Introducing Shop Floor Teamwork at Small Manufacturers in South Africa Anton Grütter University ...

18 Pages·2003·0.25 MB·English

Introducing Shop Floor Teamwork at Small Manufacturers in South Africa

Anton Grütter
University of the Western Cape, Cape Town, South Africa
Tel: [phone] Email: [email protected]

Abstract

This paper reports the research model and preliminary findings of a 27-month
longitudinal study on 12 firms that participated in the Workplace Challenge (WPC).
The WPC was a R24½m (approximately US$2,7m) initiative by the South African
government to support the introduction of employee participation programs at small
and medium-sized manufacturing firms.

Preliminary findings were that some firms implemented the practices associated with
team-based work organisation (TBWO) more comprehensively than others. However
at the end of the study period only firms that had started implementing TBWO well
before the WPC commenced showed unambiguous improvement in operational
performance measures such as productivity and quality. A number of other findings
and initial interpretations are also reported.

Introduction

The Workplace Challenge was a South African government initiative to facilitate
workplace change at manufacturing firms. It started in 1996 by developing high-level
consensus between business and labour organizations on the objectives and process
that should be followed during the project. At the time the WPC was a project of the
National Economic Development and Labour Council, a tri-partite institution with the
aim of promoting socio-economic accords between the three social partners, business,
labour and government. It was aimed at bridging the divide between “business” and
“labour” over how to constructively involve employees in re-structuring firms to
become more “competitive and productive” while avoiding job losses.

At the national level the WPC was governed by a WPC committee with representation
from all three parties. Regional initiatives were undertaken in each of the country’s
nine provinces during 1997/8 to inform and promote the project with employer and
employee organisations. This often took the form of consultative workshops involving
the unions and industry associations of the dominant sector in the area with the
objective of producing “workplace change agreements” that could serve as models for
firm level agreements.

At firm level 12 sectors with about 5 firms each were expected to participate over 2
years. These commenced in 1999 and were rolled out in the following phases:

Nurturing: Sector manager was appointed who recruited firms to participate and
helped to establish a sector steering committee to drive the process.
Orientation: Capacity building workshops were conducted for labour
representatives, middle management, supervisors and shop floor
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employees to familiarise themselves the new way of working and to
provide the opportunity to debate the issues of concern.
Implementation: Representative committees at firms chose consultants from a register
who were the charged with developing a workplace change plan for
the firm and helped to implement it. The consultant’s fees were
partially subsidized by the WPC. Over the 2-year period of
implementation regular “milestone” workshops were held in each
sector where participants shared their experiences.

A researcher was appointed for each sector to document the process and capture the
lessons learnt. In addition the author was appointed to conduct research across all the
participating firms and a market research company contracted to collect information
on customer satisfaction and employee perceptions and attitudes.

What is Team-based Work Organisation?

There are numerous sources of firm performance such as market and raw material
access, technology, labor skill, process and supply chain management, etc. The one
that interests us here is how firms achieve superior operational performance through
the way in which people on the shop floor are organized to work. Other forms of team
work such as strategic management teams and project teams, as well as financial
performance outcomes are excluded from the research.

Figure1: Practices associated with Team-based Work Organisation
Work Organisation
TPM
TQM Team Work
Quality Autonomous
Employee
Mgt Maintenance
Involvement

Kaizen Consultation
Performance BOP
Development
Measurement
of Skills
Waste Cells
Elimination JIT Human Resource
Management
Process
Management
Supply Chain
Management

TBWO rarely occurs in isolation. As Figure 1 illustrates it is usually practiced in
conjunction with a selected number of other practices that are associated with a
variety of contemporary management approaches. However a distinguishing
characteristic of TBWO is that some form of team work and decentralized decision-
making is adopted in preference to a hierarchically organized shop floor.

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Savannah, Georgia - April 4 – 7, 2003
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Research Design

The research question was formulated as: how does team-based work organization
(TBWO) contribute to improved operational performance of manufacturing firms?

