best practice aerospace

Best Practices in the Aerospace and Defence Industry is available electronically on the World WideWeb at the following address:http://strategis.ic.gc.ca/SSG/ad03414e.html

This report was prepared for the Aerospace and Defence Branch, Industry Canada, by UnderdownAssociates of Nepean, Ontario.

For information about the contents of these case studies, or for additional print copies, please contact:

Bryan Paul DalphySector Development OfficerAerospace and Defence BranchIndustry CanadaRoom 617C, East Tower235 Queen StreetOttawa ON K1A 0H5

Tel.: (613) 946-5797Fax: (613) 998-6703E-mail: [email protected]

Permission to Reproduce: Except as otherwise specifically noted, the information in this publicationmay be reproduced, in part or in whole and by any means, without charge or further permission fromIndustry Canada, provided that due diligence is exercised in ensuring the accuracy of the informationreproduced; that Industry Canada is identified as the source institution; and that the reproduction is notrepresented as an official version of the information reproduced, nor as having been made in affiliationwith, or with the endorsement of, Industry Canada.

For permission to reproduce the information in this publication for commercial redistribution, pleasee-mail:[email protected]

Cat. No. C2-505/2000EISBN 0-662-29151-4

Aussi disponible en français sous le titre Pratiques exemplaires dans l’industrie de l’aérospatiale etde la défense.

Contains 20%recycled material

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Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Composites Atlantic Limited — Company Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Hiring the Right People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Creating an Organizational Culture to Support Continuous Improvement . . . . . . . . . . . . 4

Composites Atlantic’s Commitment to Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Performance Management and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Continuous Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Messier-Dowty Inc. — Company Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Increased Demand Leads to Rapid Evolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Sound Values and Effective Communication — Keys to a Committed Work Force . . . . 17Keeping Employees Informed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Rewarding Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Building an Effective Management Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Management Competencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Succession Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Linking Company Strategy to Every Employee’s Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Strategic Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22The C.O.R.E. System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Other Human Resources Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Messier-Dowty Employees are Driving Continuous Improvement . . . . . . . . . . . . . . . . . . 25

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

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NMF Canada Inc. — Company Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Organizational Culture and Workplace Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Recruitment, Training and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Performance Management and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Evaluation of Employee Performance and Development . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Standard Aero Limited — Company Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Creating the Right Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Overview of Training at Standard Aero Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44The Standard Aero Human Resources and Training Organization . . . . . . . . . . . . . . . . . . . 44The Standard Aero Approach to Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Types of Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45The Training Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Resources Used and Return on Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Job Classification, Performance Appraisal and Compensation . . . . . . . . . . . . . . . . . . . . . 48

Some Standard Aero Training Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50On-the-job Technical Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Apprenticeship Program for Machinists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Health and Safety Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52Management Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Training to Support Quality and Productivity Improvement . . . . . . . . . . . . . . . . . . . . . . . . 53

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

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Introduction

The Canadian aerospace industry believes that having effective human resource elements is acritical component to ensuring the growth and survival of a company. These elements includethe ability to adopt new managerial and shop-floor practices and to develop new staff trainingtechniques, such as teaming and empowerment.

To examine the human resource issue, Industry Canada’s Aerospace and Defence Branchhosted the National Aerospace Skill Symposium in February 1999. This skill symposiumidentified the use of best practices case studies in human resources as the number one prioritythat addresses the changing human resource needs of companies.

This document has been prepared in response to that priority.

BEST PRACTICES IN THE

AEROSPACE AND DEFENCE INDUSTRY

“Teamwork and Continuous LearningLead to Success at

Composites Atlantic Limited”

Best Practices in the Aerospace and Defence Industry — Composites Atlantic Limited

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Company Profile

Mention Lunenburg, Nova Scotia, to most people and two thoughts come to mind: Lunenburg’sbeautiful countryside, well known to tourists everywhere, and the famous Bluenose schooner,whose success in international racing competitions became a Canadian legend. They probablywon’t think about leading-edge aerospace technology unless, of course, they have donebusiness with, or had the opportunity to visit, Composites Atlantic Limited. This rapidlygrowing company, located in Lunenburg, has established an international reputation forinnovative design, high-quality manufacturing and customer service. The company has built ahighly skilled, motivated and stable work force and is empowering it to contribute to thecompany’s success.

Composites Atlantic Limited was launched in 1993 as a 50/50 joint venture between theAérospatiale Matra group and the Province of Nova Scotia. The company is an internationalleader in the design and manufacturing of advanced composite components and integration ofsubassemblies for aerospace, defence and commercial markets. Its products include aircraft andhelicopter components, such as leading-edge fairings, radomes, structural panels and ducting;space and defence products, such as launch tubes, ballistic nose cones, electromagneticinterference protected enclosures and satellite components; and pressure vessels for space andcommercial applications. Composites Atlantic Limited has over 80 customers throughout theworld. Major customers include Aérospatiale, AlliedSignal, BF Goodrich, Boeing, Bombardier,Bristol Aerospace, Lockheed Martin and Raytheon.

The company’s 4650 square metre plant, located in Lunenburg, Nova Scotia, is being expandedto 9300 square metres. Its work force, currently about 80 employees, is expected to reach 100employees by July 2000. In addition to its plant in Lunenburg, the company has a sales office inKent, Washington, and an engineering office in Laval, Quebec.

Composites Atlantic’s highly versatile manufacturing capabilities encompass a wide range ofcomposite materials and manufacturing technologies. Composites manufacturing processesinclude hand lay-up, filament winding, resin transfer moulding, compression moulding,thermoforming and pultrusion. Associated manufacturing processes include computer numericalcontrol (CNC) machining, laser machining, robot-controlled plasma spray, bonding, surfacefinishing and assembling. The company’s facilities include computer-controlled filamentwinding (five, three or two axis), four- and three-axis CNC milling machines, three cleanrooms, and several autoclaves and ovens for curing composite parts. The company’s laboratoryprovides a comprehensive range of testing capabilities to support quality control and productdevelopment, including chemical analysis, physical properties and non-destructive testing.


1 Qualité des Approvisionnements pour les Industries Françaises Aéronautiques et Spatiales.

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Computer systems are used extensively within Composites Atlantic’s manufacturing,engineering, testing and business operations. Several processes, such as machining, cutting andfilament winding, are computer controlled. Manufacturing operations are coordinated using astate-of-the-art Manufacturing Resources Planning (MRP II) system, featuring real-time barcode data collection, which provides full traceability and maximizes efficiency andperformance.

Composites Atlantic has comprehensive product design and development capabilities andperforms some or all design work on about 60 percent of its products. It also designs andmanufactures all of its own tooling. The company’s engineering department is equipped withthe latest computer-assisted design (CAD) tools, such as ProEngineer and other software,providing complete two-way compatibility with CATIA. With research and developmentspending of 5 percent per year, the company considers its product and process developmentcapabilities as essential to its competitive success. The company wins a lot of business byinvesting in up-front development work to produce prototypes, demonstrating that it can makethe product better and for less cost.

Composites Atlantic Limited holds the following quality certifications: ISO 9001, BoeingD1-9000 and Qualifas,1 as well as airworthiness certifications from Transport Canada and theU.S. Federal Aviation Administration.

Hiring the Right People

Composites Atlantic’s human resources management was discussed at length with ExecutiveVice President and General Manager Maurice Guitton. Mr. Guitton, who is also a member ofComposites Atlantic’s board of directors, had primary responsibility for setting up the companyand has been involved in hiring decisions since the beginning. “Composites Atlantic makes apoint of hiring people locally,” says Guitton. He emphasizes that this policy not only reflects thecompany’s sense of responsibility toward the surrounding community, but also makes goodbusiness sense. “This community,” he continued, “has been a source of many highly motivatedpeople who are developing their careers in parallel with the growth of the company.”

The selection process at Composites Atlantic is rigorous but flexible. The company wantspeople who are highly qualified or have high potential, but uses some flexibility in evaluatingpotential applicants. Entry level qualifications for production operators are Grade 12 graduationplus some demonstration of mechanical ability. Prior experience in composites or aerospace isnot necessary, but the applicant must have the ability and motivation to learn. Local people,some of whom received post-secondary education outside the area, are also hired at higherlevel positions. The company maintains a list of pre-screened applicants whose applications


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have been reviewed and who have had preliminary interviews. Managers from all departmentsare involved in this preliminary screening process.

When there is a need to hire new workers, applicants are chosen from the pre-screened list andare interviewed. The interviewing process, which may last up to five hours, is conducted byMr. Guitton and the managers with whom the applicant would be working. The goal of theseinterviews is to assess the applicants’ abilities and attitudes and to communicate what thecompany’s expectations are. The applicants also learn about what it is like to work atComposites Atlantic, and are asked the questions, “What are your goals?” and “What can youdo for the company?” They must be willing to devote more than 40 hours a week to theircareers, including work time and training. The company looks for candidates who aremotivated, flexible and willing to learn and work in teams.

Creating an Organizational Culture to Support Continuous Improvement

The organizational culture at Composites Atlantic has been shaped by its leadership — peoplewith technical backgrounds who are also concerned with the human side of the business. In hisearly career, Executive Vice President Maurice Guitton sometimes saw management that wasautocratic and out of touch with employees. He vowed that if he became a senior manager,he’d use his power in a positive manner. Guitton has assembled a management team withsimilar values and a common goal — creating an atmosphere of trust and loyalty in whichmanagers and their employees work on the same team.

The management style at Composites Atlantic emphasizes effective communication to ensurethat employees at all levels have the information they need to be effective and that managersand their employees understand each other’s concerns. Maurice Guitton stresses thatemployees need to know about issues that may affect them; for example, if a program isborderline in terms of profit margin, employees should know about it so they understand theimportance of finding ways to improve things. Employees are aware of the quality andproduction targets that they must meet. If, for some reason, they cannot meet these targets,they discuss the situation with their managers and agree on what is achievable and what can bedone to meet the target.

Everyone in the plant, from the most senior manager to the most recently hired employee, isreferred to on a first-name basis. All managers have an open-door policy. Maurice Guittondescribes the thinking behind this approach: “In traditional organizations, people are usuallyafraid to go to management and tell them what’s wrong with the organization, but that’sprecisely the kind of information we need.” This approach is a two-way street, “If I don’t likethe way someone is doing things, I tell the person directly and we fix the problem and moveon.” Guitton stresses that, in a no-blame atmosphere, employees understand that covering uptheir own mistakes benefits no one in the long run. Employees know that if they make honestmistakes, they will not be fired or otherwise sanctioned. Underlying this attitude is the common


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understanding by everyone in the company that true job security comes from making thecompany better.

The organizational structure at Composites Atlantic has been designed to support teamwork anda customer orientation. The company is organized along functional manufacturing units, such aslay-up, assembly and finishing, and other functions, such as engineering, quality assurance,laboratory testing and marketing/sales. The functional units operate as teams and are supervisedby a team leader. The company’s Production Manager, Ali Syed, is responsible for allproduction operations. Team leaders for each manufacturing process report directly to Syed.Overlying this functional unit is a management-based program that focusses onproduct/customer orientation. A program manager has overall responsibility for each programand interfaces with everyone involved, including manufacturing, quality assurance, engineering,finance, sales and customers. Reporting to the program manager is a program leader, whofocusses on the manufacturing aspects and interfaces directly with team leaders for eachmanufacturing process.

Program meetings, involving the program manager, program leader, production manager andrepresentatives from quality assurance, engineering, finance and sales, are held frequently todiscuss any issues relevant to the success of the program. Managers communicate keyoutcomes of these meetings directly to employees on the shop floor and within otherdepartments. The goal is to keep all employees informed about the programs and operations inwhich they are involved.

To support its team-based philosophy and reinforce employees’ sense of ownership for theirwork, the company has a profit-sharing plan based on team rather than individual performance.Last year, the company distributed about $1000 per employee through the plan. The amountthis year will likely be close to $1800. Each employee’s total remuneration also takes individualperformance into account as explained later under Performance Management andCompensation.

