West Michigan metal fabricator improves company culture, invests in its workforce to win over Caterpillar as a customer
July 11, 2013
What happens when new owners of a metal fabricating business find out that they have to improve the shop's welding performance or risk losing its biggest customer—in the first week they take over the business? They have frank conversations with employees, find the root cause of the problems, install new processes to ensure quality, and ramp up training so that everyone can deliver acceptable welds on a consistent basis.
“Got faulty joints? Cracks appearing where you don’t want them? Not getting the same consistent results day after day? If so, it’s time to start worrying. Transform your welding program in a mere 16 months with CAT 7SWE.”
What may sound like a late-night infomercial was more of an ultimatum that Caterpillar delivered to the new owners of Sintel Inc., a metal fabricator located in Spring Lake, Mich., back in the fall of 2011. Nick Kulkarni, the company’s president and CEO, had been on the job for a week when the heavy-duty equipment manufacturer notified the shop’s management that it intended to eliminate Sintel as a supplier of fabricated parts because of poor quality and delivery performance. Such an action would have resulted in Sintel shutting its doors.
Kulkarni simply couldn’t tune in to a different station. His company was forced to engage in this new program. Aggressive and high-impact changes were needed immediately—one of which was turning around the struggling welding department.
The Sintel management team had invested in the business because they believed in the increasing strength of American manufacturing, particularly as jobs, once sent overseas were returning to domestic shores. In addition, Sintel boasted several customers with long-term prospects for growth because of the industrial sectors they served and their ability to export products. With new management talent in place, Sintel would be in a strong position to serve those customers with full turnkey capabilities, including engineering and design, laser cutting, forming, robotic and manual welding, machining, assembly, and in-house powder coating. Managers understood that their collective experience in operations, engineering, and lean manufacturing would make a real impact over time.
The problem in late 2011, however, was that Caterpillar controlled the stopwatch.
Undeterred by the ultimatum, Sintel management moved forward, motivated to maintain Caterpillar as a customer. After several “difficult” conversations with Caterpillar supply chain, manufacturing, and purchasing managers, Kulkarni said, a crisis management program was initiated. This called for extensive investigations into quality and delivery performance through “blitzes” aimed at identifying and resolving root causes of problems, Kulkarni added.
The management team also had to have a frank discussion about what would happen if Sintel didn’t turn its performance around. For a majority of the company’s 200 employees, it was the first time they had heard what the true cost of poor-quality products meant to the company’s financial viability. That type of information had never made it to the shop floor before.
“It wasn’t directed at any group. It wasn’t a blame game or fingerpointing,” said Scott Keeney, a senior weld engineer who was around before the new owners took over, but wasn’t empowered previously to make the changes necessary to prevent the Caterpillar ultimatum.
Kulkarni said he remembered the look of shock on the employees’ faces as the conversation continued about the cost of poor quality. He had seen it before.
“In my experience, that often happens when you have a conversation about previously unavailable information,” he said.
Also at this time, Kulkarni made a bold statement that may be viewed as somewhat ill-timed given the stark reality of the fabricator’s situation. He announced that the company’s welding department and its 35 welders would become a “welding center of excellence,” suggesting that the troubled department would achieve world-class excellence and emerge with a competitive advantage when compared to other metal fabricating operations in the region.
“At the time, I may not have been in a position to make such a cocky statement,” Kulkarni said.
Just 16 months later, though, he and the rest of the Sintel family can make that statement confidently, without worrying about being braggarts. In April Caterpillar recognized Sintel as one of the few fabricators in its supply chain to be certified for its welding performance (see Figure 1).
In 16 months the metal fabricator rose from the bottom of Caterpillar’s performance list to the top of the class. This is how it made the transformation.
After a couple of forthcoming meetings between Sintel management and workers, some trust was generated, but further steps needed to be taken to hasten the much-needed turnaround. Kulkarni said the employees needed definitive proof that they were valued—something that wasn’t so obvious under the previous company ownership.
