Tag: training

OM in the News: German Apprenticeships in South Carolina

BMW’s plant in Spartanburg, S.C., is its biggest production facility in the world. It produces 1,400 cars a day and sends 70% of them overseas, making BMW the biggest car exporter in the U.S. By employing 9,000 people and training 100 apprentices at any one time, the BMW plant contributes to a skilled American workforce.

Overall, German companies employ about 700,000 people in the U.S. Often they implement the German-style training schemes for young people. In Germany, half the graduates of high schools and junior high schools choose a track that combines training on the job with further education at a public vocational institution. “This apprenticeship model,” writes the German ambassador to the U.S. in The Wall Street Journal (May 5, 2017), “is one reason why Germany has the lowest rate of youth unemployment in Europe and has been able to keep manufacturing jobs in the country.”

As high-wage countries, Germany and the U.S. face similar challenges in protecting existing production facilities and creating new manufacturing jobs. One of the most decisive factors for companies is whether they can find skilled and motivated workers, which is what apprenticeship programs provide. It’s also important to prepare for the industries of the future. In the era of New Manufacturing (what Europe has dubbed “Industry 4.0”), artificial intelligence and other digital technologies will transform factories and the workplace.

We all know that there is a tendency toward higher education in the U.S. Nevertheless, the success of the German apprenticeship model builds on the conviction that it is an equivalent alternative to college education. That approach in Germany has provided a solid return on companies’ investment, helped them to innovate, and contributed to warm relations between employers and employees.

Classroom discussion questions:

  1. Why is this model so rare in the U.S?
  2. What other German company has widely used apprentice training in the U.S? (see Chapter 1)

OM in the News: Amazon Revs Up Its Warehouses

An employee at Amazon's center in Schertz, Texas
An employee at Amazon’s center in Schertz, Texas

“This year alone, Amazon has built 26 new warehouses, bringing its world-wide total to 149,” reports The Wall Street Journal (Nov. 29, 2016). And it wants its new warehouse employees to get to work—fast. To prepare for the flood of holiday orders already under way, Amazon has been using technology ranging from touch screens to scanners to robots to shrink the time it takes to train new hires to as little as 2 days, compared with up to 6 weeks for a conventional warehouse job. The shorter training period saves Amazon money as it expands its workforce by 40%, adding 120,000 U.S. temporary workers for the peak holiday sales season. These types of workers can stay on from 6 weeks to 3 months to drive forklifts or pick orders.

Amazon trainees get hands-on training as early as their first day on the job. On the warehouse floor, they learn how to pack up shipments, coached by a screen that tells them which box size to use and automatically spits out a piece of tape to fit it. In conventional warehouses, by contrast, new employees typically spend their first days in classroom training.

A typical Amazon warehouse has loading docks for trucks to pull up to on either side to keep merchandise moving through. Two shifts keep operations running nearly 24 hours a day as the holidays approach, with groups of employees keeping goods moving along an 8-mile maze of conveyor belts. Orange robots that move faster than humans carry shelves full of merchandise to stations where workers can reach them. Screens show the workers what the desired item looks like and where it is placed so they can pluck it off the shelf quickly and accurately. That’s a far cry from a conventional warehouse, where workers have to memorize—often by location number—where items are stored, and then go looking for them when needed.

Classroom discussion questions:

  1. Is it difficult to recruit workers for these short seasonal jobs?
  2. Who are the typical recruits?

OM in the News: Wal-Mart Tries to Skill Up

Until recently, very few retailers bothered to train entry-level service workers
Until recently, very few retailers bothered to train entry-level service workers

Wal-Mart, famous for keeping costs down (including employee-related costs), is testing a new approach: investing in workers through higher wages and training, on the theory that this will pay off all around—for customers, the company and employees. The firm plans to roll out the new training program to all of its 4,500 U.S. stores by early 2016. And by then, Wal-Mart hires will earn at least $10 an hour.

Wal-Mart isn’t alone in its new focus on training front-line workers, reports The Wall Street Journal (Sept.5-6, 2015). The trend, known as “upskilling,” is rippling across the retail and service industries. McDonald’s, Starbucks, Gap, CVS Health, Kaiser Permanente, and UPS are moving in the same direction. It’s a big change, even for companies with a reputation for taking care of employees. Many firms train college-educated workers and managers, but few focus on front-line workers.

Employee turnover costs money— $5,000 per front-line worker, or 20-30% of an entry-level salary. Standard turnover in retail is 50% in the first 6 months. If Wal-Mart can reduce this churn, persuading people to stay at least 12-18 months, it will save tens of millions of dollars a year. Wal-Mart also hopes that the new training will result in better customer service and happier shoppers.

Front-line employees—cashiers, cart pushers and sales associates—will now spend their first months in a supervised on-the-job training program. In the past, they sat through a few days of orientation and safety drills. The only real job training happened in the store—knowledge passed on by more experienced employees. The new program, called “Pathways,” delivers instruction in gamelike computer modules—each just 2-3-minutes long. New employees spend their first six months practicing what they’ve learned from the games and drills, watched over closely by managers and preparing for a “gateway” assessment that can earn them a dollar-an-hour raise and sometimes more.

Classroom discussion questions:

  1. What are the advantages of these training programs?
  2. Why has it taken so long to see such changes?

OM in the News: Layout and Hiring Tales at Uni-Solar

 We are aware of the dramatic impact China’s new solar production push has had on this fledgling US industry. (See my blog on Oct,19,2010) . Selling prices have dropped 30-40% in the past 2 years due the Chinese competition.

The Wall Street Journal (Dec. 1, 2010) tells the story of Greenville, Michigan’s loss of 4,000 jobs overnight in 2006 when Electrolux shut its refrigerator factory. When Uni-Solar broke ground on the 1st two of 6 giant new solar factories, the town of 8,000 saw the sun about to shine again. But quickly shrivelling in sales and unprofitable, Uni-Solar capped at only 400 employees and is already looking to move production abroad to India. 

Now as to why I share this story as a layout (Ch.9) topic:  the twin solar plants (each more than 288,000 sq.ft.–the size of 5 football fields) sit side-by-side, part of building plenty of capacity for growth. But shortly after the plants were built, managers realized they could have instead doubled capacity “by simply attaching  a small wing on the side of a plant and  reconfiguring  the floor plans to maximize the use of long rows of automated machines”. A very interesting quote!

The 2nd half of the tale you may want to share with students is the changing skill set needed (Ch.10) from the time the old Electrolux plant opened 28 years ago. Donna Cooper, 51, tells of her start in the old factory: “I had never had a job interview”. The screening process consisted of reading an eye chart and showing she could touch her toes. For Uni-Solar she had to go back to school at a community college, then through a terrifying series of  job interviews, some 3-on-1. At $15/hour, she makes less than her old job paid. “High wages for unskilled workers is a thing of the past”, adds Cooper. This points to a structural change in our economy.

Discussion questions:

1. How common is the Greenville story?

2. What caused the sudden changes in the solar panel industry when everyone seeks “green” energy?

3. Discuss the new skill sets needed in manufacturing.