IW Best Plants Profile - 1996

Feb. 14, 2005
State-of-the-art technology and union-management cooperation have produced outstanding results at Rockwell Collins. By John Teresko At A Glance Productivity increase in the last five years: 71%. Approximate manufacturing cost reduction per unit of ...

State-of-the-art technology and union-management cooperation have produced outstanding results at Rockwell Collins. By John Teresko At A Glance

  • Productivity increase in the last five years: 71%.
  • Approximate manufacturing cost reduction per unit of product shipped: 21% (excluding purchased materials cost).
  • Approximate percentage reduction in the product-development cycle: 55%.
  • Approximate number of production-material suppliers who account for 80% of the dollar volume of purchased material: 100 versus 200 three years ago.
  • Current ratio of employees per supervisor: 55:1 compared with 29:1 in 1991.
  • Percentage of total plant workforce participating in empowered work teams: 85%.
  • Percentage of production workforce now participating in self-directed work teams: 75%.
  • Percentage of production (units shipped) represented by products introduced within the last 12 months: 40%.
  • Scrap/rework as a percentage of sales: 0.84% for fiscal-year 1995.
  • Number of benchmarking studies conducted in last three years: 20.
Managements usually do get the unions they deserve. That may help to explain why the combination of Rockwell International Corp.'s Rockwell Collins Avionics & Communications Div. and its unions -- the International Brotherhood of Electrical Workers (IBEW) Locals 1634 (Coralville) and 1362 (Cedar Rapids) -- is a winning team. The current success of the organization that Arthur Collins launched in the Great Depression as the Collins Radio Co. results from the willingness of all employees to accept personal responsibility and demonstrate the leadership qualities necessary for the company to be preeminent in its field. Together, operations and union leadership at the division have formalized an unusual partnership, Organization 2000, to carry out a unique world-class labor-management vision. "Because of this close relationship among Rockwell Collins people, many traditional rules have been modified to allow for a workforce flexible enough to maximize customer satisfaction and efficiency," says Steve Yoder, manufacturing production lead at Coralville. The labor contract is hard evidence of how seriously the people of Rockwell Collins take the commitment to that mission. Instead of being the usual printed, bound, and unchanging document, the Rockwell Collins Coralville contract comes in a three-ring binder. "That's so it can be changed and modified any time during the three-year contract period with the concurrence of both parties," says Moe Kassem, IBEW Local 1634 business manager/president. Both locals are involved in major management decisions and actively participate in team-based management. "We call the contract a living agreement," adds Kent Statler, Coralville site leader. Coralville is one of three Rockwell Collins sites in what the division calls a single-plant/multiple-site concept where eight manufacturing cells are supported by integrated product teams (IPTs). Leaders in each IPT report to the vice president of operations, Herm Reininga. The three sites are located within a 30-mile radius, with two in Cedar Rapids and one in Coralville. It was simpler in 1931 when the youthful founder, an amateur-radio buff, first set up shop in the basement of his Cedar Rapids home. By 1933, when Arthur Collins moved into leased quarters and formed the company, product excellence and market-driven vision already were evident. Demonstrating the kind of business acumen that today fuels the entrepreneurship of Silicon Valley, Collins recognized the opportunity of that era -- assembling radios for ham operators. (Up to that time, each enthusiast would build his own.) Later in 1933 came an event that was as dramatic as Rockwell Collins global-positioning devices enabling the recent rescue of a downed aviator in Bosnia. Collins was asked by Adm. Richard Byrd and CBS to supply the communications gear and expertise to establish radio contact with Byrd's historic South Pole expedition. The first sign of the division's current avionics and military-communications activities came in 1934 when it supplied the radio equipment for Goodyear's blimp, the Enterprise. World War II brought burgeoning employment -- a peak of 3,332 workers in operations versus 1,562 today -- and the union. Local 1362 was established in 1943. A growing market in avionics (a contraction of aviation and electronics) carried the company through the next decades with such highlights as supplying the communications equipment that carried the first message back from the moon in 1969. That year also marked the takeover attempt by Ross Perot's Electronic Data Systems Corp. that in turn led to Collins accepting an offer