April 18, 2014
Drew Greenblatt firmly believes that Marlin Steel, Baltimore, is only as successful as the talented crew that works on the shop floor. That's why the company's management team has created a Skills Matrix, ensuring that the shop always has someone who can stand in and perform the job of someone else.
Drew Greenblatt was a veteran of the corporate world when he decided that the suits of that world no longer suited him, so in 1998 he rolled up his sleeves and jumped into the world of bagels.
Actually, it was bagel-holding tray manufacturing. The company he purchased, Marlin Steel Wire Products, then located in Brooklyn, was a manufacturer of trays and baskets for bakeries and bagel shops. Greenblatt’s education in metal fabricating was just starting. (For more on those early days and to get an idea of what the company is all about, read “New metal fabrication player touts high-value engineering” at www.thefabricator.com/article/shopmanagement/new-metal-fabrication-player-touts-high-value-engineering.)
More than 15 years later, his education is continuing, but now he realizes the need to focus on the human element of fabricating. Greenblatt strongly believes that the broad skill base of his 32 employees makes his company a much more valuable supplier of metal fabricating services and products. He believes in it so much that he has established a Skills Matrix that provides an organizational snapshot of just what skills each employee has and what they lack. It’s clearly posted in an area where everyone can see, and because wage increases come with the learning of more skills, people actively seek out the additional training.
As fabricators struggle to find the right additions to their shop floor mix, The FABRICATOR reached out to Greenblatt to discuss Marlin Steel’s Skills Matrix and what it means for his company, which was designated a “Pioneer Employer” in 2013 by The Hitachi Foundation and the Precision Metalforming Association.
The FABRICATOR: What are the origins of the company’s Skills Matrix?
Drew Greenblatt: Several years ago business was picking up, and we were going to have to start shipping more jobs out. Around the same time, one of our people that was in charge of shipping and logistics had a medical issue and had to leave the factory for a couple days. At that moment we realized she was the only person who knew how to create packing slips, UPS forms, and a couple of the other activities. We couldn’t ship anything because this key employee took care of all this perfectly for years, but she had a medical issue and had to leave and couldn’t be there. We literally were making stuff left and right, but we couldn’t ship anything because we didn’t have key personnel in that role.
At that moment there was an epiphany that we have to cross-train the heck out of our team. We couldn’t have all our eggs in one basket. That was the catalyst. But there were other wonderful benefits that germinated out of this.
We realized that in every key role, we need to have a lot of cross-training. So we created a Microsoft Excel spreadsheet with everybody’s name on it and what tasks they really know right now. Once we populated that, we put it up on the lunchroom wall, and people realized that some people had many fewer skills than others, and some had more. The ones with fewer skills didn’t want to be on the bottom rungs and said, “How can I learn more things so I can earn more points?” because we had a point system tied to it. It started this great interest in people improving themselves and wanting to learn more machines and parts of the factory. We rewarded people—they would get a pay raise—as they learned more machines and robots.
Before that, all we did was, if you learned something, you got more money. By putting it on the wall, we could see where our skill gaps were. It made it very visible. And it also was transparent to the company: Who were the people who were most valuable? They were killing themselves to cross-train and learn a lot of things. Who were the ones being complacent and not learning the new technology and not keeping up? So there was a huge spotlight on where we had too little cross-training concentration, and it helped motivate people because they got competitive. They wanted to learn more.
We did this about seven years ago, and it’s been a tremendous success. People really have embraced it. We freshen it up every 90 days. We’re very diligent about encouraging people to do better because we make it public and it’s very transparent. The other nice thing about it is that in most companies, when you get ahead, you get promotions by having a beer with the owner after work or playing golf with the plant manager. This is a meritocracy. It’s very explicit and transparent what it takes to get ahead in our joint. There’s no confusion. It’s all in black and white, right there. You learn more machines; you get more money, and you’re more valuable to the company. If you don’t know these skills, you can see, quite transparently, that you have a very low point value to the team.
