Volvo GM Heavy Truck Corporation:
Focused on Quality and Cycle Time Reduction
Ó Copyright 1996 by Organizational Dynamics, Inc.
| Volvo
GM Heavy Truck Corporation (VGHT) which began operations on January 1,
1988, is a major manufacturer of Class 7 and Class 8 tractors and trucks in the United
States. VGHT has captured 12 percent of the
market, making it the third-largest producer of heavy trucks in the nation. The company is
a joint venture between AB Volvo of Sweden and General Motors Corporation. Volvo owns 87
percent of the corporation and General Motors owns 13 percent.
VGHT is headquartered in Greensboro, North Carolina. The
company has approximately 4,000 employees.
VGHT operates two truck-assembly plants. The New River
Valley plant in Dublin, Virginia, has a daily production capacity of 50 vehicles.
VGHT markets its trucks through three operating companies
- NORTHERN WHITEGMC, based in Columbus, Ohio; SOUTHERN WHITEGMC, based in Greensboro,
N.C.; and WESTERN WHITEGMC, based in Salt Lake City, Utah. WHITEGMC and
VOLVO are trucks are marketed in Canada through Volvo GM Canada Heavy Truck Corporation,
Milton, Ontario. |
About two years ago the VGHT sent a team to look
in Memphis at the possibilities for relocation. As part of the Memphis Regional Chamber,
Donald Fisher met with this group. The reason Memphis appealed to VGHT as the city of
choice is because their business is "after market sales" and provides repair
parts for trucks that need to be sent out very fast. They saw a competitive advantage in
Memphis where Federal Express Corporation is headquartered. They wanted to be close to
FedEx so they could ship these parts overnight. VGHT saw themselves as a quality
organization but were lacking in total integration of key processes and did not
consistently document these processes across the board. Richard Wells, VGHT's Vice
President and General Counsel, hired Donald Fisher to do a national assessment based on
the Malcolm Baldrige National Quality Award criteria. The plan was to look in seven areas
at their assembly and distribution sites: the management staff, supervisory staff, their
data network, strategic planning, human resource development, and customer focus and
satisfaction.
Donald looked at VGHT's quality control, since they were a major distribution house. He
looked at how VGHT was manufacturing and building their trucks as well as keeping the
trucks supplied and on the road with good parts. Donald also looked at the quality of
results. Did VGHT measure results? What was the likelihood VGHT could be a world class
quality organization? How did VGHT satisfy the dealer networks and their customers? Fisher
discovered VGHT did not have the strategic thrust to be the quality company they perceived
themselves to be.
Six months later Richard Wells invited him to meet with Per Lindquist, President and
CEO of VGHT North America. Dr. Fisher met with them for a day and explained what he could
do for them in the assessment area using Baldrige. Volvo International in Sweden used
Baldrige as a measuring tool and it was coincidental the Swedish operation was putting a
lot of |
pressure on the U.S. group to also use Baldrige as a measuring tool. The timing
was right. Dr. Fisher had authored a book called Measuring Up To The Baldrige whose
title had become the slogan of Volvo International. Per Lindquist was impressed with the
book and with Donn's references from work completed with Cigna Corporation, Federal
Express, and other major companies.
Dr. Fisher was invited to visit their sites in Orrville, Ohio, Dublin, Ohio, and
Greensboro, North Carolina. He interviewed about 200-300 key managers and supervisors as
well as union representatives. He asked 91 questions based on his assessment process
outlined in the book, Measuring Up To The Baldrige.
| By conducting the Baldrige Assessment, Donn,
discovered many of VGHTs key processes were not totally integrated. VGHT hired a large
consulting group out of New York, Price Waterhouse, to redesign many of their marketing,
sales, and other key processes. There was no learning loop in place where the people that
were actually involved with these processes on a daily basis were connected in a training
program. There was no centralized training function and there was no focus on shortening
process time of these key processes. |
There was no learning
loop in place .... There was no centralized training function and there was no focus on
shortening process time of these key processes. |
Dr. Fisher finished his assessment process over a two month period. In
Greensboro, N.C., Dr. Fisher gave the results to the President and all of the Vice
Presidents in a conference room and through satellites across the country to all their
plant sites. In his report he provided data to show there were opportunities for
improvement within VGHTs key assembly and production processes. Price Waterhouse had not
addressed these areas.