from North American Rockwell in 1971. Two months ago Rockwell sold its aerospace and defense businesses to Boeing Co. Rockwell Collins survives as a Rockwell International Corp. unit, as do the parent's automation, semiconductor-systems, and automotive operations. The new strategy positions Rockwell Collins as a key element in the increasing electronics focus of the parent -- the electronics business already accounts for 71% of the sales of the corporation. It also means a change of emphasis for the division. The current production operation provides packaging, assembly, and test services for a wide variety of communications, guidance/navigation, information-distribution, and commercial command-and-control electronics. Today, the customer list includes both the Dept. of Defense (DOD) and commercial clients, but the emphasis is changing. "We are in transition from our traditional military focus to a commercial/dual-use focus," says Yoder. For example, the division is leveraging its military global-positioning technology for commercial applications. The Rockwell Collins Vision System is one adaptation for the agricultural market. By integrating satellite signals, map overlays, software, and hardware, the Vision System can create and maintain a geo-referenced database for a farmer's acreage. TransitMaster, a GPS-based information-management system for city buses, is another adaptation of the technology. In the computer arena, Rockwell Collins has introduced the Trekker, a voice-actuated mobile computer with an LCD monitor as part of the headset. The new market emphasis is running in parallel with a new urgency on updating the organizational process for military customers. With the government's acquisition reform, doing business with the military involves adjusting to new rules -- and maybe new competitors, says Yoder. Instead of reams of specifications, the new government attitude, simply stated, is to "get it done as efficiently as possible. That opens the door to competitors from the commercial marketplace," adds Yoder. "Rockwell Collins has been recognized by both the DOD and commercial customers as Best in Class,' and we need to maintain and improve that position." In terms of organizational philosophy, "Rockwell Collins originated with the traditional command-and-control style," admits Kassem. That began to change in the 1990s as management saw the need to shift to self-directed or empowered work teams, says Yoder. "Our first step -- and a continuing step -- was communication. All of us had to understand the need to change the way we do our work in order to renew the organization. We had to create a clear case for change. People must realize why change is required and what the consequences of not changing involve." The next step was to clearly define the goals or vision of the organization. Rockwell defines it simply -- to be "the best diversified high-technology company in the world as judged by the customers, employees, shareholders, and community." That breaks down into "being the supplier of choice, being recognized as the best place to work, providing the highest returns to our investors, and being recognized as engaged, enthusiastic supporters of our communities." Mary Fredericksen, chief steward of IBEW Local 1362, works toward those goals as a member of the Change Process Advisory Board. "We sit down around the same table -- the VP of the division, other company management, top HR people, along with the bargaining-unit management -- and we're all equal in that room. That would never have happened five years ago." Frederickson, a 34-year veteran at Rockwell Collins, is currently helping to implement a flat-panel-avionics program. Her background, experience, and skills also enable her to serve as a "floater," filling in for workers who are on vacation or absent for other reasons. The process changes have not been restricted to the plant floor. Management positions have been impacted, as well. For example, the Rockwell Collins management structure was cut by three layers, says Yoder. Many former managers became team members with different responsibilities than before. While many front-line supervisors have retained those responsibilities as managers in a formal sense, they have broadened their skills into production-coordination roles while shifting management of day-to-day activities to their factory teams. The result has been a more competitive operation, with fewer managers per employee and improved business results. In 1991 the employee-to-manager ratio was 29:1, today it is 55:1. "We used to be in a control paradigm," says Rosie Behel, business manager for IBEW Local 1362. "That control is loosening up. The old adage was that you leave your brains at the door. That is no longer true." Approximately 75% of the production workforce now participates in self-directed work teams. Releasing that know-how has had positive results. Consider quality. On the ARC-210 Airborne Transceiver, first-pass