Employee participation on the Health and Safety Committee and Employee Committee isimportant because managers and non-managers can work together on key issues of commonconcern. The Health and Safety Committee meets every month to discuss health and safetyissues. The committee’s membership includes managers from manufacturing, quality assuranceand materials handling and non-management employees from throughout the plant who serveon the committee on a rotating basis. The Employee Committee has monthly meetings todiscuss profit-sharing, benefits, events such as the Christmas party, and any issues of concern toemployees and management. The committee includes Executive Vice President MauriceGuitton, Production Manager Ali Syed and employee representatives from each department.

Composites Atlantic has a policy of promoting from within. Employees have opportunities tomove up the ladder if they acquire the right experience and training. For example, shop-floor


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employees can be promoted to process team leader, program leader and, subsequently, programmanager. The company’s training activities, discussed below, play an important role in helpingemployees progress in their careers, as well as raising the overall technical capabilities of thework force.

Composites Atlantic’s Commitment to Training

Improving skills and knowledge is an important and ongoing part of every employee’s job atComposites Atlantic. The company supports in-house and external training and has beenincreasing the resources it devotes to training each year. Last year, external training costs,including instructors’ fees and tuition for external courses, averaged over $900 per employee. Ifthe resources devoted toward in-house training were included in this total, it would beconsiderably larger.

All new employees take an orientation course, which includes information on the company andits policies and procedures, employee responsibilities and benefits, the ISO 9001 quality system,health and safety, and materials handling. Several company managers are involved in providingthis training. During the orientation session, employees receive a manual outlining thecompany’s policies and procedures.

The company provides a number of in-house courses on the production technologies andrelated skills used in its manufacturing operations. All employees take a one-week course in thefundamentals of composites. There are also courses in vacuum forming and resin transfermoulding for employees who work in these areas. Employees can also take courses in draftingand blueprint reading. Depending on the subject matter, in-house courses are taught bycompany or external specialists.

Composites Atlantic invests heavily in acquiring new technology, expanding its facilities andtraining its people — roughly $1 000 000 annually or 10 percent of revenues. In return, itexpects its people to invest in themselves by taking some training on their own time. Coursestypically run from 4:00 to 5:30 p.m. and sometimes later. Employees are paid for the firsthalf-hour with an understanding that they will contribute an equal amount of their own time.They are generally willing to stay later because they realize that they are gaining valuableknowledge. As a service to the community, Composites Atlantic Limited has allowedindividuals outside the company to attend some courses. These people pay a nominal fee tohelp cover the cost of outside instructors.

To provide an effective and easily accessible learning environment, Composites Atlantic hasbuilt its own 20-desk classroom within the plant. Along one side of the classroom, a wide rangeof the company’s products are displayed to illustrate technical issues. Charts showing qualityperformance, inventory turnover and other production-related variables are posted along theother side. The classroom is a multi-purpose facility; it is also used for problem-solving and


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planning sessions. The company also pays the tuition for external courses, subject tomanagement’s approval. In some cases, it has allowed employees to take leaves of absence tostudy full time.

As a knowledge-based manufacturing company, the ability of Composites Atlantic’s work forceto generate, utilize and communicate information is a key factor in the company’s ability tocompete in the international marketplace. The company’s design, manufacturing and businessprocesses are becoming increasingly computerized and integrated via computer. The companycurrently uses 56 computers among 80 employees and all employees have access to computers.An employee’s ability to work effectively in this environment is increasingly dependent oncomputer literacy. Recognizing this reality, the company has supported a number of employeesto purchase home computers through a payroll-deduction agreement.

According to Maurice Guitton, an important part of every manager’s job is to recognize talentin employees and help them find ways to develop their abilities. Troy Brake is an outstandingexample of an employee who is meeting the challenge to develop his career. He was hired threeyears ago as a production worker after completing Grade 12. As he was very interested incomputer-assisted design, he proposed to management that he purchase a computer system,suitable for CAD, based on 50/50 cost sharing with the company — management agreed. Brakebought the computer and learned CAD programming through a combination of self-study andhelp from the company’s engineers. He is now a first rate CAD programmer.

Performance Management and Compensation

All employees at Composites Atlantic are paid on a salary basis, with adjustments made forovertime and leave without pay. Salary is tied to skill level and performance, based on severalcriteria. Production employees must qualify in at least one production skill, such as lay-up,autoclave, filament winding, compression moulding, thermoforming, etc. Each production skillis rated based on two to five levels. A representative five-level classification scheme ispresented on the next page.


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Level Capabilities

1 Basic work, with supervision

2 Ability to work, unsupervised

3 Standard operator level; ability to work to all production requirements

4 Ability to train and supervise people at lower levels

5 Composite technician level; ability to troubleshoot, communicate at theengineering level and contribute to development programs

The standard operator level represents the skill level that a typical production operator can achieve. This level corresponds to the operator being sufficiently skilled to meet thecompany’s principal production requirements within a particular process. Operators at this levelearn a standard wage for that job category.

Employees are also rated on several generic skills and behaviour that reflect their performancein contributing to the company: quality of work, quantity of work, attendance, ability to planand organize, flexibility and potential, health, safety and environment, continuousimprovement, teamwork and years of service. Employees receive yearly performance assessments, based on a management-of-objectivessystem, that are used to adjust compensation and to assess people for promotion. Compensationlevels are based on achievement of individual, team and company objectives. To initiate theprocess, a production employee and his or her supervisor discuss and agree on objectives forthe coming year. These objectives are recorded on a review form. For most jobs, six to eightobjectives are sufficient. The objectives should be specific, realistic, meaningful, achievable,challenging and measurable, and reflect company business and health and safety objectives. If,as the year progresses, circumstances change, the objectives can be modified. Year-endperformance reviews are conducted by the supervisor, with input from the employee and nextline supervisor. In addition to the yearly formal assessment system, employees receive continuous feedback onperformance from their managers, who also pass this information upward within theorganization. Managers can request raises and/or promotions for employees at any time duringthe year, if they feel that they are warranted. This approach provides a more direct linkbetween performance and reward than relying exclusively on yearly assessments.

Composites Atlantic uses a skills matrix to track the overall skill set of its work force. Thematrix contains a row for each employee and a column for each level within the productionprocess that indicates specific and generic skills needed within the company. The cells formed


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by the intersection of each row and column are colour-coded, showing each employee’sprogress in attaining skill levels in each category. This matrix shows, at a glance, the capabilitiesof the company’s work force, making identification of priority areas for skills developmentimmediately visible.

Continuous Improvement

Shoky Mahmood, Quality Assurance Manager at Composites Atlantic, has a staff of ninepeople, over 10 percent of the work force, representing a major investment in quality assuranceby the company. Reflecting the company’s total quality management approach, qualityassurance personnel work closely with production and program management to ensure thatquality concerns are incorporated into the company’s product design and manufacturingoperations. Each quality assurance employee is assigned to work with one or more teamsresponsible for manufacturing programs. The Quality Assurance Department has weeklymeetings to discuss quality issues across the company and to examine new ideas for qualityimprovement.

Because of the critical nature of its products, it is not surprising that Composites Atlantic placesgreat emphasis on its quality management system. The company holds several quality andairworthiness certifications, as discussed earlier, and, in 1994, became the first aerospacecompany in Atlantic Canada to achieve ISO 9001 registration. Shoky Mahmood explains theimportance of effective quality systems in winning and keeping business: “We have beenaudited by over 70 primes and never failed an audit. In fact, audits by potential customers, forthe purpose of qualifying our company’s quality system, often lead to additional visits and newbusiness.”

The company’s approach to quality is to resolve problems at the lowest possible level within theorganization. Managers encourage employees to develop a sense of responsibility for theirwork. One of the key tools used to encourage responsibility is the Continuous Improvement ToDo List. Each entry on the list includes (1) a statement of the problem/issue, (2) thecountermeasure being developed, (3) the person responsible for problem resolution and (4) theexpected completion date. Entries are filled out jointly by employees and their supervisors andcan be initiated by either person.

The company is implementing a system of delegated inspection in which qualified employeesare given responsibility to inspect and sign off on work within their production unit. Thisinitiative began in one area of manufacturing and will be expanded throughout the company.Currently, ten production employees have been qualified to inspect and sign off on the qualityof work within their production units. According to Quality Assurance Manager Mahmood, theinitiative has been well received by employees and is a source of pride among those qualified toperform delegated inspection.


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In 1998, Composites Atlantic began adopting lean manufacturing with encouragement andsupport from one of its customers — BF Goodrich Aerospace. Program Manager Jake Wheelerspent 10 days at BF Goodrich, in California, learning that company’s methods of leanmanufacturing and continuous improvement. The BF Goodrich people have also been toLunenburg to provide training to managers at Composites Atlantic.

The initial focus within the lean manufacturing initiative at Composites Atlantic has been on the5 S’s and visual factory concepts, both of which are described below. The company has alsobegun to streamline its manufacturing processes, using Kaizen events, and eventually plans tomove to a just-in-time system for work flow. The lean manufacturing initiative is not beinglaunched as a separate program, but rather as part of the company’s ongoing continuousimprovement process, which began several years ago with a commitment to total qualitymanagement principles.

Composites Atlantic is adopting the 5 S’s philosophy as a key step toward lean manufacturing.Originally developed by the Toyota automobile company, the 5 S’s provides a basis for creatinga self-sustaining culture, which perpetuates a neat, clean, safe and efficient workplace.Moreover, it helps build and sustain a total quality management environment. The 5 S’s arepresented below:

Element Employee Action

Sort Clearly distinguish between what is needed, what is not needed and whatshould be thrown out (i.e., outdated, defective or unused items)

Simplify Organize items logically, making it easier for anyone to find, use andreturn them to the proper location

Sweep Keep things clean (i.e., floors swept, machines and furniture clean)

Standardize Maintain and improve the first three S’s in addition to personalorderliness and neatness

Self-discipline Make a habit of maintaining the correct procedures and thinking abouthow they can be improved


2 Wall-mounted board with hooks for each tool and the tool’s outline drawn on the board to show properplacement.

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Employees are responsible for implementing the 5 S’s in their work areas. This means morethan just cleaning up messes; it involves reorganizing the physical workplace to make worksafer and more efficient. The goal is to eliminate all forms of waste in inventory, transportation,processing, scrap, motion, overproduction and a person’s effort. Application of the 5 S’s is nota one-time event. Employees will continuously look for ways to improve on a day-to-day basis,as well as during subsequent periods of concentrated effort on the 5 S’s.

Program Manager Jake Wheeler is the company’s lean manufacturing coordinator. Tointroduce the 5 S’s to the work force, he makes half-hour presentations to groups of employees.He and other managers then reinforce the ideas from the seminar through ongoing discussions.To underscore the need for the 5 S’s, Wheeler conducts evaluations of work areas to assesstheir status relative to the 5 S’s criteria. The results of these evaluations are used by employeesto focus their efforts on continuous improvement.

“The biggest challenge in implementing the 5 S’s is getting employees to understand that it’snot just about cleaning up a work area because the manager wants it cleaned up, or saving afew seconds here and there,” says Wheeler. “Employees have to understand that smallimprovements, multiplied many times per day, can significantly improve the company’sperformance.” Ali Syed adds, “Everyone has to be involved, from senior managers to the mostjunior employee; otherwise, it won’t work. It takes a while to get people convinced of the valueof the program; it’s important not to try to do everything at once.”

The company began applying the 5 S’s by having one group of employees reorganize their workarea. In this particular work area, one of the problems was that tools were not stored in anorganized manner. It was difficult for workers to find the tools they needed quickly. Sometimesnew tools were ordered because misplaced tools could not be found. Using the 5 S’s approach,the employees determined what tools were needed for their work. They took inventory withintheir area and assembled a complete set of tools, buying new ones where necessary. Thecomplete set of tools was then organized on a shadow board2 and a new rule established: Puttools back on the shadow board when finished with them.

