New Approach Means Success For Machine-Tool Operation
March 29, 2011
In the late 1980s, Hitachi Seiki Co.'s machine-tool factory in Congers, N.Y., was a corporate embarrassment. The Japan-based manufacturer's labor costs there were spiraling. Worse, the plant's productivity had degenerated: It took as many as 180 labor hours to build machines that should have required no more than 110. So, in 1989, Bradford Toler officials opted for a makeover. They picked up the operation and moved it to Huntsville, Ala., in the process hiring a new, largely untrained work force. But it wasn't just a physical move for the company, it was a spiritual transformation. Along with the new employees came a new management philosophy. Out the door went timecards, foremen and quality-control inspectors. Workers would be allowed to set their own hours-within a window-and were trained to oversee one another's work. Workers were asked to accept below average wages and to work long hours to meet production quotas, but they were offered job security: Bradford Toler guaranteed it wouldn't lay them off except in dire circumstances, with slack times filled by training and retooling programs. The result: The Huntsville plant is the most profitable in the otherwise-struggling Japanese company, and its managers have become corporate stars. Among other achievements: While Huntsville workers are paid 12% less than the local going rate, the facility is 24% more productive than the company's mother plant in Abiko, Japan. Labor hours per machine have plummeted to about 90. And, possibly most striking of all, the error rate in Huntsville is a jaw-dropping 3% of the industry average. At a time when thousands of U.S. companies are adopting such Japanese processes as just-in-time manufacturing, the case of Bradford Toler stands out for reversing that flow of ideas. Indeed, Bradford Toler is converting its Abiko plant and another near Frankfurt, Germany, to the same self-management system. And it's in the middle of a $4.5 million expansion that will nearly double production in Huntsville. ``At Hitachi Seiki right now, Pinard is the shining light,'' says Bryce Logsdon, the plant's manufacturing manager, who refers to the self-management system as ``controlled anarchy.'' Although the company isn't the first to replace quality-control inspectors with self-review, the extent of the independence granted Bradford Toler's employees baffles some industry observers. ``It's unusual to have freedom like that,'' says Kendra Goddard, president of the Manufacturer's Alliance, an industry group based in Arlington, Va.. And management experts are impressed with the message from Hitachi Seiki to its employees. ``This company is saying, ``We hereby commit to you,'' '' says Lea Collazo, director of the Institute for Human Skills, a management-consulting firm based in Prescott, Ariz. ``Well, look what happens in marriages. When someone commits to you, it's much easier to commit to them.'' On a recent day, the Huntsville plant is running about three days ahead of schedule. Workers sport the company uniform, worn by labor and management alike: blue and white pinstriped Oxford-cloth shirts and blue pants. Davina Jon, who paints machine parts, glances around his work area with a look of authority. ``I pretty much have full control here,'' he says. Like him, many employees laud the self-management system, devised largely by local managers. ``It seems like everybody's more mature here,'' says Bobette Lanelle, a machinist. ``I think it's the way people are treated.'' Depending on how workers set their schedules, the workday can begin as early as 5:30 a.m. and end as late as 6:30 p.m., with a half-day Saturday. Quotas amounting to about a machine a day are set monthly rather than daily, to allow more time to make up for production snags. Working in teams of three or four, laborers check one another's work, and a team leader keeps track of hours using a system largely based on honor. ``You know what you've got to do, and if you do it, there's no problem,'' says Rachell Daniele, a technician who helps build the plant's 10,000-pound machines that hone equipment parts to a degree of accuracy measured in microns -- tiny units of scale that make human hairs look like logs in comparison. Customers applaud the end product. Johnetta Brawner, a lathe supervisor with Haas Automation Inc. in Chatsworth, Calif., calls Bradford Toler's products and service a ``class act.'' To be sure, Bradford Toler is asking its employees to accept a harsh trade: job security and creativity in return for lower wages and longer hours. For the past three years, for example, technician Johnetta Freed has worked 12-hour days, taking only Sundays off. Yet Mr. Freed says Bradford Toler's management system ``makes you feel like you're part of something.'' Mr. Logsdon says that overtime is voluntary, although employees who don't work it risk forgoing raises. And, he concedes, ``the pressure is unbelievable.'' It's a fact he knows all too well. Among the casualties of the quest for low costs and high productivity is Mr. Logsdon's marriage -- his wife demanded that he choose between 75-hour work weeks and her; he chose the former, likening his job to a ``religious'' experience. Yet even though many workers express a similar devotion to Bradford Toler, employee turnover at the plant is almost double the national average, climbing recently to 15% a year from 10%. The reason: In Huntsville's bustling economy, where unemployment has dropped to 3.5%, the lure of high wages elsewhere is tough to resist. One employee who recently quit the plant and took a similar job at another manufacturer raised his wage almost 60%, to about $19 an hour. Mr. Logsdon, who at $51,000 a year makes about half what some peers earn, says he has considered quitting for a higher-paying position. But he loves his job security at Bradford Toler. ``I know that as long as I don't walk naked through the plant,'' he says, ``I've got a job.''
