A business driven and major operational change has led to a shift in organisational structure at NSK Bearings. Steve Metcalfe and Gordon Cairns explain to Louise Hoffman how the workforce is now rising to this new challenge.
In 2016, NSK Group – the global bearings, automotive component and steering system manufacturer – will be celebrating its 100th anniversary. But the company’s Peterlee bearings factory has already been doing some partying of its own, reaching the 30-year milestone two years ago.
One of the first of the Japanese inward investment plants to be set up, NSK Bearings Peterlee began operations in 1976 following some visionary top level thinking, which resulted in a firmly established NSK presence in Europe relatively early on in the manufacturing timeline.
“NSK deliberately decided to build the NSK business presence in Europe,” said HR manager Steve Metcalfe. “It wasn’t a case of waiting for OEMs in Europe to get business from NSK and then setting up a plant, this was NSK being quite far-sighted back in the 70s.”
Peterlee has felt the pressure, however, and eight years ago the plant was forced to rethink its operations. “We were making a whole range of products, from standard size bearings you would typically find in a washing machine, through to automotive products, and it became very clear that we couldn’t compete in those standard size bearings. So the decision was made to move products that we couldn’t sustain to our sister plant in Poland,” Metcalfe explained.
And it was this strategic move by the Peterlee plant to become a solely automotive business that has triggered one of the most significant structural changes at the site to date.
“The redirection came at a cost – a very high investment cost, but also significant headcount reductions as well,” Metcalfe began.
“Turn of the century we were employing about 800 at the plant, and now we’re employing about 400,” and likewise, the 50-strong management team has been reduced to just 16 members.
“One of the things that was recognised, thanks to the far-sightedness of the manufacturing director in particular,” added performance management consultant Gordon Cairns, “was that, with that sort of reduction, we could not go on managing in the same way we always had and be able to maintain our high standards of quality, price and delivery.” The route that was chosen to deal with this problem was the introduction of the self managed teams model – defined as ‘a team of people working together to ensure the future viability of the business’ – which calls for groups of workers to make their own decisions as a team in the day-to-day operating of their part of the manufacturing process and to take responsibility for the outcome, while the management staff move from a tradition ‘tell and do’ approach to one of support, acting as a resource for the team.
“We chose this because of the structure of the site. Many of the workers here have 10, 20, sometimes 30 years of skill so we have got a tremendous amount of expertise and we have got to harness their ability,” said Cairns.
“They are experts in their field and don’t need to be told what to do, but they need a supporting model that helps them get the best performance, removing obstacles and supporting them in achieving their team objectives,” Metcalfe added.
The implementation of this new structure has come as part of a wider project, entitled ‘Destiny is in our Hands’ by the manufacturing director in order to remind people that what they do today is directly contributing to the future success of the business – an idea central to the workings of the self managed team model.
The help of Cairns – owner of GC Consulting and long time associate of NSK Bearings Peterlee – was enlisted in rolling out the new strategy as Metcalfe explained: “Once we had come up with our definition of a self managed team, we contacted Gordon who has a relationship with the plant going back some 20-plus years and had helped us develop our supervisory programme back in the 1980s and achieved national training awards during that process.
So this relationship made it a lot easier for Gordon to respond to this new challenge.” The management team were taken offsite for several days of strategic discussion and training before embarking on this journey of change. “They had to understand the implications of working as a resource for a self managed team as opposed to just telling a team what to do. It has implications for control – about how you use your authority as a manager,” said Cairns.
The team were coached on the three primary areas of responsibility they were now to adopt, which were: promoting responsibility within people, promoting awareness within the business, and promoting self confidence. “When people have been dependent upon being told by managers what they’ve got to do for a lot of years, they lose self confidence,” Cairns explained. “They know what needs to be done – they’ll tell you that straight away – but actually having the confidence to do it when there’s no one else around, that is something different.
“Managers are now door-openers – or rock-rollers as I call them – because if there is a rock in the way of a team, the team can use the manager as a resource and say, ‘can you please go and see so-and-so and get this obstacle removed?’” The journey of change has, as Metcalfe and Cairns point out, been a recognition within each individual of the way in which his or her behaviours can affect a process, and how a change in those behaviours, likewise, can improve that process. Indeed, as one Peterlee manager commented, “choosing and using the wrong behaviours as a manager was like putting sand in a gearbox – it would still work, but the effort to produce the desired results would become so much greater, and so much less could be achieved.”
And the adoption of this principle by the manufacturing director himself has been key to the success of the project so far. “This has been a major breakthrough because, when you get someone who is enlightened and is open to change and realises its importance at that level in an organisation, it provides a tremendous example to the workforce,” Cairns enthused.
Results have already been seen, primarily on the shopfloor which has seen real changes already. Managers now have time to plan and introduce measures aimed at making the Peterlee plant internationally recognised as a centre of excellence.
“What we’ve done with the self managed teams approach is to form an agreed standard for shopfloor condition, and it has transformed the look and feel of the factory in just a few months in terms of 4S condition,” Metcalfe explained. Not only this, but plant performance continues to improve to an impressive degree, with over five per cent productivity improvement achieved per year, a manufacturing cost reduction of four per cent per year, and a PPM of less than five parts per million.
Going forward, “the biggest task for us I think is to get all the characteristics of the self managed approach across our production areas, as well as our support function areas, so that it is a plant-wide approach,” said Metcalfe. “We need to learn to walk before we can run, but we have an extensive supply chain and I can immediately see a huge amount of benefit by influencing their organisational approach, and indeed the wider organisation of NSK Europe. But we need to get it right for ourselves first.
“As Gordon and I said at the beginning of the year, it’s a bit like, when you’re considering this level of change, you’re holding a balloon full of helium, and that balloon represents the level of change you are going through. We didn’t want to let go of it until we were sure we had the right plan, the right resource, the knowledge and understanding we needed. But what we’ve done over the last six months really is to let go of that balloon. So far it’s going really well, but we still have things to do – we’re not finished yet!”
Cairns concluded: “Part of the evolution of NSK and one of the key factors in its success over the last 32 years and into the future is that it’s not complacent and is certainly not insular – it’s outward looking and always responsive and seeking a better way. It’s sort of the embodiment of all of the continuous improvement, kaizen and kanban philosophy.
“It reminds me of Rosabeth Moss Canter when she said “giants learn to dance” – well, NSK Peterlee isn’t quite a giant, but my word it certainly is nimble on its feet!”