The study was conducted by means of multiple longitudinal cases using interviews,
document analysis and quantitative data as information sources. Field work was
conducted for 27 months since March 2000 at 12 firms participating in the WPC in
the following regions and sectors in South Africa:
Kwa-Zulu Natal Auto-components 5 Cape Clothing 2
Kwa-Zulu Natal Footwear 2 Cape Metal Fabrication 1
Kwa-Zulu Natal Furniture 1 Cape Auto-components 1

Theory & Research on TBWO

“Everyone knows that teamwork is a good thing; in fact it is essential! “ (Maxwell,
2001) Statements like these abound in the popular literature on teamwork encouraging
firms to introduce frontline or shop floor teamwork in one form or another. While
there are numerous authors in the academic literature who support the notion that
TBWO is an important element of contemporary approaches to managing operations
(Mohrman & Novelli, 1985; Womack et al, 1990; Katzenbach & Smith, 1993;
Kochan & Osterman, 1995; MacDuffie, 1995; Schonberger, 1996; Ichniowski et al,
1996) there are research findings that indicate that TBWO is a too complex a
phenomenon to make it an unqualified “good thing” (Bailey & Sandy, 1999).

Gladstein (1984) conducted research on a comparatively large sample of sales teams
in an insurance company. She found that subjective group member ratings of group
process and organisational support were positively correlated with satisfaction and
perceived performance, but negatively correlated on actual sales revenue. This means
that team members mistakenly thought that when they felt good about the way in
which their team worked, that it translated into improved performance. It highlights
the need to be cautious about anecdotal evidence when claiming team work success.

Lawler & Mohrman (1987) found that quality circles were difficult to sustain after the
initial honeymoon phase. Quality circles, although no longer popular in Western firms
today, relied on voluntary participation by team members to make improvements to
the production process. These research findings point to the fact that individual
motivation cannot be relied on to sustain a teamwork initiative over time. If sustaining
process improvement is important, as the thinking behind Kaizen (continuous
incremental process improvement) requires, then the assumption that positive
employee attitudes and improved motivation will result in performance improvement
does not necessarily hold. A meta-study of employee participation Locke and
Schweiger (1979) found that 60% of studies reviewed found improved employee
satisfaction, but only 22% of studies found improved job performance seems to bear
this out.

On the basis of three previously researched cases of firms that did achieve
demonstrable performance improvement we proposed that successful implementation
of TBWO is likely to go through three sequenced phases (Grütter et al, 2002):
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Savannah, Georgia - April 4 – 7, 2003
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1. Work team engagement is positively associated with early implementation
credibility-building activities.
2. A rapid rate of performance gains is positively associated with both an outcome-
orientation & substantive participation.
3. Sustaining performance gains is positively associated with team
institutionalization.

In the first phase it is important to secure employee buy-in to the programme to
introduce TBWO through addressing employee’s concerns and proving the
commitment of management to see the programme through. Thereafter there needs to
be a focus on enabling shop floor employees to make actual process improvements, as
opposed to mistaking intermediate activities such training, change management, etc.
for the end. Finally, as it will not keep happening by itself, an organisational
mechanism needs to be established to make process improvement a regular feature of
work life.

Research Model

The research model proposed that the two independent constructs of Structural
Changes and Ongoing Practices would drive the dependent construct of Operational
Performance. Structural changes referred to more or less permanent systemic or
organisational changes, whereas ongoing practices referred to work practices that
were used.

Figure 2: The Research Model

Work Organisation

Structural Changes + Ongoing Practices = Operational Performance

Policy Systems People Process Productivity Quality Time

In addition to qualitative data attribute and variable data was collected on the
following variables for each construct:

Structural Changes Ongoing Practices Operational Performance
Steering Committee Communication/Consultation Productivity
Shopfloor Layout Training Quality
Batch Size/Kanban Employees in Teams Time
Incentive System WCM Methods in Use Absenteeism
Employment Equity Policy Implementation of Suggestions
Stock-holding
Maintenance
Best Operating Practices
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Firm Profiles

Table 1: Firm Profiles
Firm Industry Process ShopflEmpl EmplChg (cid:57) indicates the
R Furniture Batch/Ass 57 (cid:74) = change was in a
desirable direction.
G Footwear Batch/Ass 139 (cid:74) =

K Auto-comp Batch 234 (cid:78) (cid:57) (cid:56) indicates the
O Auto-comp Batch 401 (cid:80) (cid:56) change was in an
J Clothing Batch/Ass 70 (cid:74) = undesirable direction

C Auto-comp Batch 159 (cid:78) (cid:57)
= indicates no
E Footwear Batch/Ass 21 (cid:80) (cid:56)
substantial change.
X Metal Fabrication Eng. Shop 65 (cid:78) (cid:57)
S Auto-comp Batch 126 (cid:78) (cid:57)

U Clothing Batch/Ass 191 (cid:74) =

Y Auto-comp Batch 64 (cid:74) =

N Auto-comp Batch 98 (cid:80) (cid:56)

Table 1 shows that most of the firms participating in the research were small to
medium sized manufacturers. Auto-component manufacturers predominate while all
but one of the firms used batch type production processes. Employment trends over
the period of the research were varied.

