Connecting the Dots “Manufacturing Processes...... People Processes”

Connecting the Dots“Manufacturing Processes . . . . . . People Processes”

2nd Squadron 4th Cavalry Squadron Staff March 22, 1991

JoeKarl

Agenda & Reminders

• Welcome• Speaker Introduction• Handouts• Connecting the Dots “People Powered Lean”

– Building a Case– Case Study– Look at the “Process”

• Gaining Engagement, On Boarding, Production Skills, Leader Development

– Q&A

Hypothesis

If we can create Ownership and Engagement from the “Start” (On Boarding) and we have Engaged

Leaders . . . We can positively influence

1. *Increased Employee Satisfaction 2. *Increased Employee Engagement 3. Increased Customer Satisfaction 4. *Decrease Production Costs 5. Increased First Pass Yield6. *Increased Employee Skills 7. *Increase Production Capacity8. *Decrease Cycle Times9. *Decreased Turnover10. Increased Revenue 11. *Decrease Cost 12. *Increasing Profit

All Are Measurable Events

Gallup Business SuccessProductivity, Profitability, Retention, Customer Satisfaction

SustainableGrowth

EngagedEmployees

EngagedCustomers

TheRight Fit

IdentifyIndividualStrengths

Real ProfitIncrease

Great Leaders

StockIncrease

On Boarding

Signs of Actively DisengagedEmployees

• Physically present but psychologically absent• “What can I take” rather than “what can I give”• Share unhappiness about work with peers• “I’m 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

Signs of Not EngagedEmployees

• 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

Signs of Engaged Employees

• Psychologically committed to company• Consistent levels of High Performance• Innovative and drive for efficiency• Intentionally build supported 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

Building a Case for Engagement

(CEO . . . Hourly)

7

“The most important process in your organization is the process that describes the relationship between the leader and their people. It is the only process that matters.”

Mike PettersPresident, Northrop Grumman Newport NewsOctober 21, 2006

“Ownership & Engagement” Thru the Lean Journey

PeopleEquipmentMaterials

Process

Ownership

Engagement

The goal of People Powered Lean (PPL) is to support the plant’s Lean Manufacturing Improvement initiative by synchronizing and integrating the

People side of the business with manufacturing.

People Powered Lean

Overall Goal

Gallup Business SuccessProductivity, Profitability, Retention, Customer Satisfaction

SustainableGrowth

EngagedEmployeesEngaged

Customers

TheRight Fit

IdentifyIndividualStrengths

Real ProfitIncrease

Great Leaders

StockIncrease

On Boarding

10

Gallup Engagement Hierarchy

What do I get?

What do I give?

Do I belong?

Howcan wegrow?

Ownership

2) I have materials and equipment I need to do my work right1) I know what is expected of me at work

6) Someone at work encourages my dev.5) My Supervisor/Someone at work cares4) I received recognition last seven days3) I do what I do best every day

10) I have a best friend at work9) Coworkers committed to quality8) Mission/Purpose of company7) At work, my opinions seem to count

12) Opportunities to learn and grow11) Progress in last six months

Growth

Teamwork

ManagementSupport

BasicNeeds

Copyright © 1992-1999 The Gallup Organization, Princeton, NJ. All rights reserved.

Gallup StudyOnly 26% are Engaged

(loyal and productive)

55% are not engaged (just putting in time)

19% are actively disengaged (unhappy and spreading their

discontent)

$350 billion per year in lost productivity

Each employer is wasting approximately 10% of their

payroll dollars on lost productivity due to

disengagement

Signs of Engaged Employees• Psychologically committed to company• Consistent levels of High Performance• Innovative and drive for efficiency• Intentionally build supported 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

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

Signs of Actively Disengaged• Physically present but psychologically absent• “What can I take” rather than “what can I give”• Share unhappiness about work with peers• “I’m 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

Three Business/Social Groups in Every Organization

In Group – High Trust – Good Communications – “Let ‘em Run” Goal Setting– Low Task Definition Needs– High Relationship Needs

Led(O)

Leader

Led(I) Led(M)

Out Group – Low Trust – Stressful Communications – “By the Numbers” Goal

Setting– High Task Definition Needs– Low Relationship Needs

Strategic Goal For High Performing Unit

Facts:– Little movement from Out to In– More movement from In to Out due to

Leaders breaking the Goal Alignment Contract/Agreement

Middle Group The Key to Success

New Employees make a decision within first 48 - 72 hours from introduction to immediate supervisor.