The first thing management did was renovate the bathrooms completely. In short, they were unfit for use, and in some cases, employees waited until the end of their shifts to go home and use their own bathrooms.
The renovation didn’t end there. The company installed proper ventilating systems to remove weld fumes and upgraded safety equipment, such as curtains and protective gear, for the welders.
The new ownership team also changed the company’s zero-tolerance attendance policy, which was often the cause for workers being fired. For instance, veterans who needed to visit Veteran Administration hospitals for certain services often were given negative attendance marks. New flexibility was given to workers that reflects the realities of modern health care and the difficulties of trying to work and meet family obligations.
With the rise in expectations, management straightened out the wage structure. In the past welders were brought in at different levels of compensation—none of which was tied consistently to skill level. That changed when wages became linked to skill level, years of service, and certification attainment. Keeney described it as a three-tier system akin to pre-apprentice, apprentice, and journeyman skill levels. A C-level welder is an entry-level welder, a B-level welder has two to five years of training, and an A-level welder has at least five years of training and has advanced through all of Sintel’s training while attaining key certifications.
These steps helped to get employee buy-in into the turnaround efforts, but Sintel needed to address work processes as well. Without clearly defined work practices, the metal fabricator still ran the risk of consistently producing inconsistent parts.
“When we came onboard in November 2011, one of the most marked things that rang in my head was an out-of-control manufacturing system,” Kulkarni said. “Out of control because there was no process development that had taken place. Therefore, there was no process control.”
In other words, if a metal part was welded one particular way one week, Sintel couldn’t guarantee that the same part design would be welded the same way the next week. Welders were left to make the part as they believed it should be made. Weld quality suffered as a result.
To improve the quality of welding, Sintel didn’t need to find a roadmap. Caterpillar had one prepared for them already.
Caterpillar’s 7 Steps to Weld Excellence (CAT 7SWE) program provides a guidance that helps metal fabricators comply with Caterpillar welding standards and assists shops in establishing best-in-class welding practices and process control. In essence, it’s a quality management system for welding operations that provides a means of quality improvement and standardization of processes. It also includes a certification procedure for the people, process, and equipment used in welding.
With a framework as a guide, Jeff Falzone, Sintel’s director of engineering and quality, and Keeney went to work developing a process failure mode and effects analysis (PFMEA) program tailored, at first, to the welding errors that were hurting the company the most. Once the root cause problem was identified, the team began looking at a way to standardize the work process—typically through training and standard work instructions based on visual work guidance—that could then ensure consistent and quality products.
While PFMEA sounds like a highly technical tool for ensuring quality, it’s rather a dogged approach to prevent rework for the welding department. For example, Sintel welders had no real experience with or knowledge about using measuring tools and techniques to check weld quality prior to Caterpillar’s ultimatum. Now welders with supervisory direction can conduct cut and etch tests to determine if welds meet quality specifications because they were given the appropriate tools and training. Soon these quality checks will be done in a new laboratory space where the destructive testing can be done much more quickly, leaving welders to keep the torches lit for longer periods of time.
Falzone and Keeney are working to standardize work instructions further by tying worksheet elements to instructional drawings and pictures that accompany job files in Sintel’s new enterprise resource planning software. This evolution of process standardization is in the developmental phase, but everyone has high hopes for it to come to fruition.
The company’s future plans also call for the use of software to prevent potential quality issues. Sintel plans to use finite element analysis software to predict deflection caused by heat, which will allow upfront process engineering to eliminate causes of variation before a single part is welded.
“We are trying to be as cutting-edge as possible and give the guys the best chance to attain success in their weld operation with minimal paragraphs of information,” Keeney said.
“If you give somebody a declaration on a two-page work instruction, you are going to have them take the first sentence and everything after that is a blur,” he added. “We have gone back to a visual type of presentation.”
Falzone is confident that the quality framework and work process development have made a real impact.
“Giving the welders a clear, concise path to follow instead of a haphazard direction—that has really helped a lot,” he said.
