Business Improvement Techniques Training at NMHG

1. Business Improvement Techniques Training at NMHG A Business Case William Kerr HRM

2. Contents • NMHG – The Company • The actual, no messing about, very scary, Business Scenario late 2008-early 2009! • The Plan, why Training? • The Delivery • The Outcomes • Thought for Today • Some additional slides about HRM, RoI, Benefits of NTA & DMAIC, which you will probably not read but really ought to!

3. Overview of NACCO • NACCO Industries, Inc. is an operating holding company with subsidiaries in the following principal industries: lift trucks, small appliances, specialty retail and mining. • In 2010, total revenues were $2.7 billion and net income was $79.5 million.

4. NMHG Organisation • NMHG designs, engineers, manufactures and sells Materials handling equipment under the Hyster® and Yale® brand names. • Lift trucks and component parts are manufactured in 10 countries worldwide including, the United States, Northern Ireland, Scotland, the Netherlands, China, Italy, Japan, Mexico, the Philippines and Brazil.

5. Craigavon Market Areas • Europe, Middle East and Africa 95% • Americas 3% • Asia Pacific 2%

6. Craigavon Plant • Plant opened 1981 • Head count 652 • 2011 output 15,000 • Current Day rate 63 • Days to build truck 4 • Takt Time per truck 9(mins) • Shift pattern 3

7. The Actual Business Scenario 7

8. Total Market 2005 - 2010 8

9. The Plan, Why Training? • Textbook response • Cut Quickly • Cut deep - especially Labour and T&D • Our Response • Identify & Engage Stakeholders (Board, Unite, Employees, DEL,INI) • Reduce costs sensibly • Invest in T&D • Maintain and enhance skills for the Recovery • Focus T&D on Business Objectives e.g. Flexibility, Continuous Improvement (B-I.T) • RoI Methodology (Phillips)

10. The Delivery • Business Improvement Techniques • DEL funded and delivered by SRC • Very high credibility with both Management and Employees • Compatible with our drive for Quality and Effectivity • Practical project aspect of the programme gave an immediate (and continuing) Return on Investment • Employees gained skills which compliment our Culture of Continuous Improvement and Team Work • Settled on a standard, robust DMAIC problem solving model (define, measure, analyse, improve, control) • We then ‘rolled out’ the skills acquired to other Employees

11. The Delivery • We initially trained 45 Employees who gained a recognised NVQ Level 2 • Model is routinely utilised as an analytical approach ensuring fixes are made permanent– activities not restricted to ‘Shop floor’ • 30 x Improvement projects • e.g.. Yard storage of NxGen frames – 13 minutes for ‘move man’ to locate & transport frame, now down to 4 minutes. £11k annual savings

12. Poor storage of frames No FIFO

13. Good FIFO

14. Good FIFO

15. The Delivery.Business Improvement Teams

17. The Outcomes • >130 Craigavon Employees qualified NVQ, ILM, etc • Recruited over 170 people in 2011(this would have been an unmanageable number had we taken the “text book” response) • Significant Intangible benefits – morale, loyalty, trust, cross functional awareness • Retain key staff • Able to respond to unprecedented ramp up in production

18. The Outcomes Won 3 Regional Training Awards Which show the outstanding effects and benefits as a direct result of training. • Large Employer category • Now is the Time category • Individual category Won 2 National Training Awards Presented to entries that are exemplars of excellence. • Large Employer category • Now is the Time category

19. The Outcomes • January 2010 30 trucks per day • January 2012 90 trucks per day • > 50% Reduction in NCR’s/100 trucks versus 2009 • Improved Conversion Cost control • Inventory Absolute Financial Variance back to <1% • HRM kept his job

20. Thought for Today Apologies to Radio Ulster

27. Conclusion DEL Aim NMHG delivery >30% (and growing) of our Workforce gained an ‘applied’ Qualification Achieving an Empowered Culture of Learning and Development – ‘Employability’ Increased Workforce by 170 this year and ‘day-rate’ levels (Export) up by 200% in 2 years • To promote learning and skills • To prepare people for work • To support the economy

28. Additional slides not included in presentation References. • Phillips’ Return on Investment Model: Jack Phillips ‘How to measure training’ • Ulrich HR Multiple Role Model: Dave Ulrich ‘Human Resource Champions’ • Benefits of National Training Awards • DMAIC Model available on request

29. Phillips ‘Return on Investment’Methodology • Reaction and Planned Actionof the participants to the training • Learninggains in skills and knowledge achieved by the participants • On-the-job Application applied and practiced • Business Impactoutcomes of training in terms of Company Goals • Return on Investment • Conservative, adjusted Conversion (monetary value) • Isolate (can we trace that to the Training intervention) The model also recognises that there should be intangibles benefits that will be presented along with the RoI calculation.

30. Phillips ‘Return on Investment’Methodology Isolating the effects of training Converting data to monetary value Tabulating program Costs Evaluation instruments Evaluation purposes Significant Influences Collecting Post-program Data Policy Statement Procedures & Guidelines Staff skills Management support Technical support Organisational Culture Calculating the return on investment Evaluation design Evaluation levels Identifying intangible benefits

31. Phillips ‘Return on Investment’Methodology • Develop Objectives of Training • Develop evaluation Plans and Baseline Data • Collect Data during Training • Collect Follow-up Data after Training • Isolate the Effects of Training • Convert data to Monetary Value

32. Phillips ‘Return on Investment’Methodology

33. Ulrich Model

34. Ulrich Model

35. What are the benefits of being an NTA winner? • NACCO HR Vice president visit to Craigavon on a fact finding mission based on such achievements/awards • Training provider CforC, Case study on our Problem solving training • European Six sigma magazine highlighted our 17% improvement in truck reliability through our award winning training programme • External interest in our company, starting a benchmarking exercises/networking Meetings • Good Promotion for our organisation through DEL, press releases • NTA helped towards us gaining a higher level IiP Award • NTA is good supporting evidence, towards EFQM assessments

36. What are the benefits of being an NTA winner? • Enhanced partnerships with Local colleges • European Lectures visit Craigavon (benchmark) • Celebrated NTA awards with Employees(Tee shirts, pens with logo) • Enhanced reputation with our Company Union & Employees • NTA’s have given our Employees a positive lift and reason to celebrate after such a difficult year for the company 12 months on, the NTA learning framework continues, to help guide us for future training programmes

37. HR Display NTA Awards