Business Improvement
Techniques Training at NMHG
A Business Case
William Kerr HRM
Contents
• NMHG – The Company
• The actual, no messing about, very scary,
Business Scenario late 2008-early 2009!
• The Plan, why Training?
• The Delivery
• The Outcomes
• Thought for Today
• Some additional slides about HRM, RoI,
Benefits of NTA & DMAIC, which you will
probably not read but really ought to!
Overview of NACCO
• NACCO Industries, Inc. is an operating
holding company with subsidiaries in the
following principal industries: lift trucks,
small appliances, specialty retail and
mining.
• In 2010, total revenues were $2.7 billion
and net income was $79.5 million.
NMHG Organisation
• NMHG designs, engineers,
manufactures and sells Materials
handling equipment under the
Hyster® and Yale® brand names.
• Lift trucks and component parts
are manufactured in 10 countries
worldwide including, the United
States, Northern Ireland, Scotland,
the Netherlands, China, Italy,
Japan, Mexico, the Philippines and
Brazil.
Craigavon Market Areas
 Europe,
Middle East
and Africa 95%
 Americas 3%
 Asia Pacific 2%
Craigavon Plant
•
•
•
•
•
•
•
Plant opened
Head count
2011 output
Current Day rate
Days to build truck
Takt Time per truck
Shift pattern
1981
652
15,000
63
4
9(mins)
3
The Actual
Business
Scenario
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Total Market 2005 - 2010
490,000
470,000
450,000
430,000
410,000
390,000
370,000
350,000
330,000
310,000
290,000
270,000
239,685
250,000
230,000
210,000
215,000
190,000
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5 05
5
5 06
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7 07
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7 08
8 08
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9 09
9
9 10
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0
40
10
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40
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Q
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Q
Q
Q
WITS
FEM/JIVA Shipments
STF1F WITS
STF3 FEM/JIVA
STF2 WITS
AOP
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The Plan, Why Training?
• Textbook response
– Cut Quickly
– Cut deep - especially Labour and T&D
• Our Response
– Identify & Engage Stakeholders (Board, Unite,
Employees, DEL,INI)
– Reduce costs sensibly
– Invest in T&D
– Maintain and enhance skills for the Recovery
– Focus T&D on Business Objectives e.g.
Flexibility, Continuous Improvement (B-I.T)
– RoI Methodology (Phillips)
The Delivery
• Business Improvement Techniques
– DEL funded and delivered by SRC
– Very high credibility with both Management and
Employees
– Compatible with our drive for Quality and Effectivity
– Practical project aspect of the programme gave an
immediate (and continuing) Return on Investment
– Employees gained skills which compliment our Culture of
Continuous Improvement and Team Work
– Settled on a standard, robust DMAIC problem solving
model (define, measure, analyse, improve, control)
• We then ‘rolled out’ the skills acquired to other
Employees
The Delivery
• We initially trained 45 Employees who gained
a recognised NVQ Level 2
• Model is routinely utilised as an analytical
approach ensuring fixes are made
permanent– activities not restricted to ‘Shop floor’
• 30 x Improvement projects
• e.g.. Yard storage of NxGen frames – 13
minutes for ‘move man’ to locate & transport
frame, now down to 4 minutes. £11k annual
savings
Poor storage of frames
No FIFO
•12
Good FIFO
•13
Good FIFO
•14
The Delivery.
Business Improvement Teams
The Outcomes
• >130 Craigavon Employees qualified NVQ, ILM,
etc
• Recruited over 170 people in 2011(this would
have been an unmanageable number had we
taken the “text book” response)
• Significant Intangible benefits – morale, loyalty,
trust, cross functional awareness
• Retain key staff
• Able to respond to unprecedented ramp up in
production
The Outcomes
Won 3 Regional Training Awards
Which show the outstanding effects and benefits
as a direct result of training.
• Large Employer category
• Now is the Time category
• Individual category
Won 2 National Training Awards
Presented to entries that are exemplars of
excellence.