With the new system, employees no longer waste time looking for tools. If one is missing, theempty space on the shadow board makes it immediately obvious. When implementing the 5 S’sin their work area, the employees found a number of spare tools that had been purchased asreplacements for misplaced tools. The spare tools are now kept in a storage area and can betransferred to work areas when new or replacement tools are needed.

The highly visible improvements from this project have helped communicate the benefits of the5 S’s to employees throughout the company. Another idea, which came from shop-floor


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employees following the 5 S’s, was to paint equipment areas, which are prone to resin buildup,white. Spilled resin is visible against the white surface and can be promptly cleaned up. Oncethe 5 S’s have been implemented throughout the plant, they will be applied to the engineeringand administration offices.

The second component of the company’s lean manufacturing initiative is the visual factoryconcept. Creating a visual factory actually begins with using the 5 S’s to organize work areas sothat anything out of place will be immediately obvious. Beyond this initial step, the companyhas implemented a system of visual controls that makes the status of processes, machines andupcoming work orders immediately visible to anyone in the plant. The system employs colour-coded status indicators: green, operating normally, yellow, operating but problems encountered,red, not working correctly and gray, calibration and/or maintenance in progress. Notice boardsposted in each work area show the planned workload and specific job orders to be processed.The notice boards have spaces, organized by customer and by month, in which job-order cardsare posted. Coloured dots on the job-order cards show the status of orders and these dots usethe same colour-coding as the other visual controls. Machine usage logs are posted next toprocess equipment. These visual controls allow everyone in the company to see what iscurrently happening and what is planned for equipment and processing areas throughout theplant.

A third aspect of the lean manufacturing initiative involves process improvement. The companyrecently held a Kaizen event, involving several production employees, managers and Kaizentrainers from BF Goodrich. The five-day event involved about 50 percent training and50 percent improvement work on one manufacturing process. Employees found ways toimprove their work. For example, by simply putting a door between two processing areas, thetravel distance for parts was reduced from 2135 metres to 1130 metres, resulting in a20 percent time savings. This and other changes resulted in a 40 percent reduction in cycle timeand work-in-progress inventory.

Keeping the momentum going for continuous improvement is crucial. The level of effort on the5 S’s and other continuous improvement activities must vary with the workload in the plant.During peak periods, this activity level is reduced, but management makes sure that somecontinuous improvement effort is ongoing. Ali Syed adds, “We have a production meetingevery Friday and there is always some time spent on the 5 S’s or other continuous improvement initiatives.” Consistent with the importance that the company attaches to continuousimprovement, contributions to continuous improvement initiatives are considered as part ofemployee performance evaluations.

How big a difference can empowered employees, using continuous improvement methods,make to the company? Executive Vice President Maurice Guitton points out that CompositesAtlantic achieved a 15 percent improvement in productivity last year, much of it due to the


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efforts of shop-floor employees. Ali Syed concurs, “Continuous improvement provides the toolsto empower our employees. It makes them more effective and leads to increased productivity.”

Conclusion

Composites Atlantic is an excellent example of a company that uses its human resourceseffectively to help achieve success in the aerospace marketplace. The company has beenwinning new business and exceeding its revenue growth target of $1 000 000 per year. Itsemployees are enthusiastic about their work. This was clear not only from our interviews andplant tour, but also from the fact that the turnover rate from all causes is about 0.5 percent peryear, far below the industry norm. The quality of life in the Lunenburg area is another positive.Employees at all levels place a high value on being able to work for an advanced technologycompany and live in the area. They are willing to make an extra effort to ensure that thecompany is successful.

Leadership by example is a key factor in the company’s success. Its organizational culture andvalues have been determined by the management style of senior executives. By developing amanagement team with similar values, the company intends to maintain its culture and values asit continues to grow.



“Management Leadership DrivesPositive Change at

Messier-Dowty Inc.”

Best Practices in the Aerospace and Defence Industry — Messier-Dowty Inc.

3 In this case study, “Messier-Dowty” refers to Messier-Dowty Inc. or Messier-Dowty (Toronto), comprisedof the Ajax and Peterborough facilities.

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Company Profile

Messier-Dowty Inc. is a major supplier of landing gear systems to aircraft manufacturersthroughout the world. In Ontario, the company has 435 employees at its Ajax facility and65 employees in Peterborough. The work force is 36 percent managerial and administrative,20 percent engineering and 44 percent unionized production workers. Sales in 1999 were over$140 million, most of which was either exported directly or indirectly through sales of Canadianregional and business aircraft.

Messier-Dowty Inc. is part of Messier-Dowty International, the leading global supplier oflanding gear systems with worldwide sales of $750 million in 1999 and over 2700 employees. Inaddition to Messier-Dowty Inc. (Ajax and Peterborough), Messier-Dowty International’sCanadian operations include manufacturing operations in Mirabel, Quebec. Messier-Dowtyprovides landing gear systems to some of the world’s major aircraft manufacturers and is thesole supplier to Airbus and largest supplier to Bombardier. Although its roots go back to theformation of Dowty Aerospace 60 years ago, the current organization was created in 1995 as ajoint venture, when Britain’s TI Group and France’s Snecma combined their landing gearbusinesses. Messier-Dowty International became a fully-owned Snecma company in 1998.

Messier-Dowty International has implemented a global strategy based on supplying comprehensive landing gear systems, from runway to cockpit, whose design, manufacture andintegration into an airframe is undertaken as a seamless, global engineering challenge. In thisenvironment, engineering teams span supplier–customer boundaries to focus on the interfacebetween landing gear and airframe. Their goals are to optimize the aircraft design, from anowner perspective, while minimizing development and manufacturing costs and time.Competitive advantage is created by constantly finding new ways to improve landing gearsystems and to ensure that they are manufactured reliably and economically while meetingcustomers’ scheduling requirements. The approach has required expansion of the skillspossessed by the company’s engineers, technologists and manufacturing employees. Thesechanges have been very evident at Messier-Dowty Inc. (Ajax and Peterborough), which designseverything it manufactures.

Messier-Dowty3 has created a cohesive management team and committed work force toimplement the above strategy while responding to a rapidly changing aerospace market. Theresult has been a tripling of company sales and a substantial increase in profitability since 1994.This case study illustrates how the company’s human resources practices have helped achievethese results.


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Increased Demand Leads to Rapid Evolution

The early 1990s were a difficult time for Messier-Dowty. The company was particularlyvulnerable to external market conditions because it only had two landing gear programs. Adownturn in the aerospace market led to a downsizing of the work force. Employee morale hadseen better days. Fortunately, market conditions began to improve, leading to newopportunities. A determined effort at diversification led to new programs and improved sales.This was a positive development, but brought with it a host of unanticipated problems. Messier-Dowty’s manufacturing and business systems had not been updated during the downturn ofprevious years. The result was high-intensity strain on these systems as the company struggledto respond to growing business opportunities and more demanding customers. Inefficienciesthat had crept into the system when production volumes were lower were amplified by theincreasing demands. Delivery times and profitability suffered, so the company had to makemajor changes.

In 1995, a mostly new management team, led by President Ken Laver, undertook the challengeof fixing the basics of Messier-Dowty’s manufacturing system while continuing to meetimmediate customer needs. A team effort was undertaken with minimum formal team-buildingmethods and philosophy — there wasn’t time. Tony Wood, Vice President, Operations,described it this way, “Everyone from the president on down was chasing parts through theplant, determined to find out where excessive costs and time delays were occurring.”Gradually, they succeeded in bringing processes under control, eliminating bottlenecks andreducing non-value-added work. Performance improved dramatically, allowing the business tocontinue expanding.

The challenges faced by Messier-Dowty throughout the 1990s were made even more dauntingby the growth in the complexity of the business. The number of programs increased from two tothirteen and the programs themselves grew more complex as Messier-Dowty evolved from alanding gear assembly supplier to a landing gear supplier/systems integrator. During this time,Messier-Dowty began to make significant changes to the way it worked with its suppliers byincreasing the proportion of work being contracted out while moving to fewer suppliers. Today,the company manufactures 53 parts in-house, down from several hundred parts five years ago.

Sound Values and Effective Communication — Keys to a CommittedWork Force

Keeping Employees Informed

One of the key factors behind Messier-Dowty’s success has been the support of a motivatedand committed work force. Creating this work force was challenging because morale had beenpoor during the downturn in the early 1990s, followed by a period of rapid growth during which


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management made a concerted effort to increase productivity. As processes were streamlined,gaps in work schedules were created. Management had to deal with employees’ fearsconcerning the impact of improved productivity and increased outsourcing of their jobs.Management made a verbal commitment to employees that it would make every reasonableeffort to avoid laying off workers as a result of the changes being made to the business.Management asked for and received one concession — that employees who had free time takeon other tasks to help the company, even if that meant a machinist sweeping the shop floor.

Over the last five years, Messier-Dowty management has honoured its commitment of makingevery reasonable effort to avoid layoffs. Although the growth environment made it easier toavoid layoffs, specific plans were needed to keep employees with the company. For example,when Messier-Dowty spun off a non-core business in 1998, the affected employees stayed withthe company and were simply reassigned to other jobs on a priority basis.

In late 1996, Messier-Dowty launched a new strategy to improve communication across thebusiness. The goal was to replace the rumour mill with facts so that employees would be betterinformed on the direction of the business and why decisions were being made. Some of theinitiatives used to implement the strategy are discussed below.

Management Meetings: During these quarterly off-site meetings, managers are briefed onmanufacturing, financial, marketing and other business issues. The objective is to provideconsistent messages to all managers, which can then be cascaded to all employees throughsubsequent meetings.

Cascade Briefings: Managers hold monthly one-hour meetings with their direct employees toinform them of the outcomes of management meetings; to review sales, profit and cash flownumbers; and to discuss other developments. Information cascades down through theorganization, providing all employees with a better understanding of how the company is doing,where it is going and the rationale for decisions.

Stand-up Meetings: Cell leaders hold brief, informal meetings once or twice a week to dealwith issues needing immediate attention.

Lunch with the President: Groups of employees are invited to lunch with the president to voiceconcerns, have questions answered and share ideas among departments. When these luncheonswere first instituted, most of the focus was on employee complaints, but as these issues havebeen resolved, the focus has shifted to discussing future developments within the business.

Quarterly Newsletter: The Human Resources Department publishes Touchdown, with HumanResources Vice President Barry Wohl acting as editor and employees from throughout thecompany contributing material. A typical issue contains articles on business developments, aprofile of a Messier-Dowty department or group, and accounts of employee social events.


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Human Resources Runways: These official company bulletin boards, placed strategicallythroughout the facilities, inform employees about recent developments in the company,employee benefits, job postings and other items.

Barry Wohl stresses the importance of multiple paths of communication, “You need top-down,bottom-up and sideways communications to fill the black holes that might otherwise stop theinformation flow.” His Human Resources Department has been instrumental in developing andimplementing the communications strategy, but it could not have worked without support fromthe other managers. By communicating clearly, consistently, accurately and often, managementhas increased the level of trust and confidence among employees.

Rewarding Employees

One of the most important things that Messier-Dowty management communicates to employeesis the high value placed on their contribution to the firm. Management’s policies and actionsdemonstrate this in a number of ways.

Profit Sharing: Messier-Dowty pays a bonus to its employees when the company has met orexceeded its financial performance targets, i.e., profit and cash flow. Charts showing progresstoward these targets are posted within the plant. All employees receive the same amount. Lastyear, they received a $1500 bonus and that amount is expected to be even higher this year.

Physical Environment: In spite of an increasing workload, Messier-Dowty managers andemployees have continued making improvements to their physical work space. Visitors to theplant in recent years have noticed many visible changes: painted floors, clearly delineated workareas, better organization of work-in-progress, etc. Air conditioning, rarely found in machiningoperations, was installed in the plant at a cost of approximately $500 000. There are no hardnumbers that say it will pay off, but management believes that the improved workingenvironment will enable people to be more efficient.

