Power defines the nature of any organization. How power is wielded determines how an organization is run, and how well it is run.
For decades, the organizing principle for most companies, including manufacturers, was the command-and-control model, under which power largely resided at the top. But with the influence of technologies that have provided more information to more people and have required organizations to coordinate their activities more cross-functionally, the old model has been breaking down.
Now, many manufacturing companies are embracing the notion of a collaborative organizational structure under which power is more widely shared. The Manufacturing Leadership Council’s latest survey on the Collaborative Enterprise, published in April, predicted that over the next five years, manufacturers’ organizational models will essentially invert.
While only a quarter of the survey’s respondents say their companies have adopted a collaborative model today, within the next five years that number is expected to rise to 39%. At the same time, the percentage of those still with a command-and-control structure, at 37% of the survey today, will decline to just 19% by 2023.
This trend was on full display last week at the Manufacturing Leadership Council’s plant tour at Adient, a $16 billion manufacturer of vehicle seats that spun out of Johnson Controls in 2016. ML Council members toured the giant company’s 225,000-square foot West Point, GA, plant where seats for Kia Optima and Santa Fe vehicles are produced and learned about Adient’s High Performance Teams (HPT) program, an empowerment plan for the plant’s 300 employees that is serving as a model for other Adient factories.
On the tour, ML Council members witnessed how a vehicle seat is made. The West Point plant, using steel seat frames made by Adient, assembles the seats with foam, fabric, and trim components using a combination of manual labor and robotic systems based on a just-in-time production model. A typical seat can require about 100 components and the West Point plant produces 183 different seat configurations. Accordingly to plant officials, it takes about eight minutes to build a seat.
The HPT program is designed to drive operational excellence by focusing on key metrics, simple problem solving, and distributing power and responsibility to the plant floor level. The program, targeted to improve results in safety, quality, delivery, and cost, has been in operation at the worker level in the West Point plant for the past 14 months. Over this time period, ML Council members learned that West Point has achieved 453 days without an OSHA-recordable incident, has booked $4.3 million in savings from continuous improvement activities, and has even improved its employee retention rate. Adient officials said that turnover for HPT-involved employees stood at 1.8%, compared with 9.8% for employees not in the HPT program.
Interestingly, the HPT concept reflects the difference in management philosophy between the command-and-control and collaborative organizational models. For example, under the traditional philosophy, managers are thought of as “thinkers”, while employees are thought of as “doers”. In contrast, HPT looks at the role of management as coaching and mentoring.
When it comes to problem-solving, the difference is even more striking. Under the traditional approach, employees identify problems and managers fix them. Under HPT, employees are empowered and both taught and allowed to fix some of their own problems.
On the crucial question of where power resides, the traditional approach clearly has it firmly entrenched at the top of the organizational pyramid. But under HPT, power belongs to everyone, Adient officials said, with the top responsible for breaking down barriers, assigning resources, and establishing the direction and pace of the business.
“A lot of companies have a culture of being more straight-laced, more serious and strict, with hard-core ‘slam the fists’ manufacturing bosses,” said one Adient official. “To be successful at HPT, you have to be a little different and take care of the people. They have to be comfortable about giving up power to the hourly employees.”
HPT is monitored by a scorecard system that uses data from an array of operational processes and also includes a structured meeting regimen. In addition, HPT requires a dedicated HPT coordinator at a plant. And salaried employees have HPT as a component of their annual review. “Scorecard development is huge within HPT,” said an Adient official. “Building the scorecard is very hard. You need things measured across lines and you need to measure the correct things. We make sure they are complimentary and not competitive.”
Right now, HPT is applied solely within the four walls of the Adient plant. But Adient officials said they would like to see the program extended to and embraced by the company’s supply chain. “At this point, we haven’t made an impact on our supply base by what we are doing here,” said the Adient official. “We would like to. Kia is interested and has taken our safety program. But it depends on culture as well.”
In many ways, HPT is indeed more of a cultural approach to running a plant than it is an operational discipline, although it is certainly that, too. Looking ahead, when more and more automation will be implemented in the plant in coming years, Adient officials see HPT blending into the company’s culture in even deeper ways.
“In three to five years, we won’t be using the term HPT,” said the Adient official. “It will just be how we work. We won’t talk about HPT; we’ll just run the plant. As long as we have people involved, you’re going to need something to keep people motivated.”