Team Training Yields Profits

July 1, 2006
TRAINING PAYSThat's one finding of a recent report from the Manufacturing Performance Institute (MPI), a Shaker Heights, Ohio-based research organization, and Development Dimensions International (DDI), a Bridgeville, Pa-based human resources consulting company.

Manufacturing plants that provide workers with more than 20 hours of formal training annually report significantly better performance than those that train less, says the report, titled, "2004-2005 Super Human Resources: Realizing Manufacturing Excellence Through Better People." For example, plants that topped the 20-hour threshold reported median sales of $181,000 per employee vs. a median of $150,000 for plants training fewer than 20 hours. The report is based on data from the IndustryWeek/MPI 2004-2005 Census of Manufacturers, which includes information from more than 1,000 manufacturing plants.

The primary reason to train employees, according to the report, is to give them the opportunity to take ownership of their day-to-day activities, in the form of empowered, or self-directed, work teams. In the study sample, plants that had their entire workforce empowered workers. In fact, according tothe report, many of the manufacturing philosophies that can improve operations and processes, such as Lean Manufacturing or Total Quality Management, simply cannot gain traction withotut employees "owning" their jobs.


One company buying into the concept is The Chrysler Group, the Auburn Hills, Mich.-based automaker owned by DaimlerChrysler AG. "Basically, we're going to a small-team manufacturing-based organization, and we've put a lot of training together collectively with our union to help our workforce adjust to all of the competitive landscape changes," says Fred Martin-Dicicco, a Chrysler director of union relations.

Under the program, hourly workers at all Chrysler plants are being transitioned to small, empowered teams averaging about six people per team. They receive training on waste reduction, improving safety, root cause problem analysis and other disciplines, as well as cultural training for dealing with the organizational changes, says Martin-Dicicco. "And really, the important part is for them to understand why there's a need for change, that the world is changing and that we can't continue to operate in the traditional way," he adds.

Additionally, all plant employees including engineering and support groups are receiving 40 hours of training on ways to better support plant floor operators. Beyond that, team leaders, supervisors and union leaders receive another 40 hours that cover a combination of technical and behavioral skills.

The Chrysler training initiative was launched about 18 months ago and will take several years to roll out across 26 plants, says Martin-Dicicco. But the company is already seeing early benefits. At one plant, better communication between empowered hourly work teams and the engineering staff led to development of new tools and procedures that produced a 40 percent productivity boost, says Martin-Dicicco. Other plants have also seen gains, in terms of better quality, more uptime and improved scrap and waste reduction, he adds.

See the main story that goes with this sidebar: Tackling the Training Challenge