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Empowering success: employees take charge of their jobs.

How much would you spend for a system that increases your plant's productivity by 30%, cuts labor cost in half, and reduces scrap and rework to practically zero? Sound too good to be true? Want proof? Read on.

Back in 1985, Lord Aerospace in Dayton, OH, invested in a system that by 1990:

* improved productivity by 30%,

* reduced scrap and rework cost by 85%,

* reduced four to eight hour setup times to less than an hour,

* improved cycle time for one part from 75 days to seven,

* reduced a 50% reject rate on parts shipped to near zero.

So what is this system, and how much does it cost? Lord calls it "self-directed work teams," and its costs are measured in terms of communication, dedication, involvement, and trust rather than in dollars.

Lord Corp's Dayton plant is a part of the Lord Aerospace Products Division. The larger portion of the aerospace operation is located in Erie, PA. Dayton employs approximately 70 employees distributed across six self-directed process teams and an additional three support teams. There are also some quality-life type teams involved in activities such as newsletters, safety, and security. The plant runs two 10-hour shifts, manufacturing vibration-isolator mountings for aircraft companies such as Boeing, Lear Jet, and Piper. It is also Lord Aerospace's most productive plant.

In the beginning

Back in 1985, Lord was close to shutting down the Dayton facility. Problems such as a 50% reject rate on parts received from Dayton and a high employee turnover rate were becoming too much to tolerate. "One year we had 57 employees and we turned over 45 people. The discharges, job eliminations, layoffs, and quits all made a real poor environment for everyone," says Mike Rogers, employee relations manager at Lord-Dayton.

So how does a company on the brink of closing its doors back in 1985 not only turn a plant around but transform it into one of the company's most productive plants? We began by going to the workers, the experts," said Mr Rogers. "We asked them what it would take to turn this place around."

Some of their answers surprised management, says Dave Lichtinger, plant manager. "Basically, what workers told us was that they were over managed. While the company had been expounding the virtues of empowerment and employee involvement, the reality was that employees were hampered by management."

Management delegated responsibility, but not authority. "There were too many tiers of management," said Mike Smedley, one of the team leaders at the plant. "There were so many layers of management and so many bosses that at one time it took six signatures to get a tool from the crib. Employees lacked motivation and merely did what they were told."

Soon after, conditions began to change when work teams were formed to improve working conditions and solve problems.

"We were hearing some pretty stark things," says Mr Rogers, "how heavy-handed we were, how we really didn't give workers any freedom, and how there wasn't any trust."

Out of those meetings came a five-year plan that would eventually culminate in an all-equal operation in which the workers--all salary--run their operation as if they were running a business.

"When we submitted that plan, there were a lot of skeptical people," continues Mr Rogers. "There were those who thought we should have been able to turn it around in a year or two. But we felt there was a tremendous environment change or culture change needed and it was going to take a while. In fact, it was just recently (1990) that we went all-salary. To build trust it really took a lot of time and a lot of working together instead of the old 'us and them'attitude."

The transition

Over the first five years of the plan, many changes took place, all initiated and directed by the workers. The first step, in 1986, was to develop worker involvement teams and a no-layoff pledge from management. "We made a pledge that no one would be laid off as the result of any improvements in the processes," says Mr Rogers. "Barring some horrible economic down-turn in our market place, we would not have any layoffs." Despite a recession now closing in on two years, there hasn't been a single layoff at the plant since the pledge was made in 1986.

At first, involvement teams worked on reducing scrap and setup times. By 1987, the first workcell team was formed. "The team consisted of three operators, a CNC programmer, a facility engineer, and a maintenance technician that designed the cells themselves. They measured the floor, laid out the cell on paper, and we brought in riggers to move equipment around," said Mr Lichtinger. The resulting cell consisted of two Cincinnati Milacron T10, eight-pallet machining centers; a Mori Seiki SL7B turning center; a six-spindle drill press; and a deburring station to produce a complicated, tight tolerance helicopter rotor head component from forging to finished part. Until then, the part was the plant's worst quality problem.

The first workcell was a glowing success. Team members reduced scrap from over $300,000 a year to practically nothing. Work-in-process inventory went from $3.5 million to $150,000. Leadtime was cut from 160 days to 32 on the cell's main product.

Because the pilot cell was so successful, the manufacturing cell concept gained a lot of credibility and attention at Lord-Dayton. "We used what we learned to quickly form other cells, with just as much success," says Mr Lichtinger. "In 1989, a cell was formed using five Toyoda FH55 HMCs, a deburring station, and a stamping press to produce a series of engine-mount components. This cell featured a workhandling system capable of holding 40 permanent setups."

By mid-1989, five self-directed work teams were established, eliminating four supervisors from the shop floor. Today, the company has six self-directed production teams consisting of from four to eight people, and three support teams. The plant consists of four machining cells, an elastomer processing/bonding cell, and an assembly/packing/shipping cell.

