC

MACHINIST

13

JANITOR

MATERIAL CLERK

34

MESSENGER

PERSONNEL SPEC

PLANT AND FACILITIES


MECH

MATERIAL INSPECTOR

MATERIAL SPECIALIST

166

P/C SPEC - ATTC


P/C CLERK

2
58

PROGRAMMER

35

147

Skill Paths
1.
2.
3.
4.
5.
6.
7.

Aircraft Mechanic
Avionics/Electronics
Sheet Metal
Armament Mechanic
Technical Inspection
Test Pilot
Maintenance Support
a.
b.
c.
d.

8.

42 Labor Categories
8 Skill Paths

AMSS (Hydraulics, Machinist, etc.)


Specialized Mechanics
Records Clerks/Production Control
Supply and Logistics

Other Support
a.
b.
c.
d.
e.
f.
g.

Human Resources
Information Technology
Finance
Administration
Environment Health and Services
Training
Facility Support (Monitors, Service Attendants, Janitors)

148

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.

149

Life Cycle Skills


Development Program

Leader
Development
Training

Complex
Tasks
Pre-Employment
Employment
Skills

Management
Skills

Leader
Skills
Training

V
Basic
Skills

Intermediate
Skills

Mentor
Skills

Advanced
Skills

IV

Initial
Entry
Skills
Training

Basic
Training
Practical
Application/
Coaching
Evaluation

Skills
Evaluation

A Guide

Intermediate
Training

II

Practical
Application/
Coaching
Evaluation

Soft Skills
Development

Advanced
Training

III

Practical
Application/
Coaching
Evaluation

Experienced Personnel

I
Competency Level

Employee Career

150

Right Person/Right Job


Move the Employee in the Right Direction
Quantity of Work

Go To Person
High Quantity
Low Quality

High Quantity
High Quality

Low Quantity
Low Quality

Low Quantity
High Quality

New Person

Quality of Work

151
What is our plan to move our people along the correct developmental path?

Strategic Objectives
1. Training is NOT about INDIVIDUAL CHOICE. We Care!
2. Job Performance and Training are Seamless
3. 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 Dollars
6. People drive Skills Based Requirements
You can be perfectly trained and absolutely unproductive!
152

People Focused Training


1. Every employee is on a Career Path
2. 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 Job
d. 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 recorded
8. The Employees Skills Record and Career Path Map is updated.

153

Goal Alignment System


Led
Led
Led
Led

Leader
Communication

Goal
Alignment

Awareness

Performance Reviews

Organizational Goals

Cost
Schedule
Quality
Safety

Individual
Individual
Development
Individual
Development
Development
Plans
Plans
Plans

Resources
Required

Individual Goals

Compensation
Opportunities
Responsibility
Work
Environment
Recognition

154

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

155

On Boarding

Hiring

Skill Paths
1. Mechanic
2. Assembly
3.Sheet Metal
4. Material Handler
5.Technical Inspection
6. Maintenance
7. Production Control

Training Program
Overview

Employee Skill Path


Common Skills
Training
What every employee
needs to know

Cell
Training
Skills to do 1st Job

Intermediate Skills
Training
Skills to do second and
third job

Lead/Advanced
Skills Training
Skills to Teach Others
the Job

Master Mechanic
Mentor

Tech Specialist
156

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.

157

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

158

Skills Transfer
Subject Matter Experts
Standardized Work

Those Who Have


the Information

Training
System

Training
Audience
Those Who Need
the Information

159

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

160

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

161

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

162

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.

163

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

164

Strategic Goal

If I only have one guy


show up for work I want
to be able to build an
entire bucket
Dick Dale
Operations Manager

165

Churn
Sucking Cost Invisibly!

166

Churn
Definition: 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!

167

Causes
Individual Induced:

Sick
Appointment
Work Schedule
Lifestyle
Apathy
Vacation
Dont 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
168

Churn
Good 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.