Findings in respect of the Independent Constructs

Table 2: Off-Production Time
Firm Comm/HrsWkd% Train/HrsWkd% Teamw/HrsWkd% Off-ProdHrs/PdHrs%
R 0.1% 0.0% 0.1% 0.3%
G 0.1% 0.1% 0.3% 0.5%
K 0.2% 0.5% 1.2% 1.9%
O 0.6% 0.2% 1.3% 2.1%
J 0.3% 2.0% 0.1% 2.4%
C 0.3% 0.2% 2.2% 2.7%
E 0.2% 2.0% 0.8% 3.0%
X 0.3% 1.0% 2.9% 4.2%
S 0.4% 0.3% 4.1% 4.8%
U 0.5% 3.8% 0.5% 4.8%
Y 0.7% 1.3% 3.4% 5.4%
N 1.0% 1.1% 4.4% 6.4%

Table 2 shows the average monthly paid time of shop floor employees spent by each
firm on three selected activities as a percentage of total paid time. These measures
were operationally defined as:
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Savannah, Georgia - April 4 – 7, 2003
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Communication & consultation: Paid time off production for meetings, briefings,
etc. not directly related to production.
Training Formal training in paid time or paid for by the
firm, not including informal on-the-job training.
Teamwork Paid time off-production for team member or
leader meetings directly related to production.

These measures include normal and over-time as well as permanent and non-
permanent employees. The three measures are also added up to provide a total “off-
production” time as a percentage of total paid time. Please note that this and
subsequent tables are sorted in ascending order by the last measure.

These measures made it possible to make meaningful comparisons across firms
despite varying firm size. As these measures represent key activities in the
implementation of TBWO they provide a useful indicator of intensity of
implementation activities undertaken by the firms.

The first point to note is that some firms had spent as much as 6% of their shop floor
payroll on non-productive time, while others dedicated a very low percentage of their
shop floor employees’ time on these activities. This makes it possible to separate the
firms into “high” and “low” implementing firms.

Secondly, high implementing firms spent most of the time on teamwork activities.
This is because a number of those firms implemented the practice of shop floor teams
meeting to review performance and coordinate work activities for 12 – 15 minutes at
the beginning of every working day.

Thirdly, high implementing firms also spent relatively more time on communication
& consultation and training than low implementing firms.

Figure 3: % Off-Production Paid Time for a High and Low Implementing Firm
Implementation: % Off-Prodn Paid Time Firm Y Firm R
16%
14%
12%
10%
8%
6%
4%
2%
0%
Mar-0A0pr-0M0ay-0J0un-0J0ul-0A0ug-0S0ep-00Oct-0N0ov-0D0ec-0J0an-0F1eb-0M1ar-0A1pr-0M1ay-0J1un-0J1ul-0A1ug-0S1ep-01Oct-0N1ov-0D1ec-0J1an-0F2eb-0M2ar-0A2pr-0M2ay-0J2un-02
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As can be seen from Figure 3 some firms implemented more than others over the
period that data was collected. The peaks in the monthly off-production paid time for
Firm Y represents periods of intensive training when in some months more than 10%
of paid shop floor time was not used for production.

