October 12, 2012
As the skilled labor crisis continued unabated, Schuette Metals launched a unique in-house training program. Sources said that more than anything else, good training will be key to the fabricator’s future success.
Last year Schuette Metals dealt with a large order increase from a defensecustomer. The shop welcomed the business, of course, but it conflicted with the fabricator’s training sessions for some workers. Schuette managers could have canceled the training to devote all shop resources to the large job; or they could have kept the training regimen and devoted more time to getting the job done for the defense contractor. Both options would meet or beat the customer’s requested due date, but the latter would cost the fabricator more.
Schuette went with the more expensive option. Its goal is for all employees to receive job-specific education beyond training required to comply with manufacturing standards from ISO, the American Welding Society, and others. Training is built into the production schedule, so canceling it really isn’t an option. Training is that important.
Tony Schmidt relayed this story (see Figure 1). The longtime welder, quality assurance analyst, and quality assurance manager has an unusual title in the contract fabrication business: director of education. Considering the ongoing skilled-labor crisis, his title may not be that unusual in a few years. Schmidt worked at Case New Holland back when it had the “J.I.” prefix to its name. When the Case plant in Wausau, Wis., shut down 19 years ago, one of its suppliers—Schuette Metals in nearby Rothschild—came calling.
Most revenue at Schuette comes from large OEMs, whose jobs call for repetitive work. The remaining revenue (about 15 percent) comes from nonrepetitive, high-mix, low-volume orders. In the welding area, the company divides its operations accordingly. A portion of the shop’s 40 welding stations perform repetitive work, the remainder nonrepetitive. Schmidt spent time welding on both types of jobs, and his supervisors began to notice his workmanship and attention to detail. Before long he became a quality analyst and, eventually, the quality department manager.
Last year Schuette re-evaluated the company needs, as Dean Peterson, human resource manager, explained. “In looking at our overall training program, we recognized some shortcomings and what we were getting from the technical colleges. There were pieces that were missing that were specific to our business.”
The company has good, long-standing relationships with technical schools in the Wausau region. In an area hit hard by the Great Recession, Schuette continued to hire throughout the financial crisis. As other companies closed their doors, the regional manufacturing capacity plummeted even below the depressed demand of the time, and Schuette was happy to take on that demand. As the company grew and continued to hire, local schools took note.
Still, by last year Schuette discovered that the training those colleges provided just wasn’t quite enough. “Tolerances have tightened up tremendously from what they were even 10 years ago,” Schmidt said.
“We have an agreement with the schools that they can take students to a certain level, and we can take them to the next level,” said Randy Ruder, vice president of operations.
So near Thanksgiving last year Schmidt was asked to be a founding welding instructor at the fabricator’s new in-house training program called the Schuette Welding Academy. Earlier this year Schmidt became director of education, a new position that will lead training efforts not only in welding, but also eventual programs in machining, quality, and sheet metal cutting and bending.
“We think this will pay dividends for us in the future,” said Dean. “It’s also part of our objective to add skill-based pay into our compensation system.”
This harks back to shop practices years ago when, as part of a much smaller company, workers cross-trained on various processes, performing, say, plasma cutting one day and then welding the next. And some current workers still can operate multiple machine tools. In the coming year, though, the company hopes to formalize a cross-training effort.
“If you have certifiable skills at different levels, you will have the ability to increase your earning potential,” Dean said.
Hard skills are only part of the equation. The fabricator has a family atmosphere. Turnover is low. According to sources, President John Peterson views Schuette as a place that helps buttress the local community. A community can’t thrive without good employers, and vice versa. If the shop continually churned through talent, not only would the company suffer, so would Rothschild, Wausau, and surrounding towns.
This all starts with the hiring and training process.
The fabricator wants people with a curious mind, good attitude, and technical aptitude. When hiring, managers pay attention to body language. Is the interviewee engaged? Does he or she ask questions? As Dean explained, the company may turn away highly talented candidates because of attitude problems. After all, technical knowledge and skills can be taught, but a poor attitude is hard to correct.
The company administers a written test in math and blueprint reading, then a hands-on job performance exam that includes an American Welding Society fillet weld test. “I also have them weld around pipes and other out-of-position joints,” Schmidt said. “When I watch how they manipulate the gun around these pipes, I can tell how well their welding skill is established.”
The results give Schmidt a roadmap for the training program. He informs managers whether or not he feels the candidate is a good person to hire, and determines how many weeks of training the candidate would require if brought onboard. From that, managers make their hiring decision.
“We look at all aspects,” Schmidt said. “Attitude is a big thing.”
A welder may pass the written tests with flying colors but not do so well laying down a bead; another candidate may produce a beautiful bead but fail the written tests. The company might hire both candidates if they have good attitudes that fit the company culture, though Schmidt said welding aptitude can carry a lot of weight. Information in a written test can be taught rather quickly, but expert hands-on welding ability can take a long time to develop.
“Outside the technical end, one of the questions we ask is, Are you looking for a job or are you looking for a career? We’re interested in people who are looking for careers,” Dean said. “Many people out there could be stop-gap production people. We would have them in here maybe one or two years. They may help, but we need people who want to grow with us. We need to make sure we have opportunities for them to grow within our company. And we make sure we outline a plan for them for their future development.”
