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Empowered work teams at Chrysler: Responsibility replaces inspectors

The conventional approach to mass production was use employees as flexible robots, making quality a separate function. Even in the 1950s, the world changed too quickly for work rules and inspections to keep up, and few, if any, engineers could foresee everything that could go wrong.

Toledo plant

Job enrichment, a well-measured and well-tested system, dramatically boosted quality (and often raised productivity as well) by pushing power down, replacing inspection with responsibility, and having people work in teams. Volvo tried it in the 1960s, and quality skyrocketed, according to then-president Pehr Gyllenhammar (who retired in the 1990s). Volvo found that production under teams stayed constant, largely due to systems constraints, but that the time and capital invested to make the switch was more than paid off in cost savings from reduced turnover and absenteeism. Their experiment in teams was spread throughout the company, and as time went on, they found additional gains in lower warranty costs coupled with resulting sales and marketing benefits. Instead of paying customers to buy through low prices, advertising, and rebates, companies with a reputation for quality can charge a premium.

Also see our article on involving employees in Neon engineering (1994)

In automotive assembly, where vehicles are produced on immense, expensive lines, empowered work teams build cars with higher quality than people without any control over their work. There are also side benefits, including lower turnover; less sabotage; and healthier, less fatigued employees who can work a longer part of their lives, delaying retirement costs.

Using empowered teams should be relatively easy because people usually prefer to work together; it relieves boredom from repetitive jobs, and lets people support each other when needed. However, when times get tough, most people naturally seize control as an immediate reaction, so keeping the teams empowered over the long term requires considerable discipline. There are other potential problems, as well: teams seem to prefer high quality to high production, and have to be (but often aren’t) set up with proper training, power, and information.

Belvidere teams at Chrysler

Toyota has been using empowered teams for decades, at least partly because they were needed for continuous improvement and defect prevention.  At Toyota, teams are responsible for finding and solving problems, finding product defects and stopping them on the spot, and for making processes more efficient. This works partly because people whose jobs are eliminated by efficiency are not fired or laid off, but transferred; keeping production at steady levels, partly by restraining growth, is a key method for avoiding layoffs. 

A Toyota, where each plant can see thousands of employee suggestions every year, committees often grant authority to people at low levels, including line workers, to implement suggestions and action steps. In many cases, the person making a suggestion also implemented it. There is a bias to action as well –  even when the committee feels the change will have no real impact, or a small negative impact, it is generally approved if there is low cost, to increase the odds of having the same person provide the next big idea.

kaizen board for empowered work teams at chrysler factory

analysis of causes board

Chrysler started pushing power to the shop floor in the late 1980s, resulting in greater quality and efficiency, as they broke down the symbolic walls between engineering, styling, and production departments and formed platform teams. Though that work was sometimes discredited due to design flaws and supplier gaffes, the company made rapid progress towards quality, shared responsibility, and cost reduction. The acquisition by Daimler-Benz resulted in an interlude of backsliding and quality inspectors, but empowered teams have been making progress in recent years. Unions have aided the company by dropping the complex work rules instituted decades ago, and dropping down to two job classifications, on a plant by plant basis – sometimes with enthusiasm, sometimes with trepidation.

work teams

According to Chrysler spokesman Ed Saenz, team-based manufacturing is being phased in throughout Chrysler Group (which currenly employees 95,000 people). “The primary driver is trying to empower and support assemblers — doing far more listening and a lot less giving orders than we ever have. Team leaders are union members, not management or supervisors; they are empowered to lead teams with six to ten people per team. … we were asking them to take their brain and hang them on a hook at work. If you free people up and empower them, they bring the skills they have outside the plant to work. These are the people who know how to do the job and how to do it better. ”

Team leaders are selected from people who have at least 90 days’ experience, with acceptable attendance, safety, performance records, and test scores. Attendance is crucial for the team leaders, because they help to set productivity norms, and because supervisors are moved to support roles instead of handling discipline.

