The Situation
Ever increasing steel prices and competition from other steel manufacturers prompted the owners of Precision Steel Manufacturing Corporation (PSMC) to seek out methods to reduce lead times, and increase productivity and profitability. PSMC’s principals realized that in order to implement a comprehensive program for improvement in these areas, they first had to refocus the company’s underlying culture. Without the support and understanding from all employees, management felt that sustaining the success of a Lean manufacturing program would be difficult and unlikely.

The Response
Vice president of operations Jeff Amos acted as PSMC's program coordinator when partnering with GENEDGE ALLIANCE to establish the necessary human resources infrastructure which incorporated the following elements:

• Documented organizational policies and guidelines
• A formal performance measurement system and employee feedback mechanism
• Both monetary and recognition-based incentive systems for improved performance
• Formal leadership development training for first-line supervisors and effective communication at all levels

The primary objectives of this long-term relationship were to enhance the "soft skills" of PSMC’s leaders, increase job satisfaction and employee involvement, and provide an incentive-based performance management system in order to pave the way for the comprehensive Lean initiative that followed.

GENEDGE ALLIANCE's team leader Laura Rathburn began by conducting an Employee Survey, gathering responses from all employees to measure the perceived balance between individual and organizational needs. Survey results were summarized, analyzed and subsequently published throughout the plant. A detailed, prioritized action plan was developed and implemented for improved operating performance and increased employee satisfaction.

Following the survey, all front-line supervisors successfully completed a comprehensive leadership development program designed to provide the necessary skills and abilities to supervise, coach, coordinate, and lead activities. During this 6-month program, GENEDGE ALLIANCE simultaneously worked with the company's owners in developing standardized policies and procedures.

These policies and procedures were formalized into a comprehensive employee handbook and distributed to all employees. The handbook provided a framework for the consistent application of company policies and operational guideline goals of reducing the risk of litigation, improving operations, and strengthening the abilities of front-line supervisors to manage their teams. Among the new policies implemented, PSMC's drug-free workplace policy has significantly reduced insurance costs associated with safety.

In the final steps of developing the essential HR infrastructure, GENEDGE ALLIANCE’s Laura Rathburn worked with the owners to create an employee performance management system and incentive program. A performance appraisal form was developed, which included standards of performance for each category. In addition, an independent set of incentive metrics were established for tracking organizational performance on a quarterly basis. These were accompanied by a simple set of guidelines for calculating quarterly incentive payouts for each employee.

Once the HR infrastructure was established, PSMC's owners and GENEDGE ALLIANCE project managers set out to improve on-time delivery and cost control by implementing a scheduling system that would highlight outstanding orders and load work centers to capacity. Through GENEDGE ALLIANCE's assistance senior management was better able to monitor the flow of customer orders in the manufacturing process, identify potential problems, and take remedial action to achieve on-time delivery at the most economical cost.

With the company's underlying culture NOW focused toward supporting a program for improvement, Lean manufacturing principles were then implemented factory-wide. Employees participated in a series of hands-on Lean workshops and Kaizen blitzes to provide participants with the skills necessary to improve overall plant performance and move PSMC a step closer to becoming a world-class organization.

The Results
The above projects administered through GENEDGE ALLIANCE have proven to be important factors in breaking down the barriers that were preventing Precision Steel from becoming a world-class organization. The company has seen a remarkable increase in employee morale and job satisfaction, while experiencing a decrease in turnover, absenteeism, and disciplinary issues. Employees are working together more effectively to solve problems throughout the plant and productivity has increased as a result of their continuous improvement efforts.

The annual financial impact from this project is estimated to be $5,500,000. This was achieved through increased sales and throughput while reducing labor costs and overtime. Additionally, there were thirteen jobs created or retained.

Management's Comment
"The scheduling project helped us understand the impacts of capacity on our ability to schedule across certain resources. The throughput gained from these resources greatly affected our ability to make on-time deliveries. On-time delivery rose from an average of 55% in 2006 to over 95% in 2007. The manufacturing implementation project helped us expose our employees to training necessary to compete and move a step closer to becoming a world-class organization.

GENEDGE ALLIANCE has allowed us to expose members of our organization to training across multiple areas from Workforce Development to Set-up Reduction. While some organizations feel that training and education of employees is not a good investment, we are not one of them. We feel that this type of training will give our employees the tools necessary to make us a better manufacturing company.

We have also enjoyed simply working with GENEDGE ALLIANCE on these projects. They have brought forth a wealth of knowledge to teach us better ways to do business. I applaud their attention and genuine care towards helping small manufacturers such as Precision Steel Mfg. Corp. We will definitely look to them in the future to support our needs." - Jeff Amos, Vice-President of Operations

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