IW Best Plants Profile - 1995

Feb. 14, 2005
By Michael A. Verespej At A Glance Scrap/rework reduced from 2.1% of sales to 0.2% of sales in the last five years. Total inventory down 23% in the last five years. Work-in-progress inventory down 50% in the last five years. Sales volume at the ...
ByMichael A. VerespejAt A Glance
  • Scrap/rework reduced from 2.1% of sales to 0.2% of sales in the last five years.
  • Total inventory down 23% in the last five years.
  • Work-in-progress inventory down 50% in the last five years.
  • Sales volume at the two plants up 55% in the last year.
  • Sales per man-hour up 21% in the last year.
  • Number of lost-day injuries at the two plants reduced by 80% since 1990.
  • Productivity up 72% in five years.
  • Annualized return on assets, 21.1% last March.
The summer before he joined Super Sack Mfg. Corp. at its plant in Savoy, Tex., Brad Eisenbarth had worked in an old-line manufacturing plant where he witnessed and experienced the all-too-common communication problems between those in power and those on the floor "trying to get things done." He never wants to go back. "It is mind-boggling how much wasted effort there is when you can't work on the same level," says Eisenbarth. "Here it is all one group. It is a phenomenal difference having self-directed work teams. It is more than just letting people make their own decisions. It is a family feeling where things are a lot more open, particularly with regard to passing on and sharing information." That sentiment is shared by Brian Suchsland, an industrial engineer at Super Sack's five-year-old sister plant located 12 miles east in Bonham, also in Fannin County, Tex. Suchsland had worked in a traditional manufacturing plant before joining Super Sack this summer. "There I just clocked my time," says Suchsland. "Here you have the enthusiasm and attitude you need for a successful business. This place is manufacturing heaven." There are several reasons why the 325 employees -- who take plastic woven fabric and cut it, glue it, and sew it to manufacture flexible intermediate bulk containers (bags) for the agricultural, food, and pharmaceutical industries -- hold their employer in such high regard. First, they have the freedom to perform their jobs the way they see fit. "Each team meets as a unit at the beginning of each shift to talk about what happened yesterday, to review the day's work, to discuss quality criteria, and to go over work orders," says Janet Gott, the former plant manager at Bonham who became plant manager at Savoy last year. "They all have input to set goals for the day. It gives the teams the opportunity to address problems, to recognize workers for their accomplishments, and to reinforce the behaviors that they want." Second, workers learn to perform every aspect of sack production -- and are responsible for safety, quality, and housekeeping as well -- and their duties change depending on the needs of the day. Third, there's no threat of team leaders becoming too powerful. Team leaders rotate every three months, with each team member filling the leader's role before anyone gets a second term. Fourth, team members hire, fire, and discipline the people on their team. Workers can transfer to another team only if that team wants them or can use their skills -- not for reasons of incompatibility. One team, for example, suspended itself for three days without pay for its inability to work together. Eventually, the team voted to recommend that some of its members be terminated. Fifth, workers have the opportunity to shape and make modifications to both the base pay plan as well as a bonus plan that can pay out -- based on each individual team's production output -- more than $1,300 every six months. (Workers earn 10% of all sales beyond the plant's break-even point.) "We need to tie the amount people will earn to the effort as quickly as possible," says David Kellenberger, Super Sack's vice president of manufacturing. "Thus, we have team members vote shares monthly even though the bonuses are only paid out every six months. That way the workers know that if they make X amount of bags, they will make X amount of dollars, and they know what they will make if they continue at that pace." In addition, at the workers' suggestion, base pay has been replaced with a pay for knowledge, involvement, and skills program in which employees earn points for learning new job skills, for involvement on plant cross-functional teams, for courses they take to add to their education, and for community involvement. "Workers had a lot of input to the weighting system," says Kellenberger. "It is an evolving -- and much better -- pay system because team members themselves had to decide whether one job is more valuable than another." The decision by Super Sack five years ago to empower employees has had a remarkable impact on the $25 million company. In the last five years, scrap/rework has gone from 2.1% of sales to 0.2% of sales. Total inventory is down 23%, and work-in-process inventory is down 50%. What's more, in the last 12 months, sales volume at the two plants is up 55%, with sales per man-hour up 21%. In addition, a mandatory musclestretching program at the start of each shift has helped reduce the number of lost-day injuries at the two northern Texas plants by 80% since 1990. There's also a strong environmental commitment. All products can be reprocessed, and all scrap is recycled. Super Sack reconditions used bags, pioneered the use of water-based inks for printing on woven plastic bags, and built a treatment system to remove all ink solids from its wastewater. But the transformation from departmentalized batch manufacturing -- when buffer stock was built up and each bag traveled throughout the entire plant -- didn't come easily. Super Sack first experimented with a self-directed work team in order to make a specialized product at Savoy in 1989, then moved the concept to its start-up plant in Bonham in 1990. But when Super Sack first tried to switch the Savoy plant to self-directed work teams, the plan failed miserably. "We had a random drawing of names to set up the first team of eight to 10 people," says Gott, and then set out to teach them "interpersonal skills so that they could coexist and address the conflicts that were inevitable." But "we did not give them all the information they needed," says Kellenberger. "One of our greatest mistakes at the beginning was our failure to recognize how important training was. You need to make a huge commitment of time and resources for training people in communication, goal-setting, and general team-building skills to make a successful transition. . . . "We had told employees that they were empowered, but they didn't know what it was that we wanted them to do, and they didn't understand that empowerment meant responsibility and accountability." Despite those early struggles, the new way of working began to succeed, says Kellenberger, for two reasons. First, Super Sack had faith enough in its concept to switch the entire plant to self-directed teams over Labor Day weekend in 1991. "We never wavered, even though we did agonize," says Gott, who points out, though, that even as recently as 13 months ago some employees at the Savoy plant wanted to go back to the old methods of work. Second, Super Sack finally convinced its managers to let teams make mistakes. "When we began the team approach, workers were more than happy to plan, schedule, and make products," says Kellenberger. "But it was the tendency of most workers to let others -- that is, those in management -- handle the problems. We had to learn to let them come to us for information and not just make the decisions ourselves. We had to learn to let the teams make mistakes so they could learn to manage themselves." If a team has a problem resolving a conflict, it can sit down with a plant manager. "But we don't go in and solve problems for them," says Gott. "We ask questions to get the conversation going so that they can resolve the problem." The other difficult aspect of switching to a team approach was the reluctance of workers to approach another team member about a problem. "We used to keep everything inside and not tell people how we felt," says Sallye Spindle, a member of Team Five at Bonham. "We had to learn to attack the problem, not the personality." Jessie Siler, a coach for support teams at Bonham, agrees. "Originally we were little groups of people who didn't want to say anything. Now we shout to be heard." With those problems behind them, Super Sack's productivity is soaring -- up 72% in five years -- and the plants' annualized return-on-assets stood at 21.1% this past March. There's also been an unexpected side benefit. That is, because everyone takes a turn as team leader, "everyone now sees all the problems" from a different perspective, says Kellenberger. As Kathy Dowd, a member of Team 6 at Bonham, asserts, "You get to know people better as team leader, and you get more of an understanding of how things are done. I don't think I could go back to the old way."

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