Strategy1. Focus on New Hires Immediately

– On Boarding, Production Skills, and Leader Development

2. Focus on the Middle Group: Move them into the In Group as quickly as possible

– Production Skills & Leader Development

System Solutions

Systems Include• On Boarding

• Organizational Scheme• Leader Development

• Production Skills/Career Path Development

Systems Include• On Boarding

• Organizational Scheme• Leader Development

• Production Skills/Career Path Development

Powered Lean “PPL”Powered Lean “PPL”

SS

OM

1S

MU

NE

GM

OM OM

SSSS

1S 1S

GT GT

NE

Organizational Scheme

GM: General ManagerOM: Operations ManagerSS: Shift Supervisor1S: 1st Line SupervisorMU: Make Up SupervisorGT: Go To EmployeeE: Employee NE: New Employee

Vertical Dyad Linkage

EE

•How The Work Gets Accomplished•Core Daily Business Element•Communication Linkage•Planning Horizons•Specific Task/Behaviors

Organizational Schemefocuses on linkage and

its affect on the CoreBusiness Element

Training Concept

209

Training Program Overview

Skill Paths

1. Mechanic

2. Assembly

3. Sheet Metal

4. Material Handler

5. Technical Inspection

6. Maintenance

7. Production Control

Common SkillsTraining

What every employee needs to know

CellTraining

Skills to do 1st Job

Intermediate SkillsTraining

Skills to do second and third job

Employee Skill Path

Lead/Advanced Skills Training

Skills to Teach Others the Job

Master MechanicMentor

Tech Specialist

Hiri

ng

On

Bo

ard

ing

Soft Skills Development

Career

Complex Tasks

Life Cycle Skills Development Program

ManagementSkills

Basic Skills

Intermediate Skills

SupervisorDevelopment

Training

Supervisor Practical

Application/Evaluation

Advanced Skills

Initial Entry

Skills Training

I

MentorSkills

V

Competency Level

Experienced Personnel

Employment Skills

Skills Evaluation

BasicTraining

Practical ApplicationCoaching/ Evaluation



III

II

IntermediateTraining

AdvancedTraining

IV

Pre-Employment VI

College Transfers

Adult Education

Current Employees

Community Colleges

High Schools CommonSkills

TrainingTech Schools

Orient,Screen

&Identify

Candidates

Building PipelinesBusiness Metrics:

- 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

Military

State Employment Offices

Temp Agencies

Other Companies

Interview&

AssessSkills

GenerateLabor Req’s

HiringDecision

Increase Cost Decrease Cost

1st JobSkills

Development

ShouldBe

Tracked

Case Study

• ESCO Covington, a heavy manufacturing plant located in Covington, KY

• Produces heavy steel “Buckets”

• Need: “Build more quality steel products faster to improve market share and increase profit”

• Situation: High attrition and issues filling jobs at the speed of business

• ESCO Covington, a heavy manufacturing plant located in Covington, KY

• Produces heavy steel “Buckets”

• Need: “Build more quality steel products faster to improve market share and increase profit”

• Situation: High attrition and issues filling jobs at the speed of business

ESCO Covington People Powered Lean

Over 300 Employees10.3 Weeks Hiring Process

Production Skills ProcessOn Boarding Process

Where to Start?Where to Start?

