Self-Managed Work Teams -- Reality or Fad?

April 1, 2001
A number of companies are demonstrating that work teams work, and produce major benefits. But management has to provide long-term support and leadership to achieve success.

Self-Managed Work Teams -- Reality or Fad?

A number of companies are demonstrating that work teams work, and produce major benefits. But management has to provide long-term support and leadership to achieve success.

by Ray Kulwiec

Flexible Steel Lacing Company, Downers Grove, Illinois, has been making fasteners for conveyor belts, as well as conveyor-belt fastener application tools, for many years. But the way it has conducted manufacturing has changed dramatically in recent years. Today, the company's manufacturing is based on a product-focused work-cell concept instead of a functional department scheme. And operators assigned to each cell work in self-managed teams. Operations include metal stamping, cold heading, heat treating, machining and assembly.

Although mentored by a manager/coach, the teams are accountable for their performance measurements, which are reviewed quarterly by the plant manufacturing manager. There are no area managers, supervisors or foremen in between. Significant benefits have resulted in order fulfillment cycle time (reduced 30 percent), and plant productivity as measured by sales dollar per employee (12 percent in the last three years). The team concept here has been applied to all areas of the enterprise, not just work-cell production. It includes teams for purchasing, shipping, facilities and office.

Work teams have been around for a while. Unfortunately they have not always worked. As a result, the concept has sometimes been thrown into the category of "another management fad." In fact, work teams can be extremely successful and beneficial. But they have to be nurtured, and provided leadership from top management. They also require open access to company information.

The essence of a work team is empowerment. Individual team members assume responsibility and make all decisions regarding workplace operations (as opposed to just making "employee suggestions"). They rotate in different roles on the team. Workers buy into the process, use "brain power," and enjoy improved morale. Increased productivity and quality, and continuous improvement, are the result. The benefits of opening up the power of the "thinking worker" and flattening the organization chart can be enormous. Figures 1 and 2 contrast the bureaucratic hierarchic layers of the traditional organization chart with the simplified one of the team-based organization.

How can it work?

Individuals operating within classical organization structures are used to 1) decision-making from the top down, 2) information systems designed to support top management, 3) departments based on functions, 4) planning, control, and improvement functions separated from operations, and 5) specialization of work.

From this viewpoint, the question, "How can it work?" is valid. Self-managed work teams truly represent a major paradigm shift. A good deal of time and effort must be invested to achieve the cultural change necessary for overcoming built-in barriers and putting work teams to work.

Given that a team, rather than an individual, is necessary to get the job done, one obvious question is how large the team should be. At Flexible Steel Lacing, the number varies from five to 20, depending on the work mission, and averages around 10 to 12. According to manufacturing manager Bob Hafey, each team goes through four phases in its development as an autonomous, decision-making, working team.

"In each phase there is education, which is classroom training during company hours," says Hafey. "When ready, the team applies for phase certification, after which its performance is audited. After the final phase the team is certified to operate on its own, with a coach available as needed," he adds. A monetary reward is provided upon certification in each of the four phases.

The manager coach, who in some cases was a supervisor under the old structure, mentors the group during its development. Typically the coach works with several teams at once in this way, according to Hafey.

Material handling, team style

Material and tools are brought to work-cell locations from receiving by lift truck operators, who are members of the receiving team at Flexible Steel Lacing. The work-cell team manages its own point-of-use inventory. Typically, the work cells produce to stock, with completed product moving from the production floor to a finished-goods storage area. From here, another work group, the shipping team, takes over.

Shipping team members pick items from storage to fill orders for distributor customers. As its name implies, this team also performs the packaging and shipping activities. Measurements of shipping-team performance include order accuracy and customer service (on-time delivery). In this way, a link is provided between employees and the customer, an important facet of customer service for the ISO 9001-certified company.

The shipping team was actually the pilot group for the entire team program. Because of this team's close visibility to customers, the coach and mentor was the then chief operating officer, Jerry Paulson, who now serves as company CEO. During the team development phase, the COO actually moved his operation down from the corporate office to the shipping area. As a general rule, self-managed teams tend to have closer visibility to senior management because of the reduction of management layers across the organization.

Self management = self measurement

Working with the manufacturing manager and coach, each team at Flexible Steel Lacing sets target performance goals for the year, and tracks progress toward the goals. The areas tracked for improvement include:

• Safety;

• Quality;

• Cooperation;

• Productivity;

• Delivery;

• Continuous improvement.

Progress and performance are reported in quarterly meetings with the manufacturing manager. Although team performance is an important criterion, each individual likewise is responsible for his/her own performance.

Information makes it work

A key to successful teams is consistent availability of accurate information. For self-management to work, decision-making on the part of team members must be based on good information. An example can be provided by Kraft Foods Inc., a subsidiary of Philip Morris Companies Inc. Kraft operates 62 plants in the U.S., Canada and Mexico. Operators at many of the company's plants work within self-directed teams.

Order information and production instructions are downloaded from the enterprise level -- through a manufacturing execution system (MES) -- to the plant floor, directly to an operator running a production line. It is important that the company be connected throughout, from top to bottom, with a common, uniform database, and that all units operate with a single set of user-friendly, information and work-practice systems.

To make it happen, Kraft is not only completing its information connectivity infrastructure, but is also providing the capability for measuring the integrity of the information used. Validity of data is tested and measured by employees at geographic-area, plant, and sub-plant levels. Trends in accuracy performance are monitored regularly, as part of a continuous improvement program.

Still an individual matter

As indicated earlier, teams are typically measured against agreed-upon goals, and team incentives frequently provided when goals are met. But teams are made up of individuals, and individual performances add up to the performance of a team as a whole. Therefore, individual performance goals are usually also necessary. What happens when an individual is not pulling his/her weight, and bringing down the performance of the entire team?

Obviously individual sub-par performance is a concern of the entire team, particularly when performance is tied to incentives. For a self-managed team, the group tries to help the individual raise performance to acceptable levels. If adequate progress is not made, the manager coach or supervisor is brought in to help effect a solution. If various improvement efforts fail, the individual may have to leave the team, and, in some cases, the company. Some self-managed groups also have the responsibility of interviewing and hiring new or replacement team members.

From plant floor to executive suite

Despite some rocky experiences, the team concept is catching on in a number of companies, and is even being extended to include the CEO and senior executives. While improved productivity is one of the major reasons cited for establishing various work teams across an enterprise, there is evidence of a direct relationship between profitability and a cohesive top-level team.

According to John W. Hunt, writing in the Financial Times (1/5/01), the challenges for achieving successful top teams include:

1) Keeping the team size within workable limits (about six);

2) Assessing the proper skill mix needed on the team;

3) Recognizing that consensus, while desirable, is not the ideal for all situations;

4) Devising different kinds of meetings and meeting frequencies to achieve different short-term and long-term objectives;

5) Providing an open forum for all to express their views, not just the CEO.

In an era when partnering and collaboration are becoming business models for supply-chain success, the idea of work teams within an enterprise is gaining greater validity than ever before. The resulting benefits make excellent business sense, so long as managements realize that the team concept won't produce results overnight -- it requires a long-term commitment.

About the author

Ray Kulwiec is a communications consultant and writer specializing in material handling and manufacturing topics. Based in Arlington Heights, Illinois, he has covered the field of material handling for many years as an editor and has served on the Board of Directors of the Materials Handling & Management Society. Kulwiec has also been a member of the College Industry Council on Material Handling Education. Currently he is on the board of trustees for the Material Handling Institute. He may be reached at [email protected].

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