169

Transition Acceleration

Current Job

Time
Quality
Level of Effort

Future Job

Current State:
How long from assignment to competency?
170

Leading and Lagging Indicators


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

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

171

Churn Impact
Do the Math!

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

172

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 Job
Metric: Time to Competency
Best Case: Minutes
Worst Case: Never

173

Early Interventions

Better Job Matching


Leverage Developmental Opportunities
Increase reaction time where possible
Understand Churn caused internally and
externally
Information System informed Depth Chart

174

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?
175

Each Pipeline has a different


Mean Lead Time
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

176

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

177

Leader Churn
Definition: 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! 180

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

181

The Leader Development Challenge


Playing to Win!

182

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

183

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 Managers
ability to lead them.

184

Agenda
The Theory
Improving Current Leader Performance
Building Future Leaders

185

The Leading Indicator of Future


Business Performance
the strength of the Leader to Led Linkage.

186

The Gallup Path to Business Success


Real Profit
Increase

Stock
Increase

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

People
Enter
Here

Identify
Individual
Strengths

Engaged
Customers

In-Group/Engaged
Employees

Great
Leaders
The
Right Fit

187

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

188

Core Business Data Element


Project Plans
and
Labor Estimates

Leader
Assigning
Charge #s &
Approving
Time

Assigning Work to Crew in Discrete Increments and


Measuring Goal Accomplishment

189

The 1st Line Supervisor Challenge


Orders

Success = Orders Completed within Cost, on Schedule,


Safely, with no Re-Work

Materials

1st Line
Supervisor

Products

Machines
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

190

The Rubber Meets the Road


Equipment
and Tools
New Folks

Work
Packages/
Orders

Success = Orders Completed within Cost,


on Schedule, Safely, with no Re-Work

Go To
Operators

Products

Materials

Machines

Training
and
Qualifications

191

1st Line Supervisor Challenge


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

Equipment
and Tools

Work
Packages/
Orders

New Guys
1st Line Supervisor =
PROBLEM
SOLVERS

Go To
Operators

Materials

Machines

Products

Success = Orders Completed within


Cost, on Schedule, Safely, with no Re-Work

Training
and
Qualifications

192

Goal Alignment System


Leader
Communication

Goal
Alignment

Led
Led
Led
Led
Awareness

Performance Reviews

Organizational Goals

Cost
Schedule
Quality
Safety

Individual
Individual
Development
Individual
Development
Development
Plans
Plans
Plans

Resources
Required

Individual Goals

Compensation
Opportunities
Responsibility
Work
Environment
Recognition

193

Gallup Path to Business Success


Organizing for Success
Real Profit
Increase

Stock
Increase

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

People
Enter
Here

Identify
Individual
Strengths

Engaged
Customers

Engaged
Employees

The
Right Fit

Great
Leaders

194

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
195

Organizational Scheme
Leader is a BIG Word
GM

OM

1S

SS

SS

1S

1S

GT

MU
NE

Vertical Dyad Linkage

OM
SS

GT
NE

OM
GM: General Manager
OM: Operations Manager
SS: Shift Supervisor
1S: 1st Line Supervisor
MU: Make Up Supervisor
GT: Go To Employee
E: Employee
NE: New Employee

Based Upon a Total Operational Headcount of 3060

10
30
60
160
100
500
1600
600

196

Leader Development Program


Perfect State

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.

Systematic Approach to Leader


Development
Managers are the Primary Trainers
with the right tools kit to develop their
Supervisors
Managers 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

197

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!
198

Defining the Current State


1.
2.
3.
4.
5.
6.
7.
8.
9.

