Learning Leaders: Operational Excellence

Textron Inc. is an Example of an Organization Whose Training Program has Resulted in Operational Improvements Across the Enterprise

Despite the recession, the top initiative for many organizations is developing and delivering new products and services, according to Bersin & Associates’ research conducted in April 2009. This same research also showed that 47 percent of organizations cited skills gaps in critical positions as one of their top talent challenges.

Josh Bersin, president, cautions that now is not the time to cut back on operational training programs, despite tighter budgets: “Our research shows that the difficult business climate has forced companies to be leaner and more focused, and themost successful organizations have created deep levels of specialization in their operational lines of business.”

Textron Inc., named a winner for operational training excellence in the Bersin & Associates Learning Leaders program, is an example of an organization whose training program has resulted in operational improvements across the enterprise. According to Bersin, Textron achieved Learning Leader status by meeting a set of rigorous criteria, including strong business alignment, a high degree of executive and managerial support, well-designed learning experiences and proven high impact.

MATERIALS EXCELLENCE

Textron, Inc. has been providing innovative solutions to the defense, homeland security and aerospace communities for more than 50 years. The company had 2008 revenue of $14.25 billion and operates in 29 countries with 36,000 employees. Since 2001, Textron has been evolving from a conglomerate functioning as a traditional holding company to a builder of businesses in multiple industries. Its five business units are Bell Helicopter, Cessna Aircraft, Textron Systems, Industrial and Finance.

As the company transitioned to a single strategic enterprise vision, Textron’s senior leadership identified severalmajor challenges. A comprehensive needs analysis in 2007 showed gaps in the ability of Textron’s businesses to effectively manage the flow of material and information across the company’s integrated supply chain operations.All too often, production was hampered because the right material was not available at the right place and the right time. The assessment also revealed that Textron often had stockpiles of high-value inventory tying up cash flow.

Textron University’s performance solutions consultants began discussing that gap with the business units to better understand their specific training needs.

According to Kevin Brady, director of performance solutions for global leadership development at Textron University, these meetings revealed a number of challenges: “Many of our people lacked exposure to the entire end-to-end product creation process.We also found very diverse skill levels and different sets of systems, tools, and processes in various places across the enterprise.”

Working with the company’s integrated supply chain council—composed of Textron’s operational leadership—Textron concluded that the knowledge gap in materials handling necessitated a formal training program and made it a high priority.

According to Brady, the next step was finding a partner for developing a learning solution: “It was critical for us to find a partner that could bring thought leadership as well as practical experience. The executive education team at Ohio State’s Fisher College of Business emerged as the best fit for us.”

Together, Textron and Ohio State University developed the Materials Excellence Program(MEP), a blended learning program designed to teach participants how to make accurate strategic decisions regarding the use of planning systems and materials and information flow processes (see above figure). The program, launched in 2008, targets Textron’s material and inventory planners, buyers, production supervisors and others involved in the making of day-to-day materials and production- related decisions.

MAKING DECISIONS

The MEP includes pre-work based on customized e-learning, five days of classroom
instruction and an eight-week post-classroom project cycle. The classroom training covers 10 topics, ranging from material requirements and capacity planning to inventory management and lean manufacturing.

During the five classroom days, participants apply new knowledge and skills to solve business problems using a computer based simulation. Participants also break into teams and make production and material decisions as they run a real business project.

“We find that the key enabler of learning is the combination of the simulation and project work,” says Brady. “Participants see the outcomes of their decisions in a ‘safe’ environment and then apply what they’ve learned in a real business situation.”

In the eight weeks following the classroom instruction, participants continue to meet to complete their materials projects and can consult with the OSU faculty and with their business-unit mentors. The program culminates in a WebEx project review session attended by the program participants, the program sponsors, and Textron’s integrated supply council leadership. During this review, participants discuss the tools and methodologies implemented as a result of their projects, the roadblocks they encountered, and successes and lessons learned.

Informal coaching and discussion is encouraged, and participants learn from each other’s experiences and from the business-unit representatives who participate in the review. A program Website provides a community of practice and opportunities for blogging.

“These informal learning opportunities promote networking between program participants and help ensure that the materials excellence projects tie to strategic business objectives,” says Brady.

HIGH IMPACT

A cross-enterprise sponsorship team is responsible for ongoing nominations of participants. Since the program’s launch in January 2008, 142materials team members and leaders have been trained. The program has already produced exceptional results— employees have completed at least 24 projects within at least seven business units as a direct result of theMaterials Excellence Program.

Textron’s Jacobsen business, for example, implemented advanced inventory signaling concepts with its engine supplier, reducing inventory by more than $1million while maintaining a high delivery rate.Also, Cessna Aircraft used cell design and modified process flow to reduce inventory shortages of critical aircraft parts from15 percent to less than 5 percent. Textron’s Kautex business virtually eliminated overtime in one of its production units by refining its cell design, the
scheduling process, and reducing changeover times. This resulted in a labor savings of more than $250,000 per year.

The program has helped Textron’s business units focus on specific materials issues and generate results that include cost savings, increased productivity and improved communications. Participants have been able to apply the knowledge and skills they learned in the program to actual Textron challenges— with an immediate impact on the business.

According to Josh Bersin, it’s important for learning organizations to identify the roles in their company where they can help drive deep levels of specialization for highest value: “Operational training is more important than ever for competitive advantage and profitable growth. Textron is a fantastic example of how people with deep skill levels in operational lines of business can produce orders of magnitude improvements in quality, efficiency and effectiveness.”

—The author is vice president of marketing for Bersin & Associates. For more information about the Learning Leaders program, go to the Website www.bersin.com/leaders.

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