IW Best Plants Profile - 1999

Team-Centered Success Eaton-Aeroquip's Global Hose Div. offers a glimpse at the way teams really work. By Weld Royal Deep in the heart of Arkansas' Ozark Mountains, Eaton Corp.'s Aeroquip Global Hose Div. makes 47 million feet of hydraulic hose per year. The product, which snakes through engines in large Ford trucks, John Deere tractors, and other heavy equipment, serves much the same purpose as it did when the factory opened in 1975. It carries oil or hot fluids. But the process of making hoses in Mountain Home bears no resemblance to the way it was done 24 years ago. Today the factory thrives on the brains, and occasionally the brawn, of 285 hourly workers, organized into more than 50 teams, who run the place as they see fit. Bonds between workers form around irreverent cartoons, fishing, and bad haircuts. When Kreg Partee, a member of the Finishing Work Cell, pulls out a crimson folder from the drawer at his workstation, a crowd begins to gather. Inside the folder are dozens of sketches. One shows three of his teammates, the tallest has two black eyes, and the others standing next to him frown. "That's just a spoof of three guys in my area fighting over gravy hose -- it's easiest to coil," drawls Partee, Eaton-Aeroquip's unofficial in-house artist who spends his time off sketching Native Americans and painting children's bedrooms. Partee symbolizes the informal peer pressure that drives the plant's improvements. Since 1993 response time to customer concerns has improved 99%, and productivity and manufacturing output have both increased by at least 50%. When something goes wrong, Partee often notices and sketches a cartoon. For instance, every hose is built around a mandrel made in a tank that is extremely sensitive to jolts. A few workers habitually bumped the tank, causing ripples to form in the mandrel, which had to be remade to prevent imperfections from ending up in hoses. Partee sent a warning with a small cartoon posted at the station captioned: "You toucha the tank, I breaka your face." It depicts the man who runs the machine grimacing and holding a club. At his feet lies an unconscious worker with a large bump on his head. Ironically, one of the plant's biggest successes has been the prevention of such injuries. The accident rate has been reduced by 50% in the last three years. Workers notice problems and point them out to members of the safety team, who order changes. Carpal-tunnel syndrome, tennis elbow, and other forms of tendonitis pose a major risk to workers. Several were injured by rolling 70-pound spools of wire. When an employee flagged the hazard, designers reworked the spool to be easily rolled by the smallest employee -- a woman under five feet tall. To remind production staff to report dangers, Partee caricatured a typical Eaton-Aeroquip worker. His beer belly protrudes over his trousers, heavy gloves and a safety knife hang from his belt, and he wears the de rigueur baseball cap. The caption reads: "I didn't get hurt so they gave me this shirt." When the factory reached a milestone -- 500,000 hours without an accident -- canary yellow T-shirts printed with Partee's sketch were made and awarded to employees. Few days pass without somebody wearing the reminder. Not many factories shower as much attention on an employee's avocation as Eaton-Aeroquip does on Partee's. It helps that many employees have relationships outside of work. Several met in school before ending up on the same shift. Everyone seems to know everyone else in Mountain Home, a town of 10,000, which is free of smog indexes and fast lanes. People born here tend to stay, and those who move to Mountain Home rarely leave. Favorite pastimes include trout fishing in the White and North Fork Rivers. Wild-turkey hunts and chili cookoffs are popular. This is the second year in a row that IndustryWeek has named a factory in the town as a best plant. Last year a Baxter Healthcare facility won. Something may be in the water, but locals swear it's a series of quality initiatives that has earned them notice. Methods modeled on the Malcolm Baldrige National Quality Award swept through Mountain Home. Best practices stuck. In 1990 Eaton-Aeroquip began an initiative to help reduce inventory and improve delivery. Then the plant adopted Aeroquip Quality Plus, which concentrates on improvements in strategic planning, leadership, and customer focus. It introduced a Quality Operating System benchmarked from Ford Motor Co., which reduced waste and improved quality. The most important change to emerge from all of these initiatives is the way the plant learned to organize around teams. Most employees join two types, a work team and a problem-solving team. Few workers embraced them when they were introduced. "Implementing teams has taken five years, and now we're really reaping the rewards," says Steve R. Chentnik, quality administrator, who joined the factory 20 years ago as a part-time groundskeeper. So many initiatives had been launched that workers found it hard to keep up with them all. When teams were organized in 1994, employees thought they were the management flavor of the week. Mavericks didn't like the threat to their independence. The mostly male production staff was told to talk about their feelings. They balked. When asked about concerns, workers willing