Go find the High Performers


Find out what they do and dont do everyday
Write it down
Agree on the Mission Essential Task List and High
Performance Behaviors
Ensure Alignment with Business Goals and Value Stream
Compare all the Leaders behaviors to the High Performer
behaviors
Managers and Supervisors Conduct Goal Alignment Sessions
to validate current behaviors and identify improvement areas.
Analyze to define, defend, and distribute Performance
Improvement resources
All Leaders Continuously Improving Systematically

199

Scenario Exercise

200

Observable Behavior
Example
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.
201

Tell me about the best 1st Line


Supervisor you know
Take a Blue Slip

202

High Performer
1st Line Supervisor
Mission Essential Tasks
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
See Hand Out

Demonstrates Leadership
Understands Manufacturing Process
Seeks Continuous Improvement
Plans Work
Communicates up the Chain
Communicates to Subordinates
Builds Teams
Technically Competent
Uses Technology
Develops Crew

203

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

204

Designing Leader Development Systems


Senior Leader Guidance

Managers are the Primary Supervisor Trainers, Assessors, and


Developers
Focuses on single value-added behaviors, techniques and
procedures key to each Supervisors 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

205

Goal Alignment System


Leader
Communication

Goal
Alignment

Led
Led
Led
Led
Awareness

Performance Reviews

Organizational Goals

Cost
Schedule
Quality
Safety

Individual
Individual
Development
Individual
Development
Development
Plans
Plans
Plans

Resources
Required

Individual Goals

Compensation
Opportunities
Responsibility
Work
Environment
Recognition

206

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
207

Program Objective
Move Employee to the Left
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

DYSFUNCTIONAL
All 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.

Task
Technical
Competence

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.

208

Supervisor
Developmental
Strategy Matrix
Initial Assessment

Does Not
Know How to
do the Task
Knows How
to do the task
needs On
the Job Help
Knows the
Job but has
trouble
putting it all
Together
Knows their
area but
needs to
Understand
entire Value
Stream

Send to
Established
Training Course
Task Coach
High Performing
Supervisor/
Manager
Task Coach
High Performing
Support Staff

Reassessment

Spend the Day


with High
Performing
Supervisor at
their Job Site
ID Developmental
Positions either
up or down
stream
ID Support
Shadowing
Opportunity

209

Building the Tool Kit


Developmental
Assignments

Customized
Courses

Goal
Alignment
Session

Access
Procedures,
Manuals,
References

Independent
Study

Mission
Essential
Task

Commercial Off
The Shelf
Courses

Scenarios

Low Cost

Coaches
On the Job

EPSMs

Subject
Matter
Experts

Tips and
Best
Practices

Medium Cost
High Cost

210

** Electronic Performance Support Modules

Managers
or
First Line Supervisor
Who is First?
Get the Managers on the right
page first, then have them
develop the First Line Supervisors
211

Building Future Leaders


Developing Bench Strength

212

Leader Churn

213

2nd Squadron 4th Cavalry


Squadron Staff - March 22, 1991

214

2nd Squadron 4th Cavalry


Squadron Staff - January 1, 1991

215

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

216

Foreman Internal
(Unscheduled)
Churn Data
Total Foreman
# of General Foreman Changes
# of Area Changes
Both General Foreman & Area

= 33
= 19 (58%)
= 9 (27%)
= 7 (21%)

217

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 GameOperations

Paradox: Trust by Nature Builds Slowly


We dont have the time!
218

Transition Acceleration

Current Job

Time
Quality
Level of Effort

Future Job

Current State:
How long from assignment to competency?
219

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

220

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
221

Leadership Pipelines
1.
2.
3.
4.

Former Leaders
Transfers with Area Experience
Transfers without Area Experience
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

222

Developmental Phases
1.
2.

Do the right things


Do the right things right

3.
4.

Do the right things better, faster and more effectively


Are we doing the right things? Re-defining the right
things
Prepare for next career path position

5.

} Prior to 1

st

Day on Job

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


Day
223

New Leader On Boarding Program


OVERVIEW
Bull Pen

Warm Up

I Know

I Can Do

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

Throwing Ks
I Can Apply

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

Competency
Check

Gaining Manager Involvement

Competency
Check

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

224

Scenario Exercise
A Leaders Perfect 1st Day

225

Foreman Warm Up Scenario


Scripting a High Performance
First Day on the Job
First Day is a Performance Day not a lets see
how it goes day

226

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.