College Transfers

Adult Education

Current Employees

Community Colleges



Orient,Screen

&Identify

Candidates



Military


Temp Agencies

Other Companies

Interview&

AssessSkills


HiringDecision


1st JobSkills

Development

ShouldBe

Tracked

Training Concept

209

Training Program Overview

Skill Paths

1. Mechanic

2. Assembly

3. Sheet Metal

4. Material Handler

5. Technical Inspection

6. Maintenance

7. Production Control

Common SkillsTraining

What every employee needs to know

CellTraining

Skills to do 1st Job

Intermediate SkillsTraining

Skills to do second and third job

Employee Skill Path

Lead/Advanced Skills Training

Skills to Teach Others the Job

Master MechanicMentor

Tech SpecialistH

iring

On

Bo

ard

ing

Production Identifies

Requirement

HR PostsRequisition

HR Receives

Applications

HR SchedulesInterviews

Skills TestHiring

Decision

Drug Screen and

Physical

Applicant Given Report

Date

HR AdminInprocessing

Admin In-Processing & Video BasedOSHA Training

OJTTraining

Example Hiring Process July 2004

Offer Sent

ProductionInterviews

Cycle Time: 10.3 WeeksCost: $2,008 per new hire(Labor costs only)

ESCO Modernization Program

Results:Improved production efficiency by 23% (29.42

hours/product to 23.98 hours/product) representing a 1st year direct cost reduction of $285,600

Reduced the time to hire from 10.3 weeks to 1 week

Reduced the cost of hire from $2008 per hire to less than $500 per hire

Decreased 1st year attrition rate from 59% to 6%

Reduced overall attrition by 31%

Results:Improved production efficiency by 23% (29.42

hours/product to 23.98 hours/product) representing a 1st year direct cost reduction of $285,600

Reduced the time to hire from 10.3 weeks to 1 week

Reduced the cost of hire from $2008 per hire to less than $500 per hire

Decreased 1st year attrition rate from 59% to 6%

Reduced overall attrition by 31%

In six months, the project team analyzed, designed, developed, and piloted a modernized teammate acquisition program named People Powered Lean (PPL).

In six months, the project team analyzed, designed, developed, and piloted a modernized teammate acquisition program named People Powered Lean (PPL).

Components:• Modernized hiring process• Scenario based interview/skills

assessment• “World class” first day• Common skills training program;• Production cell training program• First 90 day coaching and feedback

process• PPL management system focused

on reducing the new Team Mates time to competency in their first job and reducing 1st year attrition.

Components:• Modernized hiring process• Scenario based interview/skills

assessment• “World class” first day• Common skills training program;• Production cell training program• First 90 day coaching and feedback

process• PPL management system focused

on reducing the new Team Mates time to competency in their first job and reducing 1st year attrition.

The overarching goal was to create new Team mate engagement from first contact leading to improved business performance.

On BoardingBuilding People Pipelines to Attract, Hire, and Retain the Right People, in the Right Numbers, in the

Right Skills, at the Right Time, at the Right Cost…

“Getting The Right People on the Bus”Recruiting - - - Trying Out - - - Making the Team

“Getting The Right People on the Bus”Recruiting - - - Trying Out - - - Making the Team

Are You Forecasting Your Labor as you Forecast Your Business

• How far out are you looking?

• What skills will you require?

• Lead time from labor requirement to competency?

• Who manages this process?

Are You Forecasting Your Labor as you Forecast Your Business

• How far out are you looking?

• What skills will you require?

• Lead time from labor requirement to competency?

• Who manages this process?

Building Pipelines:

• Orient, Screen, Identify

• Interview & Assess Skills

• Common Skills Training

• 1st Job Skills Development

Building Pipelines:

• Orient, Screen, Identify

• Interview & Assess Skills

• Common Skills Training

• 1st Job Skills Development

Decrease Cost of Hiring, Reduce Attrition, Reduce Hiring Cycle Time, Decrease Time to Competency, Improve New Hire Performance

College Transfers

Adult Education

Current Employees

Community Colleges



Orient,Screen

&Identify

Candidates



Military


Temp Agencies

Other Companies

Interview&

AssessSkills


HiringDecision


1st JobSkills

Development

ShouldBe

Tracked


Requirement

HR PostsRequisition

HR Receives

Applications


Skills TestHiring

Decision

Drug Screen and

Physical


Date


Admin In-Processing & Video BasedOSHA Training

OJT Training

Example Hiring Process: July 2004

Offer Sent

ProductionInterviews

Cycle Time: 10.3 WeeksCost: $2,008 per new hire (Labor costs only)