It’s also very good when it comes time for pay raises. People that are very low on skills, it’s kind of obvious. And people who have a gang of points, it’s obvious why they are the highest-paid people in our facility.
FAB: Did you need some sort of formal human resources structure to implement this type of program?
Greenblatt: You don’t need a formal HR department. Everyone on the factory floor knows, “Bill knows how to run these three machines, Tom knows how to run these nine machines, and Skip has never learned a machine—all he knows how to do is sweep or load boxes.” It shows what’s going on and where your defects are. It shows if Tom goes on his honeymoon and Bill takes a vacation day, you’re toast.
We don’t have any HR people. My CFO handles HR matters, but we don’t have an HR person. There are a couple other things happening simultaneously in this process. Another element is that we have these production bonus programs per cell. Every two weeks we provide cash bonuses if they hit their goals. In early February we paid out $7,800 to our team for two weeks’ worth of work—and this is on top of their very good wages and very good health insurance—because of their contribution to pushing things out. We do it on a very microlevel: individual people and individual cells comprised of a few people. Whatever they get out, it’s a black-and-white dollar amount in revenue. If they push it out, they get a check. They are very engaged and motivated to hit their numbers.
In the old days we used to have people walking around with clipboards saying, “Hey, you go to the bathroom too much. You’re talking about the Ravens and Orioles too much.” It’s patronizing and treating people like little kids. Now, because of this bonus program, we don’t need that level of management. They’re gone from our facility. But we have these huge bonuses going out to these guys, and we’ve got their attention. They’re engaged. They’re a bunch of entrepreneurs, and because of that, they don’t need to be micromanaged. That all goes away. We treat them like adults, like professionals. This is all happening simultaneously. It’s been a huge benefit to the company, because they are really killing themselves to get their numbers. They know if they take too many coffee breaks, they won’t hit their numbers this week.
It’s very black and white. It doesn’t change week to week. It’s X dollars of revenue per cell, and the cells are micro. A lot of companies say, “If the company does well this year, at the end of the year we’ll give a 1 or 3 percent bonus.” Most employees are thinking about every paycheck, their next car payment, mortgage payment, or rent payment. That’s what’s on their mind. It’s too far away to think about that annual bonus, and those annual bonuses are often tiny. So we make our bonuses huge, and we make them frequent so we get their attention. It’s instant gratification. Two weeks is pretty instant. So you get 26 bonuses a year. You’re really fired up. Twenty-six times a year, it’s either a really happy day or a sad day. And these guys are going hard for it.
We don’t make the bonus too easy. So we don’t ever get into the situation where somebody gets 26 payrolls. On the flipside, we don’t make it too hard, because then either we’re not giving them the right tools or they’re not a good fit for our company. On average it’s about 14 payrolls a year.
FAB: How does an employee go about taking advantage of the opportunity for additional skill development?
Greenblatt: If someone wants to learn a new skill, they talk to the supervisor and get scheduled in. We usually do it during overtime. They get paid for it, and the supervisor gets paid for it. And we encourage this.
We’re more resilient when our employees are better trained. One week we’ll get a lot of material handling back orders. Then the next week, we’ll get a lot of laser cutting orders. Then the next week, we’ll get a lot of sheet metal punch orders. The good Lord doesn’t give me a nice blend every day. And two weeks will be different from the next two. So having our people nimble and able to jump from machine to machine depending on our bookings allows the company to be nimble too.
When customers ask me for outrageous delivery dates, I can say, “No problem.” Why? Because I have so many guys cross-trained we can run the heck out of these machines off-hours, early, or late. Things just go better. And if a couple of them are on vacation or sick, it doesn’t matter. Our bench is deep enough, we can accommodate.
So we encourage the training. It makes our employees indispensable, improves their job security, and improves the company’s security. We have dedicated, engaged employees who know a lot of machines. More than likely they like their jobs because they’re not doing the same old same old every day. And when clients call with an unreasonable request, we say yes because our team is deep enough to accommodate it.
