Based in Portland, Oregon, ESCO Corporation (www.escocorp.com) is a
global manufacturer of engineered metal parts and components for
industrial applications, including construction, power generation,
and aerospace. As part of the company's Engineered Products group,
ESCO's Covington (Kentucky) facility primarily manufactures metal
parts and components for the construction and forestry industries
and employs 92 people.
Since launching its People Powered Lean (PPL) initiative in 2004,
ESCO Covington significantly improved its production efficiency by
23 percent - a cost savings of $285,600.
According to Sien Whitmire, ESCO Covington's human resources
manager and the program's team leader, the original purpose of the
PPL initiative was to analyze, design, develop, pilot, implement,
and improve a human capital management system by providing the
production manager with the right people, with the right
manufacturing skills, in the right numbers, at the right time.
The PPL initiative was sparked by the need for a new hiring
process. In March 2004, it took 10.3 weeks and $2,008 to bring a
new employee onboard. In October of that year, Whitmire led a
project team to create the People Powered Lean initiative. The new
program featured a modernized hiring process, a scenario-based
interview and skills assessment, a common skills training program,
a production cell training program, a 90-day coaching and feedback
process, and a management system focused on reducing the new hires'
time to competency in their first job.
"It was important to create new-hire engagement from first
contact," says Whitmire. She says that in two years, the program
reduced the cycle time to competency from 9.3 weeks to four weeks.
The initiative reduced the cost of hire to less than $500, its
first-year attrition rate from 59 percent to 6 percent, and average
attrition by 31 percent. Overall production efficiency also
improved 23 percent, from 29.42 hours per product to 23.98 hours
During the analysis phase, every leader at the ESCO Covington
location was charged with reviewing the existing hiring process,
initiating improvement opportunities, and designing future hiring
processes. Each senior manager was engaged in validating future
state design and development and served on an executive review
board, which met monthly.
Prior to October 2004, ESCO Covington's hiring process had been a
traditional, human-resource-driven process that had proved
inefficient and had failed to address new employees' - or
management's - needs. With the new hiring process, Covington
production managers today participate in the entire hiring process,
rather than simply submitting a new-hire requisition and waiting
for a new employee to show up on the plant floor after watching
eight hours of OSHA videos.
As a result, production managers are able to develop realistic job
previews to help potential applicants determine for themselves if
they are interested in - and qualified for - the position. In
addition, ESCO Covington production managers partner with local and
state agencies to find new employees who match detailed job
descriptions. Further, plant team leaders and supervisors
collaborate on scenario-driven skills assessments, rather than
focus exclusively on traditional job interviews.
Thanks to what Whitmire calls ESCO Covington's "PPL culture," the
facility has reduced the previous interview cycle time of two weeks
down to four hours. Says Whitmire: "The new processes help
acclimate new employees to their work environment, making sure that
their first impressions of the company are positive. PPL also
helped create a team environment for new employees."
Today, ESCO Covington's PPL initiative serves as a comprehensive
step-by-step process that ensures the best candidates are hired.
The first step begins with the Kentucky State Office of Education
and Training, which prescreens candidates to ensure they meet the
basic requirements for specific posted openings. Applicants also
complete web-based and paper-based preview questionnaires, which
allow screeners to further assess candidates' qualifications prior
to moving on the actual application process.
Once an applicant has been referred to ESCO Covington's human
resources, team leaders conduct the PPL's scenario-based interview
and skills test to determine if there is a fit. During the
interview; the applicants performs all the tasks they will need to
be able to perform on the job. The result is a skills assessment
document that is completed and agreed upon by both the team leader
and the applicant. If the applicant meets minimum requirements, a
contingent offer is made on the spot, and the skills assessment
becomes the benchmark for the new employee's development plan. Next
day, the team leader receives the offer letter, a drug test is
administered, and the new employee receives a packet of forms that
must be completed prior to the first day of work.
ESCO Covington holds "World Class" first days each Thursday, which
ideally leaves the new employee thinking, "Wow! These guys really
know what they're doing." During this first day, new employees meet
with the plant manager, safety manager and value stream manager.
Using OSHA training models, the new employees are also shown how to
perform their jobs safely. At the end of the first day, the new
employees work with an HR representative to go over the packet, and
the team leader briefs the new employees on what to expect the next
The following Monday, new employees begin common skills training,
which encompasses a variety of subject areas, including common
terms and acronyms, crane safety and operations, equipment and tool
operations and maintenance, visual inspection, OSHA regulations,
and quality assurance. Much of the training is computer-based and
is integral to the individualized training plans that the team
leader and trainer developed based on a new employee's initial
interviews and training.
Once the new employee has completed the learner-based training
modules, the team leader and the trainer meet with the new employee
to discuss the individual's training plan. The new employee then
begins cell training, supervised by the team leader, who maintains
an individualized monthly feedback process to assess performance
and update skills development during the employee's first 90 days.
The team places special focus on people, rather than on the program
- customizing the process based on the individual's skills level
and abilities. As a result, the team has found that the PPL process
eliminates waste in development and training when the specific
employee does not require additional or "standardized" development
or training resources. Says Whitmire: "People's needs drive this
program, not classroom headcounts.
As with all lean initiatives, the PPL program's success relies on
the support of the management team and every leader within the
organization. Individual team members play major roles in hiring
and "on-boarding" new employees.
ESCO Covington partnered with Chesapeake, Virginia-based Training
Modernization Group (TMG) to develop and implement the PPL
"culture." TMG President and CEO Joe Barto says: "We've found that
there is no one silver bullet that can solve all problems. Linking
complementary systems is easier and more responsive than developing
completely new processes. Also, we must respect and empower the
core relationship between the leader and the new employee. It is
the sum of those relationships that leads to high performance."