Case study training(2)

Case Study

MotorolaInstitutionalizing Corporate Initiatives

http://www.motorola.com/mu

Case Study● In the seventies, Motorola faced stiff competition,

especially from Japanese competitors ● Then CEO Bob Galvin asked human resources to

prepare a five-year training plan, specifying how Motorola employees' skills would be upgraded.

● He called for ten-times improvement (10X) in product quality within five years.

● A corporate vice president for quality was appointed, and each group and manufacturing facility established a quality function

Case Study● Product design and manufacturing were

closely examined, and several weaknesses were identified.

● Although the engineering-driven company was good at working with new technologies, the process of translating technology capabilities into new products was too slow.

● Product designs were too complex, leading to high manufacturing costs.

● Product quality was inconsistent.

Case Study● In one meeting, Galvin suggested that technical

solutions – such as better designs and automated manufacturing – were necessary, but not sufficient measures for competing effectively.

● Motorola needed to become more efficient, more flexible, more responsive to customer needs.

● He suggested altering the organizational structure by establishing smaller, focused business units with decentralized authority, an by reducing organizational layers.

Case Study – Participative management Program (PMP)

● PMP teams - “quality circles” ● “I Recommends”● Managers were expected to respond in writing

to each I Recommend within 72 hours.● Each Facility has PMP steering committee

which included shop-floor reps.● A 200 page PMP Manual specified procedures.● Some managers complained that the PMP

format was too mechanistic

Case Study – MTEC, 1980 - 1987● In 1980 Bob Galvin advocated making a significant

commitment to training and education.● He believed that new technologies created a more

pressing need to increase employees' skills, especially for production workers,

● Many executives disagreed with Galvin. ● Galvin rarely issued mandates, preferring to

delegate most decision making to the group heads.● But this time, he overrode his manager's objection

and decided to allocate $35 million to establish the Motorola Training and Education Center (MTEC)

Case Study – MTEC, 1980 - 1987

● Bill Wiggenhorn, then a manager at Xerox, was hired as vice president for training and education.

● MTEC was expected to be self-supporting by 1986.

● Some managers proposed that MTEC be required to assess the RoI. Galvin disagreed.

● Each group is free to purchase training from any source, so MTEC's revenues will be proof enough of its value.

Case Study – MTEC, 1980 - 1987

● MTEC had tow main goals: strengthen PMP and support quality initiatives.

● In the early eighties a five-part curriculum was designed to upgrade workers' skills so they could participate in quality efforts. It covered:– Statistical process control,– Basic industrial problem solving– Making effective presentations– Running effective meetings and– Setting goals and measuring performance.

Case Study – MTEC, 1980 - 1987

● Most courses were aimed at first-line employees; there were few courses for supervisors, engineers and managers.

● Attendance was usually optional, and use of new skills on the job was not always reinforced

● Beginning in 1984 every group was required to spend at least 1.5% of payroll on training.

● Technical and managerial courses were added.– For example, a senior management program (SEP)

brought top managers together for a week to discuss a topic suggested by the CEO and to formulate a action plan for addressing it

Case Study – MTEC, 1980 - 1987● The topic for the 1984 program: Asia: Past,

Present and Future.● Follow-up action plans included formation of

a country managers organization and task on marketing and product design in Asia.

● The SEP was well received, and it became an annual event, with a new topic each year.

● New programs were developed. – Manufacturing management Institute– Manager of Managers (MoM)– Advance Manufacturing Technology symposium

Case Study – MTEC, 1980 - 1987

● A positive word of mouth about MTEC began to take hold. Training expenditure in 1985 were approximately 2.2% of payroll

● In 1986, the Galvin Center for Training and Education was opened in Illinois. Executive programs were held there.

● MTEC began offering quality courses to suppliers, in order to improve the quality of purchased components.

Case Study – MTEC, 1980 - 1987● As manager sent more employees to MTEC,

a new problem became evident: many workers did not have the requisite reading or arithmetic skills to participate in quality courses like statistical process control.

● Some were neither fluent in English nor literate in their native language.

● Complaints about PMP intensified. ● A new corporate return-on-net-assets

(RONA) bonus was instituted. Employees received a bonus if both the corporation overall and their business unit hit its target.

Six Sigma and 10X Cycle Time, 1987 - 88

● All Motorola groups met their “10X” quality improvement goal.

● Factors contributing to improved quality included:– Investments in advanced production technologies– Closer management attention to quality metrics– Consistent effort by production employees

● However, benchmarking still revealed companies with superior product quality.

● A senior engineer circulated a white paper, “Six Sigma Mechanical Design Tolerancing”

Six Sigma and 10X Cycle Time, 1987 - 88

● Six Sigma indicates a quality level of 3.4 defects per million opportunities; the paper noted that most Motorola products were being produced with quality levels at or below 3 sigma. It explained:– Three-sigma design yields 2,700 defective parts

per million. A product design with 10,000 characteristics, either parts or manufacturing steps, yields 27 defects per finished product. Since such products are becoming very common, traditional three-sigma designs are completely inadequate

Six Sigma and 10X Cycle Time, 1987 - 88

● Bob Galvin seized on “sis sigma” as a new rallying cry.

● With much fanfare he announced in 1987 a Six Sigma Quality effort.