Table 3: Implementation: Structural Changes
Firm SteerComm StaffFacil Cells SmallBatch EmplEquityIncentSch Retrench Visits
R n (cid:56) n (cid:56) n (cid:56) n (cid:56) n (cid:56) n (cid:56) n (cid:57) n (cid:56)
G y (cid:57) n (cid:56) n (cid:56) n (cid:56) n (cid:56) n (cid:56) n (cid:57) n (cid:56)
K yn (cid:57) y (cid:57) y (cid:57) s = y (cid:57) n (cid:56) yn (cid:57) s =
O yn (cid:57) y (cid:57) y (cid:57) y (cid:57) y (cid:57) n (cid:56) n (cid:57) s =
J yn (cid:57) ny (cid:57) y (cid:57) n (cid:56) y (cid:57) y (cid:57) yn (cid:57) n (cid:56)
C yn (cid:57) s = s = s = n (cid:56) s = n (cid:57) s =
E yn (cid:57) n (cid:56) ny (cid:57) s = n (cid:56) n (cid:56) y (cid:56) s =
X yn (cid:57) s = n (cid:56) n (cid:56) y (cid:57) s = n (cid:57) s =
S y (cid:57) s = s = s = s = n (cid:56) n (cid:57) s =
U n (cid:56) n (cid:56) y (cid:57) y (cid:57) y (cid:57) y (cid:57) s = n (cid:56)
Y y (cid:57) n (cid:56) y (cid:57) ny (cid:57) s = n (cid:56) n (cid:57) s =
N yn (cid:57) y (cid:57) y (cid:57) y (cid:57) s = y (cid:57) n (cid:57) n (cid:56)
y = yes s = some n = no

Table 3 is a summary of the structural changes undertaken at the firms over the data
collection period.

Most firms constituted representative steering committees at the start of their
initiatives as it was virtually a requirement for participation in the WPC. Generally
speaking these committees served their intended function to facilitate communication
between management and the shop floor employees and to provide forum for
addressing concerns. Interestingly in many cases these committees disbanded or were
incorporated in other structures after the initial issues had been resolved.

Upgrading staff facilities like canteens and locker rooms were prominent activities in
the early phases of some firms’ initiatives, but were not attended to in other firms.

Many firms made shop floor layout changes or converted to cellular manufacturing.
Not all these firms made the layout changes early in their initiatives as may be
expected. Reduction in batch size or implementing kanban systems took place only at
a few of the firms.

Employment equity programs were instituted at a number of the firms, but at some
they were not given any particular priority. Incentives schemes operated at three of
the firms and of these two schemes were team-based reward systems.

Large scale retrenchment took place at only one of the firms that closed down at the
end of the research period, though some of the other firms did have to contend with
small scale retrenchments and/or short time. Finally, few of the firms exposed their
employees to external influences by means of customer or supplier visits, although
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Savannah, Georgia - April 4 – 7, 2003
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employees from all firms participated in “milestone” workshops where the firms
participating in the WPC shared their experiences on a regular basis.

The primary comment that can be made from these findings is that the high
implementing firms as measured by percentage off-production paid time were also
more likely to implement more of the structural changes. It also appears that some
practices such as steering committees and making shop floor layout changes were
more common than other such as incentive schemes and off-site visits.

Table 4: Implementation: Work Practices
Firm WCPractices Chg Sugg/Empl/pm WIP/Output BOP Chg
R l (cid:80) (cid:56) 0.00 (cid:74) = l (cid:74) =
G l (cid:80) (cid:56) 0.01 (cid:74) = l (cid:80) (cid:56)
K h (cid:78) (cid:57) 0.06 (cid:74) = h (cid:78) (cid:57)
O h (cid:78) (cid:57) 0.03 (cid:74) = h (cid:78) (cid:57)
J m (cid:78) (cid:57) 0.00 (cid:74) = l (cid:78) (cid:57)
C l (cid:78) (cid:57) 0.01 m (cid:78) (cid:57)
E l (cid:78) (cid:57) 0.11 (cid:74) = m (cid:74) =
X l (cid:74) = 0.04 (cid:74) = l (cid:80) (cid:56)
S h (cid:78) (cid:57) 0.08 (cid:78) (cid:56) h (cid:78) (cid:57)
U h (cid:78) (cid:57) 0.04 (cid:78) (cid:56) m (cid:74) =
Y h (cid:78) (cid:57) 0.37 (cid:78) (cid:56) h (cid:78) (cid:57)
N h (cid:78) (cid:57) 0.05 (cid:74) = h (cid:78) (cid:57)
l = low m = moderate h = high

World Class Practices include visual management, awareness of value creation &
waste elimination, the use of process improvement techniques and allocation of
resources to enable implementation of improvement suggestions. Best Operating
Practices refers to housekeeping, designated & accessible storage of tools & jigs,
updating & availability of BOP documentation, rapid performance feedback to the
shop floor, etc. On both these parameters most firms made improvements although
some started from a relatively high base, but the low implementing firms once again
did not achieve much improvement on these practices.

