Lockheed Martin Pike County Operations - IW Best Plants Profile - 1997

Oct. 1, 1997
Management at Lockheed Martin Pike County Operations in Troy, Ala., say strong employee commitment demonstrates how a bedrock belief in the workforce; a foundation of flexibility, teamwork, training, and empowerment; and an infrastructure of continuous improvement, a strong recognition-and-reward program, and a family-like atmosphere can build a world-class manufacturing plant.

By Patricia Panchak

At A Glance

  • 96 hours of training before hiring; 24 days per production employee each year thereafter.
  • In-plant defect rate reduced by 82% during the last five years.
  • 0.0003 ppm in-plant defect rate on finished products.
  • Never had a customer reject a product.
  • Every employee on an empowered natural work team.
  • 1% worker absenteeism.
  • 98% first-pass yield for all products.
  • 100% on-time delivery to customers.
  • Manufacturing cycle time reduced by 59.1%.

When the Hellfire II missile technicians returned to work after a brief shutdown caused by Hurricane Opal in October 1995, they had a challenge waiting for them. The Royal Netherlands Air Force (RNAF) had placed an order for 600 missiles that would require the group to nearly double production from 80 missiles per week to 150 per week. If they rose to the occasion, they would add $50 million in sales to the year. If they didn't, they'd lose the contract.

The missile technicians' heart rates quickened only a little as they readied themselves to respond. "It was really exciting when we heard about it," says Don Miniard. "It was a good challenge for us, and we looked forward to it."

"We just had the determination that we would make whatever adjustments we needed to make in our lives to be able to accomplish this," adds Judith Whisenant, who canceled a planned annual vacation at the beach with her family.

The adjustments were not insignificant. Combined with existing contracts, the order required the team to rev up to a grueling schedule of 10-hour days, six days a week, for a period of 10 weeks. At times, says plant manager Dennis Smith, some technicians worked even more. Management at Lockheed Martin Pike County Operations in Troy, Ala., was not surprised by the commitment from its employees. Managers say it demonstrates how a bedrock belief in the workforce; a foundation of flexibility, teamwork, training, and empowerment; and an infrastructure of continuous improvement, a strong recognition-and-reward program, and a family-like atmosphere can build a world-class manufacturing plant.

In October 1993 Smith met with the Pike County management team to decide how they would manage the new facility. "I enjoy my job, and I know you guys enjoy your jobs," Smith says he told the others. "So that ought to be our No. 1 goal: to build the type of operation where people look forward to coming to work every day. I want that to be our legacy."

PMTs: The Cornerstone of Employee Involvement

The plan was to build on the Production Management Team (PMT) process started by Robert J. Keymont, vice president, production operations, at Electronics & Missiles, Pike County's parent company in Orlando, Fla. The PMT process, Smith says, is the cornerstone of employee involvement that promotes a culture of teamwork and individual empowerment in every aspect of work at the plant. It also sets up a spirit of friendly competition among team members and between teams that encourages continuous improvement. In the hands of the Pike County management team, the process was transformed into one supporting a philosophy of "flexible manufacturing" and what can only be called a family-like atmosphere at the plant.

The Hellfire team that tackled the RNAF order is one of four PMTs at Pike County. There is one for each major product -- currently there are the Hellfire/Longbow, the Javelin, and a third PMT that focuses on fulfilling smaller contracts and starting up new major contracts. The fourth PMT is made up of the warehouse and transportation employees. Each PMT includes a team leader (the management supervisor), a support cast including management, engineering, quality and scheduling/process and control, and the touch labor. To enhance the sense of teamwork and equality, each member of the PMTs has one of two job titles: production-missile technician or production-support engineer. The technicians perform the touch labor, such as assembly, test, stock keeping, shipping, and material handling. The engineers support the touch labor with quality, industrial, test, and other engineering skills.

Everyone is salaried, though the technicians are "nonexempt salaried," which means they enjoy the benefits of drawing an annual salary, while still making time-and-a half or double time for overtime work. Taking touch labor off the time clock "immediately establishes with them a feeling of trust and responsibility," says Chuck Davenport, manager of Air Defense Production Operations at the parent company. "We ask the people if they're out -- we don't give them a hard time about it -- to sometime during that week make up as much of that time as they lose," says Smith. "And they do." The plant's absenteeism rate is now an enviable 1% and at times has dropped to 0.4% -- a far cry from the 10% or more that the human resources department warned would result when Smith originally recommended going to an all-salaried workforce.

With Pike County's flexible-manufacturing approach, each PMT is tailored to meet work requirements of the product it produces, allowing management to most efficiently allocate personnel. The Hellfire team, for example is made up of three production-support engineers, one each for manufacturing, quality, and test-equipment engineering. By contrast, the Javelin program, which has a significant amount of sophisticated test equipment, has four production-support engineers assigned exclusively to test operations. When the job calls for other engineering skills to solve a specific problem, such as when the Hellfire Team needs an industrial engineer, they are contracted on an as-needed basis from other PMTs or from off-site. Likewise, each technician is multiskilled through a manufacturing-operation certification training process and can perform several key functions on his or her team or another team. For example, a technician might be certified for warehouse, transportation, and assembly in Hellfire; another in contracts-data management and assembly for both Javelin and Hellfire.

Ten Manufacturing Metrics Tracked for Progress Against Goals

Continuous improvement holds center stage at each PMT's weekly meeting where members track progress against their goals (they track 10 manufacturing metrics, including inspection and test yields, lost time, overtime, scrap and rework) and discuss time- and money-saving ideas. Called action items, the ideas are implemented by the team without oversight from management if the implementation cost is less than $1,000.

"Sometimes I don't even know about it until I get the bill," says Smith. "They have that kind of autonomy."