The team leader can take actions once handled only by supervisors or middle managers, including calling in the skilled trades (such as machinists) to make changes or repairs.

Problem solving tools

Fred Goedtel, Vice President of Transmission, Casting, and Machining Manufacturing, provided some examples of the results.  For example, at a new transmission plant, the “first time through” rate is already as good as a plant which has been making transmissions since 1998 (the first time through rate, or FTC, is the percentage of units that come through with zero defects anywhere in the process.) Process improvements increased speed; the machining area started out at 140 jobs per hour, but after four months as a team with weekly meetings, they were able to push out 192 jobs per hour.

problem solving board

Several new tools are used, including a five-minute morning team meeting, but the key physical tool is a simple dry-erase “problems board,” which is visible to all team members. People write problems, rate their priority, and suggest possible causes. The problems board lets the local team set the agenda; it also provides visible evidence of progress, or lack of progress.  Goedtel said that “they like to work on low-level chronic problems. When we have a big problem in the plant, lots of people run to help; the ones we don’t really get into are the nagging day-to-day issues that never make it onto management radar screens. But low-level chronic problems can spike and become special-cost problems.”

metric achievement board closeup

The “quality flying squad” approach – teams of heavily accented men in lab coats - was touted after Daimler took over, but there is only so much one group of experts can do – and taking decisions up several levels is also demoralizing to those who may have better solutions but can’t get them implemented because of their position at the bottom of the corporate hierarchy.  The “quality gates” approach, as enforced by inspectors, also had its limits, requiring additional time and personnel, not preventing problems (but catching them), and not catching hard-to-see problems.

Power

The ideal is for teams to take the next step — as they tend to do in Toyota factories – and implement solutions, too.  As teams get more confident and experienced, they need supervisors to intervene less often. For example, the Detroit Axle plant had to install a harness that was hard to put in correctly; the team leader called the supplier, had them come on-site to see the problem, and told the supplier how to change the harness to make it easier to put in without damage and in less time. The problem was fixed in two days. According to Fred Goedtel, that problem, if it was resolved at all, would have taken quite a bit of paperwork and time, and could have taken weeks to fix. In the meantime, problems might have made it out of the factory and into the market.

In another case, a team was getting a number of complaints for transmission bells being made out of specification. Making the bells is complicated, with 27 separate fixtures on a key machine. The team divided them by three shifts (nine per shift) and made each shift responsible for their nine fixtures. They set up readable boards with instructions and specifications for each layout, and when they had problems, immediately called for a machinist to fix it, taking the machine down – something unheard of in the past, when machines would only be maintained during off times. The entire team worked on the problem and brought an issue with five to twelve problems per week down to one problem in three months, with no capital expenditures or management involvement.

empowered work teams

Having teams make changes also reduces resistance to change, both by the teams and, surprisingly, by suppliers. Often changes are cheaper and more effective as well.

As in the early 1990s, employees are being given more input into the design of workstations and processes, and given more resources to make changes as needed afterwards. Often these can be tested via a model factory in the massive Auburn Hills engineering complex.

Rotation and repairs

Job rotation is part of the plan for flexibility and well-rounded managers at Toyota; workers at Volvo tended to adopt job rotation as a way of relieving boredom, distributing jobs fairly, and spreading physical demands. (They also tended to enlarge their jobs to do more from end to end, and to check their own work instead of designating a quality checker.)

Job rotation shows people how their work impacts on others. Goedtel said, “When you get people rotating, they learn what defects they would send downstream; so when people rotate to upstream jobs, they don’t send as many problems down. When everyone knows what’s important downstream, they take care of it upstream.”

truck assembly

People are also rotated out to repair departments, so they can be trained on “what not to do.” This has cut internal repairs dramatically. When there is no rotation, one person does the repairs, and people don’t try as hard to stop defects, figuring they’ll be stopped by the checker/repair person; and that increases the risk of problems reaching customers. When people rotate to the repairs post, “repairs disappear and dry up because people see how to stop them internally and try to control their own zone to have no defects.”

