People Powered Lean: A Human Capital Management Program

1
People Powered Lean A Human Capital
Management Program

• ESCO Covington
• Where Steel Manufacturing is a Team Sport!
• October 20 and 21, 2004
• AME National Conference
• Plant Tour

2
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)
3

• Begin with the end in mind
• Build more quality steel products faster to
  improve market share and increase profit.

4
Lean Enterprise Goals

• Improve Quality
• Eliminate Waste
• Reduce Lead Time
• Reduce Total Costs
• Through
• Near real time visibility over
• Process
• Materials
• Cost
• Equipment
• And

5
People
6
Concept of Operations
A Systems Engineering Approach
Phase 1 Current State Good Ideas
People Powered Lean
April June 2004

7
Hiring Process July 2004
Production Identifies Requirement
HR Posts Requisition Sends to OET
HR Receives Applications
HR Schedules Interviews
Production Interviews
Welding Test
Hiring Decision
Drug Screen and Physical
Applicant Given Report Date
Offer Sent
Cycle Time 10.3 Weeks Cost 2,008 per new hire
(Labor costs only)
HR Admin Inprocessing
8 Hours of Video OSHA Training
OJT Training
8
The Hiring ProcessOpportunity for Improvement
9
ESCO Hiring Process August 2004
Production Identifies Requirement
HR Posts Requisition Sends to OET
OET Screening
HR Receives Applications
HR Schedules Interviews
Interviews Conducted Welding Test
Hiring Decision
Drug Screen and Physical
Applicant Given Report Date
Offer New Hire Packet Sent
HR Admin Inprocessing
Plant Manager Meeting
Shift Supervisor OSHA Training
Process/ Quality Training
Cell 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
10
People Powered Lean Policy Statement

• ESCO Covington 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.

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Business Metrics

• If we fully implement People Powered Lean we
  will
• Reduce Lead Time to Increase Market Share
• Improve Bucket Production to Headcount Ratio to
  Reduce Labor Cost per bucket and
• Improve PROFIT margin
• by optimizing the plants physical production to
  labor capacity.

12
People Powered Lean Mission

• Provide our production supervisors the right
  people in the right numbers in the right skills
  at the right time to improve business
  performance.

13
Project Scope

• Enrich the Lean Manufacturing Continuous
  Improvement Process by developing and
  implementing a Human Capital Management Program
  called People Powered Lean
• Featuring
• Improved Employee Acquisition Process
• Modernized Orientation Program
• Integrated Skills Development Program (starting
  with Welders)
• Embedded PPL Skills Management System

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Acquisition of New Team Mates

• Goal Create a New Hire Pull System
• When Production needs people they create an
  order
• Production demand cues the PPL system.
• Reduces cost of Hiring by utilizing Subject
  Matter Experts to recruit, identify, and evaluate
  skills of recruits
• Maximize our best source of New Hires (Current
  Employee Referral)
• Optimize use of Government Employee Services to
  Outsource as much as possible

15
ESCO RJP
Link to full RJP
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Interview

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

17
New Teammate Orientation

• Goal Create a world class first day.
• New Employee Leaves after his 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 build some buckets!

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Team Positions
Initial Focus July Oct 2004

• Welders
• Machinists
• Blast and Paint
• Final Assembly
• Team Leaders
• Schedulers
• Managers
• Sales
• Shipping
• Receiving

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Value Stream Map toTasks to Cell Map
Cells
Tasks
Value Stream Map
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Common Skills Training

• Goal Using Subject Matter Experts 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
• Bucket Terms
• Use a Ruler
• Cranes Safety and Operations
• Equipment/Tools Operations and Maintenance
• Visual Inspection
• OSHA (Job Focused)
• Quality Assurance

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Cell Training

• Goal Improve Welder 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

22
Life Cycle Skills Development Program
Management Skills
A Guide
Leader Development Training
Complex Tasks
Leader Skills Training
Pre-Employment
V
Basic Skills
Intermediate Skills
Advanced Skills
Mentor Skills
Employment Skills
Soft Skills Development
IV
Initial Entry Skills Training
Basic Training
Intermediate Training
Advanced Training
III
Practical Application/Coaching Evaluation
Practical Application/Coaching Evaluation
Practical Application/Coaching Evaluation
Skills Evaluation
II
Experienced Personnel
I
Employee Career
Competency Level
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ESCO CovingtonLifecycle Skills Buckets and MFP
Pre-Hire
Initial
Intermediate
Advanced
Mentor
Basic
Orientation
Bucket 101
Master Bucket Welder
TABE
Common ESCO Training
Master Bucket Builder
Cell
Cell
KMSS
Welder
Cell
Cell
Weld Test
Common Welding Training
Master MFP Welder
MFP 101
Master ESCO Builder
Cell
Cell
Cell
Cell
Bucket 101
TABE
Orientation
Master Bucket Machinist
KMSS
Common ESCO Training
Cell
Cell
Master MFP Builder
Machine Operator or Other Skill
Cell
Cell
Skills Test
MFP 101
Master MFP Machinist
Cell
Cell
Cell
Cell
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PPL 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
• Aligns PPL with Labor Resource Planning
• Measures Head Count to Production
• Predictive Measures Focus

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It is All About Performance!
REQUIRED Level of Performance CURRENT
Level of Performance

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

Measures of Performance
Resources Required
Performance Gap
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The Depth Chart

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

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End to EndHuman Capital Management
Step 3 Interview/ Employee Hired
Step 2 Pre Hire/ Recruit/ Assess
Step 4 Orientation
Step 1 Generate Labor Requirement
Lean Program Integration PPL Management
Program Continuous Improvement
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After the Welders and Buckets
Welding Skills
Machinist Skills
Blast Paint Skills
Team Leader Skills
Final Assembly Skills
Sales Scheduling Skills
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If I only have one guy show up for work I want
to be able to build an entire bucket
Strategic Goal

• Dick Dale
• Operations Manager