FAB: How much of an investment does this type of program take?
Greenblatt: We budget 5 percent of our direct labor budget for training. Most companies come nowhere near that. But who’s got the more powerful employee? The one that’s been trained year in and year out? Who brings more results to the table? Which employee is going to get 99 percent out of a machine rather than 60 percent? It’s no contest. People spend half a million dollars on the machine and then save on the training. It befuddles me. How is he going to know where to do the grease settings so it won’t break in three months? I think that’s shortsighted.
We grew eight years in a row, and in 2012 and 2013 we were on the Inc. 5000 list of the fastest-growing companies in America.
We’re not doing Facebook social networking here. We’re bending and welding wire and sheet metal. We’re not some soft Internet company where you have a bunch of guys in India and China. We’re making everything 100 percent in the U.S. and growing fast. So that’s one thing we’re really proud of. That’s an ultimate metric. And people are coming back to us because the guys are doing great quality, and we’re accepting unbelievably fast turnaround on jobs.
FAB: What are other benefits that may be attributable to the Skills Matrix?
Greenblatt: Another metric we watch is quality. We measure our quality very carefully. In the last 60 days, we’ve had only one escape. We had one job where we didn’t have perfect quality. Out of all the hundreds of different jobs we ship out every month, we had only one job escape. The quality is excellent.
The other thing that’s nice about all this is we have a better-quality person working here—more pleasant, easy-going, and hard-working. When you’re throwing all kinds of training dollars at people and getting them engaged, they stay longer. They’re more into it. And that begets other benefits.
We’ve gone 1,870 days without a safety incident. We had a different president last time we had a safety incident. And that’s what we’re most proud of. But this is back to having great people that are dedicated, well-paid with bonus checks, and very engaged. A lot of people have a job. They punch in and punch out. But this is a career. The Skills Matrix contributes to them becoming engaged and dedicated to the team.
FAB: How extensive is the skills development program within Marlin Steel?
Greenblatt: It started out very simplistic: Who else can print out a UPS form? It quickly bloomed. Now we have the entire company covered. We have engineers who can create a print and a bill of materials and also initiate acceptable-quality-level inspections and final article inspection. We have to have backups. We have every element of the company on that Skills Matrix.
In short, it has just exploded. Obviously, it’s mostly production stuff—setting up a laser, doing the programming for a laser, and being able to check the quality of parts, for example. Then there’s another section for the punch and for the welders. Everybody in the company has their own sections of the Skills Matrix.
FAB: Isn’t there a risk of developing highly skilled employees who then can jump easily to another company?
Greenblatt: I have highly trained people that could leave for another company. But the alternative is to have really poorly trained people who stay. Wouldn’t that be worse? I think that’s a definite hang-up for shop owners, but it’s very shortsighted. I’d rather have the smartest, safest, most engaged, most fired-up people working for me, and if a couple here and there leave me, that’s OK.
Of course, it hurts when they leave me, but I’ve got a gang of stories to tell you on the flip side. Because I sent all my guys to welding school, we don’t make welding mistakes, and how many hundreds or thousands of jobs have I shipped with perfect welds because these guys are so well-trained. That was really expensive, and some of those guys have moved on. But the team I’ve been able to retain is larger because I’ve invested so much in them, and they’re making my clients enchanted with me. That’s my job: to make my clients enchanted with me. And if my employees are trained, we have a better shot at getting them to that mindset.
FAB: What would you say to a metal fabricator that is thinking about ramping up cross-training efforts?
Greenblatt: I think you get great dividends. The employees are the ones who move the needle. The clients open the box, and they see great quality or junk. If your employees are focused on making a great part, you’re going to get a lot of reorders. Of course, the training has to be productive. Will it get the machinery to work more efficiently? What can be done to improve the programming of the machine tool? Will it help to reduce scrap? It’s things like that we’re training on. That’s how you move the needle. That’s how you get the bang for the buck.
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