227

1st Day Preparation Warm Up


4.

Task: Network with Key Players Interface with Planning and PC

5.

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

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

6.

Warm Up Event: Meet with Supervisor to receive Supervisor guidance and direction with Coach.
Conduct and analysis and back-brief Supervisor on 1 st Day Plan.
Supporting Tasks: None
1st Day Event: At end of first day report progress to Supervisor.

Task: Administer Time and Accounting System Pay crew

7.

Warm Up Event: Pay Coaches Crew


Supporting Tasks: Use the Computer
1st Day Event: Successfully Pay Crew

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.

228

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

229

1st Day Preparation Warm Up


Task: Demonstrate Technical Competence

11.

12.

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

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

230

Performance Improvement Plan


Candidate Name:
Current Position:

Task

Plan Developed By:


Reviewed By:

Bull Pen

Warm
Up

The Heat K

Coaching:

- Spend time with teachable


moment expert as he/she points
out opportunities

- Walk area, identify teachable


moments and take action

- Analyze teachable moments to


determine if systemic issues exist

- Share lessons learned with all


crews and other MPLs

- LDP primer

Training / Event

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

231

Break

232

Building Lean Leaders

233

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
234

1st Line Supervisors


We have Leaders who are busier than ever but
dont 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.

235

Common Current State Issues


Operational Responsibilities have exploded yet no clear
articulation of those roles and responsibilities
Leaders cant 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 todays 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

236

Saying or Doing Leaders


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.


effective

I learned how to give an


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

237

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


238

The Elephant
Systemic Culture Change
Operations
Manager
1st Line
Supervisor
2007

Senior
Executives
Shift
Supervisor
Support
Leaders

2008 ?

2009 ?

2010 ?

2011 ?

239

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
240

Senior Leader Commitment


Win-Win Terms
If the 1st Line Supervisors change their
behaviors to become Lean Leaders then
The Seniors will create a better condition for the 1 st
Line Supervisor by also identifying and eliminating
waste from their position in the organization.
The Seniors will present their proposal for the 1st Line
Supervisors for their approval.
Once approved the Seniors will report out to the 1st
Line Supervisors on the same program management.
241

End State
Increased Trust between the Leader and
the Led
Increased Trust, increases SPEED and
decreases COST!

242

Lean Leader
Mission Essential Tasks
1.
2.
3.
4.
5.

Knows their Process


Knows their Customers and Suppliers (SIPOC)
Identifies Day to Day and Systemic Waste
Prioritization
Eliminates Waste & Improves Business
Performance
6. Engages Team Mates
243

Creating the Lean Leaders


System
Senior Leader Involvement
Whats Different
Development
Training

Structured
Gemba
Structured Coaching

244

Training and Gemba Outline


Tell Me

Show Me

Training

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

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

245

Senior Leader Involvement Structure


Senior Leader Involvement
Define
Whats
Different

Whats Different
Development

Vet the
Training and
Gemba

Walk the
Gemba
Walk the
Gemba
Training

Walk the
Gemba

Structured
Gemba

Senior Leader
Level Waste
Identification

Training

Walk the
Gemba

Structured
Gemba

Senior Leader
Level Waste
Identification
and Elimination

Training

Structured
Gemba

Senior Leader
Level Waste
Identification
and 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

Training

Structured
Gemba

Senior Leader
Level Waste
Identification
and Elimination

Structured Coaching

Senior Leader
Level Waste
Elimination

246

Coaching Structure
Senior Leader Involvement
Training

Structured
Gemba
Training

Waste Elimination and


Data Collection

Structured
Gemba
Training

Structured
Gemba
Training

Structured
Gemba

Coaching
(Steps 1 - 4)

Goal
Alignment
Session
Coaching
Matching/LineUp and
Resource
Session
Line-Up and
Resource
Review
Approval
Coaching
Group Kick
Off Meeting

Coaching
(Steps 5 7)
Individual Coaching
Event Focus

Sessions
Attribute Focused
Coaching
Vice President
Gemba

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

247

TRUST

Keys to Success

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

248

Golden Rule of Leadership


they
Treat your subordinates how you
would like to be treated.
1 at a time!
249

The Organization Takes on the


Personality of its Leaders!

