Looking at People as the Most Valuable Production Technology
While automated equipment and computerized systems are important, Republic Windows credits recent gains in productivity and quality to investment in employees
June/July 2002

When most of us think "production technology," automated equipment or increasingly powerful computer systems come to mind. Kevin Heylin, vice president of manufacturing at Republic Windows and Doors, suggests, however, that "people are the best investment."

In recent years, a commitment has been made to educating, training, and involving workers in making the Chicago-based window manufacturer's plant as efficient and productive as possible. While significant investments also have been made in equipment and systems, Heylin credits efforts to train and develop its people-empowering them to analyze and improve processes throughout the vinyl window maker's operations-as key to tremendous gains made in the past few years.

Those gains include increases of 25 to 50 percent in productivity. In 2001, the company saw volume up 15 percent, while its overall labor costs were reduced, Heylin states. These gains, he adds, did not come by sacrificing quality, as the number of internal and external quality defects also dropped 16 percent last year. "We have 500 plus manufacturing workers," he notes. "We want 500 plus quality auditors."

Republic's overall goal, Heylin states, has been to establish a "high-performance culture" within the entire company, not just in manufacturing. "We've added structure to everything we do, setting standards for everything. If you don't have standards, then you can't judge whether or not you're doing a good job."

Kevin Heylin, Republic's vice president of manufacturing, left, and
Tim Widner, glass production manager.

The company is willing to pay for high performance, however, and invests in its employees, he points out. "We see the company as a learning institution," he notes, pointing to the various educational opportunities offered, including job-specific training and more indirect programs like English as a second language and mathematics.

Pay incentives are available to factory workers and supervisors, as well as employees throughout operations at Republic. Those who are trained, tested, and certified as capable of performing a particular operation receive an addition to their basic wages. In manufacturing operations, skill-based pay means union wages, plus an additional 20 cents an hour for certification in various skill modules. Another program offers bonuses, paid out every two weeks, based on productivity-gain sharing among workers in a line.

Another example of the manufacturer's decision to invest in employees , according to Senthil Rajamanickam, the firm's manufacturing manager, is the formation of its "Special OPs" (operations) team. This elite group of manufacturing personnel are trained in operations to make any product. They can float to train other employees and are basically "on-call," like doctors, to come in and work on any particular production line to meet spike in demand, he states. If, for example, the company gets a project involving an usually large number of casement windows, the Special Ops team would come in to assist the regular workers or run an additional shift.

The highly-paid employees that have earned a spot on the crew benefit the company by eliminating the need to hire and train more people during times of high demand. The group also serves to provide motivation for other workers, who also may have potential to become a part of it, Rajamanickam notes.

Investment in training employees also has paid off in the safety arena. In analyzing each area of its operations, efficiency is important, but "the number one priority is safety," Heylin emphasizes. From 1999 to 2001, the company saw a 65 percent decrease in accidents, while sales increased from $54 million to $75 million. For the first two months of 2002, the company had zero accidents, a first in its history.

As part of the overall safety plan, e-mails are sent immediately to 14 people in the company, including the president, when there is an accident. An investigation is started and a report of what should occur is completed within 72 hours. This is followed by retraining everyone in the area within 30 days. In promoting safety, Rajamanickam stresses that the company's approach is proactive, and not punitive. The focus is on education and maintaining awareness. It happens in the facility, in fleet operations, and in the field where Republic has installers working. And it includes regular inspections, not to put anybody on the defensive, but to improve practices, Rajamanickam notes. One of the tools used is a digital camera, which, he explains, serves to both identify areas that need improvement and provide images of what each production area should look like.

Again, Heylin points out the importance of setting a standard for everything, including a photo of how each work station should look. This provides workers with the tool to judge for themselves.

Added Productivity
Providing tools to workers to judge and improve processes themselves is a key element of Republic's implementation of lean manufacturing methods. The company uses what it calls the "Blast" process, which begins with defining each step in the manufacturing line, looking at such factors as equipment constraints, quality issues, etc. "There has to be a rationale for everything we do," Heylin states. "We want to have value added at every step. If you're putting in a screw, that adds value to the customer. If you're walking three steps while carrying a part, that doesn't add value."

Rajamanickam notes that before Republic begins to work on a line, the company has the workers involved play a learning game involving the construction of boats. The game gives them a better understanding of cellular manufacturing concepts and how each stage of production affects the next. The game also enables them to see what this type of process can achieve once it is completed, he explains, making workers much more enthusiastic.

Line supervisors hold regular meetings on the floor with workers.

Once "blasted," lines have used about 50 percent less space, while increasing productivity by 50 percent. Republic's Ramguard line, which produces a mechanically-fastened vinyl double-hung, went from 7 units/man per hour to 15 units/man per hour. Heylin notes that involving production line workers in the process and rewarding those working on the newly-configured lines is key to the success. Employees have benefited from a 50 percent increase in wages and this has helped translate into zero turnover in the line for three years, as well as a 100 percent decrease in quality defects, according to the company.

At this point, three of the manufacturer's production lines are now finished with the Blast process, and in each case the amount of square footage on the plant floor used by the line has been reduced significantly. Together, the three lines now take up a total of only 20,000 square feet and have an annual capacity of 275,000 windows. It is hoped that eventually similar types of changes will be made in each of the company's nine production lines. This will reduce space utilization further to make way for additional product lines.

The company still has a way to go to reach its goals, Heylin notes. The target five years ago was to produce and distribute 700,000 windows a year from the 300,000 square feet of operating space in the facility. Some companies use several facilities to produce and handle similar product quantities, he adds.

FulFilling Potential oF Building
Republic garnered a lot of attention several years ago when it moved into its current facility in Chicago. Its unique design attracted the attention not only of the window and door industry, but the architectural world as well. The manufacturer was cited for its commitment to the city of Chicago, as the building was located in an under-utilized industrial area. Additionally, it was noted for its grand, yet very human-friendly design.

In discussing the changes taking place at Republic, Les Teichner, chief operating officer, notes that many were inspired by the building, but the company wanted to make sure the building was not an end in itself. "We wanted more than just a nice looking building. We wanted to fulfill its potential."

An important step toward that was the establishment of a new mission, vision, and values. One example of its continued commitment to its employees is that one element of Republic's vision is to be recognized some day as one of Fortune Magazine's "Top 100 Places to Work," he notes. In turn, Republic expects employees to share certain values, including the notion that each person is "100 percent responsible for his or her actions and the success of the company," Teichner states. These changes, which he emphasizes are taking place throughout the company and not just in its manufacturing operation, make it "a particularly exciting time."

Click here to view all industry close-ups.