Vehicle manufacturing is tough, but Volgren Australia is proof that if you don’t shy away from change in the face of competition, you can steer your own success.
Next time you board a Transperth bus, chances are it’s a Volgren-built vehicle. Based in WA and Victoria, Volgren builds coach, school and public buses but struggled against overseas and national competitors.
Recognising the need to change its operations to improve quality and safety, it underwent massive operational and workforce changes under the careful direction of WA manager Matthew Smith.
It used to take 45 days and 1000 hours to build each vehicle but that figure has been dramatically reduced.
“Our CEO set a challenge to build buses in 10 days and less than 500 hours which was inconceivable at the time. We have exceeded these goals and are planning our next level of improvements,” he says.
“In the bus industry we certainly have seen major changes in the landscape … a high proportion of school buses are now imported from overseas competitors,” he says.
“Like any manufacturing business in Australia if you’re not striving to improve, you’re not in the game.”
Fail fast and move on
He says initial attempts at culture or behavioural change were ineffective and they quickly realised a different approach was needed.
“One of the first things that we tried was to use consultant groups to see what could be done,” he says.
“If anything, this was a valuable but rather painful learning curve because it almost broke us. It was an attempt at forcing change via a technical approach.
“Of course, what this failed to consider was that people have emotional responses to change, and do not believe that change is better.
“Without giving people the ability and confidence to transition, all it really did was create an incredible amount of stress. Staff were still trying to do what they believed to be best practice … unfortunately, in their experience, this was what has been tried and proven in the past.”
As a consequence, the build process became unmanageable.
“Our quality defects at the customer inspection almost rose 1500 per cent, we fell off the pace by almost three weeks on on-time delivery. These are critical factors that you cannot ignore,” he says.
Learn from failure, try again
In its next attempt, the company took a more people-driven approach, including better leadership and creating effective shop-floor groups.
“To do this type of change you must have leadership … you cannot sit at a desk to manage it, you must get out on the shop-floor and spend a lot more time talking to people,” Smith says.
“Secondly, we completely took a relook at how we selected our team leaders. We had the usual fault that many companies have in promoting leaders based on technical knowledge — we began looking for exactly the opposite.
“We were looking for team leaders to actually lead the team, and so we were looking for a totally different skill set – how to have conversations, how to inspire confidence, how to draw out the best in other people.”
He says they also worked on diversifying the groups to bring a range of ideas together.
“If you have four welders who are all the same age and all did their apprenticeships at around the same period and you ask them to solve a problem they will always come back with the one answer,” he says.
“We started diversifying cross-functional groups with someone old, someone young, a welder, a painter, an electrician, so when they had problems the ideas that came out were very different.
“We keep the groups small to encourage conversations and introduced flexibility through allowances so leaders could be trialled and groups added or rearranged to suit workload volumes.
“We removed individual targets and focused on a consistent, balanced group effort.” He says these groups mean workers are better equipped to deal with problems.
“If you have one manger who’s trying to manage everything, he’s only got one set of eyes, he won’t see everything — problem solving needs to be delegated to the lowest possible level,” he says.
“If you can empower your entire organisation on fixing problems the results will exceed your expectations.”
Changing tools too
Volgren also changed the layout of its Malaga facility, including improving tool availability, material delivery systems, embracing lean manufacturing and improving the working environment.
“We had a lot of operations that were done in situ on the vehicle, this involved a lot of platform work, a lot of climbing up and down, a lot of working at heights and a lot of heavy lifting,” Smith says.
“Now over 80 per cent of operations are done in an ergonomic position as a sub-assembly on a jig, then the modules are assembled into a whole vehicle.”
Efficiency and safety have vastly improved.
“The operator has all the tools available at his fingertips to do the job at a waist height bench so there is no possibility of strains or falls, and we have seen a dramatic reduction in the total number of injuries along with a reduction in the cost of managing our injuries,” he says.
Customers are also a lot happier.
“We’re back to an extremely good level on quality and our on-time delivery has recovered to being near perfect,” he says.
Lessons learnt
He says the major takeaway from the whole process was to get the staff on board first.
“In essence you’re trying to achieve a revolution. Revolutions do not occur because somebody is ordering them to do it, but because everybody wants change,” he says.
