Oilwell Cable Company Case Study

Register to read the introduction… Laurent, operations manager for Oilwell Cable Company, pulled his Bronco 4x4 onto Kansas’ Interstate 70, he heard on the CB about the traffic jam ahead of him due to icy road conditions. Although the traffic was moving some, Norm decided to get off at the eastern offramp for Lawrence, rather than the more direct western offramp, to save time. While waiting for the offramp to come up, Norm’s mind drifted back to his discussion with Bill Russell, the general manager, on the previous day. Norm had been contemplating adding microprocessors to their rubber mixing equipment in order to save manual adjustments on these machines. This would improve throughput and reduce costs simultaneously, though without displacing any employees. Based on the data Norm had seen, it appeared that the microprocessors could cut the production time by 1 percent and reduce scrap from the current rate of 1 percent down to one-half of 1 percent. However, it seemed that this might be an issue that should first be submitted to the production team in charge of rubber mixing for their thoughts on the idea. Once before, an even simpler change had been made without their knowledge and it wound up causing considerable trouble. As the traffic wound around two cars in the ditch by the highway, Norm reflected on how difficult it was to make changes at this plant with their team management process, though there were advantages too. It probably stemmed from the way the company was originally set …show more content…
Bill Russell sees the major benefit of the team process as its production flexibility. Employees are also very receptive to change. Since the 1990 layoffs, the employees have become much more sensitive to outside threats to their jobs. This spurred quality and productivity gains of over 30 percent in 1991. The primary benefit of the team process to the employees is having a say in their own work schedule. A typical secondary benefit was the elimination of penalties for making an error. The employees feel that this is an excellent place to work; absenteeism is only 0.7 percent, and only two people have left voluntarily since 1988. Overall, the employees seemed to feel that this process worked well but wasn’t utopian. “It doesn’t give away the store,” one employee commented. Two disadvantages of the process, according to the employees, were the time and energy it required on their part to make decisions. As an example, they noted that it required three full days for the teams to come up with the revised layoff lists. Normally the teams met once a week for an hour and a half. But when the teams made a decision, the implementation of the decision was virtually immediate, which was a big advantage over most management decisions. Although this process required more time on the part of the employees, the total amount of time from idea to full implementation was probably less than that in a traditional organization, and it was clearly more successful. When asked if he would ever be willing to work in a regular work environment again, one team member voiced the opinion that this process while very good, really wasn’t that much different from a well-run, open, traditional organization. Teams realized that not every decision was put through them. They felt that