Requirement

HR PostsRequisition &Sends to OET

OETScreening

HR Receives

Applications


InterviewsConducted;

Welding Test

Hiring Decision

Drug Screen and

Physical


Date


Plant Manager Meeting

Shift Supervisor

OSHA Training

Process/Quality

Training

Example Hiring Process: October 2004

Offer;New Hire

Packet Sent

Cell Training

Structured Orientation and Training Process

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

In Order to Attract, Hire, and Retain . . . Ask Yourself

• Are you forecasting your labor as you forecast your business? – Are your labor forecast driven by your production needs– What is the Minimum and Maximum required– Are competitors/new companies expected to enter into the market– What are the recruitment differentiators (conditions, environment, pay, stability,

schedule, parking, overtime, etc.) • How far out are you looking?

– Do you expect increased/decreased production– What are the Pipeline Capacities

• What skills will you require? Current or New?– What does your candidate profile look like?– What does the job look like (RJP)– Is there a skills assessment; if so who administers it

• Lead Time from labor requirement to competency?– What are the in processing procedures

• Who is responsible for managing it?– Who does orientation and screening– Who conducts the interviews

• What options do you have?– What and where are the pipelines– What are their capacities

College Transfers

Adult Education

Current Employees

Community Colleges



Orient,Screen

&Identify

Candidates

Business Metrics:- 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

Military


Temp Agencies

Other Companies

Interview&

AssessSkills


HiringDecision


1st JobSkills

Development

ShouldBe

Tracked

ExamplePipeline Capacity Analysis

2. Adult Education

1. Community Colleges

4. Tech Schools

3. Other Companies(VEC)

• Community Colleges (65 identified) – Tidewater (50)– Paul D. Camp (15)

• Adult Education (108 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

Example Orientation and Screening

• Conduct Initial Orientation by providing Realistic Job Preview to each interested person. www.vasteemer.com

• 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 Candidate Sheet• Provide Candidate with Hiring Process/Cycle Time

Information and Tracking Sheet

Orient,Screen

&Identify

Candidates

ExampleCandidate Classifications

1. Hire Now: Exceeds All Criteria 2. Hire: Meets All Criteria3. Near Hire: Will meet All Criteria within 30 days with

self-directed development4. Far Hire: Will meet All Criteria within 120-180 days with

self-directed development5. No Hire: Will not meet minimum criteria for at least 6

months 6. Best Athlete 7. Has unique skills outside of current Job Search

Requirements

ExampleInterview and Skills Assessment

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. Plant Tour2. Skills Assessment3. Attitude Assessment4. Hiring Decision5. New Teammate Skills Development Plan

Interview&

SkillsAssessment

ExampleSkill Assessment Classification

• Fully Qualified:– Passes Skills Assessment 1st Time– Good attitude

• Qualified:– Fails part of Skills Assessment – Good attitude– Can pass with minimal re-training…– Company provides training on the spot

• Minimally Qualified:– Fails most of Skills Assessment – Good attitude– Requires significant training either pre- or post hiring

• Unqualified:– Fails all of Skills Assessment – Good attitude– Refer to Local Training Facility/School for skills development

In Process &

CommonSkills

Training

ExampleIn Processing and Common Skills

TrainingGoal: Efficiently in-process and bring new

teammates to competency on all Common Tasks prior to assignment to work area or cell.

Example “World Class First Day”

Goal:– New Team Mate leaves after first day thinking:

• Wow! These guys really know what they are doing.• I’ve 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.• 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.• Let’s go to work!

Experiences . . . Beliefs . . . Actions . . . Results

ExampleWorld Class 1st Day

Thursday’s 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 or Office Call• 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

World Class 1st DayThursday’s 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

Example Common Skills Training

Tailored Individual Development Plan developed at the Interview and Skills Assessment.

Example Learner Based Training Lesson Outline:

1. Message From the GM2. Safety/OSHA 3. Production Terms and Language 4. Use of Personal Protective Equipment (PPE)5. Reading Measurements to the 1/16” Detail6. Blueprints and Weld Symbols7. Quality Assurance

NOTE: A Web Based Platform so that New Hires can review and pre-train prior to Interview. Can be used as a post hiring support tool.