yield is 99.3%, representing an improvement of 72.5%. Typical yields for the industry: 86%. The integrated process team responsible for the product won two DOD awards -- the Navy's Secretary of Defense Superior Management Award and the DOD Value Engineering Achievement Award. Rockwell Collins sees a direct connection between empowerment practices and marketplace success. Yoder cites a workprocess-redesign example involving hundreds of employees that resulted in a projected annual cost reduction of $4 million. Other efforts currently underway include an effort to reduce cycle time of the design-change-notice process from four days to four hours. Yoder says such activities are important contributing factors in the division's order-capture ratio of 90%. Approximately 40% of current production is products introduced within the last 12 months, he says. Plant personnel are in integrated product-and-process-development (IPPD) teams, contributing to a significant 55% reduction in the product-development cycle. Other evidence of improved competitiveness is the improvements in productivity. Based on the total employment, Rockwell Collins experienced a 71% increase in the last five years, adds Yoder. Calculated on total sales per employee, the five-year productivity increase is 65%. Yoder attributes that performance to the leadership emphasis in Rockwell Collins' high-performance work system, as well as to the cellular approach used by the IPT and IPPD teams. Other factors: common use of design of experiments, statistical process control, and investments in state-of-the-art production equipment. An example of the latter is the way the MAGICS system of online work instructions enhances quality, flexibility, and the performance of all involved. The creator of the instructions in industrial engineering benefits because the system is paperless and online. Changes can be immediate, ensuring that all users are accessing the same up-to-date information. That eliminates problems with lost paperwork or time wasted copying and distributing material. Production operators benefit, too -- by being able to do such things as zoom in on views, inquire about components, and instantly know the status of the assembly (build progress, missing parts, defects). The quality system is enhanced by MAGICS, because it forwards reports on assembly progress. While such manufacturing technology is an important enabler, the key to the winning performance at Rockwell Collins is the way the union and management have seen common interests in reorganizing work. "Start by realizing that the union will be skeptical," says Kassem, "and understand that management should take the initiative and walk the talk. Then all involved should proceed by doing what is right as opposed to who is right and who is wrong." Adds Statler, "If you are successful in getting into a partnership, eliminate the idea of getting out as an option. Stick with it and make it a success. Be rational. Don't let your emotions rule. With so much at stake, leadership has to be substituted for emotion." Kassem, who faces election every three years, is blunt about his participation in the partnership. "If I have to make decisions based solely on being reelected, I know I will have failed in serving my constituency. In this partnership, we have to respect the different areas of responsibility and realize that the competition is with the outside." He says both sides must be honest, trustworthy, and open -- no hidden agendas. "I want Rockwell Collins people to be the best, and I believe that the union cannot be the best without management excelling in organizational leadership." Adds Statler, "Joint partnerships call for mutual respect and mutual understanding. On either side, be prepared to appreciate that it is impossible to please all the people all of the time. Above all, I can't overemphasize the importance of communicating." Kassem clearly believes the partnership is a pioneering effort. "We're setting a new tone. We're breaking a lot of paradigms. We've relegated the traditional system to history." In its place the management/union partnership is fostering new traditions. Some are in recycling and safety. In a recycling effort, the partnership organized teams that target waste reduction and landfill avoidance. Their award-winning efforts have reduced the tonnage hauled to landfills from 889 in 1991 to 307 in 1995. The recycling is a joint effort with Goodwill Industries. Among Rockwell Collins environmental efforts, the use of chlorofluorocarbons has been eliminated. Efforts targeting workplace safety have reduced the Occupational Safety & Health Administration reportable-injury rate by 35% since 1993. Fredericksen positioned the accomplishments of Rockwell Collins in comments she made to the plant publication, Vision Magazine: "We'll help make this happen because this is the kind of place I want to work in."

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