Of course, if Sintel wanted better results in its welding operation, it needed its welders to take a new approach to their job. That required training.
Investigations into root causes of problems revealed that the welders demonstrated various levels of skill in print reading and interpretation and that they, for the most part, had difficulty visually inspecting a joint to determine if it was good or bad. The goal was for the training to eliminate these core deficiencies and bolster the knowledge base of the welders.
Falzone said one of the biggest successes was related to the formation of a mentoring program in which some of the very experienced welders were paired up with less experienced welders on a daily basis across the company’s two shifts. Management gave the OK for the experienced welders to walk away from their typical production commitments, arguably costing the company money because they weren’t producing as many parts during a very crucial time, to participate in this type of training.
“There was a huge transference of knowledge, both technical and tribal,” Falzone said. “It paid huge dividends for us from a quality standpoint.”
The more experienced welders shared tips with their protégés on how to identify signs that there might be too much porosity in a weld, for example. That got the welders to start thinking alike instead of each welder relying on his own beliefs as to what made a good weld.
“An experienced pair of eyes helping an inexperienced pair of eyes know the difference and make the distinction between a good and a very good weld—we had good success in this area,” Falzone said.
Meanwhile, Keeney went to work preparing a course on welding symbology. After all, a welder couldn’t be expected to read a print and turn the instructions into a Caterpillar-approved weld unless the welder knew what the symbols meant.
So for several mornings in early 2012, Keeney and the welders gathered at 4 a.m. to go over PowerPoint presentations on symbology and print reading skills that were deemed necessary for the new welding expectations. The welders needed more than just good technique; they needed to be able to apply a very specific weld to a very specific joint for a very specific application.
The welders also made use of Caterpillar’s online Certified Training University. Keeney said that Sintel might hold the record for highest recorded number of hits from one company on that part of the Caterpillar website.
“It was really great with the new leadership,” Keeney said. “They gave me the tools to empower my welders to take an entire shift off of welding and sit down in front of a computer and do a computer-based training class. It took some guys eight hours. It took other guys 16 hours. They didn’t put the pressure on them to get it done in two hours.”
Kulkarni said that positive results in the company’s gas metal arc welding and gas tungsten arc welding activities began to emerge about seven months into the turnaround. The transformation was slow to start, but once the employee turnover stopped being an issue, the training efforts gained more traction. The cultural change was gaining momentum.
By April the cultural change had propelled Sintel into Caterpillar’s spotlight. In only 16 months, the fabricator had gone from being one of the worst suppliers in the OEM’s supply chain to one of its top performers with regards to quality and delivery (see Figure 2). Kulkarni said he remembered the words of Caterpillar Process Control Engineer Joanna Cannon as she presented Sintel with its 7SWE award: “Top-notch welding programs integrate people, proc-esses, and equipment to produce a superior product.”
Kulkarni added that he was especially proud that Sintel made the transition with the on-staff welding talent. There wasn’t a push to hire new people at top pay rates. There was and continues to be investment in pulse welding technology, but the new welding power sources didn’t guarantee acceptable welds. The employees’ efforts—from Falzone’s and Keeney’s skill development program to the welders’ buy-in and raised performance results—made the difference.
“Frankly, success builds more success,” Falzone said. “We are taking that idea of cultural change and expanding that journey to our other core competencies, specifically in our brake forming, paint, and assembly areas. We are taking the same tack of training, mentorship, and visual management, as well as some of the technological approaches.
“We think, in fact, that we can build on that success and make this transformation certainly plantwide,” he added.
Caterpillar recognizes Sintel’s ability to transform. In addition to the 7SWE award, Caterpillar has entrusted its once troubled student to actually train new and seasoned welders to be compliant with Caterpillar welding quality standards as part of the Train the Trainer and Production Weld Training programs.
“I really hope that it does provide some inspiration to other folks that may find themselves in a difficult position like we were in,” Kulkarni said. “It’s all about who is on the bus with you and how you can motivate them.”