Impact on customers

“The fewer defects inside the plant, the fewer you get outside the four walls.” That’s Fred Goedtel’s way of putting it.  For example, a transmission team plant put seals onto a shaft; when the seal was opened, the material would develop “position memory” and sometimes popped back out again later. Only about two transmissions per day had the problem, but it may also have caused defects later on in the field; any transmission failure is particularly bad for Chrysler, given the failures of its “Ultradrive” in the early 1990s.  The assembly team discovered that if the gasket was bent the other way first, then opened and put on, it would bring the problem down from one or two a day to one every week or two. The team also updated the job instructions and added the process to a layered audit process.

Because their solution helps the seal to seat better, it is likely to avoid leaks that could hurt the company’s reputation. The team solved a potentially nasty problem, at no cost, in an example of “creativity before capital.”

Effect on supervisors and managers

It sounds easy enough when Fred Goedtel says it: “When I see teams get engaged and take ownership, supervisors’ and managers’ jobs get easier, and they go off to find other ways to support the team. People generally step back and try to support it and make it better – get in the role of supporting operations and the team.”

In many organizations, that has not been the universal response. In past job enrichment efforts, supervisors and workers who could not get used to the new way were transferred to other areas. Chrysler tries to keep supervisors and managers in step with assemblers via training and coaching. According to Ed Saenz, Chrysler is doing “a tremendous amount of training to explain the changes, demonstrate the benefit, and show why this has to happen – the competition is getting tougher every day, and this is our response to that.”

problem board

The primary indication that a team is not being supported – that a supervisor or manager has not made the transition – is their lack of engagement or problems that have not been addressed or resolved (which are visible because of the problem boards). In those cases, managers are talked with, trained, or coached.

Implementation

In general, according to Ed Saenz, the system has taken root better in Mexico and in new plants (even though they used existing employee). Team-based assembly was implemented during the two-month-long changeover at Belvidere from Neon to Caliber; “there’s a seven to eight week change where we can rejigger the system.”

The UAW, and Nate Gooden in particular, supports the effort; according to the UAW’s John Stallings, all local unions have signed on to support the “smart teams” initiatives.

Permanence

One problem with many quality interventions is their potential for fading over time, if new managers “clamp down,” “cut costs,” and “stop people from wasting time.” When management or corporate ownership changes, the cultural belief that people should do as they’re told tends to take over. Empowered teams can reduce costs, but because it doesn’t necessarily increase production numbers, it’s often seen as a luxury.

While Chrysler Group has been under fire recently, it is important to separate manufacturing processes from other issues. Suppliers have sometimes substituted inferior materials or changed specifications; unrestrained cost cutting from some managers or executives have wreaked havoc with some designs; Mercedes sapped profitability by removing Chrysler Credit from the bottom line, while forcing the use of expensive parts and charging consulting feels; and ill will from the unattributed statements of Daimler executives and board members damaged Chrysler’s public standing. That said, manufacturing defects – excluding engineering issues, such as those that led to recent ball-joint recalls, and supplier issues that cannot be readily caught on the factory floor – appear to be constantly falling. The problems that have been experienced have not, for the most part, been assembly problems, and that is where the teams are working. The examples given by Fred Goedtel show that the teams can even overcome engineering issues.

So far, the effects of Chrysler’s move to team-based manufacturing seem to be overwhelmingly positive. From the outside of a company that guards its warranty costs –which have been steadily improving – it seems that there have been substantial benefits, and it is clear that management, from the CEO on down, is intent on spreading the system.

David Zatz has a Ph.D. in organizational psychology. In addition to his work as a change agent and survey expert with Toolpack Consulting, LLC (toolpack.com), he contributes to the comprehensive Chrysler web site, allpar.com.

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