Cottonsoft CASE STUDY 10

Automation and Skills Development Go Hand-in-Hand

THE COMPANY Cottonsoft Ltd (Cottonsoft) was originally set up in 1986 as PlyPak Industries, but went into receivership in 1988. It was then purchased by a group of Dunedin entrepreneurs, and now employs 67 staff. Cottonsoft is a tissue-converting company which manufactures and markets a range of paper-based products. The company has now rebuilt itself and launched a number of very successful brands.

PRODUCTIVITY CHALLENGE

Cottonsoft traditionally had a well-developed understanding of sourcing/managing the supply of raw materials and of marketing products to customers and households across New Zealand. However, strengths in these areas were offset by production weaknesses and inefficiencies. The major problem Cottonsoft faced was in getting its new plant and equipment to perform as expected. It had initially seen its investment in automation as a 'golden bullet' to improve productivity.

However, a number of issues soon emerged. First, the new machinery required a different skill set from employees. Secondly, Team Leaders were spending too much time 'firefighting' teething problems in the automated approach. Finally, there was no effective way for the company to track the productivity of each machine and work centre, and therefore accurately assess the return on its new investment.

MEETING THE CHALLENGE

Cottonsoft invested $3.5 million in new plant and equipment technology, recognising that this was a weak area of the business. However, this move was not without its problems, as CEO Steve Silvey recalls: "The company was naive to think that investing in machinery would solve productivity problems." From the beginning there were many implementation issues associated with the machinery and its operation. Team Leader Paul Tarrant says, "things were breaking down all the time, it took about three months to get it right."

In response, new roles and leadership training were implemented to improve productivity and a big focus was placed on skills training for the staff to adapt to the new machinery. However, finding and retaining staff with the appropriate skills proved difficult at first and the incentive of higher wages was needed to hold onto staff with the right skills. "It was important to pay our people well to get the right skills that we needed," says Peter Byers, Demand Manager.

Previously, the work undertaken by production workers had little variation in it, and involved repeating the same task hundreds of times during a shift. However, the new approach required production staff to become semi-skilled, industrial automation machine operators. Getting the best out of machines required operators to adopt a problem-solving approach to their work, using appropriate settings and features without necessarily involving engineers at every step.

The company also examined work processes related to the new machinery. While the production process itself had not changed significantly, the introduction of automation meant people's tasks had changed. Work Centres monitor and measure production efficiency and the production process has been divided into a series of easily recognised work parts. Problems have become more readily identifiable and thanks to better communication, solutions have been devised more quickly.

CEO Steve Silvey notes that: "improving the skill levels and work processes around the machinery was as important as introducing the machinery itself." In addition, a 'buddy' system was introduced to spread technical knowledge about machines across production teams.

Outside experts were also brought in to combat the teething problems associated with new technology and operations. This has allowed operational staff to focus on their core production roles, rather than troubleshooting problems with new machinery.

Providing production measurement training and team leader development was also essential for ensuring that operators understood any information relating to productivity that was presented to them. Team Leaders spend a few minutes with their teams at the start of each shift to review production results, the level of output that is required and how this will be achieved. "When people are interested in the job, they think about the processes and an easier way to do it," says Paul Tarrant, Team Leader.

Another important development has been the implementation of effective productivity measurement. The company has learnt that this can only happen if productivity data is translated into a form that can be used to help decision-making. CEO Steve Silvey says: "to improve our business, it is important to invest time and money in what we are recording to get the right information."

The information collected so far has demonstrated a number of tangible improvements in productivity and the company is now confident that the investment made in new machinery has generated an acceptable return. Going forward, this information will also allow Cottonsoft to identify reasons for productivity decreases, and develop strategies in response.

KEY LEARNINGS

• Investing in new technologies, such as automation, is not about losing staff, but rather about getting the most out of the human resources available.
• Investing in technology is not a single solution to increasing productivity.
• New technologies are changing the skills that operational staff need to have.
• Timely measurement of productivity is critical as this enables proactive productivity improvements rather than reactive ones.
• Effective work processes allow better focus by all areas of the company.
  

RETURN ON INVESTMENT

Target group	Benefit	Value to the company
EMPLOYEES	Employees heavily involved in restructuring workplace practices, technologies and services.	Widespread staff support for new direction/strategy
	Frontline staff given responsibility for day-to-day business decision making.	Clear performance targets and accountablility, greater responsiveness to customer needs.
	Many new formal and informal learning opportunities for staff	More highly skilled and committed staff
MANAGEMENT	Five layers of management collapsed into two	Clearer channels of communication across company, company intouch with its market.
	Staff committed to learning and change	Stronger skill base, better staff retention, 43% decrease in time lost through injury.
	A culture of service excellence sucessfully adopted by staff.	The rate of goods delivered in full, on time, undamaged rose from 62% to 96%

BECOMING MORE PRODUCTIVE

Lifting productivity involves exploring all the ways your workplace could do things smarter and better. No matter what your business does, or how big or small it is, there are a range of way you can improve its productivity, including:

• Building leadership and management
• Organising work better
• Networking and collaborating
• Investing in your people and their skills
• Encouraging innovation and using technology to get ahead
• Creating workplace culture
• Measuring what matters.