The figures for implementation of suggestions per employee per month are not
particularly reliable as few of the firms kept good records on this measure. However
given the emphasis placed on implementation of employee suggestions by the
literature the mere fact that this measure is not recorded well indicates that most firms
are also likely to be weak implementers of this practice.

Work-in-progress reduction is also commonly regarded as an important practice in
lean firms. Measured in aggregate not much reduction of work-in-progress was in
evidence in these firms, although in some firms there were instances of work-in-
progress reduction in isolated areas. (These figures were mostly obtained from
accounting systems and therefore may not have been an accurate reflection of reality.
However it must be said that the figures are generally consistent with the observations
of the researcher.)
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Savannah, Georgia - April 4 – 7, 2003
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Findings in respect of the Dependent Constructs

While there were specific differences between the firms in terms of the finer detail of
the implementation of structural changes and ongoing practices we can conclude that
there was enough consistency in the variation of the independent variables that we can
expect outcomes consistent with our hypothesis that high implementing firms can
expect higher operational performance improvement and vice versa.

The findings at Firm R are presented here as typical of a low implementing firm. The
findings at Firm Y are then presented as those typical of a high implementing firm.

Figure 4: Firm R Labour Productivity
Firm R Productivity Mnfct Wages/Sales%
Mar-0A0pr-0M0ay-0J0un-0J0ul-0A0ug-S0e0p-0O0ct-0N0ov-0D0ec-0J0an-0F1eb-0M1ar-0A1pr-0M1ay-J0u1n-0J1ul-0A1ug-S0e1p-0O1ct-0N1ov-D0e1c-0J1an-0F2eb-0M2ar-0A2pr-0M2ay-0J2un-02

(The line through the middle of the data is a trendline.)

While a marginal reduction of manufacturing wages as percentage of sales has been
achieved at Firm R it cannot be interpreted as conclusive evidence of significant
improvement in labour productivity.

Figure 5: Firm R Quality
Firm R Quality Value of Returns
Mar-00Apr-00May-0J0un-00Jul-00Aug-00Sep-00Oct-00Nov-0D0ec-00Jan-01Feb-01Mar-01Apr-01May-01Jun-01Jul-01Aug-0S1ep-01Oct-01Nov-0D1ec-01Jan-02Feb-02Mar-02Apr-02May-0J2un-02

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The best available measure of quality at Firm R was value of returns from customers.
However it was not an accurate measure as these returns were influenced by other
factors than purely the quality of the product. For instance, the high returns at the end
of 2001 and early 2002 was attributed by management to poor sales to final
consumers by Firm R’s customers. On the available data we cannot conclude that
quality improved.

Figure 6: Firm R Absenteeism
Firm R Absenteeism
Mar-00Apr-0M0ay-00Jun-00Jul-0A0ug-00Sep-00Oct-00Nov-0D0ec-0J0an-01Feb-01Mar-01Apr-01May-01Jun-01Jul-01Aug-0S1ep-01Oct-01Nov-0D1ec-01Jan-0F2eb-02Mar-02Apr-0M2ay-02Jun-02

Using absenteeism as proxy measure of employee attitudes we cannot conclude that it
improved from the data in Figure 6 above.

Figure 7: Firm Y Productivity
Firm Y Productivity Real Production Value/Paid Hour
Mar-0A0pr-0M0ay-0J0un-0J0ul-0A0ug-0S0ep-0O0ct-0N0ov-0D0ec-0J0an-0F1eb-0M1ar-0A1pr-0M1ay-0J1un-0J1ul-0A1ug-0S1ep-0O1ct-0N1ov-0D1ec-0J1an-0F2eb-0M2ar-0A2pr-0M2ay-0J2un-02

At Firm Y the value of production output was recorded as it went into the finished
goods storage area. The monthly totals were adjusted for price increases and divided
by the total paid hours for the month. It is evident from Figure 7 that labour
productivity did not improve over the 27-month period that data was collected.

14th Production & Operations Management Society Conference
Savannah, Georgia - April 4 – 7, 2003