Lycoming Engines’ senior leadership team meets weekly to discuss all aspects of the business – from inventory turns and suppliers to new product development and safety issues. What’s striking about these otherwise unremarkable meetings is the inclusion of two senior representatives from the local union.
Just three years ago, such a scenario would have been unlikely. There was a lack of communication between the management and the union.
Basic principles guide Lycoming Engines
Lycoming Engines operates by principles of safety, quality, delivery, costs, leadership and teamwork. Its improvements over the past three years show what can happen when leaders and employees work together to create a vision, communicate openly, and relentlessly train employees to address and solve problems.
Even in an economy that is experiencing a downturn, Lycoming Engines, which manufactures piston aircraft engines, is growing, and the business is aggressively moving from the red into the black. Its products are what its customers want, productivity is high and deliveries are meeting or exceeding goals. New products were introduced this year, and more are in the planning stages.
The business has been recognized nationally for its business practices – from its operational excellence to its ability to perform as a supplier. The factory is also a cleaner place to work. Last spring, Discovery Channel taped an episode of How It’s Made at Lycoming Engines.
Reflecting this success, the labor union and management in 2008 agreed to a five-year United Auto Workers (UAW) contract. Such a lengthy multi-year agreement is rare, but both sides wanted to lock in the goodwill that had been built over the past few years, says Ian Walsh, Lycoming Engines’ senior vice president and general manager.
Assessing ‘disconnects’ and changing the culture
When Walsh came to Lycoming Engines in the summer of 2004, the business had been beset by a number of issues: the continued economic fallout from 9/11, quality control issues and a lack of investment in the business. Looming over all of this was the lingering bitterness from a 1997 strike by employees who were angry over the outsourcing of work and the lack of a union contract.
Walsh spent the first six months looking at the “disconnects” – what was preventing the business from moving ahead. It was clear that the distrust among employees was the major impediment to changing how Lycoming Engines did business.
“We were trying to accomplish a major shift in the focus and energy of the organization – from dealing with the baggage of the past to dealing with the challenges of the future and working together to become more competitive,” says Don Wagner, the vice president of operations.
Putting two union leaders on the leadership team was a huge step forward, and sent a strong message that the only way Lycoming Engines would move forward was by working together, says Suzette Snyder, the director of human resources. “All leadership team members, including union leaders, get the same information flow,” she says.
In the first half of 2005, a three-year contract had been negotiated and Walsh had put together a new leadership team. With these two critical pieces in place, the business began to address its operational issues.
Teamwork and a new way of working
A new spirit of teamwork alone wasn’t going to solve the problems, of course. But it made it easier to introduce new processes – through Textron Six Sigma and lean – that would allow managers and employees to identify and eliminate waste and redundancies.
Walsh and his team demonstrated that “lean” principles are about increasing the competitiveness of the business. Training across all levels of the business – from value stream mapping every aspect of the company to how to run a more effective meeting – provides employees with the skills to do their jobs better.
In just three years, Lycoming Engines has increased the number of green belts from three to more than 130. More than half of the employees on the shop floor are trained on the fundamentals of lean, says Doug Foster, a Textron Six Sigma master black belt and leadership team member.
Walsh and his team also continuously communicate information about the business – the good and the bad – so employees understand what everyone needed to do to become profitable. “Now everybody is aligned on metrics and they understand,” Walsh says. On-time deliveries have improved from 44 to 98 percent; quality has increased 96 percent.
A sure sign of success is that Lycoming Engines is now gaining some of the work that they previously outsourced – they demand the same kind of performance from vendors as they expect of themselves.
“The more competitive we become, the more we demand from our partners, especially our suppliers,” Walsh states.
“Becoming Premier is about being the best at what you do!”