Family Day: Management invites employees to bring their families and friends to visit the site.The employees act as tour guides and provide demonstrations of manufacturing operations.These events have drawn over 900 people.

Bring Your Kid to Work Day: Once a year, employees are encouraged to bring their Grade 9teenagers to work with them. After receiving a guided tour, they meet the president and othersenior managers. This gives teens an opportunity to see first-hand the type of work theirparents do.

Christmas Parties: The company hosts a Christmas party, held at a local hotel, for employeesand their spouses. Formal invitations, each hand-signed by the president, are mailed to theemployees’ home. President Ken Laver and other senior managers make an effort to greet


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everyone as they arrive or during the evening. The Messier-Dowty employees’ Sports andSocial Club also organizes a children’s Christmas party and the company purchases a gift foreach child. In the week leading up to the holidays, Ken Laver and other senior managers try toshake hands with everyone in the company, extending holiday wishes and thanking them fortheir contribution.

Global Art Contest: Messier-Dowty International held an art competition for employees’children with the theme “The Airplane of the 21st Century.” Close to 200 children, fromFrance, the United Kingdom and North America, took part. The first place winner and winnerin another category were children of employees working at Messier-Dowty’s Peterborough andAjax plants respectively. The first place winner’s artwork appears on Messier-Dowty’sChristmas cards. The artwork of all other contest winners appears in the company’s Year 2000calendar. All of the children who entered the contest received a large colouring set and a copyof the calendar, which listed all those who entered the contest on the second page.

Summer Jobs: Messier-Dowty hires a number of its employees’ university-level sons anddaughters. Children of all employees are encouraged to apply. The Human ResourcesDepartment ensures that the selection process is unbiased with respect to the parent’s positionwithin the company.

Purchase of Company Cars: All employees are given an equal chance to purchase companycars at the end of their leasing period. The Human Resources Department ensures that thebidding process is fair.

Messier-Dowty Promotional Material: The Human Resources Department has produced itemsto promote company team spirit, including quality clothing, mugs, etc. These items are given inrecognition of employee efforts, such as participating on process improvement teams. Theseitems have become very popular with the employees and, in response to demand, can also bepurchased by employees at cost.

Production Manager Eli Brigler did a case study on the company’s communication strategy aspart of his MBA studies. According to Brigler: “Employees spend more than a third of theiradult life in, and travelling to and from, the workplace. It is important that employees take pridein their achievements since usually only bad news filters home.” Many of the events describedabove are intended to bring families closer, while instilling pride among Messier-Dowtyemployees. How well does this work? An exact measurement might be difficult; however,based on the high participation rates, these programs are viewed very positively by employees.

Clearly, Messier-Dowty’s investments in its work force have been good for the business as wellas its employees. We asked President Ken Laver how the company balances the interests ofcustomers, employees and owners. He answered this way: “Everyone should put the customerfirst — building successful, stable relationships with customers is in the long-term interest of


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managers, employees and shareholders. The key is to look beyond the scope of what you aredoing today and identify how your company can be more valuable to customers in the future,and get all employees involved in making this happen.” He provided an example of a Messier-Dowty manager who actually requested that a promotion, already awarded, be postponed. Aprogram that the manager was responsible for was coming to a critical milestone, and themanager wished to stay with the program to ensure that everything went well.

Building an Effective Management Team

The senior management team, which has led Messier-Dowty through the current period of rapidchange, was assembled mostly from individuals who came from other parts of the organizationand from other companies. They brought with them their individual abilities and a willingness totake on a challenge. As the focus has shifted from fixing problems to continuous improvement,the company has developed a long-term approach to ensure that its management team will beable to meet future challenges. Some highlights of this approach are discussed below.

Management Competencies

Ken Laver recently gave a presentation at an executive education round table, sponsored byIndustry Canada and the Ontario Aerospace Council, in which he articulated five key qualitiesthat managers need to develop:

Flexibility: Being able to respond rapidly to a changing environment.

Communication Skills: Being able to communicate effectively your organization’s vision,mission, goals and objectives throughout the company in order to enhance employee motivationand empowerment. Senior managers should spend most of their time communicating.

Team-oriented: Being able to create and work within teams to enhance internal capabilities andbring in external capabilities where needed. Working effectively on customer–supplier teams inwhich everyone “gets a vote” on how a product is designed.

International Mind-set: Being comfortable with differences in cultures and able to appreciatedifferent business concepts.

Strategic: Being able to think outside the box and see new opportunities and directions; forexample, evolving from supplying components to supplying assemblies and developing asystems engineering capability.


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Education

The company uses several means to build competency among its managers. For example, it hassupported some of them to earn conventional or Executive MBA degrees, in some cases, at aforeign university. Recognizing that the MBA route is not appropriate for all managers,Messier-Dowty has been working through the Ontario Aerospace Council to examine thepossibility of creating an Executive Education Program for aerospace managers.

Succession Planning

Human Resources Vice President Barry Wohl has been working with senior management todevelop a succession plan. To develop and update the plan, he first meets with all vicepresidents individually to get cross-feedback on managers’ performance and to identify changesto the business that may occur over a three-year period and the implications for managementcompetency. He then develops a preliminary plan that is presented at senior management’s off-site meeting. The plan is then refined through a process of open discussion. According to Wohl,“Developing the initial succession plan was tough. There was a considerable amount of input togather and analyze; however, the annual updating process will be much easier. Besides makingthe company better prepared for the future, the succession plan is a motivating factor formanagers to perform well and build their potential.” The succession planning process developedat Messier-Dowty has been adopted by Messier-Dowty International.

Linking Company Strategy to Every Employee’s Job

Strategic Planning

At an off-site meeting in January 1996, the senior management team developed a new processfor planning and running the business based on a combination of bottom-up and top-downplanning. The process begins with managers discussing past performance and futureopportunities with their employees. This is followed by a senior management off-site meetingduring which the strategic plan is updated. The plan defines critical success factors to supportthe company mission and initiatives that are linked to these factors. Messier-Dowty’s missionand critical success factors are presented on the next page.


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Messier-Dowty Key Business Mission“Maintain and strengthen Messier-Dowty’s position as a world-leading landing gear

supplier in its chosen segments through the eyes of its stakeholders”

Critical Success Factors: What the team must accomplish to achieve its business mission

C Maximize profitabilityC Benchmark quality outputsC Provide world-class customer supportC Achieve 100 percent delivery reliabilityC Minimize utilizing working capital to finance business growthC Simplify and integrate business systemsC Maintain competitive advantage through innovative design and manufacturingC Create an environment that encourages people to maximize their contribution to the

business goals

The C.O.R.E. System

Messier-Dowty’s performance management process is called C.O.R.E. (CommunicatingObjectives and Results for Excellence). C.O.R.E. is the principal mechanism for linking thecompany’s strategy to the tasks and performance objectives of all employees and for aligningday-to-day operations with the business plan.

The C.O.R.E. process consists of the following six elements:

1. Communicating the strategic plan, critical success factors and initiatives.2. A responsibility review, in which the major responsibilities of an employee’s position are

reviewed and prioritized.3. Performance plans, developed to support the strategic plan and performance improvement

objectives.4. Progress reviews, which are formal and informal updates that are conducted during the

business cycle.5. A year-end review, which provides a final performance review between the manager and

employee.6. Developmental plans for each employee.

The C.O.R.E. process cycle begins once the annual strategic plan has been developed by seniormanagement. The critical success factors and initiatives are the key inputs to the C.O.R.E.


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process. Starting with the president and proceeding down through successive levels in theorganization, employees complete their C.O.R.E. responsibility reviews and performance plans.Non-union employees participate directly in the C.O.R.E. process. Unionized employees havetheir manager’s performance plan communicated to them and have a developmental plancreated.

Employees start a new C.O.R.E. process annually with their direct managers. At the initialC.O.R.E. meeting, management is responsible for ensuring that the employee understands theC.O.R.E. process, the critical success factors, and his or her responsibility for any initiativesand supporting tasks. The employee and his or her direct manager conduct a responsibilityreview to ensure that they are in agreement on the employee’s responsibilities and priorities,that the responsibilities are in alignment with the strategic plan and that performance standardsare understood. Opportunities for performance improvement are also highlighted.

Performance plans are developed for the significant tasks the employee is responsible for.These plans are tied directly to the initiatives and critical success factors.

The performance plan answers the following questions:

$ Why is this being done?$ Who is going to be involved?$ What is to be done?$ When is it to be done?$ What resources will be used?$ How can the objectives be achieved?

Once completed, the responsibility review and performance plan are approved by the direct andnext level managers.

The manager and employee meet on a regular basis to review and discuss progress in achievingthe performance plan. These meetings provide an opportunity for management to give feedbackand support, and to ensure that there will be no surprises at the end of the cycle. A formalinterim review is required about halfway through the year to document the status and results ofinitiatives. It also provides an opportunity to review the employee’s commitments, reassessplans and objectives, acknowledge good performance, update strategies and renewcommitments. At the end of the business year, the manager and employee conduct a year-endreview meeting to examine success in implementing the performance plan and the employee’seffectiveness in carrying out his or her major job responsibilities.

The interim and year-end reviews evaluate not only the achievement of objectives but also themethods used; how effectively people have worked together; effects on suppliers, customersand other departments; and the skills being used and developed. Results of performance plan


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reviews are communicated back to senior management to provide information on the success inachieving strategic plan initiatives. The results are also a major input for creating theemployee’s developmental plan.

Developmental plans are designed to assist employees in developing skills that will:

1. Address weaknesses identified in the year-end review.2. Improve organizational flexibility and employee mobility.3. Meet future organizational requirements for skills and qualified personnel.4. Meet the employee’s personal goals and aspirations.

There is no direct link between C.O.R.E. and compensation, although achieving one’sperformance plan is a factor considered in salary reviews.

Other Human Resources Systems

Messier-Dowty’s Human Resources Department has been updating systems for job evaluation,performance evaluation and compensation. These interrelated systems play a central role inemployee development, as well as in identifying the company’s human resources needs.According to Human Resources Vice President Barry Wohl, coming up with well-designedsystems is only the first step toward success. “For the systems to work, the Human ResourcesDepartment must get support from other managers and the company’s employees. We have toconvince them that the system is fair and will provide benefits that justify its use. The trust builtup through the communications initiatives provides a foundation.”

Messier-Dowty Employees are Driving Continuous Improvement

Regardless of where they work within the company — management, engineering, shop floor oradministrative offices — Messier-Dowty employees are increasingly being delegatedresponsibility to critique, invent and implement new practices.

The company is introducing lean manufacturing concepts to its operations, including re-organization of work into cells, the 5 S’s approach to work habits, elimination of non-value-added work and adoption of a pull or just-in-time system for managing the flow of workthroughout the plant. Tony Wood, Vice President, Operations, points out that the companydownplays the term lean manufacturing: “Labels get overused and can lose credibility. Ouremphasis is on getting people involved in making the improvements.” Employees areparticipating in the re-design process through action workout teams, which focus on specificmanufacturing problems or re-design objectives during seven-day problem-solving sessions.During the sessions, employees are trained in problem-solving and teamwork methods by afacilitator hired specifically for that purpose. The action workouts have so far resulted in


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several improvements to the company’s manufacturing operations and are expected to be anongoing mechanism for continuous improvement.

Process improvement at Messier-Dowty is by no means confined to the shop floor. Improvingthe company’s design and development processes is a high priority. George Novacek, Director,Electronics Facility at Messier-Dowty’s Peterborough operation, has been working on changingthe engineering processes and culture for five years. “When I first took over managing thePeterborough facility, most of the engineers were not overly concerned with the developmentcosts and times involved in their work. Also, because engineers like to design things, there wasa tendency to re-invent the wheel. The business mind-set needed to make practical decisionsversus buy decisions was not there.” Novacek has been instilling this business mind-set in hisengineers through a combination of training courses, coaching and leading by example. Itappears to be working. During the last five years, development times at Peterborough havebeen reduced from five to two years and sales have increased from below $2 000 000 to$7 000 000. Further improvements are expected as process improvement teams map design andmanufacturing processes to identify opportunities for the elimination of non-value-added steps.The Peterborough division has strengthened its manufacturing engineering function and ismoving toward closer integration of design and manufacturing engineering, which willultimately lead to concurrent engineering.

