“This was not only a change programme; this was our fight for survival,” says Adrian Roberts, personnel manager at the Llanelli plant.
Low-cost competition from eastern Europe meant the factory, which makes engine components, had lost more than 500 jobs since the late 1990s, cutting its workforce to 360. And it faced losing more when its German parent, the Schaeffler Group, moved the manufacture of yet more products to locations in Romania and Slovakia.
“People felt that closure was imminent. The grapevine was rife with rumour,” Roberts recalls. “We knew that we needed to differentiate ourselves to safeguard the plant, but we couldn’t compete with eastern Europe.” Instead, the management decided to transform the factory into a “production location of choice” for high-tech products by boosting the skills of the remaining employees. With this came the recognition that the plant required a huge investment in training and development to create a culture of continuous improvement.
The strategy was linked to the statement “the rate of learning must be greater than the rate of change”. As Roberts says: “We switched investment from machinery to people and focused on becoming a learning organisation.” The transformation that the strategy has since created has made Schaeffler sit up and take notice.
But getting the workforce back to learning was no small task in a factory operating around the clock. Time and resources were limited because manufacturing output had to be maintained. Employees had also become cynical about management initiatives – the company had introduced programmes that had faltered before. So one-to-one meetings were held with every employee to explain the plan. “The key thing we said was that ‘even if this place does close, you are equipping yourselves with better skills and a marketable and portable qualification’,” Roberts says.
To involve the whole workforce in the culture change, the firm brought in a “5S” (sort, straighten, sweep, standardise and self-discipline) training programme for all employees to improve the work environment. At the end, staff told senior managers the areas in which they would enhance the environment. This led to immediate improvements in productivity, quality and health and safety.
“The view had been that people should come in to do a job – clock in and clock out – but we said that we wanted them to add value, cut costs and improve,” Roberts says.
The company had started an NVQ programme back in 1998, but this had never got off the ground. “We had left it with supervisors to do the assessing, but they didn’t have the time, the commitment or the will, so nothing was moving,” Roberts explains.
The next step was to relaunch the programme, and this time it has proved a success. All 200 operators are now working towards an NVQ level 2 in performing manufacturing operations. A local technical college has been brought in to provide supervision and the operators will be qualified by the end of the year. For some, it will be the first external qualification they have ever had.
The roles of managers, supervisors and team leaders were also reviewed. It was found that the team leaders were spending too much time on the machines and weren’t fulfilling their leadership roles. This meant that supervisors were doing the team leaders’ jobs, while the senior managers were doing supervisory work. The company redefined people’s roles and responsibilities, but realised there was also a need for training in skills such as communication for team leaders. So a team leaders’ programme was developed, incorporating an NVQ level 3 in management. Supervisors are now taking an NVQ level 3 in business improvement techniques too.
To help the team leaders and supervisors practice the skills they are learning, senior managers are involved in delivering training and are putting an “INA slant” on modules. The full commitment of senior management is key to the scheme’s success, according to Roger Evans, the plant manager. “It’s vital to focus on making sure that the team remains energised and unified,” he says.
Communication with employees has dramatically improved. The works council, which reviews this issue, has found the company grapevine is now seen by employees as the least reliable source of information. The company posts information on business targets on the factory floor. These are renewed, in some cases daily, to show how the plant is meeting standards.
INA is determined to create a self-development culture in which people take charge of their own learning. It has established a learning centre at the plant where employees can use computers to access Learndirect courses. So far 100 people have signed up for courses.
The firm has also launched Six Sigma and Kaizen programmes, focusing on cost-cutting and improvement. Roberts says the roll-out of these schemes is a tribute to how far the employees have come. “Two years ago they would not have been ready for such programmes,” he says.
The effects of the change programme have been widespread and tangible. Staff turnover has dropped to 2.5 per cent from 8.1 per cent in 2001 and absence rates have been cut in half. Productivity and health and safety have improved, while cost-reduction projects undertaken by employees have resulted in savings of more than £324,000. Quality has also improved: the defect rate has fallen from 53 per million to 6.5 per million.
These achievements received outside recognition when the plant was rated one of “the best-performing suppliers” by Ford and was named “Welsh people development company of the year”. The Schaeffler Group is watching with interest. “Nothing is definite yet, but we are very positive. Because of the activities we have been doing, a lot of interest has been taken in us in terms of new developments,” Roberts says.
The good news does not end there. The most significant impact has been on the motivation and commitment of the workforce. Earlier this year Llanelli heard that it would lose more low-tech products to eastern Europe in 2005, but the response from employees was to send a charter to the German head office stating their commitment to the company. They have since heard that the plant may be given more high-tech products to develop.
“This is simply not the same factory it was three years ago,” says Nigel Watkins, a production worker. “We now regard ourselves as the best in Europe.”