At the same time VGHT was going through the assessment process they were developing a
new truck line from Sweden called the 2200 project. It
was a secret project for a unique truck line, owned 87% by Volvo of Sweden, and 13% by
General Motors Corporation. VGHT was tying to change their image with only 12% of the
market share for heavy duty trucks in this country. Their biggest competitor was
Freightliner owned by Mercedes. VGHT wanted to move their market share up to 18%. That is
why they went through reengineering, were becoming ISO 9000 certified and were trying to
integrate all their processes together. Timing was right for Donald Fisher to go through
his assessment process.
| Dr. Fisher ... identified
two areas in the manufacturing process that needed attention; first, the documentation
process needed to go deeper, and second, there was no learning cycle connected with the
reengineering process. .... He explained how the ... Process Activated Training System®
would reduce process cycle time and learning cycle time of the key identified processes. |
When Dr. Fisher first went to VGHT to present a
proposal to conduct the Baldrige assessment he explained the scoring - the maximum score
for any company is 1000 points. The President told Dr. Fisher they should be in the
600-700 range. Even though they fell below that range, they accepted the facts well.
Within a few months Dr.Fisher was hired to come in and train 42 of their key people on how
to conduct self assessments using Baldrige criteria. Dr. Fisher spent three days
developing a team of internal assessors inside VGHT. He identified two areas in the
manufacturing process that needed attention; first, the documentation process needed to go
deeper, and second, there was no learning cycle connected with the reengineering process.
In other words, the people were reengineering processes but they were not connected with
the way people learned the processes. He explained how the system he developed, called
PATS (Process Activated Training System®) would reduce process cycle time and learning
cycle time of the key identified processes. PATS is not a system that advocates
documenting all processes but only looks for those that are key or critical that
would make a difference in various work areas throughout the plant or organization. |
Dr. Fisher met with management in a half-day session and explained how PATS
connected with their ISO 9000 and reengineering initiatives inside the plant. He also
explained how PATS would expedite employee learning and how to work in teams to document
best practices.
Dr. Fisher was then hired to come in and work with the project team assigned to the 2200
Project. This team was given a year and a half, off site at a
secret location, to develop the world's safest truck. They chose to use the PATS system at
their New River Valley plant in Dublin, VA.
Jimmy Poole, an ODI Consulting Partner, along with Dr. Fisher conducted a two-day off
site PATS session. They taught 20 people who had reengineered the processes for this new
truck line on how to transfer their knowledge of what they had developed over to 66 new
people that were moving from the old part of the plant to this new 2200 Project which
is VGHT's new way of manufacturing trucks. Some of the VGHT trainers were in this class in
order to develop an in-house PATS training session.
| According to Dr. Fisher, "The unique
challenge of this is we have been able to go into the site where this secret 2200 Project
has been developed and work with the prototype team. They are going to be transferring
their knowledge over to all the other employees throughout the corporation that have
always known the old way of manufacturing the truck. Now they're going to learn the new
way and the PATS system is going to be used to transfer this knowledge over to them. We
can bring new people from the old plant over to these new processes and reduce their
learning cycle from three weeks to maybe two days." |
Now they're going to
learn the new way and the PATS system is going to be used to transfer this know- ledge
over to them. |
ISO 9000 requires complete documentation of critical processes. The PATS system
provides a process to enter all of the key identified processes and sub-processes into a
database. Therefore, VGHT was able to identify and document best practices inside their
company using PATS. The way they identified what the best practices were was to ask the
questions: "What are the processes that we use on a daily basis? Are these processes
absolutely necessary? Are these processes completed correctly the first time to get the
product out the door without customer complaints and without high warranty cost to prevent
a product from coming back within the first week"?
Dr. Fisher explained how the PATS process works. "The first step is to identify a
group of people as "Subject Matter Experts" (SME's). We teach the SME's how to
teach core processes to their coworkers who we call the 'Process Activated Learners'
(PALS). We write the processes behaviorally in order to measure results and see if
behavior is actually changing on site." Seventy (70) key critical processes were
documented at VGHT by the 66 people working in teams of three. Each group presented their
results to the other groups. These processes can only be 20-25 minutes in length. If a
process takes more than 20-25 minutes to teach it needs to be broken down into two
processes.
SME's can learn to teach these processes on site. One of the criticisms employees had
for Dr. Fisher was, "we don't think the management will support us in allowing us to
have time at our work site to teach these processes." Dr. Fisher took these employee
concerns back to the General Manager of the Dublin plant. He invited Dr. Fisher back to do
a one-day session with all of the management staff. Management will spend the last half of
the day learning the processes as PAL's from a select group of previously trained SME's.
| In order to have the Training Department
personnel buy-in and support the process, Dr. Fisher gave them a role to set the stage for
whenever these two-day sessions with SME's are set. They become coaches to the
network of SMEs and aid in their continuous development. "We teach how adults learn,
we teach them adult learning theory, we teach them how to handle negative employees, we
teach them the whole process of how to transfer this knowledge from one employee to
another. The method is teaching one on one or two on one. They don't do it in groups and
it's done on site and it's just in time learning. SME's throughout the plant site are
empowered to teach these processes just in time so it doesn't continue to be a process
problem on line, and that's the unique part. How you deploy the learning throughout the
work sites is a very strong feature of this whole system." |
SME's throughout the
plant site are empowered to teach these processes just in time so it doesn't continue to
be a process problem on line, and that's the unique part. |
Ten percent of the workforce are informally SMEs. If there are approximately
4,000 employees in the U.S. for VGHT, there should be 300-400 Subject Matter Experts. The
100 SME's that are learning PATS at Dublin, Ohio, will deploy this knowledge to their
plant in Orrville, Ohio. Dr. Fisher is also developing a Lotus Notes database to help them
deploy the process to the other sites much faster. VGHT will work with Dr. Fisher to pilot
and test the software inside the plant site in Dublin, Ohio.