One of the major improvements currently under way at Messier-Dowty involves programmanagement. Messier-Dowty operates as a matrix organization with functional and programmanagers. A program manager is responsible for each landing gear program and must keep theschedule, budget, quality and statement of work in balance throughout the course of a program.Program managers must ensure that functional areas work well together and that manufacturingpriorities respond to customer requirements. To handle the growing number and complexity ofprograms, the company decided to introduce a new system that would support uniform programmanagement methods across all programs. Ken Chandler, Director of Program Management, isleading the team that is developing and implementing the new system. When they examined thecompany’s current program management practices, they found significant variations fromcontract to contract. Developing the new system has involved selecting the best practicesalready being used at Messier-Dowty and supplementing them with others used elsewhere.Program management software was selected that provided reasonable compatibility with plansfor the new system.

According to Ken Chandler, the challenges involved in implementing a new programmanagement system are 40 percent procedures-related and 60 percent people-related. Peoplewill have to know how to use the new system and why it is important. Everyone who will havesome contact with the new system, including program managers, procurement managers andengineers, will receive training on the system. Messier-Dowty has been working with theOntario Aerospace Council to develop a program management course that will providecomprehensive training for its program managers. It will be implemented at Messier-Dowty in


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2000. Some program managers, designated as super users will receive extra training and beresponsible for providing support to other users. To avoid overloading them, these super userswill be assigned relatively smaller programs during the start-up period. The new system will beimplemented on existing programs when they reach a gate or milestone point. To ensure thatthe people-related issues associated with the system are dealt with effectively, the vicepresident, human resources, is on the implementation steering committee.

Conclusion

Senior management at Messier-Dowty has set a clear mission and objectives for the companyand adopted values that are in the long-term interests of its customers, employees and owners.Management focusses on informing employees so that they understand the business, whydecisions are made, what the decisions mean to them and what they can do to help thecompany. The human resources function supports this process by developing and executing a human resources strategy as a key element of the company’s overall strategy. This represents adeparture from the traditional role of human resources as being primarily an administrativefunction. The new approach requires the senior human resources manager to be part of thecompany’s leadership and act as a change agent, in partnership with the other senior managers.

Messier-Dowty’s size appears to favour effective human resources management. The companyis large enough to have dedicated human resources professionals, but not so large as to makeorganizational change unwieldy. Nevertheless, the company’s approach to human resources,and many of its methods, can certainly be adopted by smaller companies, even those without aseparate human resources function. The starting point — the chief executive officer and allother managers should consider human resources to be one of their key responsibilities.



“Focussing on Values Creates anEffective Organization at

NMF Canada Inc.”

Best Practices in the Aerospace and Defence Industry — NMF Canada Inc.

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Company Profile

NMF Canada Inc. (also referred to as NMF) is a world leader in the production of large aircraftwing panels. Located in Mirabel, Quebec, 20 kilometres north of Montreal, the companyemploys over 180 people at its 9300 square metres plus manufacturing facility. As a majorsupplier to Bombardier, NMF Canada Inc. has provided wing panels for Bombardier regionaland business jets, including the Challenger, Global Express, Lear Jet 31, 45 and 60 and deHavilland Dash 8-400. Other customers include Mitsubishi Heavy Industries, Israel AircraftIndustries (IAI), Messier-Dowty, Avcorp and Bell Helicopter Textron.

NMF Canada Inc.’s proprietary Formax shot peening technology, used to manufacture wingpanels, provides the company with unique capabilities and a competitive advantage in theglobal marketplace. NMF has been building on this advantage by adding other processcapabilities as it evolves into a fully vertically integrated wing manufacturer. The 1990s havebeen a period of rapid expansion for the company, the expansion having occurred in threephases:

Phase I: NMF Canada Inc. was formed in 1991 and, at the request of Bombardier Aerospace,built a facility in 1992. As part of this initiative, the company designed and built the largestsaturation shot peening machine in the world.

Phase II: In 1995–96, the company added several downstream operations, including liquidpenetrant inspection, chromic acid anodizing, a paint shop for fuel-resistant coats and topcoats,and an inspection and finishing facility.

Phase III: In 1998, NMF acquired machining and design capabilities, which established thecompany as a vertically integrated manufacturer of wing assemblies, and set the stage for thenext major goal — to become a manufacturer of complete wings. The company acquired a10 000 rotations per minute, 3-spindle, 5-axis gantry milling machine, capable of machining18 metre long parts, and created a numerical control (NC) programming group, equipped withCATIA, NCL, Vericut and AutoCAD software. NMF also added a structural assembly facility.

The expansion has been accompanied by rapid growth in the company’s work force, which hasdoubled annually during the last seven years.

NMF Canada Inc. has been recognized as an outstanding aerospace supplier and for itsexcellence in management. In 1997, the company won the Mitsubishi Supplier of the YearAward and, in 1998, the company was recognized as a Supplier of Excellence by Israel AircraftIndustries for cost reduction and quality achievements. In January 1999, NMF was voted one ofthe 50 best-managed companies in the Arthur Anderson-Financial Post survey (also sponsoredby the Canadian Imperial Bank of Commerce and PeopleSoft).


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NMF Canada Inc. has a strong organizational culture, based on fairness, open communications,teamwork, learning and entrepreneurship. This case study examines NMF Canada Inc.’sorganizational culture and the management practices that created it.

Organizational Culture and Workplace Environment

To understand the organizational culture at NMF, one needs to know that most managers in thecompany have advanced from the ranks of the company’s production workers. OperationsDirector Guy Levasseur, for example, came to the company with a background in machiningand welding and was originally hired to work in production. Shortly after being hired, he sawthat there were opportunities to improve production methods and brought this to the attentionof President David Cook, who then assigned him responsibilities in methods development andsubsequently in management. The development of Levasseur’s career, and those of other NMFmanagers, parallels the growth of the company. “What this company looks like is what we looklike; the organizational culture was created from the ground up,” states Levasseur.

NMF Canada Inc. has a non-traditional management philosophy, based on semi-autonomouswork teams consisting of 10–12 employees and led by a team captain. The approachemphasizes multi-skilling and strives to maximize employee sense of ownership for the workbeing done.

The Management by Walking Around approach is widely practised at NMF, from the presidenton down. President David Cook can be found in the plant, discussing technical issues andfinding out what is new from employees. If there is a rush in production, NMF managers, whostarted out on the shop floor, will get involved in hands-on production operations. The presenceof managers who have advanced from the shop floor helps create a close working relationshipbetween managers and production workers. It also demonstrates that there are opportunities forpeople to advance in the company.

Most managers at NMF have learned how to manage people mainly from their own experienceand from each other. According to Levasseur, NMF managers always ask the question, “Howcan I manage my employees the way I wanted to be managed when I was doing their jobs?” Toanswer this question, the managers often discuss different ways of managing employees anddealing with specific issues. The company considers the shop-floor background of many of thecompany’s managers as one of its most valuable assets. As the company grows, themanagement approach will evolve but the goal for management is to stay close to its shop-floorroots. To this end, managers who move up through the ranks have a responsibility tocommunicate the management philosophy to those who join from outside.

NMF managers emphasize that their first priority is the well-being of the company’s employees,and this starts with an open-door policy. All employees can talk to any manager in thecompany. If employees are having problems with their work, managers try to find out why. If,


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for example, an employee is not suited for the work to which he or she has been assigned, themanager will try to transfer the employee to a different type of work or location in thecompany. In some cases, special arrangements have been made; for example, a painter with aknee problem had difficulty reaching the underside of wing panels. The solution was to havethe panels racked higher. In the case of disputes between employees, those involved areresponsible for bringing the problem to the attention of Management CoordinatorAnne Truchon, who designates a mediator to help the employees solve the problem.

To create an atmosphere of confidence and common purpose, the company emphasizeseffective communication, both vertically and horizontally, throughout the organization. Thereare frequent management meetings involving the supervisory level and above. Supervisorsdiscuss the outcomes of these meetings with their team captains, who then relay information toteam members. Operations Director Guy Levasseur also holds monthly employee–managementmeetings with small groups of employees. Managers make a point of listening to everyone whowill be affected by a decision. Once a decision is made, managers explain it to everyoneinvolved so those who disagree with the decision will understand the reasons behind it.

NMF endeavours to create an entrepreneurial atmosphere in which employees think about howthey can help the company succeed. Charts showing work schedules, performance in meetingschedule objectives and quality conformance are posted throughout the plant. To provide anopportunity for employees to see how their work fits into the big picture, the company isarranging an employee visit to a major customer’s plant.

Managers at NMF are expected to extend the team-based approach across departments. Forexample, they are encouraged to make their needs known to upstream departments, toanticipate scheduling problems in advance and to ensure the availability of additional people toavoid problems. If, for example, the on-hand supply of a particular part or material is fallingtoward problem levels, the manager responsible will talk to the relevant people to get thingsmoving before a serious shortage occurs. Vice President, Operations, Steven Kennerknechtpoints out that middle managers are the ones who see the problems first-hand; it’s important togive them support and latitude to solve them.

Although the management approach has evolved from the ground up through practicalexperience, managers understand that they must manage in a consistent manner. Decisionsmust be consistent with the company’s values and be in compliance with applicable regulations.While the line managers are very involved in human resources management, ManagementCoordinator Anne Truchon is responsible for documenting human resources-related proceduresand information, and for ensuring that the correct procedures are consistently followed. Humanresources management is governed by rules noted in the company’s employee manual. Thisdocument, which is provided to all employees, articulates the rights and responsibilities ofemployees and management in topics such as working hours, statutory holidays, sick leave,


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workplace behaviour, health and safety, seniority, job classification, pay rates and promotion.The manual was developed by management and a committee of employees.

Do employees like working at NMF Canada Inc.? Management Coordinator Anne Truchon hasbeen with the company for three years and has worked with managers and employeesthroughout the company. According to Truchon, “For people who really like challenges, alwayslearning new things and being part of a team, this is a great place to work.” Based on NMF’sextremely low turnover rate, less than 2 percent per year, the company has proven that it hasbeen able to find the right kind of employees.

Recruitment, Training and Development

NMF has found that a disciplined approach to recruitment is essential to building an effectivework force. The recruitment process begins with the management coordinator conductingpreliminary screening interviews with new applicants, as well as obtaining and checkingreferences. Line managers, for whom the new employee would be working, conduct follow-upinterviews. All new employees must undergo a medical exam to ensure their suitability foremployment.

New employees take a basic training course and receive a training manual covering thefollowing topics:

• workplace health and safety;• familiarization with the workplace, including the different departments and their

responsibilities and functions; • documents used for production, including work orders, travel cards, inspection reports,

etc.; and• terms related to scheduling, quality and process specifications.

New employees are assigned to work closely with an experienced employee during an initialtraining/probationary period, which may be three months for employees assigned to the moretechnically demanding Formax (shot peening) process, or three weeks for employees who willstart work in other operations within the company. There is a formal evaluation at the end ofthe probationary period, at which time the employee must demonstrate knowledge of thecompany’s operations and the production methods that he or she will be using.

In addition to on-the-job training, employees receive formal instruction where needed.Educational institutions, upon NMF’s request, provide in-house training courses in technicalareas, such as machining and painting. The company is currently examining possibilities ofhaving outside service providers conduct customized courses in shot peening and in basicindustrial operations. Each year, two or three of the most promising shot peeners are sent to aninternationally known shot peening course. The company also reimburses employees for tuition


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for successful completion of approved courses at outside educational institutions. To beapproved, courses must be relevant to the employee’s current or future responsibilities in thecompany.

