Culture change programme slashes overheads

23 February 2007

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Culture change programme slashes overheadsAfter introducing a three-year culture change programme to its manufacturing plant in Llanelli, automotive components supplier Schaeffler (UK) has now averted the threat of production being transferred to Eastern Europe.

Three years ago, like many UK-based manufacturers, Schaeffler UK's plant in Llanelli, South Wales, was under extreme pressure from low-labour-cost countries. Production was about to be transferred to Eastern Europe, which would have resulted in inevitable job losses at the Welsh plant. However, with the help and commitment of his workforce, the plant director at Llanelli, Roger Evans, had other ideas.

He explains: "When it came to enthusing and motivating the employees here at the plant, the philosophy I adopted was that the rate of learning should be greater than the rate of change. Back in 2001, the management team at the plant recognised that in order to survive in the long term, new products had to be attracted into the plant. So we embarked on a three-year culture change programme to try to reach our vision of becoming the production location of choice, both within the Schaeffler Group and with customers."

Starting at the top

The programme started with a management strategy workshop, which identified the vision and also determined the inherent company values that had to be adopted by all our employees in their day-to-day activities, namely integrity, innovation, respect, commitment and passion. Evans adds: "We then set about interviewing every member of the workforce individually to explain the plant's vision and to get the employees' feedback on this.

"We realised from the interviews that our employees did not possess the required skills, knowledge and expertise to achieve the vision. So we increased our investment in training in order to raise overall skill levels at the plant and to foster an environment of life-long learning and continuous improvement."

However, in order to put the strategy into place, processes and new procedures were required. A 'Single Thread' concept was established, which identified the enablers (customers, suppliers, processes, employees and costs) and the targets (meaningful KPIs - key performance indicators), at a company, departmental and team level. But the key enabler here, explains Evans, "were the people themselves, who would make the difference as to whether the plant survived the next few years".

Measured improvements

And survive the plant did. Since the culture change programme was introduced in 2001, the plant has seen some formidable improvements. Around 89 per cent of operators have now achieved NVQ Level II in Performing Manufacturing Operations – the aim is to reach 100 per cent. Many operators have also asked to proceed to NVQ Level III. And all employees at the plant have now undergone training in 5S Workplace Organisation Training.

Evans states: "Employee morale is high and demand for learning is greater now than it has ever been. Team working, co-operation and communication have all improved, as has the trust between management and the workforce."

A Learning questionnaire carried out recently at the plant had a high response rate and revealed that the workforce had a very positive attitude towards learning and development. 91 per cent said they believed it was necessary to learn new skills and 95 per cent said it was their duty to contribute towards problem solving.

The launch of the company-wide 5S programme has also contributed to the success of the plant. Improvements in housekeeping and workplace organisation have been made, as well as improvements in a range of key performance indicators. First, scrap levels have been reduced from 2.92 per cent to less than 1 per cent; accidents have been reduced by 60 per cent; absenteeism has dropped from 6.2 to 3.6 per cent; and defects have been reduced by more than 90 per cent. Added value per employee, another key measure at the plant, has also improved dramatically.

Evans continues: "We have also implemented Six Sigma and Kaizen projects, which resulted in substantial cost savings of around 500,000 euros. But the real difference has been the workforce, who now show a greater willingness to learn and to take responsibility for their own development. More than 100 employees, for example, have voluntarily enrolled on our 'Learn Direct' courses and the use of our new Learning Centre."


But not everything went smoothly and some considerable barriers had to be overcome to reach the plant's vision. As Evans explains: "Time and resources have been a major difficulty during the programme. Manufacturing output has had to be maintained to satisfy our customers. It has been a continuous balancing act to keep the initiative on track and to maintain production. The support and buy-in of all senior managers from the outset was critical. However, rather than a downturn in productivity, the benefits of continuous improvement are beginning to be realised and productivity has increased considerably."

Another difficulty was actually enthusing the workforce to learn. The factory is located in an area of Wales with some of the lowest levels of adult literacy, with many employees not having been in a formal learning environment since they left school and have no formal qualifications. Evans says: "We realised it may be difficult to enthuse these people to enter into learning initiatives. So the one-to-one interviews were very important."

The support of management in encouraging learning, says Evans, along with the support of the local college, Coleg Sir Gar, particularly in the area of basic skills, were critical success factors.

Even the CBI has recognised the Llanelli plant's recent achievements, by awarding the company the Human Capital Award for 'Education, Skills and Leadership' 2006. Schaeffler UK beat the likes of McDonalds, ARM, Baxi Heating UK and the Serco Group to win the award for its outstanding achievements in education, leadership development and skills-based initiatives. Roger Evans received the award on behalf of the plant at the awards ceremony on 19 October 2006 year at London's Hilton Park Lane.

The culture change programme at Llanelli is an ongoing project, of course, but the success it has already brought to the plant will continue to be felt for many years to come.

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