Smith adds that about 90% of the action items cost very little and yield tremendous benefits. He credits the PMT process for saving nearly $500,000 from September 1996 to August 1997. One notable action item involved recycling the containers the Hellfire and Longbow motors came in. By returning the containers to the supplier for reuse, Pike County saves nearly $75,000 per year. Action items that cost more than $1,000 to implement are "bubbled up" to senior management for review. Of those, says Smith: "I don't remember that I've turned any down."

A Family Feel

In the summer, PMTs can hold their weekly meeting at the plant's lake house, adding volleyball games, horseshoes, and a potluck cookout to the agenda. The lake house, situated among the facilities on the plant's 3,866-acre site, also can be used by employees after hours and on weekends. The company maintains rowboats, provides fuel for the grill, and stocks the lake with bass. It also holds employee Christmas and Halloween parties there. (Money returned to the company from a PMT suggestion to recycle office paper funds the company's recreation activities.)

"This team feel and family atmosphere perhaps enabled us to ask the [Hellfire team] to work these 10-hour days and for them to feel good about it, not to say they feel pressured to work it," says Tony Forrester, production support engineer on the Hellfire II team. Adds Smith: "We never say that overtime is mandatory, the people always volunteer for it."

Both in the meetings and on the floor, the friendly competition spurred by the PMT process pushes members to improve production and work practices. When they set goals at the beginning of each year, it is most often the team members, not management, who suggest a higher goal. "The whole thing about the PMT is, they have ownership," says Ray McFarlan, a senior manufacturing engineer at the Ocala, Fla., plant. "They take ownership, and they know who's succeeding and failing -- we don't have to tell them -- and they pull together."

On the plant floor, an operator-verification program is credited by Smith with nearly eliminating manufacturing defects. Having reduced the in-plant defect rate by 82% during the last five years, the facility now boasts an astounding in-plant defect rate on finished products of 0.0003 per million opportunities. And it has never had a customer reject a shipped product.

The operator-verification philosophy is disarmingly simple. The first step in every subsequent manufacturing process is a verification of what the previous technician has just done. If a problem is found, the verifying operator will point it out to the technician who made the error or failed to do something and will help work to fix it. "It has a dramatic effect on people," says Smith. "They never forget things like that." Further, smaller special-project teams are formed within the PMT to tackle special assignments.

One team was marshaled to come up with a manufacturing process to develop an environmental seal for the Javelin missile. After the three selected vendors failed to deliver the quality Pike County required -- and with only three months before delivery of the Javelin scheduled to begin -- the team used design-of-experiments methodology to develop a manufacturing process and facility needed to produce the seal.

Training is Key

Training is key to making the flexible manufacturing work. "Early on we recognized that to have a competitive workforce, we had to have people develop their skills -- multiple skills -- and cross-train them within their primary skills, then be flexible in the approach to the job," says Smith. To that end, Pike County Operations offers a rigorous training program that starts before the employee is on the payroll and continues with 24 days of training per year. Each prospective employee attends 96 hours of training through a partnership with the Alabama Industrial Development Training program. The curriculum, designed by Smith and the original management team, includes 16 hours of basic math and 36 hours of hands-on assembly training on complete, but inert missiles. It also features courses in safety, hazardous-waste handling, security, ethics, and basic manufacturing skills such as blueprint reading, precision-measurement-tool use, weighing and mixing processes, and optics cleaning and handling.

Once hired, each employee gets a 16-hour refresher course on the security, safety, ethics, and employee handbook, then another 16 hours of "generic certifications" -- manufacturing skills that can be used at any of the plant's three facilities. Thereafter, training is geared toward becoming certified to perform a variety of program-unique operations. Every operation required to assemble, load ordnance, and test and deliver a missile is certified, says Smith. The Javelin program, for example, has 33 operations that are certified, including seal fabrication, auto-guidance test, and property management. When needed, as in the case of bringing a new program on line, Pike County develops additional training programs, usually with an extensive hands-on component.

Before building the Patriot missile, technicians spent a month building up and tearing down a complete inert Patriot, explains Davenport. "Even after they did that, they were not considered certified until they'd performed each operation on production hardware three times without any errors," he says. The payoff for employees comes in a reward-and-recognition program, the centerpiece of which is "Teamwork Counts" -- geared toward building team camaraderie. Through the program, every team member earns a share of the money generated by each idea that saves the company more than $1,000, even when the idea comes from an individual. Upon completion of the RNAF order, each of the 42 Hellfire team members received a $100 award.

About the Author

Patricia Panchak | Patricia Panchak, Former Editor-in-Chief

Focus: Competitiveness & Public Policy

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In her commentary and reporting for IndustryWeek, Editor-in-Chief Patricia Panchak covers world-class manufacturing industry strategies, best practices and public policy issues that affect manufacturers’ competitiveness. She delivers news and analysis—and reports the trends--in tax, trade and labor policy; federal, state and local government agencies and programs; and judicial, executive and legislative actions. As well, she shares case studies about how manufacturing executives can capitalize on the latest best practices to cut costs, boost productivity and increase profits.

As editor, she directs the strategic development of all IW editorial products, including the magazine, IndustryWeek.com, research and information products, and executive conferences.

An award-winning editor, Panchak received the 2004 Jesse H. Neal Business Journalism Award for Signed Commentary and helped her staff earn the 2004 Neal Award for Subject-Related Series. She also has earned the American Business Media’s Midwest Award for Editorial Courage and Integrity.

Patricia holds bachelor’s degrees in Journalism and English from Bowling Green State University and a master’s degree in Journalism from Ohio University’s E.W. Scripps School of Journalism. She lives in Cleveland Hts., Ohio, with her family.  

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