Lord's elastomer cell combines all of the various processes that are required to produce a rubber-to-metal bonded engine mount in one small area, so that the product flows through the various steps and into shipping with minimal queue. Enclosed, computer-controlled, chemical-processing lines were designed to be located on the production floor similar to a machine tool, rather than in a separate room, as is usually the case with open, heated, caustic-bath processes. The parts flow in very small lots through the chemical lines, through an adhesive-application process, to one of three computerized Wabash hydraulic presses used to bond and mold the rubber to the metal. Integral to the presses is a semi-automated, quick die-change system, allowing molds to be changed in less than 10 minutes. After bonding, parts are cleaned in cycle, tested within the cell, and moved on to assembly or shipping.

Much emphasis has been placed on integrating previously indirect functions into the cells, thereby eliminating support personnel, and increasing the autonomy of each cell. For example, the tool crib has been moved from a central area, tended by two attendants, to each cell. Each team is responsible for managing its own crib, including ordering tools and supplies.

An employee perspective

From a management standpoint, gains at the plant have been substantial. But how do the employees feel about the changes? Are current working conditions as good as management claims, and do employees really feel satisfied?

I'd have to say yes to those questions," says Mr Smedley. "During my 12 years at Lord, I've experienced a lot of change here. I was here at the time when we had three or four levels of management: plant manager, general manager, production manager, and supervisor. There was always a lot of tension in the air. It seems, with the employees being a part of the decision making (as far as what is being run, when it's being run, and how it is being run) makes for a more relaxed feeling when you are standing in front of the controls, pushing the buttons."

Are teams really in control of what they do and how they do it? According to Mr Smedley there is no question about it. "We receive a master schedule from Planning that tells us what we have to run, but then it's up to us, as a team, to decide where we're going to run it, when we're going to run it, and how we're going to run it."

Each team has a dispatch list that tells them which product is in queue, in their area, and downstream. Then the team decides the run order to most effectively meet customer needs. If the team needs service from support areas to do the job, they are called, even if the support is off-site. It's up to the individual teams to make sure the machines run as planned.

Each team has a team leader chosen by team consensus. A person fills that position for one year before leadership is rotated to another member of the team. As team leader, the person acts as a liaison between the shop floor, support teams, and management. Interfacing with the front office, team leaders learn what is expected of the team and apprise management of the teams' needs. On the shop floor, the team leader works with other team members to schedule the work and maximize shop resources.

Building the teams

Does it take a special kind of person to work in the Lord environment? Are there unique skills or personality traits required to fit the mold? "We look for somebody who has X number of years experience and/or a graduate of one of the technical machine schools in our area such as our county's Joint Vocational School or Sinclair Community College," says Mr Rogers. "Then we bring in at least five candidates to be interviewed by a selection team. If the opening is in a manufacturing cell, there will be two cell team members, a quality person, a tooling person, an engineer, myself, and maybe someone from materials. One by one, we interview the five people and eventually we get together and we go around the table and rank them. We're pretty much able to draw a consensus on the number-one candidate. Everyone gets an equal vote. When the candidate is brought on board the team leader assigns a team member as a trainer."

Last year Lord invested about 3000 hours of training in its workforce. The company is big on cross-training so that every member of the team is able to perform all jobs the team is responsible for. A new member may require two or three years of training depending on their experience level coming in.

The company looks for team players. People who are loners cannot function for long in the Lord system. "You can't look out just for yourself," says Kerry Lynch, machinist. "You have to look at the whole team concept to make sure that your team is going smoothly and working as a unit together."

Personnel problems are also handled at the team level. Management enters the picture only if a team requests it. For example, if an individual is unable to get along with other team members, or two members of an individual team have a problem with each other, the team would ask Mr Rogers to become involved. "I might do some formal counseling based on team input. The individual being counseled realizes it's the team members' input as well as my observation, and if it goes to several counseling sessions, it could lead to termination," says Mr Rogers.

The company also maintains a RAP (Resource Assistance Program) line to assist troubled employees in finding help, either supplying or referring them to needed counseling. That gives any member an opportunity to go outside for help. Whether the problem is a child on drugs, alcohol problems, or marital difficulties, they can call the RAP line, seven days a week, 24 hours a day.

Despite having to overcome deplorable working conditions, poor moral, and mismanagement, the people at Lord-Dayton have managed to create an American success story. Work cells, new equipment, and a recent $8 million expansion have positioned the company well in today's marketplace as a world-class supplier to the aerospace industry. At the root of their success, however, are still the people. As Mr Rogers summed up: "We can have the nicest building in the world and state-of-the-art technology, but if you don't have the people, you are not going to be successful. That's what it really takes, giving people the power to be in charge of their jobs."
COPYRIGHT 1992 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Stovicek, Donald R.
Publication:Tooling & Production
Article Type:Cover Story
Date:Jun 1, 1992
Previous Article:CMM's abound at Quality-TIME.
Next Article:Machining centers: cutting a swath to higher production.

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