One of the main benefits of using PATS is measurement. Each key process within the VGHT
plant site has a session plan developed for it and they are numbered. As the SME teaches
their coworkers a training voucher is created. After an SME has taught a PAL, the key
process has the employee's number in the database, along with the number of the session.
The beginning time and the ending time of the teaching process is documented. All of the
training vouchers are submitted to a central location (via an electronic transfer, laptop
or by hard copy) and they are put in a database and out of this comes five different
management reports. These reports document what key processes were taught on a daily basis
for each day of the week, 1) they tell how long it took to complete the process, 2) how
long it took to teach the process, 3) who taught the process, 4) which SME taught the
process, and 5) who the PAL was that learned the process. Individual learning files for
each employee are created. Every time a person either learns a process or teaches a
process a file is developed for them. Observation reports are available and can be created
by the traditional training department that can go on site and look at either an
individual or a team to be sure they are practicing the processes that were taught. This
can be done in a matter of one to two minutes and scores two things. First, how long does
it take an employee to complete the process and second, what is the employee's compliance
percentage rate. If an employee completes a process in 10 minutes that should take 15
minutes but they have not done it with 100% conformance, (they might have done it with a
3% conformance), performance is not acceptable. The only acceptable rate with PATS is
100%.
These results are published and provide real time data. In most traditional training
programs employees are in a conference room and learn new knowledge or best practices
maybe once a month or maybe not even that often. With the PATS system it's ongoing
learning. It's done between down time. It's done right on site and it's just in time
learning, just in time knowledge. At VGHT, PATS is keeping up with both the reengineering
of these processes and the documentation as well as ensuring processes are being taught on
site so it really helps their ISO 9000 registration. PATS addresses twelve of the twenty
ISO 9000 elements.
At VGHT, they will certify all SME's annually. They don't allow just anyone to teach
these processes. SMEs have to prove 1) they are subject matter experts, 2) they understand
and know how to document and break apart key processes, and 3) they can teach adult
learners. What Dr. Fisher developed at VGHT will result in 300 people who do their job
right. VGHT is developing a whole network of people doing their job right the first time
with 100% conformance. This really addresses a lot of cycle time issues both reducing the
cycle time of the process and reducing the learning cycle time.
| PATS helped to define
empower- ment and what empowerment is to the employees at VGHT. |
One very positive result in
VGHT is the empowerment for employees. According to Dr. Fisher, "One thing that I
noticed in my Baldrige assessment was what the senior management said, 'all of our
employees are empowered'." PATS helped to define empowerment and what empowerment is
to the employees at VGHT. They can define what best practices are in their own work areas
and what are the best steps to take to complete these processes on time in a consistent
method. The system is employee driven, not management driven. |
Another result is the union buy-in. VGHT is a very heavily unionized organization
and all the people in the PATS program are union members that are going to be SMEs. Union
representation will represent a higher percentage than management representation. 'The
union sees this process as very democratic, opening up many doors for people, growing and
developing their union members throughout VGHT. The people that will be looked at for
promotion are the ones that have been identified as subject matter experts. The
traditional training budget is going to be spent on developing and growing these subject
matter experts. The focus will be an ongoing development of these people to be the team
leaders. They will understand more about the company than anyone else and become the
process champions.
| In summary, what Dr. Fisher has created within
VGHT is going to be a way of life. What they've developed is an internal audit process
where their quality assurance people will go in to all the different work groups once a
quarter and do an audit against 1) are they documenting their key processes using the PATS
system and 2) based on the observation report, what is their compliance percentages. Are
they practicing these processes that they've documented or are they having to be retrained
a number of times? Is the quality of their product improving on their work site based on
this system?. It's going to be a core way of doing work at VGHT within the next year to
two years. Any company that is going through ISO 9000 certification, or is looking at a
major reengineering process or a candidate for the Baldrige Award or the European Quality
Award would want to consider PATS as the tool to help drive them to their goals and
successes. |
Any company that is going
through ISO 9000 certification, or is looking at a major reengineering process or a
candidate for the Baldrige Award or the European Quality Award would want to consider PATS
as the tool to help drive them to their goals and successes. |
Contact Dr. Fisher today!
