Purpose Statement



THE RADIAL BEARING TEAM

George, the machine shop manager at Baker Hughes INTEQ (BHI), Houston, Texas, starred at the memo he had just received and couldn't believe his eyes. As his blood pressure rose slightly, he began to curse under his breath about the assignment he had just received.

In late 1995, George became interested in the efforts of other firms (and some competitors) to institute self-directed work teams (SDWTs). He read the trade publications and some management books on the concept, and consulted with other managers within his network both inside and outside the company on the value of the approach. He was convinced it could produce major profit gains for his unit, as well as enhance productivity and quality. After more than a year of investigating the processes for implementing such an initiative and convincing management of the power of the idea, George got the green light from the top management at Baker Hughes INTEQ to be one of the first units to experiment with the SDWT concept. The SDWT project was launched in February 1997 using the nine teams in George’s unit.

Shane, an internal consultant at BHI, assisted George in this effort and had oversight responsibility for three of the teams in the SDWT project. Shane had continually advanced through ten years of work in manufacturing and was now assigned to the production machine shop serving as an internal organizational development specialist to the machining operations group.

After 15 months of implementation, George and Shane considered the project a resounding success (see Figure 1 for a timeline of the project's events). Following some initial organizational issues as the team learned self-responsibility, the team delivered exceptional performance and surpassed every anticipated goal.

Now, in the memo George had just received, George and Shane were being asked by upper management to conduct a thorough after-action review of the initiative and produce solid evidence that the deployment of SDWTs had been a positive investment. The decision to be made by management whether to expand the project or cancel it was clear--and ominous. What evidence could George and Shane produce that would justify a continuation of the self-directed work team initiative?

Baker Hughes--Background and Prologue

Baker Hughes, a leader in oilfield services (2001 revenues, $5.38 billion), created value for oil and gas producers by providing advanced technology to find, develop, produce, and manage petroleum reservoirs, provides a broad range of products and services through its operating divisions. Each division specialized in a few segments of the industry to deploy and develop “best-in-class” products and services for drilling, formation evaluation, completion, and production. The firm’s emphasis was on practical, dependable solutions within the well bore that create value for its customers through reliability, performance, and data quality.

Baker Hughes’s strategic plan for manufacturing was to outsource simple and mature parts to suppliers, while keeping complex new technology internal to the company. The firm’s reasons for this strategic decision were to manufacture better quality parts due to close process review and engineering support, design control, cost review, and overall flexibility to meet customers’ requirements. The strategic challenge presented to the INTEQ unit was to transform

Figure 1

Timeline of Events

Development of the Radial Bearing Team

operations to meet an increasingly demanding operating environment where cost, quality, and delivery would be paramount. In migrating to SDWTs the focus of management was placed on how to meet these strategic objectives within the established corporate operating structure. They were permitted to change policy and procedures, but only within their area of operations.

In preparation for the initiative, George and his team had involved selected members from the work groups in defining the overall scope of the project and its requirements. He also worked with upper management to secure their buy-in and endorsement for the project.

For greater detail on the industry, firm, and machine shop structure, see Appendix 1. Figures 6 and 7 in Appendix 1 show the bearings that were manufactured and how they are placed in a down-hole mud motor. Appendix 3 is a Glossary for those unfamiliar with key terms in this case.

The Kick Off Meeting for the Self Directed Work Team—February 1997

“Are you ready?” George asked, looking at Shane. It was February 1997 and, after eight months of planning, the production machine shop unit of Baker Hughes INTEQ was about to launch an initiative to introduce self-directed work teams to the machine shop floor.

“Let’s make this happen,” Shane responded, as he walked with George to the front of the break room in the manufacturing building at BHI’s Houston, Texas facility.

George began the meeting by greeting the machinists.

I’d like to welcome you all to the beginning of a journey. What we begin today will have a dramatic impact on how we conduct our business in the future. Recently, we conducted a market survey with our customers regarding our performance and their upcoming needs. The results of the customer survey told us that on-time delivery, quality, and the right quantity of our tools would be the difference for the future. We can’t work any harder than we are now. We will have to be efficient and work smarter.

