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(The name of the company and certain situations are disguised due to a confidentiality agreement. The actual client approved the case study)
At parts supplier Cincinnati Detroit Marysville Inc. (CDM), the Spirit division had lost its spirit. Downtime was rampant at this manufacturing facility. "People were sitting around playing cards if the phone wasn't ringing," said Marketing Manager Allen Westmoreland. "Everything took too long because technical people weren't comfortable making decisions. They'd wait for the 'suits' to direct and sign off on everything."
Naturally, customers weren't happy with the resulting delays and slipups. Large customers such as Ivanhoe, Komatsi, Euclid-Erie and Mercedes could lose up to $15,000 an hour if one of their CDM machines was down.
Chief Engineer Bob Numura, deciding that rejuvenation was necessary, conducted a Business and Organization Renewal with the guidance of Moravec and Associates. Four renewal initiatives emerged from the process:
Since all these initiatives required greater responsibility and accountability among technical professionals, Moravec and Associates worked with Numura and the engineering teams to build leadership capability. Soon the teams began making their own decisions and discovering the satisfaction of acting on them. As one engineer commented, "It's refreshing to be in a dynamic organization where you don't have to justify intelligent decisions."
The self-managing teams make such decisions daily. One group set up a workstation the way they wanted it, rejecting Numura's suggestion. Another decided that, instead of buying spare parts from the corporate office, they would develop direct relationships with suppliers. The teams, which are on call for customers 24 hours a day for emergencies, are responsible for scheduling work hours and vacation times, resolving conflicts among team members, rotating workers, and determining day-to-day manufacturing processes. "The bosses stay upstairs," says team leader Henry Steinbach. "We haven't had to call them yet." He and another team member created their own work rotation, alternating six- and four-day work weeks.
When Spirit was having trouble with its valve suppliers, which were taking from five to seven weeks to repair defective valves returned by customers, Spirit veteran Ken Thurmond made a strategic alliance with suppliers, who trained him and a colleague from another division to repair the valves internally. Not only has this provided customers one-day turnaround, it also cut 53 percent off the price they pay for repairs.
Moravec and Associates provided consultation to help leadership cascade down from the corporate office to the division to the self-directing teams and individuals within the division. Thurmond is a prime example of the change that has occurred at Spirit. In three years, he's held three different positions, moving from project to project. "Now," he says, "I know that if I'm in charge of something, it's my responsibility."
Sometimes the Spirit division takes high-stakes initiatives. For example, the engineers devised a plan to cut through the red tape preventing it from purchasing a much-needed $65,000 testing stand. The group realized that, since the testing stand could also be used by CDM's five other manufacturing facilities and by customers, this large expenditure could quickly be transformed into a profit generator. The gamble paid off: the testing stand paid for itself in less than five months.
Because of its success with manufacturing and logistics, Spirit has been given the responsibility of distribution for the entire corporation, a move projected to increase sales by $10 million. Spirit is also partnering with CDM's corporate sales staff, assembling kits of parts for customers to have on hand. It's grown into a $6 million business with orders averaging $75,000.
Now the most difficult part of her job is "making 65 decisions at once," says technical supervisor Donna Perra. Her view of the old Spirit versus the new one is telling: "Back then," she recalls, "we were nothing more than a manufacturing plant. Now we're an innovator and customer satisfier, with everything that implies."