250

Quick Look Idea


In 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

251

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!
252

Take a Blue Slip


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

253

Closing
I cant 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

254

Keith Hornberger
Lean Sensei

255

Keeping Score
Putting it all Together

256

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?
257

Running the Business


Income 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

258

Waste Targets
1. Labor Costs
2. Production
3. Systems

259

Labor Costs
What % of your revenue is associated with
labor?
Direct Labor = 15%
Indirect Labor = 10%
Total Labor = 25%

260

Labor Cost Analysis


2006 Expected Revenue = $220 Million
Projected 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

261

Human Capital Management Program


Components
1.
2.
3.
4.
5.

On Boarding
Current Workforce
Leader Development
Building Benchstrength
Executive Development
Where do we start?
262

Start where you get the biggest


bang for the buck!
CFO Speak:
Return on Investment
263

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!
264

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?


265

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

266

ROI Examples
1. On Boarding
2. Production Skills
3. Employee Engagement

267

EXAMPLE #1
On Boarding
Return on Investment Analysis
268

Retention

Process
Hiring
Process

Initial
Training

Probationary
Period

First Year

Subsequent
Years.

1. Reduce Hiring Process Cost


2. Reduce Attrition Cost

269

New Hire Release Breakout


Number
Released

Calendar Days
Total Hired

482

Total Released

225

Percent of Total Hired

Total Released
in first 120
Days:

Total Released
120-365 Days

Total Released
365(+) Days:

131

50

31

27%

10.4%

6%

270

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.

271

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


272

ROI Analysis
ROI 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

273

Manufacturing Turnover Cost Breakout


Annual
Costs for
100 Worker
Site

Annual
Costs for
1000
Worker
Site

Annual
Costs for
10000
Worker Site

Manufacturing

Turnover
rate

Voluntary
Quits

Retirement

Fired

Replace
-ment
Costs

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

$476,000

$4,760,000

$47,600,000

TOTAL

82.4% of Turnover Costs are in the Voluntary Quits Category


11.8% of Turnover Costs are in the Retirement Category
5.8% of Turnover Costs are in the Fired Category

274

EXAMPLE #2
Production Skills Program
Return on Investment Analysis
275

Understand the Cost of Training


Overwhelming Cost of Training is Student Labor

276

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

277

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

278

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
279

By Year Savings
2003

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.
280

Intervention
Estimated Costs

1 ea Primary Level 1 Instructor

1 ea Scenario Evaluator (Part Time)

$112,000

Automated Support Tool/IT Support

$84,000

Program Management

$234,000

Metrics, Data Capture and Evaluation

$50,000

Total Costs of
Intervention:
$670,000

Courseware Design and Implementation

$30,000

5 Scenario Work Areas

$25,000

10 (+2) Computer Lab

$50,000

Recurring cost:
Instructors
IT Support
Materials

$5,000

1st year Labor Costs

40 hours x 100 New Hires x $20/Hour


$80,000

281

Return on Investment
$1,207,261:

Total Projected Savings

$670,000:

Total Intervention Costs

$537,261:

2006 Savings

Break Even: Q3/2005


282

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

283

EXAMPLE #3
Employee Engagement

Leader Development Program


Return on Investment
284

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.

285

Company Baseline
Number of Employees

3000

Average Hourly Rate (Loaded)

$40

Hours Worked per Year

2080

Salary per Individual


Workforce Salary

$83,200
$249,600,000

How can I get to this kind of Savings?