Skills every individual must know prior to starting Cell Training

Example Cell Training

1st JobSkills

Development

Goal: Seamlessly integrate new Hire into the production line and reduce “Time to Competency”

Sequence List:1. New Hire meets with 1st Line Supervisors/Cell Trainers 2. 1st Line Supervisor uses Skills Assessment Record to

develop Cell Training Program3. Supervisors use 30-60-90 day Feedback System to

assess performance and update skills development record.

4. New Team Mate and 1st Line Supervisor conduct a Goal Alignment session and agree on initial Career Path and Production Skills Training Plan.

# Interested 104 97 +7

# of Apps Received 85 81 +4

# of Screened Candidates Scheduled for Test/Interview 65 59 +6

# Tested & Interviewed 58 53 +5

Classifications

And

Assessments

Fully Qualified 7 7 -

Qualified (Less than 2 weeks) 17 17 -

Minimally Qualified (2-4 weeks) 26 22 +4

Unqualified (More than 4 weeks) 8 7 +1

Awaiting Weld Test Results (Bend) 0 0 -

Applicant Flow

Applicant Flow: Page 1 of 2

Dec. 12 Nov. 7 Delta

# Failed Interview 13 12 +1

# that Voluntarily Withdrew 9 9 -

# Awaiting Hiring Decision or Offer Pending 0 1 -1

# of Active Applicants 5 6 -1

# Offered and Accepted Employment 34 31 +3

# of Offers Declined or Rescinded 3 3 -

# Started 32 30 +2

# Terminated 7 5 +2

Applicant Flow

Applicant Flow: Page 2 of 2

Dec. 12 Nov. 7 Delta

Hiring Cycle Times- All Cycle Times measured in Calendar Days -

Cycle Time Interval Days

Application Date to Test/Interview Date 18.55

Test /Interview Date to Offer Date5.05

Offer Date to Acceptance2.64

Acceptance to Start Date10.50

Total Application Date to Start Date42.41

Changes since Nov. 7th Program Review -1.96

Hiring Cycle AttritionHiring Cycle Phase # Attrited

Pre-Application 19

App Date to Weld Test 21

Weld Test to Interview 8

Post-Interview 15

Drug Test 0

Offer Declined 2

Post-Hire (In-Training) 7

Total Hiring Cycle Attrition: 72 of 104 Candidates

Post-Hire AttritionName

Termination Date

Termination ReasonDays on the Job(Liebherr Work

Days)

7/25/2005Discharged 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. Liebherr liked Dorian’s Work Ethic and

offered him positions in Assembly/Paint. Dorian refused to work on 2nd Shift and thus was dismissed.

44

8/26/2005Discharged from Welding School. Dismissed for

‘cheating’ on his vertical Weld Test. Albert laid his test plate flat after receiving warning from Bob.

15

8/8/2005Discharged from Welding School. Poor work habits

and slow progression given as primary reasons.11

10/10/2005Unacceptable progress in Welding School and unwillingness to brake old habits. Needs more

experience than our training can provide.11

11/18/2005Discharged for falsifying application with regards to

educational background (HS Graduation).31

12/2/2005Discharged for falsifying application with regards to

educational background (HS Graduation).45

Failed Interview Results

NameInterview

DateHire Category Reason for Failed Interview

12/7/2005 Minimally Qualified

Poor Weld Test Performance & Interview revealed troubling history. Expelled from

school with 3 months left. Criminal charges pending , with January court date.

Date Range: Nov. 7th – Dec 12th

Total Failed Interviews (since 5/24/05): 15

Atmosphere of Ownership . . . 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

Organizational Goals– Cost– Schedule– Quality– Safety

Individual Goals– Compensation– Opportunities– Responsibility– Work Environment– Recognition

Communication Awareness

Goal Alignment

Led

Leader to Led Linkage

Can only occur when there is a conversation between the Leader and the Led about the Led!