We are going to split up certain departments and be process-oriented. This starts with the machine shop and its support areas, especially Planning, Customer Service, and Engineering Support. Effective today, all thirty-four of you have been assigned to Self-Directed Work Teams (SDWTs), numbered 1 through 9. Each team has a certain product or process they will be responsible for. The Customer Service Department, Planning Department, Purchasing Department, and Manufacturing Engineering Departments have also been split up into Client Focus Teams (CFT) that will support and directly interface with the customer and SDWTs. In the past, these units have focused primarily on their own functions within a hierarchical structure. Now, they will be directly focused on providing support either to clients or to manufacturing groups. That’s us. They will begin to function much more as client-focused teams. This will improve communication, ownership, and give the machine shop the support we need.” [See Figure 2 for a depiction of the differences in the organizational structures.]

Figure 2 – Traditional Hierarchical Structure vs. Client Focus Teams[pic]

There were some general murmurs from the crowd as George continued.

Let me use the radial bearing group as an example. In each SDWT, you will have five monitor positions: team coordinator, flow monitor, maintenance monitor, quality monitor, and safety monitor. These positions will be elected by your team and have a one-year term. Each monitor will have specific responsibilities that pertain to and affect your team. The team coordinator will receive a $0.25 per hour increase because of the human resource responsibilities that are associated with that position. The reason for having these positions is so decisions can and will be made at the source. In addition, all team monitors will receive training regarding their positions. Shane will be the facilitator for the radial bearing team and will help you go through the decision process. Bob will still be the shop foreman and assist with the training responsibilities.

George then detailed the responsibilities for each of the monitor positions (see Appendix 2). There were some snickers of skepticism from the crowd. After all, management had talked about major changes before, but little happened.

George continued, “As we go forward each team will identify tooling and measuring equipment that will be needed. Each team will generate and present a list of tooling needs to me. I want to inform you that all of the measuring equipment will have to be metric.”

The crowd started to talk excitedly among themselves about the forthcoming change to metric measurement and how it would affect job performance.

Raising his voice, George said,

Hold on! This makes sense because our sister facility in Germany makes the same parts that we do. Right now it is very inefficient, as Manufacturing Engineering has to continually switch drawings back and forth between English and Metric. By standardizing, we will be better off in the future. I know that all of these changes will take some time to digest and work through, but I am asking for your patience, cooperation, and expertise. In addition, each team will have to layout its work area and reconfigure the flow of work between machines. Some of the machines will be replaced because of age and the fact that they can’t be converted to the metric system. Are there any questions?

One of the machinists asked, “Are you really going to spend the money to convert the machines and measuring equipment to metric? It seems like a waste of money.”

George responded,

For the past six months, some of you have been part of the sub-team that helped us identify what was needed. This change is a cost-effective improvement. By standardizing on the machine and measurement tooling, our cost will go down. In addition, the cost to reposition a machine on the shop floor is about $3,000; the payback is substantial, as the material movement of parts will be reduced by 40% for our monthly workload of 300 orders. Yes, we will spend the money and make the initial investment.

“Are we really going to be allowed to make decisions pertaining to our area?” a machinist asked, glaring at Bob, the foreman.

“Yes,” George responded. “It will be simple decisions in the beginning, and then as the teams mature, so will the responsibilities and rewards.”

“What if this doesn’t work?” someone shouted from the back of the room.

George raised his voice and very clearly said, “There is no going back - we must make this work - and failure is not an option. If you don’t want to be a part of the team concept, then I suggest you find somewhere else to work. Meeting dismissed!”

There was a lot of grumbling and discussion from the machinists as they left the room. Some were excited about the changes; others thought things were just fine as they were; still others mulled over the question of “What’s in it for me?” while the skeptics grumbled about “why are we doing this anyway?”

ESTABLISHING THE RADIAL BEARING TEAM

Team Identity and Elections—February 1997

It was the radial bearing group’s first team meeting and emotions were running a little high. Shane surveyed the room -- eight machinists, all dressed in their work overalls, and very vocal.