● All product quality was expected to improve by another 10X in tow years, 10X more two years later and achieve six sigma by 1992

● A memo sent to each employee stated, “There is only one ultimate goal: zero defects – in everything we do”

Six Sigma and 10X Cycle Time, 1987 - 88

● All Motorola employees, worldwide, were required to take a new quality course, Utilizing the Six Steps to Six Sigma, which described a process for mapping and improving product or process quality.

● Versions were offered for both manufacturing and non-manufacturing personnel.

● Courses on quality fundamentals, first developed for PMP, were updated to reflect the Six sigma goal.

● Videos, brochures, and speeches emphasized Six Sigma.

Six Sigma and 10X Cycle Time, 1987 - 88

● Although product quality was improving significantly, product-development cycles were too long. Some competitors were able to introduce new products much faster, thus taking market share away from Motorola.

● Quality alone was not the whole answer; to achieve total customer satisfaction, Motorolans had to learn to work both smarter and faster.

● MTEC developed 10X Cycle Time aimed at middle managers worldwide.

Six Sigma and 10X Cycle Time, 1987 - 88

● In 1988 Motorola received the Malcolm Baldrige National Quality Award.

● That year George Fisher was promoted to CEO.

● With the Six sigma and 10X Cycle time initiatives, production employees were expected to know their equipments and do their trouble-shooting.

● If they need expert assistance, they must be able to describe a malfunction in detail. In other words, they have to be able to analyze problems and communicate them.

Six Sigma and 10X Cycle Time, 1987 - 88

● Two steps were taken:– First, pre-employment screening, using a 31/2

hour Basic Abilities Test Battery (BATB), ensured that new hires had the necessary basic skills.

– Secondly, remedial training was provided to existing employees.

● Studies found that employees who passed the BATB could be trained more quickly.

● So, management began to consider whether to test all employees on BATB.

Six Sigma and 10X Cycle Time, 1987 - 88

● Many employees worried that revealing their deficiencies would cost them their jobs.

● They were assured that nobody would be summarily fired for lacking basic skills, but they were expected to acquire them over the next several years, and they were strongly urged to take advantage of free courses available to them.

● Tighter screening yielded a new difficulty. HR managers reported they could not fill all open slots because not enough applicants passed the basic skills test.

● MTEC began to look into ways to help public schools strengthen their curricula, so as to improve the pool of available workers.

Motorola University● By 1989 54,000 participants had taken the six

sigma course.● MTEC was re-named “Motorola University”● Bill Wiggenhon, now president of MU, reported

to the director of corporate human resources● In 1993 Wiggenhon gave a presentation to

management, in which he stated that the need for continuous education and concluded, “Continuous improvement requires continuous change, and that requires continuous learning.”

Motorola University● By 1994 Motorola was pending about $120

million on training annually – $200 million when cost of employee time and

travel were included– The $120 million included salaries of group and

site trainers, fees paid to outside vendors, approximately $20 million in MU tuition and consultation fees, and a $13 million MU allocation.

– MU operated out of 14 facilities – the Galvin Center and 13 “hubs” worldwide

– Sold about $10 million of training to suppliers and customers.

Motorola University

● In 1994 MU using 200 permanent employees and 300 outside contractors, offered courses in engineering, manufacturing, sales, management, professional development and other topics.

● It also provided referrals to courses at colleges or offered by outside vendors.

● Wiggenhorn described MU as a “learning network, not a place”

Motorola University● The 40 hour training mandate, six sigma and

cycle-time initiatives had intensified efforts to reduce machine downtime.

● Computer-based factory equipment generated data on-line.

● Operated who were training to extract this information could generate timely reports on output, quality, and work-in-process, which previously supervisors prepared.

● The information helped operators and supervisors make adjustments in scheduling, material usage or other items.

Motorola University

● New tasks – setups, machine changeovers, troubleshooting, report generations – demanded new skills

● Operators had to be able to read manuals, understand machine gauges and displays, perform simple calculations, graph and interpret data, spot product defects and identify their causes.

Motorola University

● Executive programs and specialized courses requiring expensive hands-on equipments were held at the Galvin Center

● Wiggenhorn significantly increased the number of courses available over computer networks and delivered via satellite and interactive video.

● Most other training was delivered at work sites, using a train-the-trainer approach.

● MU also published books and videos on quality, technology and other subjects.

Total Customer Satisfaction Teams 1989 - 94

● A “Total Customer Satisfaction” program replace PMP in 1989. – Ad hoc problem-solving teams used

techniques adapted to identify problems, search for causes and solutions, and implement them.

– In 1990, a corporation-side TCS competition was organized, which became annual event.

Total Customer Satisfaction Teams 1989 - 94

● Project teams, with 4-12 members.● Teams might be drawn from a single work-group

or assembled from reps of multiple functional areas and disciplines.

● Four finalists per group (24 teams) competed at the corporate TCS competition.

● 12 minutes to describe their projects.● An MU courses, Making Effective Presentation

which previously attracted few shop-floor participants, now was in high demand by TCS teams

Total Customer Satisfaction Teams 1989 - 94

● Prizes, ranging from certificates to dinner vouchers to resort holidays.

● There were no “losers” at the corporate competition, 12 teams awarded gold medals and the rest got silver medals

● Many employees travelled on an airplane for the first time out of home country.

● Managers began to see their employees in a whole new light

● By 1993, 4,000 TCS teams were working on product designs, improving quality, and reducing WIP inventory.

● TCS projects were estimated at over $2 bn. Since 1989.

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