The company makes every effort to help people advance their careers within the company. Forexample, job openings are posted in the plant for five days. Part of every manager’s job at NMFis to find ways to match people with job opportunities. Managers make a point of learning aboutthe goals and capabilities of employees and sharing information among their fellow managers.Operations Director Guy Levasseur describes the approach, “Developing employees to meetfuture opportunities is like a chess game and we try to think six moves ahead.”

NMF’s employee development philosophy is very evident in the evolution of the company’sFormax process. Formax, the most unique and technically demanding of NMF operations,involves using shot peening for the precision forming and surface conditioning of large,integrally machined aluminum wing panels. Formax has several advantages over other formingmethods, including long-term retention of complex curvature. Once a wing panel is formed,saturation shot peening is used to create a compressive surface layer with a homogeneous grainstructure that extends fatigue life and resists stress corrosion.

Initial shot peen forming, as well as the final saturation peening, is done in a large, computer-controlled machine. The detailed or surgical forming work is done by highly skilled operatorsusing hand-held shot peening tools. As the wing panel is formed, it adopts the contours of achecking fixture, but the shape changes are controlled by the operator. It takes one to four daysto form a wing panel, depending on its size and complexity. The forming pattern is critical toquality and cycle time. François Adam is the supervisor of Formax operations. He emphasizedthat it takes special abilities to be a good Formax operator: “These people are like artists. It’shard to describe what makes a good operator; mathematical ability appears to be the commontrait.”

NMF has been standardizing its shot peening processes to ensure repeatability and tocontinuously improve quality while reducing cost and cycle time. This transformation of shotpeening from a craft-oriented process to a more systematic, documented technology is beingaccomplished by a group of the company’s most highly skilled and creative shot peeningoperators, known as Team Formax. The creation of this team has provided these individualswith challenging career opportunities as process developers. In addition to standardizing shotpeening procedures, the team is responsible for ongoing development of Formax technology,troubleshooting and employee training.

George Hébert, who joined the company six years ago as a maintenance worker, leads TeamFormax. He had been trained as an electrician but was not able to find a job in his field. Whenthe company was short-handed and facing tight production schedules, Hébert asked if he could


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work in production. He received training in basic manufacturing methods and was soon workingon production. Since this first opportunity, he has continued to advance in the company.

According to Hébert, replacing the traditional approach to shot peening with Formax has involved people issues as well as technical ones. “Everyone had their own best way of doingshot peening and egos were naturally involved.” Hébert relied on the company’s teamphilosophy to make the project work, telling his colleagues, “We each have our way of doingthe job but as a team we need to find out what works best.” He points out that it is important toinclude people with different ideas on the team to ensure that the best way will be found. Tobecome a Team Formax member, one must demonstrate superior ability in shot peening andhave the necessary character attributes, such as working well in a team, desiring technicalchallenges and being able to teach others. Admitting a new member to the team is a groupdecision.

Although the Formax approach has taken some of the art out of shot peening, it remains a verytechnically demanding process. To assist new workers in acquiring the required skills, Hébertwrote a technical manual. He has also developed a seminar for Formax technicians to help themfurther develop their skills.

NMF’s management approach encourages employee versatility. About 80 percent of theemployees are cross-trained in more than one production skill. Cross-training is not a formalprocess; managers encourage employees to learn the skills required to work in different parts ofthe company. François Adam, the supervisor responsible for Phase I (Formax) operations,joined the company in 1996 and has worked in both Phases I and II. One of the advantages hehad when he started in Formax was that he came from the downstream process, and knew howhis work would affect his colleagues. “In this company, everybody knows what the other guy isdoing. It helps us get the job done.”

Stephane Fortin is the supervisor for Phase II operations, which include anodizing, painting andshipping/receiving. He joined the company in 1998 as a mechanic. Along the way to becominga manager, he worked in painting, Formax and tooling. Fortin believes that his experience inother parts of the company helps him manage the Phase II operations. In turn, he helps othersgain experience: “I am sharing some knowledge on painting techniques with the anodizing teamleader,” says Fortin, “which should eventually enable that individual to take on moreresponsibility.”

The emphasis on versatility applies to other areas of the company as well. Michael Deshaies,Director of Machining Operations, is the company’s most experienced computer numericalcontrol (CNC) programmer and has trained others at NMF and elsewhere. He points out thatCNC programmers must understand machining as well as programming because they areinterrelated — the quality of their machining knowledge influences their programming, which inturn influences the efficiency and quality of machining.


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NMF’s policies in multi-skilling, good communication and promotion from within serve toreinforce each other. François Adam summarizes the attitude toward helping others succeed:“We all try to train our employees so they can do our jobs. Making the team stronger is the bestway to enhance our individual job security. If, in the future, I get an opportunity to move up theladder, I want to be sure that there is someone who can take over my current job.”

A high level of commitment, combined with the versatility resulting from multi-skilling hasenabled the company to turn on a dime to meet challenges. For example, one customer askedNMF to repair the damaged wing on a new aircraft several days before the scheduled deliverydate. They had five days to do the repair — four days to repair the wing using shot peening and the fifth day to paint. NMF put a task force together and sent the people and equipment on siteto do the job. To accommodate the effort, many people in the company had to do a differentjob for four days. Successfully meeting this challenge provided a positive experience for NMF’semployees. In addition to their sense of accomplishment in getting the job done, there was arealization that the company’s ability to apply its technology in different settings could lead tofuture business opportunities.

NMF’s employees are encouraged to contribute to improving quality and productivity. There isa suggestion box, but the main way that employees contribute is through direct contact withtheir managers. The company is in the final stages of implementing ISO 9002. It has designatedan ISO coordinator and hired an outside consultant to provide ISO-related expertise; however,everybody is on the ISO team. Employees are involved in developing the ISO documentation.Implementation teams, consisting of a supervisor, production team leader and one or twoemployees, are responsible for implementing ISO within each area of the company. VicePresident, Operations, Steven Kennerknecht points out that the company used the sameapproach when implementing its Materials Requirements Planning system. “If you’re going tohave an effective system, every department has to take ownership, beginning at thedevelopment stage.”

Performance Management and Compensation

Being committed to fairness and encouraging everyone to develop to the best of his or her ability are worthy goals, and most companies would agree with them. To put these ideas intopractice, however, a company needs effective systems for measuring performance and usingthe results to compensate employees and help them advance in their careers. NMF Canada Inc.has implemented a system to accomplish these goals.

As mentioned earlier, new employees in technical positions, such as shot peening, mustcomplete a three-month training/probationary period, during which time their abilities to masterbasic skills and demonstrate good work habits and attitudes are evaluated. Thereafter,employees are evaluated as they progress through the levels associated with their job category.There are three or four levels above the beginner level, depending on the job category. The


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knowledge and performance requirements for each level are defined and included in thecompany’s employee manual. Lower level requirements include understanding productionoperations and being able to perform them, interpreting work instructions and demonstratinggood work habits. Upon progressing to the highest level within a job category, one needs todemonstrate the ability to inspect one’s own work, to train workers to meet the requirements ofthe lower levels, to manage other employees and to develop the process further.

Each employee is evaluated for promotion to the next level of his or her job category afterworking a specified number of hours at the current level. The number of hours betweenevaluations varies with the job level and category. If an evaluation outcome is satisfactory, theemployee moves up to the next level. If the outcome is unsatisfactory, a second evaluation isdone a month later. The employee and his or her supervisor conduct the evaluation using athree-part evaluation form. Key topics covered in evaluations are listed below. Oncecompleted, the evaluation form is signed by the employee and supervisor. The completed formthen goes into the employee’s personnel file and the employee receives a copy.

Pay rates are tied to job levels within each category and are revised upward each year based onpublished cost-of-living statistics. By improving their skills and performance, employees areable to achieve pay raises beyond what is needed to match cost-of-living increases. If anemployee reaches the highest level within a job category and promotion to a higher job level isnot available, the employee can earn an additional pay raise at management’s discretion.

Evaluation of Employee Performance and Development

Part One (completed by employee)

• Results achieved with respect to key objectives set at the last evaluation• Suggestions and recommendations that would assist the employee in accomplishing his or

her work, and obstacles that exist• Objectives relative to the current position for the next evaluation period• Proposed steps for improving skills and capabilities in the future• Additional comments

Part Two (completed by management; performance is rated on a five-point scale)

• Employee knowledge relative to position, including technical knowledge, rules and policies,health and safety standards, and relevant industry requirements

• Attitude, including working well with management, being innovative and contributing newideas, handling stress and conflicts, accepting more responsibility and attendance


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• Productivity, including the amount and variety of work accomplished, meeting schedules,use of proper methods, working to the required standard with a minimum error rate,contribution to the team and ability to deal with non-routine situations

• Communication: written and verbal, with supervisors and co-workers, knowing when to askfor clarification

• Judgement: knowing when to take independent decisions and when to consult others,demonstrating initiative, handling complex subjects and recognizing when to changeschedules to accommodate priorities

• Management capabilities: contributing to the development of subordinates, assuring thattheir work is consistent with company standards, effective planning of the team’s work andresolving interpersonal conflicts

Part Three (completed by employee)

• Specifies training and development topics to be addressed in the upcoming evaluation period

Conclusion

NMF Canada Inc. has developed an organizational culture and human resources managementpractices that effectively meet its needs as a small but rapidly growing company. Although thecompany has avoided overly complex procedures and documentation, it has not ignored theneed for a systematic approach to human resources management. It has put in place thefundamental elements of effective human resources management, including company-widevalues and expected behaviours, systems for performance evaluation and compensation, and acommitment to managing consistently. As the company grows, it can expand its humanresources system to meet its evolving needs.

One of the most outstanding features of NMF’s management approach is the emphasis placedon values, that is, the shared ideas about how the company should operate. Although there is noformal statement of the company’s values, it is very clear that NMF managers share a numberof values that guide the way they operate. The following is an unofficial list of NMF CanadaInc.’s values:

1. Focus on the customer, including people in the company who depend on your work,aerospace companies that buy the product and the people who travel on aircraft built withour products.

2. Employee well-being is the highest priority. Employees will be treated fairly.3. Technical skills and knowledge are critical to our success.4. Managers should encourage and support employee development.5. Everyone can be part of the entrepreneurial team. How can you help the company

succeed?


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6. If you develop your capabilities and contribute to the company you should be givenadvancement opportunities.

7. Share information with others. Help them solve their problems. 8. No one has all the right answers. Work as a team to find the best way to do things; then do

them consistently.



“Training and Development atStandard Aero Limited

Built on a Commitment toContinuous Improvement”

Best Practices in the Aerospace and Defence Industry — Standard Aero Limited

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Company Profile

Standard Aero Limited is one of the world’s largest independent gas turbine engine andaccessory repair and overhaul companies. Headquartered in Winnipeg, Manitoba, with facilitieslocated around the globe, the company has over 60 years of experience in serving the needs ofaircraft, marine and industrial engine operators in over 80 countries. Standard Aero’s customersinclude corporate and charter aircraft organizations, governments/militaries, power generationand gas line pumping companies, and some of the world’s largest regional airlines.

Standard Aero’s strategy focusses on ensuring that its customers operate their engines at thelowest possible direct operating cost. The company emphasizes a repair rather than replaceapproach and has extensive facilities for component restoration. It has developed proprietaryrepair processes that, in some cases, enable components to exceed their original designspecifications. The company offers a comprehensive range of related services, includinglogistics, financing, diagnostic, reliability and monitoring tools; program management and fieldservice; troubleshooting; and engineering support.

Standard Aero employs 1200 employees in Winnipeg and 2200 worldwide. The non-unionizedwork force is about 25 percent managerial and administrative, 10 percent engineering, and65 percent skilled trades and technicians. The company’s matrix organizational structure isbased on strategic business units, corresponding to engine repair and overhaul (R&O) programs,and functional areas, such as engineering, operations, marketing, quality and human resources.Within the strategic business units, production and support operations are organized into team-based work cells. Human resources and most other functions within the company havepersonnel assigned to the strategic business units as well as within a central department. Theorganizational structure has five levels, ranging from the president to the shop floor.

