TWI Delivers High Performance Results for Gray-Syracuse
[With excerpts from Strategy Maps - Converting Intangible Assets into Tangible Outcomes]

The newly published book, Strategy Maps - Converting Intangible Assets into Tangible Outcomes, written by The Balanced Scorecard authors Robert S. Kaplan and David P. Norton begins with the following quote: “Even though we manage everyone’s competencies, we had been biased toward the high-skill jobs. The identification of strategic job families brought something to the forefront that we wouldn’t have seen otherwise... It showed us an entry-level job that was just as important. The benefits of focusing on this job will be huge.” These are the words of Paul Smith, director of human resources at Gray-Syracuse, Inc., Chittenango, New York. The company did, in fact, focus on that job and one year later Paul reported that “the TWI program cut the time to achieve strategic readiness in half. Rework dropped by 76 percent during this period, creating dramatic economic benefits.”

According to the authors, the trend away from a product-driven economy, based on tangible assets, to a knowledge and service economy, based on intangible assets, has been occurring for decades. “Even after the bursting of the NASDAQ and dot-com bubbles, intangible assets-those not measured by a company’s financial system-account for more than 75 percent of a company’s value. The average company’s tangible assets-the net book value of assets less liabilities - represent less than 25 percent of market value.”

What this means to your company can be seen by taking a closer look at the strategy adopted at Gray-Syracuse. Viewing intangible assets as the ultimate source of sustainable value creation, the company created learning and growth objectives to describe how people, technology, and organization climate can support their strategy. As excerpted from the book:

“Gray-Syracuse is a world-class producer of precision casting parts for highly engineered products used in aircraft engines, power generation equipment, and missiles. Senior management, after developing a Balanced Scorecard (BSC) and strategy map for its new strategy, had learned that the front end of the production process was a major opportunity to reduce rework and improve quality. The entry-level operators of this process, mold assemblypersons, had the greatest impact on reducing rework and decreasing the lead time from product idea to customer delivery. The company focused its limited training dollars on these critical few employees and cut the time to achieve strategic objectives in half. The Gray-Syracuse example shows how companies can focus their human capital investments and, more generally, their investments in all intangible assets to create distinctive and sustainable results.

Its employees design castings and select alloys to meet customers’ demanding performance requirements… One of its operations management processes focused on delivering high quality to the customer by reducing rework. GS had historically used flexible manufacturing at the back end of the production process, where the molded parts were finished. The new strategy identified the front end of the process as a major opportunity to reduce rework. This meant bringing flexible management approaches to the mold assembly process, in which employees assembled wax patterns produced by an injection-molding machine before converting them into metallic alloys. The strategy map analysis identified the mold assemblyperson, an entry-level position, as the strategic job family for this process. Thirty individuals, selected based on their manual dexterity in the assembly process, were currently employed in this position.

The strategy of bringing flexible manufacturing to the front-end mold assembly process would require a broad new set of competencies….the process had eight distinct configurations of activities (known as cells) to produce different types of products. For example, one cell might require the use of welding equipment, an acid tank, an X-ray machine, and a hot knife, whereas another cell required shellacking and gauging, as well as welding and X-ray. The simplest cell required eleven different activities, while the most complex cell required twenty-seven. Using…Training Within Industry (TWI), experienced GS experts developed activity and competency profiles for each cell, summarized in a TWI template. All thirty current assemblypersons would have to master the activities required by each cell. The templates would guide their training and evaluation…

The supervisor, the quality inspector, and/or the trainer used the TWI template to evaluate each of the thirty assemblypersons monthly and quarterly. They had a target to bring all assemblypersons to level 3 (“in training”) as soon as possible, and then … to level 4 (“certified: within cell”)”….According to the human capital readiness report, “the readiness level was 400, an average level of 1.6 per person per cell, when the program was introduced in 2001. . . . One year later, the readiness level had risen to 810, an average level of 3.3 …. Paul Smith, the director of human resources at Gray-Syracuse, attributed the speed with which the competency levels rose to the TWI program.”

Visit the TDO-TWI web site at www.twi-institute.com to learn more about the TWI program and why it is rapidly spreading across the United States as a skills training program facilitating positive culture change in support of Lean Manufacturing and Continuous Improvement. Contact Bob Wrona at TDO (315) 425-5144 or rwrona@tdo.org to find out how TWI provides the skills for employees to sustain a safe, positive, and productive work environment.