Authentic Communication Leader

If We Fully Implement PPL . . .1. Increased Employee Satisfaction 2. Increased Employee Engagement 3. Increased Customer Satisfaction 4. Decrease Production Costs 5. Increased First Pass Yield6. Increased Employee Skills 7. Decrease Cycle Times 8. Increase Production Capacity9. Decreased Turnover/Increase Retention10.Increased Revenue 11.Decrease Cost to Produce 12.Increasing Profit

All AreMeasurable

Events

63

Turnover Costs

Industry Vol. Quits Retire Fired

TotalTurnover

Rate

Replacement Costs

Industry Standard

Annual Turnover Costs for 300 Worker

Site

All Private 22.0% 2.5% 0.5% 25.0% $12,000 $900,000

Construction 25.5% 2.5% 1.0% 29.0% $14,000 $1,218,000

Manufacturing 14.0% 2.0% 1.0% 17.0% $14,000 $714,000

Wholesale Trade 15.0% 3.0% 1.0% 19.0% $10,000 $570,000

Retail Trade 30.0% 3.3% 0.7% 34.0% $8,000 $816,000

Transportation 15.0% 3.5% 0.5% 19.0% $13,000 $741000

Leisure and Hospitality 44.0% 2.5% 0.5% 47.0% $6,000 $846,000

Manufacturing Breakout

• 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

Manufacturing

TotalTurnover

RateVol.

Quits Retire Fired

Replacement Costs

Industry Standard

Annual Turnover

Costs for 300 Worker Site

Total 17.0% 14.0% 2.0% 1.0% $14,000 $714,000

Vol. Quits 14.0% $14,000 $588,000

Retire 2.0% $14,000 $84,000

Fired 1.0% $14,000 $42,000

Voluntary Quits Costs

Industry Vol. QuitsTotal

Turnover rate

Replacement Costs

Industry Standard

Annual Voluntary Quits Costs for 300

Worker Site

All Private 22.0% 25.0% $12,000 $792,000

Construction 25.5% 29.0% $14,000 $1.071,000

Manufacturing 14.0% 17.0% $14,000 $588,000

Wholesale Trade 15.0% 19.0% $10,000 $450,000

Retail Trade 30.0% 34.0% $8,000 $720,000

Transportation 15.0% 19.0% $13,000 $585,000

Leisure and Hospitality 44.0% 47.0% $6,000 $792,000

Retirement Costs

Industry RetireTotal

Turnover rate

Replacement Costs

Industry Standard

Annual Retirements Costs for 300 Worker

Site

All Private 2.5% 25.0% $12,000 $90,000

Construction 2.5% 29.0% $14,000 $105,000

Manufacturing 2.0% 17.0% $14,000 $84,000

Wholesale Trade 3.0% 19.0% $10,000 $90,000

Retail Trade 3.3% 34.0% $8,000 $79,200

Transportation 3.5% 19.0% $13,000 $136,500


Fired

Industry Fired

TotalTurnover

rate

Replacement Costs

Industry Standard

Annual Fired Costs for 300 Worker Site

All Private 0.5% 25.0% $12,000 $18,000

Construction 1.0% 29.0% $14,000 $42,000

Manufacturing 1.0% 17.0% $14,000 $42,000

Wholesale Trade 1.0% 19.0% $10,000 $30,000

Retail Trade 0.7% 34.0% $8,000 $16,800

Transportation 0.5% 19.0% $13,000 $19,500


PPLChallenges

1. No silver bullet…Big Problem with a lot of moving parts in a dynamic business environment

2. Focused effort based upon real analysis…not a “Good Idea of the Day” approach.

3. Recommendations must make good business sense

4. Design Executable Programs and be good Program Managers (Cost, Schedule, Quality)

5. Be realistic in execution and “eat the elephant” one bite at a time.

6. Requires long range thinking… People are multi-year projects-- if fact Life Long Projects

PPLThings to Attack

• Organizational Scheme • On Boarding• Leader Development – Current and Future• Production Skills Training• Lean Training

Questions&

Answers

Documents

Connecting the Dots “Manufacturing Processes...... People Processes”