1. What is Joe Hinrichs trying to do and what are his objectives
Joe Hinrichs’ was trying to perform a major process improvement effort targeted at Fredericksburgh over-engineered inefficient process. Hinrichs’ objectives included installation of more efficient machinery in the plant, redesigning of employee’s job responsibilities, and reducing worker idle time. Another objective was to attain the QS 9000 certification that was modelled by the European standard ISO 9000 specifically for the automobile industry to promote the development of standardisation in the industry across the world (Edmondson and Eastley, 1998).
If the objectives were not met, Fredericksburgh would not be able to meet the 1996 budget that required substantial cost improvements and setting of ambitious goals for the plant. Consequently, failing to reach the budget in 1996 could result in General Motors (GM) closing down the plant because it had poor financial performance history and had failed to meet its budget for consecutive years.
Pressures Facing the Plant
A strike had happened at GM’s Dayton, Ohio brake operations plant that caused a ripple effect among many GM plants including Fredericksburg leaving them without any customer orders. The plant had a lot of work in progress; old machines were half dismantled and new machines sat waiting for the old machines to be cleared out. The contract between GM and Union of Automobile Workers (UAW) made it difficult and expensive to lay off workers. Getting the union to agree to agree to the redesigned workers’ job description to achieve greater productivity could be difficult (Edmondson and Eastley, 1998). The 1500-ton press that was the first step and bottleneck in the production process broke down due to excessive wear.
2. What is Joe Hindrichs’ strategy for achieving these goals?
The strategy for achieving the goals was to make the changes slowly, spreading them carefully within the plant. The slow implementation allowed Hinrichs to get the reaction and initial backlash from employees before the changes was made. The careful spreading of changes showed fairness in all areas of the plant.
Right Action Steps
Fredericksburg plant chose natural worker attrition as a way of dealing with the issue of difficult and expensive laying off of workers caused by the contract between GM and UAW. This meant that no additional workers were hired and no new workers were hired to replace the ones who retired or left after the planned process. The action was ineffective because the plant had to resort to overtime hours to as a means of meeting the excess labour demands. Workers began to rely on the overtime pay as part of their expected income (Edmondson and Eastley, 1998). As the new machinery replaced the old machinery, overtime was cut. This meant that as workers became more efficient in using the new machinery they received less overtime pay, something that created a negative incentive among the workers.
During the Dayton area strike, Hinrichs decided not to lay off any workers but keep the plant open and use it as a way to eliminate overtime and make changes in job descriptions to reduce idle time in the plant. The action was effective because it built the workers’ trust towards the plant’s management. The plant was able to make up for the lost time in productivity gains by keeping focused. However, the underlying issue was that Hinrichs had to continue paying the workers and while getting no orders which had huge budget implications on the plant.
A new type of assembly cell that utilises single-operator workstations was developed by GM engineers in Fredericksburgh. The cell consisted of two separate workstations that allowed workers in adjacent stations to share the expensive balancer equipment. The stations also had the flexibility to add up to two additional workers depending on required outputs. The employees also walked around the cell instead of sitting down in a fixed location (Edmondson and Eastley, 1998). The action was effective because it allowed workers to access more machines that the previous assembly line. The two key feature of the assembly line included consistency and flexibility. That is processes and machines in all the cells were similar and the tooling in the cells could be changed to produce different models when needed.
3. How would you assess the leadership capabilities of Joe Hindrichs?
Hinrichs was focused on getting the Fredericksburg plant to become more efficient for it to achieve the goal of meeting the 1996 budget. After starting to implement process changes during the strike, Hinrichs focused on process improvement for the next year. Hinrichs also possesses intelligence; this can be seen by how he made the changes in the plants in a slow and distributed manner (Edmondson and Eastley, 1998). In making the changes, Hinrichs also showed collaboration in that he was willing to the workers’ reaction before making the changes. Hinrichs was also seen to care for the workers; well-being because he did not lay off a single worker during the Dayton area strike. Finally, Hinrichs was able to use the $30 million investment and the opportunity to incorporate the new carbon fibre material to get everyone engaged in the improvement process.
4. What should Joe Hindrichs do with respect to the 1500-ton press? What are the options available? What are the advantages and disadvantages of each? Which options best support continuous improvement in the future? Which option would you recommend that Joe Hindrichs take?
There are only three options available for Joe on the 1500-ton press. Each of these options has benefits and pitfalls alike. The first option is to contact skilled external tradesmen to repair the plant immediately. The benefit of this option is that it would allow workers to continue the production of the current shipment from the inventory of the stamped plates. On the other hand, Joe might receive complaints from the union about why he did not use skilled tradesmen from within the plant. The second option for Joe was to repair the plant using novel parts to replace the old parts (Edmondson and Eastley, 1998). The pitfall associated with this option is that it would lead to a downtime of at least four days in addition to an extra cost of $210,000. However, the upside to this option is that it would make the plant more reliable and save the costs of constant repairs and downtime. The third option is to repair the press and install the novel and more complex dies to supplement the existing die. This option would save the time for the press since it would eliminate two steps in the process. Among the available options, Joe should use the second option so as to ensure and support continuous improvement in the feature.
References
Edmondson, A. and Eastley, M. F. (1998). GM Powertrain. Harvard Business Review, 9(698),
008th ser., 1-19.
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