During the last six years, Standard Aero’s revenue has grown by 196 percent to over$4 000 000. Exports to the United States, Europe, Asia-Pacific and other regions of the worldaccount for close to 80 percent of total revenue. The company’s Large Engine Product Unit,servicing Allison T56/501D and AE2100 engines, has the largest world market share in therepair and overhaul industry. Several other business units are ranked second and third by worldmarket share.

Standard Aero cites the caliber of its work force as being a critical factor in achieving success.To create this work force, the company has developed a highly sophisticated and disciplinedtraining system. This case study illustrates the training system and its links to the firm’s otherhuman resources systems, as well as its business strategy and operations.


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Creating the Right Environment

Although this case study focusses on training and development at Standard Aero, it isworthwhile to examine how the company’s other human resources practices help create a goodworking environment, without which even the best training system would be ineffective. Thecompany’s approach to human resources can be summarized with the PRIDE acronym:Provide a positive workplace environment; Recognize, reinforce and reward everyone’sefforts; Involve everyone; Develop skills and potential; Evaluate and measure progress whilemanaging employee expectations. The first step, provide a positive workplace environment, isdescribed below.

Human resources plays a central role in fostering Standard Aero’s team-oriented culture andemphasizing harmonious relations and trust between managers and other employees. Humanresources is readily accessible to employees through human resources coordinators, who areresponsible for each business unit. The human resources coordinators are generalists who dealwith a wide range of human resources issues. Employees are encouraged to go to humanresources with problems and have the option of discussing their situation with anyone theywish. Managers learn that they should not feel threatened if employees go directly to humanresources with a problem. As Human Resources Director Alex Yoong points out, “It doesn’tmatter who was approached first, as long as problems are resolved to everyone’s satisfaction.”Besides dealing with hiring and staffing of new employees and conducting exit interviews, thehuman resources coordinators handle day-to-day employee relations issues, including careeropportunities and development.

Effective management−employee communication is fundamental to having a motivated andempowered work force. The company strives to solicit employees’ input wherever feasible. Toprovide input effectively, employees must be informed; for example; they should understandthe reasons for management’s decisions. The president gives a “state of the company” addressgenerally once a year and, several times a year, members of the executive management groupmeet with employees to discuss company developments. Cell leaders share highlights of business developments with employees at regular meetings.

Standard Aero does a number of things to boost employee morale and build loyalty; forexample, funding Christmas parties and summer picnics. Besides a traditional gift of aChristmas turkey, employees receive a yearly bonus, equal to about 15 percent of one month’spay. Also being considered is a scholarship program for employees’ children, as well as acomputer purchase program. To help employees address work-related and/or personal problems, the company instituted anEmployee Assistance Program, delivered by an outside counselling service. Employees usingthe service are guaranteed secrecy and are guaranteed that their jobs will not be at stake.


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The Human Resources Department continually works to find ways to improve its services toemployees. For example, when an employee decides to leave the company, an exit interview isconducted to determine the reasons. The department also works with its counterparts in othercompanies to benchmark human resources practices.

Overview of Training at Standard Aero Limited

The Standard Aero Human Resources and Training Organization

Standard Aero’s human resources function has 24 people in Winnipeg and 12 others outsideCanada. The executive vice president, human resources, heads the human resources function.Reporting directly to him are the directors of human resources and training. There are sixtraining staff in the Training Department, and several other staff located elsewhere in thecompany who report jointly to the training manager and their business unit manager. Thecompany tries to have as much training as possible delivered by line personnel because they aremost current in the techniques to be taught. As Human Resources Executive Vice PresidentBruce Clarke says, “The goal is to have everyone in the company become a trainer and atrainee.”

The Standard Aero Approach to Training

In its current form, Standard Aero’s training system is about three years old, having evolved toits present state through 16 years of effort that began when Bruce Clarke, now Executive VicePresident, Human Resources, joined the company as its first training coordinator. StandardAero’s human resources personnel emphasize that management support is critical to the successof the company’s training and development program. Management must create a culture thatsupports training and allocates the needed resources. All training personnel at Standard Aeroplay a role in gaining this support. A key responsibility of the executive vice president, humanresources, is to get training concepts across to other senior managers. The training coordinatorswork closely with cell leaders to ensure that training meets the needs of each cell and tooptimize scheduling. Production demands sometimes make it difficult for employees to maketime for training; however, because senior management assigns training a high priority, theneeded time is found.

According to Clive Bebbington, Director of Employee Training and Development, “Training isa process, not an event.” Standard Aero strives to provide training that is closely geared tocompany and employee needs and is delivered reliably and cost-efficiently. The mostimmediate reason for training is to meet regulatory requirements, as defined by TransportCanada, Federal Aviation Administration (FAA), International Organisation for Standardization(ISO). Other reasons include improving an employee’s skills in his or her current job,developing skills for future jobs, and attracting and retaining employees. Training needs aresystematically evaluated and used to plan training programs. Training is delivered by qualified


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instructors using documented, consistent methods. Progress and outcomes are monitored toensure quality and to support continuous improvement. Training is followed up with relatedhands-on practice within a reasonable time period, and this practice is documented.

The systems for training and development, job classification, performance management andcompensation are mutually consistent and use essentially the same approach for technical,professional and managerial skills. To date, the approach has been implemented for all technicalpersonnel, first-line managers and 70 percent of the company’s professionals.

Standard Aero trains to qualify people in skills rather than tasks. They must understand whyprocedures are done and be able to apply them under a variety of circumstances. The companybelieves that versatility creates value for the company and the employee. Multi-skilling isparticularly valuable in a cell-based organization as it allows the cell to handle changingworkloads and solve problems involving more than one skill. Cross-training (training people inseveral skill sets) is a big investment. Besides the direct training costs, it can involve paying ahigher than regular rate to a trainee in recognition of skills achieved in other areas. Thecompany considers this investment worthwhile.

The company encourages employees to attain relevant professional designations, such as thoseassociated with the Canadian Aviation Maintenance Council (CAMC), the Association ofProfessional Engineers and the Purchasing Managers Association of Canada. This promotesprofessionalism and makes the company more competitive in the marketplace. The companypays training costs and membership dues associated with these designations. Possessingrelevant designations is a prerequisite for achieving the highest pay rate for a particular job. Standard Aero has been instrumental in validating the concept of a Gas Turbine EngineTechnician, one of the designations developed and supported by CAMC. This designationdefines a cross-trained gas turbine engine mechanic and inspector. The skill set combinesdismantling, assembly and inspection into one job, replacing the old approach in which thesetasks were done by different people. The old way missed opportunities to create synergy amongthese tasks; for example, performing some inspection during dismantling.

Types of Training

Training for new Standard Aero employees begins with the company’s orientation and basictraining programs. The orientation course (22 hours over five days) provides an overview of thecompany, health and safety procedures, regulatory compliance and quality assurance and anintroduction to the company’s training system. Employees receive a package containing anemployee handbook and other documents containing information found in the orientationcourse. Technical employees take an additional basic training course (48 hours overapproximately 3–9 months) that provides comprehensive coverage of basic manufacturing


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Training Cycle and Documentation

skills, including precision measuring, blueprint reading, lock-wiring, torquing, quality assuranceand other skills.

Standard Aero provides technical and managerial training to enable employees to developthroughout their careers. Most of this training is provided in-house by company personnel andsome outside instructors. The company also pays the tuition for employees to take relevantexternal courses outside normal working hours.

The Training Cycle

Ongoing training and development at Standard Aero is based on a one-year training cycle. Theprocess is managed by training coordinators and receives input from employees and theirmanagers. At the beginning of the training cycle, skill gaps are identified and training plansformulated and recorded in training documents, described below. To avoid redundant training,qualified employees can be exempted if they meet the required standard. During training,progress is monitored and the employee’s direct manager signs off when the employee hasdemonstrated attainment of the required skills. Training outcomes are then entered into trainingdocuments. Progress is tracked by training coordinators to ensure that the time taken tocomplete courses, and the training/workload ratios, are reasonable. Darryl Rudge, QualityAssurance Training Manager, points out that the Quality Assurance Department does qualityassurance on training processes to ensure that they are operating as planned and that the qualityof workmanship meets the company’s standards.


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Standard Aero uses the following tools to manage training and development:

Employee Development File: Current information on training and development, e.g., copies ofcertificates, transcripts and training database printouts, is contained within a file for eachemployee. As the employee completes training and acquires experience, the file is updated. Thefile contains only training-related material. It belongs, and is always accessible, to theemployee, but is held by the manager to ensure adequate security. Information is transferred tothe employee’s permanent personnel file at the end of the annual training cycle. People leavingthe company can take their training files with them.

Training and Development Plan: A training and development plan defines the skills needed fora particular position and documents training progress on an ongoing basis. Training anddevelopment plans are used to plan and control training to meet skill set requirements. Trainingcoordinators work with employees and their training managers to implement training anddevelopment plans. They are initiated within six months of beginning employment and updatedon an ongoing basis as skills are required. The training and development plans of employees ineach cell are used to update the skills matrix for that cell.

Employee Development Plan: Employee development plans identify training and developmentneeds and describe agreed upon plans to address them. They are created by doing a gapanalysis between an employee’s skills and his or her training and development plan. Employeedevelopment plans specify areas of development, objectives for the development period andcourses to be taken. They are initiated upon beginning employment, re-issued annually andupdated at six-month intervals. While in progress, the plan is kept in the employee developmentfile. Each year, at the end of the training cycle, the completed employee development plan isforwarded to the Human Resources Department and placed in the employee’s personnel file.

Skills Matrix: Skills matrix charts, posted in every work cell, document the available skillswithin the cell. There is a row within the matrix for each cell member and a column for eachskill used in the cell. An individual’s progress through four levels for each skill is shown byprogressively drawing the four sides of a square within the intersection of the appropriate rowand column. The trainer and trainee must sign off at each step and the cell leader and trainingcoordinator sign off when Level 4 is completed. When an appropriate group of skills has beensigned off, the trainee is assigned a program of work (experience package) that he or she mustcomplete using the skills acquired.

Training Database: The training database provides a record of skill acquisition, internal andexternal courses, and designations for each employee. It also provides an overall view of the work force capabilities for planning purposes. Employee-specific printouts are placed in one’semployee development file.


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Resources Used and Return on Investment

Training hours at Standard Aero, as a percentage of payroll, vary over time due to changingcompany and employee needs. The company expects that, over the long term, training hoursamounting to 6–7 percent of total hours worked would be a sustainable level. According toDirector of Employee Training and Development Clive Bebbington, it is difficult to measure thereturn on training investments accurately. A more practical approach is to determine needsaccurately, set the right training objectives, and design and conduct the training in the mostcost-efficient manner possible.

Job Classification, Performance Appraisal and Compensation

In 1996, Standard Aero assessed its system for job classification, performance appraisal andcompensation. Focus groups were used to determine employees’ level of satisfaction with andspecific issues related to the existing system. The feedback indicated a need to improveconsistency with respect to pay grades and benefits, such as vacation time. There was also aneed to provide more uniform mechanisms for career development. Furthermore, employeesdid not perceive value in having separate systems for salaried employees and those paid anhourly rate. Feedback results were shared with employees, making the change process moreopen and gaining everyone’s support.

The first step in redesigning the system was to develop consistent and accurate job descriptions,using a systematic process of job evaluation. Marion Johnston, Manager, Compensation andHuman Resources Information System, emphasizes that doing this right required considerableeffort and attention to detail. To avoid inconsistencies and prevent bias, human resourcesprovided training to management on how to evaluate jobs. The department also obtainedinformation on salaries through external surveys and used this information to assist in settingcompensation levels. To improve the system and increase buy-in, human resources providedemployees with the opportunity to review the results of job evaluation and voice their concerns.

