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Steel Plant Using "Shot Clocks" To Time Workers

Mon, 11/16/2009 - 4:04am

DAN GEARINO Associated Press — November 16, 2009

COLUMBUS, Ohio (AP) — Decades ago, the NBA instituted the shot clock to pick up the pace of the game.

Today, Worthington Industries wants to see whether what works in basketball can also work in manufacturing.

The Columbus-based steel processor has installed shot-clocklike devices at its factory work stations. Teams of workers can see exactly how long they should take to do specific tasks — and how actual performance stacks up.

This is one of the most visible aspects of Worthington's "transformation plan," an attempt to become more efficient as it emerges from a historic downturn. The company's transformation included becoming leaner. It now employs 6,400 worldwide, 20 percent fewer than a year ago.

"It's a reinvigoration of the basic principles under which we grew up," said John P. McConnell, the chairman and CEO.

His father, company founder John H. McConnell, used to say that each factory should be managed like a country store, with decisions made on the local level and workers empowered to improve on their own.

McConnell is looking at ways he can retain the advantages of the country store, while modernizing and centralizing some functions. The results might be the most substantial changes of his tenure.

At the company's steel-processing plant on the Far North Side, big digital clocks are attached to the major work stations. They allow workers to see, for example, how long they have been working to reload a steel slitter, a device that cuts through a thick roll of steel sheeting. The clock shows that the goal is to complete the task in 25 minutes, 37 seconds.

The idea of timing individual tasks is not new for manufacturers. What is relatively new is the prominent display of the clocks, for all workers and managers to see, said Peter T. Ward, chairman of the Department of Management Sciences at Ohio State University.

"We have goals. We are accountable to those goals, and we share it openly," Ward said of the rationale for this approach.

The proposal for the clocks came from workers in Worthington's steel-processing plant in Baltimore, Md. This was part of the transformation plan, which began early last year.

"Everybody is back, actively trying to improve that aspect of their jobs," McConnell said. "It's been fun and exciting to watch."

This is a change from the previous two decades, he said, a time when he thinks the company got caught up in the perception of its success. McConnell has been chief executive since 1993.

Another change is taking place in an office building near the Far North Side factory. The space, which is actually the former headquarters, was remodeled last year and turned into a nerve center for sales and purchasing.

On the third floor is a long desk, where top managers talk and answer phone calls to direct the functions across the country. These tasks used to be based at each facility. By bringing the group together, company leaders hope to get a better handle on the prices they pay for steel and the prices they charge customers.

"When we give a price to a customer, we are looking across the table to make sure we have that locked up from the mill," said Andy Reich, director of customer relations and fulfillment.

Like most of the people there, he is relatively new to central Ohio. He came from Worthington's Baltimore plant, where he was superintendent.

Scott Weisenborn supervises the workers at the long desk, which Worthington calls the "trading desk." He came from the Worthington plant in Delta, Ohio.

"We're trying to get the best of both worlds," he said, by balancing local control with the efficiencies of centralization.

This is different from the past, he said, when the plants "had our own little tunnel vision."

McConnell recalls one embarrassing example of this. One of his plants was touting that it had won a new customer, only to find that it had taken the customer from another Worthington plant by offering a lower price.

That kind of thing should no longer happen, he said.

All the changes — the shot clocks, the trading desk and many others — are designed to help Worthington remain profitable at a time of sharply reduced orders from its main customers in the auto industry and commercial construction.

The company posted its first annual loss in the spring. It earned a narrow profit, $6.7 million, in its fiscal first quarter, which ended in August.

"It's very hard to make money when volumes are down," Ward said. "All of the suppliers are under tremendous financial duress, and it's a really tough time."

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