The glass is half empty, say executives from major manufacturing companies throughout the U.S. In a recent survey, two thirds of 100 senior executives are counting on losing an average of $50 million annually over the next five years. Bottom lines will bleed, they say, because of a looming shortfall of skilled labor.
The survey was conducted by Nielsen Research (New York) and commissioned by Advanced Technology Services Inc. (ATS, Peoria, Ill., www.advancedtech.com), a third party provider of equipment maintenance, information technology and industrial parts repair services.
The research project was a way for ATS to gather some hard facts about the real-world impact of the well publicized but nebulous labor crisis. It was also a way for ATS to confirm that its unique methods of alleviating other companies’ labor pains were on the right track.
ATS’ product is people. The company places personnel from its 2,000-technician base in manufacturing and distribution facilities throughout the U.S., Mexico and the U.K. However, ATS is not a placement agency. It’s a resource for manufacturers and distributors that choose to outsource production maintenance.
Why outsource maintenance? ATS says it’s a smart business decision. “We can produce a 30% improvement in asset performance through predictive technologies and transforming maintenance from reactive to predictive,” says Don Johnson, vice president of marketing at ATS.
Though big names like Caterpillar Inc., Eaton, Honeywell, GE, Honda Motor Co., Electrolux, Nissan and Johnson & Johnson appear on ATS’ client list, the company came from humble beginnings.
In 1985, 35 employees in the maintenance operation of Caterpillar Inc. (Peoria, Ill.) devised a business plan to provide other manufacturing companies with production maintenance and IT services. The venture was eventually spun off from Caterpillar in a leveraged buyout and formally became ATS, an independent company, by 1996. Today, Caterpillar remains one of ATS’ biggest customers.
Johnson says ATS has been growing 20% each year, and he gives much of the credit to the company’s unconventional approach to meeting the industry’s demand for skilled labor. ATS has been able to attract about 600 maintenance technicians per year, claims Johnson, through aggressive recruiting and training programs.
Linking Workers with Work
ATS’ newest recruiting endeavor will launch in January. A joint venture with Illinois Central College (East Peoria, Ill.), the Multi-skilled Technical Career Program will be a 40-week, accredited curriculum that will teach high school and college students the fundamentals of maintenance and automated manufacturing, explains Johnson. Hosted at ATS headquarters, the course will provide both mechanical and electrical training.
Most importantly, the program will offer good students a chance to work in the field and get on the path to a long term career. “If students succeed in the program, we offer them the chance to work at one of our sites as an active member of the maintenance team,” says Johnson.
Students in the Multi-skilled Technical Career Program earn occupational certificates for mechanical/electrical maintenance from Illinois Central College and can apply their credit hours toward a two-year associate degree.
In addition to offering formal training, ATS executives visit community colleges, hold open houses and travel to high schools to help improve the perception of manufacturing and distribution jobs. The hope is that young people will reconsider what they may have heard about working in plant environments.
“Today’s factories are clean, well lit, automated and nice places to work,” Johnson says. “And, the pay is better than in many service industries. We educate future workers about those opportunities.”
ATS also has 15 full-time, dedicated recruiters on staff. “The focus is not on bringing in bodies,” Johnson says. “It’s retention. The recruiters are evaluated on first-year retention of the people they bring in, and they are in constant contact with the employers at which we place workers.”
Interestingly, one of those recruiters is dedicated to bringing in former military personnel. According to another ATS-commissioned survey, 72% of senior manufacturing executives believe hiring veterans would reduce training costs and quickly fill the skilled-labor gap. Work ethic, discipline, professionalism and dedication are just a few of the skills former military personnel would bring, the executives said. More than 25% of ATS’ current employee base consists of former military workers, and the company has set a goal of increasing that to 35% or 40%.
Stocking the labor pool with fresh talent is a clear goal at ATS, but the company still recognizes the value that more experienced workers bring.
For example, when an organization taps ATS for outsourced maintenance, the most valuable employees from the client’s operation are kept on board to ensure “a blend of tribal knowledge and new cultural influences,” says Johnson. “That’s the combination that revitalizes maintenance operations.”
ATS then evaluates the host company’s maintenance employees to determine if they would be a good fit with ATS. “We evaluate cultural matches,” says Johnson. “Our culture is continuous improvement, discipline to the technical part of maintenance and safety. If a technician has a passion for those aspects, we transition them into becoming ATS employees.”
And, the learning doesn’t stop once hiring is done. It’s standard operating procedure for all ATS employees to complete 20 hours of mandatory training per year.
Plus, all new ATS technicians get their own formalized internal mobility program. “Their skills and preferences are put into a database,” explains Johnson. “As opportunities come up, they have the option to move to another site.” This unique “talent management program” is a way for ATS to encourage career planning, grow talent within the organization and, most importantly, retain good workers.
High-Tech Technicians
Looking a bit deeper, it’s easy to see why ATS puts so much effort into recruiting and retention. ATS’ entire business philosophy hinges on its ability to find and keep highly skilled technicians. Its employees use high-tech, predictive maintenance tools, such as thermography, vibration monitoring, oil analysis and ultrasound measurements. Infrared cameras, portable vibration analyzers and other state-of-the-art devices help increase productivity and plan the amount of downtime needed to repair machines before failure happens, according to Vlad Bacalu, product manager at ATS.
For example, ATS technicians conduct oil analyses that help determine the condition of equipment based on the concentration of wear particles in an oil sample. “A high amount of chrome might mean a bearing is starting to deteriorate,” says Bacalu. The bearing can then be replaced prior to equipment failure, and downtime can be reduced while productivity improves.”
That’s the difference between predictive and reactive maintenance. Think of it as preventing a fire before it starts versus putting it out after damage has been done. “It’s reliability-centered maintenance,” Bacalu explains. “We ensure the right procedures and maintenance strategies are in place before a failure occurs.”
ATS also teaches its technicians fundamentals of lean manufacturing and distribution, including 5S concepts, Six Sigma, continuous improvement and root-cause analysis. “We incorporate visual indicators to encourage operators to be a part of the production maintenance system and report potential problems,” Bacalu says.
Although companies generally sign one-year, renewable outsourcing contracts with ATS, “it’s more of a partnership than a contractor-client relationship,” says Bacalu. “Our employees participate in daily production meetings so we can align maintenance practices to customer needs.”
This allows ATS to work collaboratively with clients to extend the life of plant assets, increase production, avoid capital expenses and improve the ability to deliver products on time to customers.
That’s a big promise that can only be kept with a strong focus on quality labor. “If a company is just looking for a wrench turner, ATS might not be the right solution,” says Johnson.