to complain among cohorts failed to gripe in front of management. They didn't want the attention or the responsibility. "We had to convince people that their say-so would make a difference," recalls Chentnik. Workers griped among themselves about compensation -- especially about the way the factory still paid people according to a traditional, hierarchical manufacturing system. To turn those complaints into action, a group of hourly workers and salaried managers formed a team to listen to and implement suggestions. The group brainstormed a new compensation plan. Production staff who fulfill team-based requirements such as training, housekeeping, and safety would receive the factory's highest wage. Eaton-Aeroquip people praise their freedom to make candid comments, which result in changes. Promotion of homegrown talent also draws commendation. The new compensation system helped persuade a few workers that their opinions mattered. These early adopters produced a domino effect. A year after launching the team concept, management was removed from the plant floor. Roles that managers once performed, such as quality assessment, were for the most part assumed by teams. Comprehensive team training updates members' skills and provides ideas on how to improve aspects of production. Team leaders, who are chosen based on experience and commitment to the new operations systems, became the only level between production personnel and management. The factory operates on a 24-hour schedule, seven days a week, but managers work only on weekdays. Their job is to help teams reach tough goals. In one case, a haircut focused production personnel on an objective. The scrap team had reduced the percentage of unusable hose by 52% to just 2.5% of sales, but wanted to lower that. Quality administrator Chentnik challenged them to go below 2% in one month. If they did, team members could shave his head. Word spread, and employees worked a little harder at wasting less hose. It took 18 months, but by May 1997 they reached 1.9%, and five workers gave Chentnik a shiny crown. The factory turned the scrap achievement and the haircut into a celebration culminating with steak cookouts. "We do a lot of feeding," concludes Chentnik. Managers also provide production staff with assistance in such areas as finance and human resources. For example, in a bid to save money, one team turned to the financial department to find out how much the factory spends on tape used to wrap hose. They were meeting with a vendor offering a low-priced variety and wanted specifics on tape in use: How many times could it be reapplied and what was its price per foot? Similarly, the human-resources manager lends a hand with administrative tasks, such as hiring. All recruiting is done through a temporary agency, because temporary hires allow Eaton-Aeroquip workers to evaluate whether candidates will fit into the team structure. It's impossible to know if a new hire will have the gumption to tell a senior cohort to, say, clean his area. The best way to determine suitability is a few dozen shifts. After a couple of weeks, team members evaluate the newcomer's participation and agree on whether to make that person a permanent offer. The team leader in conjunction with the human-resources department does the final hiring. Managers also become involved when a team member exhibits consistently bad behavior. Team members visit customers, and negotiate with suppliers. Much of the factory's waste is sold to a company in Oklahoma. Jackie Stinnett, who serves on the recycling team, wondered what happened to waste after it left Eaton-Aeroquip -- did it end up in a dump? When invited to visit the scrap buyer, he was delighted to discover otherwise. "We met the owner and found out that the waste ended up going into carpets and was sold to other companies," recalls Stinnitt. Today peer pressure keeps the factory running smoothly, and a lot of little bonuses keep workers happy. Bonds form around common interests, which foster group spirit. Stinnett, an occasional guide to out-of-town anglers, knows where the rainbow and brown trout hide and organizes fishing trips with co-workers. These kinds of occasions provide opportunity for bonding as well as criticism. Workers reject formal peer reviews. Asked to fill out forms about how their colleagues were performing, team members saw them as formal finger pointing. Members felt they could handle occasional trouble, such as lateness or absenteeism, within the group. For the few years that formal peer reviews were used they caused unrest; they were dropped by 1998. "They hated them," recalls John (Vernon) Fowler, the factory manager. Instead, a droll wit works its way into powerful messages. Back at the artist's station, no one is immune from Partee's sardonic eye. Even Fowler shows up in cartoons. In one sketch he depicts the plant manager dressed in a Native American headdress. Fowler looks content with arms folded against his chest -- and for good reason.


At A Glance
  • Employees on empowered work teams -- 100%
  • Hours without lost-time accident -- 1 million
  • Attendance -- 99% since 1997
  • Training -- 7 days per employee per year
  • In-plant defect rate reductions -- 50% (1992-98)
  • Hazardous-waste reduction -- 98% (1992-98)
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