After a three-year period of redesign, the new systems for job classification and compensationhave been implemented at Standard Aero. They provide a uniform approach for both salariedemployees and those paid an hourly rate and match pay to skills and performance. Theillustration below shows how an employee can progress in terms of pay and job classification.Within a particular job classification, an employee’s pay is 70–100 percent of the job rate. Byperforming well and adding skills, the employee can increase pay as a percentage of the job ratewithin the current job level and subsequently move to a higher job level. At 100 percent of thejob rate, employees can earn a re-earnable bonus of up to 10 percent of the annual job ratethrough several mechanisms, such as exceptional job performance, cross-training/multi-skilling,participating on continuous improvement teams, being a trainer/mentor, pursuingdesignations/certifications and working on other projects of value to the company.


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Progression Within and Between Two Job Levels

The new system promotes employee training and development and supports the multi-skillingapproach; however, the transition to the new system required some measures to accommodateemployees. In cases where employees’ existing salaries were above the new job rate for theirclassification, the company gave these individuals priority on training and developmentopportunities to allow them to progress to a higher job classification prior to the new policytaking effect.

The company has implemented a new system for performance appraisal that uses a software-based evaluation tool to assist managers in conducting annual performance appraisals. The off-the-shelf software has built-in flexibility, which enabled Standard Aero to configure thesoftware to meet its own needs. The software leads the evaluator through a series of questionsdealing with technical and behavioural competencies that are derived from the employee’s jobdescription and the company’s vision, values and goals. Currently, the employee’s directmanager performs the assessment, which must be signed off by at least two levels ofmanagement. Down the road, the company may consider expanding the assessment to a360 degree format, in which an employee’s manager, subordinates and co-workers allprovide input.

The new system provides a more consistent approach to deciding who gets a particular job andhow much the job pays. The output of the performance appraisal, in combination with trainingoutcomes, is used for salary and promotion decisions, to identify training and developmentrequirements, and to assist in company-wide human resources planning.


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Some Standard Aero Training Programs

On-the-job Technical Training

Standard Aero’s technical training is provided through a combination of classroom and on-the-job training. The company is applying similar principles to in-house classroom training.

Technical Training and Development Coordinator Len Baspaly is responsible for the on-the-jobtraining program. Baspaly emphasizes that training must be done with the same attention toquality as the company’s repair and overhaul operations; otherwise, the outcomes will not beacceptable. He says that the old approach to on-the-job training was “learning by osmosis.” “Itdoesn’t work very well if there is no rigour, how do you know that the people doing thetraining are teaching the right things? You need a system to prevent the possibility of the wrongway being taught,” states Baspaly.

On-the-job training is carried out in accordance with well-defined company practices designedto maximize effectiveness. Before training starts, the instructor questions the trainee concerninghis or her mental and physical state to ensure that the trainee is ready, willing and able to takethe training. During a pre-training discussion, the instructor covers the following points:

• Importance of the job and consequences of error. Baspaly asks the instructors tocommunicate the message, “You are working with nuts and bolts, but people’s lives willdepend on how you work with them.”

• Use of Original Equipment Manufacturer or approved documentation.• The sequence of steps in the training, including the start and end points and critical steps. • Safety issues, including bail-in/bail-out procedures (to be used by the instructor or trainee,

respectively, for interrupting the trainee’s use of power-on equipment).

Training lessons are carefully designed. The trainer and cell leader may decide what skills are tobe taught, but the trainer is responsible to ensure that all on-the-job training and follow-upevaluations comply with relevant technical standards and approved procedures. In other words,on-the-job training is used only for teaching approved technical processes. Some good practicesthat must be built into on-the-job training include:

• ensuring that the trainee is involved in hands-on practice as soon as possible after learningtheory;

• ensuring that interruptions do not detract from training;• ensuring that training is as realistic as possible; for example, tools and materials should be

where they would normally be found in the working environment;• enforcing, for safety reasons, the requirement that the instructor must never turn his or her

back on the trainee during the training session; and


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• encouraging the trainer not to step in unless trainees are about to damage the part, themachine or themselves.

Trainees are evaluated using well-defined procedures and criteria and receive a rating of Passor More Practice Needed. The trainee must demonstrate 100 percent capability to meet thecriteria and the instructor must be truly confident that the trainee has reached the desired levelof competence in order for a passing grade to be given. If the result is more practice needed, theinstructor and student take a break prior to discussing where improvement is needed. There is apost-training period of supervised practice during which the employee must successfully utilizethe acquired skills to perform a specified number of operations.

Becoming an on-the-job training instructor requires special capabilities and commitment.During a one-day course, followed by two on-the-job evaluations, prospective on-the-jobtraining instructors learn training and evaluation methods and about the personal characteristicsof effective trainers — integrity, responsibility and consistency. Each instructor trainee is askedto do some soul-searching before deciding to become a trainer and must have the support of hisor her cell leader. Before being qualified as trainers, they must develop a new training lessonfor the on-the-job training program and obtain approval for its use. Prior to conducting on-the-job training, instructors must be technically qualified in the area of training, as well as receivetraining authorization from the Training Department. Approximately 55 percent of those whotake the on-the-job training Instructor’s Course become qualified instructors. Newly qualifiedon-the-job training instructors receive a framed certificate under glass, plus a $50 gift certificateto a local restaurant. Being an on-the-job training instructor is one way to earn credits towardthe re-earnable bonus.

Apprenticeship Program for Machinists

Standard Aero has developed a provincially approved (Red Seal) internal apprenticeshipprogram for machinists. John Leroux, Training Coordinator for the Component RestorationServices Business, explains the problem with traditional apprenticeship training: “It requireseight-week blocks of time away from the job to attend classroom and practical instruction at atraining institution. This is not feasible for most people and companies, due to lost wages andproduction time. Typically, apprentices tend to go through several companies and collectEmployment Insurance benefits during time away from work.”

The company developed an alternative program for apprenticeship training that spreads thetraining period over a ten-month period with the training being done in the evening and on the weekend. As with conventional apprenticeship training, the mix is 70 percent shop time and30 percent theory. The new training arrangements make it possible for the apprentice tocontinue working throughout the training period, providing benefits to the individual, thecompany and the economy. Standard Aero proposed the arrangement to the Government ofManitoba and obtained funding to hire instructors from local technical colleges. As part of the


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agreement, Standard Aero reserves some places in the program for smaller companies. Studentstake the training on their own time and pay for their own textbooks.

Standard Aero’s journeyperson machinists are involved in the program as mentors. Some werehesitant, at first, to become involved. Leroux asked them to think about the person from whomthey received their training. Did they appreciate that person’s help? He suggested to them thatthey have a responsibility to complete the circle. The response has been very positive, withmany journeyperson machinists participating. Besides the intangible benefits involved, being amentor is another way that Standard Aero employees can earn credits toward the re-earnablebonus.

The apprenticeship program has been very successful, with over 70 apprentices currentlyenrolled. A recent analysis of exam performance, conducted by the Manitoba Ministry ofEducation and Training, showed that Standard Aero program graduates scored significantlyhigher than average. The company’s scrap and re-work rates have decreased as a result of thetraining.

Standard Aero has developed a flexible approach to help experienced machinists obtainjourneyperson qualifications. The individuals involved include people who have learned on-the-job, people who have been away from school for a long time, or immigrants who havecompleted programs in other countries that are not recognized in Canada. They may also needto strengthen their English language skills prior to writing provincial board exams. Both groupshave the practical knowledge and required hours of experience needed for the designation. Thecompany provides individual assessments to identify what language, math and technical trainingis needed to pass the provincial board exam and, if the employee wants to continue, contractsteachers to tutor the employee in the required areas.

Health and Safety Training

Standard Aero promotes ongoing health and safety awareness, knowledge acquisition andproblem solving through several safety committees involving managers and employees at alllevels and throughout the company. These committees include (1) an executive levelcommittee, (2) safety committees for each business unit (consisting of managers and an electedemployee representative for each cell in the business unit) and (3) committees to deal withspecific issues, such as job-hazard analysis, respiratory concerns and hearing conservation.These committees meet regularly and are interconnected through common members. Totransfer the information developed by safety committees to all employees, safetyrepresentatives often speak on safety topics at weekly stand-up meetings.

Safety Officer Bob Tetrault emphasized the need for ongoing awareness building, “The keychallenge is to build safety into the company culture and keep people’s awareness of theirresponsibilities high.” This challenge is being met. Trevor Boulanger, Safety Training and


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Chemical Safety, cites some results: “The average Workers’ Compensation premium inManitoba is $1.49 per $100 of payroll. By achieving a low and decreasing accident rate,Standard Aero has been able to reduce its premiums from $1.46 to $0.25.”

Management Training

There are about 500 people employed at Standard Aero in the management and professional jobcategories. To support its policy of promotion from within, the company is implementing atraining program for managers, designed to be followed over three to five years.

Although the company previously outsourced all its management training, it has decided tobring much of it in-house, to lower costs and increase flexibility. The new program uses acombination of internal and external courseware and instructors, including:

• The Canadian Institute of Management (CIM) Program, delivered through the Universityof Manitoba. This program provides baseline skills in various management functions, suchas finance, human resources and information technology. People are encouraged to pursuethe CIM designation on their own time. The company pays the tuition and dues.

• A leadership-oriented training program, which is delivered through a combination ofvideos and in-person facilitators, was purchased from a major private sector trainingprovider. Alicja Rarog and Jack Bernier, coordinators for professional training anddevelopment, have taken facilitator training from the training provider and act asfacilitators for in-house delivery of the program to Standard Aero managers at its facilitiesin Canada and in other countries.

Training to Support Quality and Productivity Improvement

Standard Aero’s Quality Assurance and Training departments work closely with each other toprovide quality training to employees. According to Quality Assurance Director Kim Olson, thecompany’s matrix organization provides an effective framework for involving both departmentsin quality training. New employees receive an introduction to the quality assurance systemduring orientation or basic training. This includes an overview of quality principles, viewingquality from the customer’s perspective, the cost of poor quality, the company’s qualitydocumentation, the role of the Quality Assurance Department, employee and managementresponsibilities, measures of performance (quality, cost and turn-time) and continuousimprovement. Employees attend in-house seminars on a variety of quality topics and receivetraining to acquire internal quality assurance qualifications as needed.

Training is also provided to employees working on continuous improvement projects. TheQuality Assurance Department has trained about 25 continuous improvement facilitators(mostly cell leaders or engineers) in problem-solving methods and people skills. These


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facilitators provide training to project team members as needed. Approximately 8–10 weeks induration, the continuous improvement projects are undertaken with well-defined objectives inmind and make use of project-management methods. The projects have resulted in measurableresults that justify the resources used.

Since the early 1990s, Standard Aero has implemented many business process redesignprojects, which have transformed the company’s production and support operations into a cell-based organization. The redesign projects, which require significant capital outlay, haveresulted in high process ownership and large reductions in waste, cost and turn-time. ExecutiveVice President, Special Projects, Brian Lanoway leads the redesign program and enlistsresources from other business units as needed. Redesign task forces, consisting of mostly shop-floor employees, perform the redesigns over 5−6 week periods of full-time effort. Three internalconsultants work on redesign projects full-time and provide training to task force members asneeded.

Conclusion

Standard Aero has a highly sophisticated training system that is closely linked to the company’srelated human resources systems, such as job classification, compensation and performancemanagement. The company’s approach to designing and implementing training anddevelopment processes, based on rigorous attention to detail, is similar to that taken in otherareas of critical importance, such as repair and overhaul operations and business processredesign. The approach includes setting objectives high and focussing on needs, creatingprocesses that will achieve objectives consistently, and following up systematically to ensurethat processes work as intended and to find ways to continuously improve them. Consideringthe impact that employee skills can have on operational and business outcomes in an aerospacecompany, it is difficult to understand why all aerospace companies would not adopt thisapproach.

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