“This team thing is stupid,” said Bill, a machinist, as Shane walked through the door.

“No, it’s not,” responded Charles, another machinist, “I’m going to be the new boss, and you’ll take orders from me.”

“Okay, you guys, settle down,” instructed Shane.

“First”, said Shane, “I believe it’s important that everyone introduce themselves since some of you have worked together before and others have not. In addition, I’m new to the machine shop and don’t know anyone.” [See Exhibit 1 for an overview of each team member].

As they went around the room introducing themselves, Shane got the feeling that this was a high-spirited group, and, if they could focus their energy positively, the team would be very successful. If not, disaster was almost certain.

Charles, an induction welder with five years of experience, ran the bearing cast machine, a very specialized piece of equipment. Only he and Bob, the foreman, knew how to run it.

Barry, a machinist, was new to the company and had only two years of experience. George hired him to run the Mazak Integrex 50, a complex turning and milling machine designed to use multiple cutting tools. He was slowly learning the controls but, overall, had the process down.

Frank, machinist, with over 15 years in the company, could operate many pieces of equipment. He was a technical expert and a true craftsman on the Mazak Integrex 50, and hadn’t scrapped a part or received a DMR (Discrepant Material Report) in three years.

Nigel, machinist, had over 10 years with the company and ran the highly sophisticated Mazak 60 on second shift in another area of the machine shop. His aging machine was one of the units being replaced. Having never made bearing parts before, he was looking forward to learning how to produce the new parts. A Mazak Integrex 50 was a step down, but he was excited about the change in pace.

Within the machine shop there were two shifts, with a separate, two-person group on the second shift to run the Mazak M-5 and the hones and grinders.

Arthur and Larry, machinists, both ran the Mazak M-5, a small, but versatile, turning lathe. Arthur had been running this type of machine for more than seven years and operated it on the day shift. Larry was new to the company and ran the machine on the night shift because there was a large demand for small-sized bearings and mud motors. Bob had counseled Larry twice in the last six months for scrapping parts and quality problems.

Joe, machinist, with five years experience, and Bill, machinist on the night shift, with three years experience, worked a group of machines known as the Hones and Grinders. Both were skilled at their work. The two men could easily run four machines simultaneously on each shift.

Lastly, Shane introduced himself.

I have 10 years with the company in various training positions around the world and started with the company as an electronic technician. I have

worked with groups and problem solving, but never before in a machine shop. Now, what this means to you is I won’t be telling you how to run your machines or questioning your daily business. However, you need to be honest with me regarding some of the process problems and occasionally help me out with the machine shop terms.

He paused for a moment to let this sink in. “Per George’s instructions, we have a couple of things to decide in the next two hours regarding team name, team color, and the monitor positions. I’m going to help guide you through the process.”

“Oh, let’s just get to the good stuff, like the twenty-five cents an hour,” piped Arthur. Shane ignored the comment and went on.

“Let’s brainstorm possible team names first,” Shane said. The machinists responded with a wide variety of names from “The Best and Only,” “Excluders,” “Chip Cutters,” and the “Bearing Bears.” After some discussion among themselves, and because a fair amount of the team were hunters, they agreed on “Bearing Bears.”

Exhibit 1

Radial Bearing Team

Machine Shop Supervisors & Members

Name Title Years at BHI Core Job Functions1

George2 Manager 27 Monitors safety, quality, delivery, and

cost as it relates to personnel and parts.

Bob Shop Foreman 18 Coordinates day-to-day activities,

provides training.

Shane Facilitator 10 Works with teams to improve processes.

Charles Induction Welder 5 Operates Bearing Cast Machine (very

specialized)

Barry Machinist 2 Operates Mazak Integrex 50.

Frank Machinist 15 Operates Mazak Integrex 50 and other complex machines.

Arthur Machinist 7 Operates Mazak M-5, Mazak 60

Joe Machinist 6 Operates Hones & Grinders

Nigel Machinist 10 Operates Mazak 60, Mazak Integrex 50

Night Shift

Larry Machinist ................
................

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