• Large Employer category
• Now is the Time category
The Outcomes
• January 2010 30 trucks per day
• January 2012 90 trucks per day
• > 50% Reduction in NCR’s/100 trucks versus 2009
• Improved Conversion Cost control
• Inventory Absolute Financial Variance back to <1%
• HRM kept his job
Thought for Today
Apologies to Radio Ulster
Conclusion
DEL Aim
• To promote
learning and skills
• To prepare
people for work
• To support the
economy
NMHG delivery
• >30% (and growing) of our
Workforce gained an ‘applied’
Qualification
• Achieving an Empowered
Culture of Learning and
Development – ‘Employability’
• Increased Workforce by 170
this year and ‘day-rate’ levels
(Export) up by 200% in 2
years
Additional slides not included
in presentation
References.
• Phillips’ Return on Investment Model:
Jack Phillips ‘How to measure training’
• Ulrich HR Multiple Role Model: Dave Ulrich
‘Human Resource Champions’
• Benefits of National Training Awards
• DMAIC Model available on request
Phillips ‘Return on Investment’
Methodology
1. Reaction and Planned Action of the participants to
the training
2. Learning gains in skills and knowledge achieved by the
participants
3. On-the-job Application applied and practiced
4. Business Impact outcomes of training in terms of
Company Goals
5. Return on Investment
• Conservative, adjusted Conversion (monetary value)
• Isolate (can we trace that to the Training intervention)
The model also recognises that there should be
intangibles benefits that will be presented along
with the RoI calculation.
29
Phillips ‘Return on Investment’
Methodology
Evaluation
instruments
Evaluation
purposes
Isolating
the effects
of training
Converting
data to
monetary
value
Tabulating
program
Costs
Significant Influences
Collecting Post-program Data
Evaluation
design
Evaluation
levels
Policy Statement
Procedures & Guidelines
Staff skills
Management support
Technical support
Organisational Culture
Calculating
the return on
investment
Identifying
intangible
benefits
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Phillips ‘Return on Investment’
Methodology
i. Develop Objectives of Training
ii. Develop evaluation Plans and
Baseline Data
iii. Collect Data during Training
iv. Collect Follow-up Data after Training
v. Isolate the Effects of Training
vi. Convert data to Monetary Value
Phillips ‘Return on Investment’
Methodology
Isolation of Effects of Training
Participant
Annual
Improvement
Value
Basis for
value
Confidence
factor
Isolation
factor
Adjusted
value
A
£135k
Faster
production
of product
drawings
40%
80%
£43k
B
£9.24k
Reduction
in overtime
100%
50%
£4.62k
Ulrich Model
Future/Strategic Focus
Processes
Management of
Strategic
Human
Resources
Management of
firm
infrastructure
Management of
Transformation
and Change
People
Management of
Employee
Contribution
Day-to-Day/Operational Focus
Ulrich Model
Future/Strategic Focus
Strategic Partner –
Aligning H R &
Business
Strategy
Processes
Administrative
Expert –
regenerating
organisation
processes
Change agent –
Managing
transformation and
Change: Ensuring
capacity for Change.
Employee Champion – People
listening and
responding;
providing resources
to Employees
Day-to-Day/Operational Focus
What are the benefits of being an NTA
winner?
 NACCO HR Vice president visit to Craigavon on a fact finding
mission based on such achievements/awards
 Training provider CforC, Case study on our Problem solving
training
 European Six sigma magazine highlighted our 17% improvement
in truck reliability through our award winning training programme
 External interest in our company, starting a benchmarking
exercises/networking Meetings
 Good Promotion for our organisation through DEL, press releases
 NTA helped towards us gaining a higher level IiP Award
 NTA is good supporting evidence, towards EFQM assessments
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What are the benefits of being an
NTA winner?
 Enhanced partnerships with Local colleges
 European Lectures visit Craigavon (benchmark)
 Celebrated NTA awards with Employees(Tee shirts, pens with
logo)
 Enhanced reputation with our Company Union & Employees
 NTA’s have given our Employees a positive lift and reason to
celebrate after such a difficult year for the company
12 months on, the NTA learning framework continues,
to help guide us for future training programmes
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HR Display NTA Awards