Total FTE Savings
Total Savings in Dollars

51.8
$4,308,000

286

Reduce Grievances
(Union Shop)
Grievance
Grievance Hours lost (e.g. 30 hours due to other
workers making up, management time, lost
employee productivity)
Loss for each Grievance

30
$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)
Intervention Savings
FTE Savings

50%
$60,000
0.7

287

W2 Turnover Analysis
Average
Monthly
Headcount

Total W2s
issued

Churn

Annual Turnover
Rate

Hourly

176

352

176

100%

Salaried

73

72

(1)

1.4%

Hourly

189

334

145

76.7%

Salaried

82

87

6.1%

Hourly

257

451

216

75.5%

Salaried

91

97

6.6%

2003

2004

2005

288

Reduce Voluntary Turnover


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

15%

Turnover Rate

25%

Individual Turnover Cost


Total Workforce Turnover Costs
Employee Turnover due to voluntary separation
Cost for Employee Turnover due to voluntary
separation
Estimate of Intervention Effects
(Percent Reduction in Voluntary Turnover)
Intervention Savings
FTE Savings

$12,480
$9,360,000
80%
$7,488,000
25%
$1,872,000
22.5

289

Reduce Absenteeism
Absenteeism
Absenteeism Hours lost (e.g. 12 hours due to other
workers making up, management time, lost employee
productivity)
Loss for each day an employee lays out
Average number of lay outs per employee per year

12
$480
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


Estimate of Intervention Effects (Percent Reduction in
Absenteeism)
Intervention Savings
FTE Savings

$7,200,000
33%
$2,376,000
28.6

290

THINK Strategically.
2007-2010
PPL Strategy

Project Management
and
Measuring Business Impact

ACT Tactically
2006
PPL Program

291

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)
292

PPL Strategy Development


Must Dos
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
293

PPL Strategy
Must Not Dos

Try to make us a training company


Break the bank
Make unrealistic promises
Have a negative impact on production

294

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

295

Human Capital Management Strategy


2006-2009
An Example

296

Strategic Initiatives
1.
2.
3.
4.

On Boarding
Leader Development
Productivity Improvements
Team Building: Application of Lean Concepts
to Cell Manufacturing

297

1. On Boarding
Components
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

Timeline
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

298

2. Leader Development
Components
Identification of Leader
Levels
Leader Developmental
Plans
First Line Supervisor
Training
Manager Training
Succession Planning

Timeline
Analysis
Complete Dec 2005

Design
Q1 2006

Development
Q2-Q3 2006

Test
Q4 2006

Roll Out
Q1 2007

Continuous Improvement
Q2 2007 Q4 2010

299

3. Production Skills Improvements


Components

Depth Chart
External Training Courses
Formal Cross Training
Automated Tracking skills to job
Hip Pocket Training
Skills Assessment of
Current Workforce

Timeline
Analysis
Q2 2006

Design
Q3 2006

Development
Q4 2006

Test
Q1 2007

Roll Out
Q2 2007

Continuous Improvement
Q3 2007 Q4 2010

300

4. Team Building: Application of Lean


Concepts to Cell Manufacturing
Components
Production Teams/Cells
Team Based Operations
Cross Functional Teams

Timeline
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
301

Human Capital Management Strategy


Q2/2005 Q4/2008
Q2/2005

On Boarding

Q3/2005

Leader Development

Q2/2006 Production Skills Improvements

Q3/2007

Team Building

Roll Out Q1/2006

Roll Out Q1/2007

Roll Out Q2/2007

TBD

302

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
303

End of Day 1
Whew

304

Welcome to Day 2

305

Creative Memories
Overview and Plant Tour
Bruce Boulton
Operations Manager

306

Plant Tour
Feedback
Your Gift to Creative Memories

307

Lets Wrap It Up
Review Workshop Outcomes
Blue Slips

308

What Did You Want To Learn


From This Work Shop?

309

Human Capital Challenges


No silver bulletBig Problem with a lot of moving parts in
a dynamic business environment
The commitment is to provide some real analysis to focus
our effortsnot 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

310

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 multiyear projects-- in fact Life Long Projects
Do not be a part of the problem!
311

Human Capital Management


Success 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 efforts
5. 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.
312

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.

313

Thanks and Good Luck!

314