All facets of training involve safety and quality. “If you don’t have that, you’re in trouble,” Ruder said. “Beyond that, we look at deficit skill sets.”
Welding topped this list, which is why the company formed the Schuette Welding Academy last year. At this writing, about a dozen new welders have completed the program (see Figure 2). Schmidt uses training materials from the Hobart Institute of Welding Technology (www.welding.org) in Troy, Ohio, including software and videos.
New hires first learn the fundamentals: welding safety; how to change a liner, a tank of gas, tips, or diffusers; and how to identify and correct welding problems like porosity and undercut. They are introduced to the shop’s various (and unusual) iterations of pulse welding on its Lincoln Electric power sources. “We have a variety of arc transfers that are unique to those power sources, and a lot of welders haven’t worked with them before,” Schmidt said. “We have the same technology in the welding academy as we do on the shop floor.”
After learning the welding operation, the new hires are assigned to a mentor who monitors their performance and documents their progress. The mentors fill out a check sheet with specific skills and send them on to Schmidt for evaluation. Once the welders work with mentors, they then learn the idiosyncrasies of a specific job.
Soon the company hopes to launch similar training programs in machining as well as geometric dimensioning and tolerancing (see Figure 3). CNC machining presents a particular challenge, because as mainly a sheet metal fabricator, the shop doesn’t have an extra vertical machining center sitting around. That’s why the company is looking into simulation software to conduct training classes on CNC programming and operation.
The company’s training initiatives are designed to enhance and broaden an employee’s technical skill. Still, only half of an employee’s annual performance review is based on those skills. The other half is based on strategic goals that, among other things, cover employee culture, external and internal customer satisfaction, improved employee communication, and profitability (see Figure 4). “The same criteria held for the strategic management team filter down to every level of the organization,” Dean said. “What everybody does connects to those strategic goals.”
Profitability may seem a world away from a front-line welder, but as sources pointed out, it really isn’t. It’s where the rubber hits the road, or more aptly, where the arc hits the metal. After all, a front-line worker can reduce scrap levels and increase throughput, and that certainly affects the bottom line.
Schmidt learned stick welding as a 16-year-old working on trailers with his dad. “Believe it or not, I didn’t go to school for welding,” he said. “I went to school for heavy equipment servicing. I also have a degree for automotive servicing. But in those technical degrees, I did get some welding exposure.”
From the beginning, Schmidt was (and is) extremely detail-oriented. He continually worked to perfect his welding technique. He asked questions and learned. His curiosity didn’t get the best of him; curiosity was the best in him.
Today Schmidt is one of Schuette’s best welders and quality technicians, yet he spends no time on the floor welding or gauging products. Instead, he develops training materials, audits shop operations, teaches welding classes, trains new employees, and will be directing future education programs in other technology areas. The shop may be extraordinarily busy, but Schmidt stays focused on training. As company leadership sees it, the fabricator’s future relies on his efforts.
Schuette Metals Human Resource Manager Dean Peterson said that the company uses a combination of merit- and skill-based pay. “I once had a college professor tell me it was impossible to have both merit- and skill-based pay, and I said he was wrong. He told me to prove it, so I did.”
The Rothschild, Wis., company uses web-based software (Sonar 6, www.sonar6.com) that tracks performance evaluations and analyzes rating trends pertaining to business and technical skills. “It will tell us who has leadership ability, and what future roles people will play,” Dean said.
Not everyone is destined to be top managers, and some with very strong technical aptitude are happiest carrying out those job duties, be they working in SolidWorks® or striking a welding arc. Employees who don’t wish to advance still can earn a very decent living, thanks to substantial merit pay increases. Those who wish to advance and learn new skills can receive both merit- and skill-based increases.
As Dean recalled, “I once had a plant manager ask me, ‘How can we afford to pay those wages and have everybody on the top end of the pay scale?’ My response was, ‘If everybody was on the top end and had all those skill sets, you would increase your flexibility, and you would be able to accomplish more work in less time with the same amount of people.’”
Schuette Metals President John Peterson is a nephew of three brothers—Earl, Marv, and Cliff Schuette—who before World War II launched Schuette Builders, which eventually became Wausau Homes. That business led to another enterprise, Schuette Movers, which has been moving houses and other large structures since 1946.
By the 1970s Earl Schuette decided to get into the modular homes business. Sections were made in a Wausau, Wis., factory before being transported to the home site. Building the Wausau plant required a lot of metal fabricated product, and Schuette Movers also purchased a lot of I-beams and other heavy assemblies to move houses. So instead of continuing to buy fabricated products, in 1972 the Schuette family purchased a small fab shop called Midwest Metal Fabricators and renamed it Schuette Metals.
By 1983 it was an eight-person shop. That’s when the current owner, John Peterson, graduated from college and took over the company. “The history of the company really starts then,” said Randy Ruder, vice president of operations. “That’s when things really started to take off.”
Today large OEMs—Case New Holland among them—bring in the lion’s share of shop revenue. The Rothschild, Wis., fabricator operates in a 115,000-square-foot building with 163 employees. Beyond CNH, the company serves the architectural, defense, and material handling industries, among others. The shop specializes in sheet metal from thin-gauge up to about 0.5 inch.
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