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Case Studies - Best Practice at Merck Manufacturing Division (MMD)

The manufacturing division of Merck Sharp & Dohme (Australia) at Granville in South Western Sydney is developing a learning and teamwork culture based on the concepts of best practice in work-based training.

Introduction

Established in 1952, Merck Sharp & Dohme (Australia) Pty. Ltd. (MSD) is a subsidiary of the US based multi-national pharmaceutical company Merck & Co. Inc., which has grown to become one of the largest manufacturers and exporters of prescription pharmaceutical products in this country.

The Merck Manufacturing Division (MMD), was formed in 1991 with the merger of the chemical and pharmaceutical manufacturing sections. It is responsible for producing more than 90% of all MSD products made in Australia.

Of the 154 employees at MMD, approximately 60% are of Non-English Speaking Background with a gender breakdown of approximately 45% male and 55% female.

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Company Philosophy

In a highly competitive industry which relies on quality and precision, MMD aims to become the "centre of excellence" for MSD worldwide through a balance of a team of self-motivated, highly skilled people and world class leading edge technology. Its approach, based on best practice principles, emphasises teamwork which builds on the strengths of individuals and provides a support structure to encourage and assist individuals realise their full potential.

To help people to better balance the demands of their work and personal life, MSD has introduced a number of work and family initiatives. These include family leave, flexible work arrangements and programmes which help people secure access to a childcare place for children under age two.

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Background to change

Since its formation in 1991 MMD has undergone a series of significant changes which has seen the emergence of a new work organisation and a culture of teamwork.

Until about five years ago the company's work organisation operated on the traditional Taylorist model. According to Robert Justice, Manager, Human Resources at MSD, despite the company's desire to collaborate with employees and their representatives, MMD was "in the dark ages in the way (they) consulted with people". Management practices were inconsistent with future strategic direction.

Demarcation barriers and the mistrust between management and employees were identified as the biggest barriers to teamwork within the workplace. These barriers existed between management and shopfloor employees and also between employees of different classifications within the workplace. This contributed to a culture of departmental self-interest.

A consultative committee comprising equal representation from management and employee representatives was formed to discuss and negotiate industrial issues. Most committee meetings focused on departmental issues. The result was a workforce which remained alienated from the consultation process and divided by the self-interest of their respective departments.

Prior to 1993 MMD had no developed culture of continuous learning and training. Training was informal, unplanned and based on a need-to-know basis, consisting of a "buddy system" in which an incumbent passed on skills to others whilst on-the-job. Operational instructions then, according to Debbie Samoley, Workplace Change Facilitator, were not user friendly. The result was a range of inconsistent performance levels from employees who did not have a clear understanding of the whole production process.

A discernible gap existed between management and the shopfloor within MMD. This presented additional challenges to any change programme.

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Workplace Change

Change, Robert Justice points out, did not occur overnight and remains part of MMD's continuous improvement strategy. A series of key initiatives introduced over the last three years as part of the company's strategy for continuous improvement has seen the Division undergo a process of dynamic change.

A review of the Consultative Committee was conducted in 1993 in an attempt to move away from an industrial focus and toward a focus on employees including an opening up of the channels of communication and information sharing. An Employee Development Committee was subsequently formed with the purpose of communicating employee needs and concerns to senior management.

Elected by popular vote, rather than by departmental representation, the Employee Development Committee comprises eight shopfloor representative and four representatives from senior management. It acts as a forum for general discussion between management and employee representatives on issues like training and development, employee initiatives and suggestions, and workplace change. In contrast to its predecessor, the Employee Development Committee does not discuss industrial issues playing instead a key role in communicating employee initiatives and suggestions to management. Whilst not a decision making group, most of its recommendations are taken up.

At approximately the same time, a successful joint MSD/TAFE submission was made to the Workplace English Language and Literacy (WELL) programme. WELL increased awareness and application of knowledge in the literacy/numeracy/language area. One of the key changes was the re-writing of operational instructions in plain English.

The changed approach was initially met with scepticism, however this soon dissipated as positive changes became apparent, particularly changes that afforded flexibility in job descriptions.

Work-based training, based on best practice principles, now constitutes the main type of training at MMD. In an industry which is largely product driven, developing manufacturing processes specifically related to products has usually meant that production skills are best learnt within the company. The structured training program assisted MMD in gaining ISO 9000 quality accreditation.

In 1995 a process for assessment of an individual's competency and performance, including 360 degree feedback, was introduced.

In MMD this formal assessment of competency involves a combination of self-assessment, peer and supervisor assessment. This is designed to encourage "self motivated problem solving" in relation to individual development. Under this mechanism employees are asked to assess themselves, and be assessed by their peers/team leaders. They are then assessed by one of the seventeen employees trained as nationally accredited assessors on site. The trained assessor's decision is final. Where an individual has not been assessed at the level they believe they should be, the assessor will discuss and formulate a development plan together with the employee to overcome the areas in which they are deficient. Management and employee representatives are only involved in ensuring all parties are satisfied with assessments and developmental plans.

A personal training plan is also established to ensure employees who wish to do so may have the opportunity to advance their skills. Training at the site is typically modular and self-paced.

A new plant employee classification structure was introduced with a basic platform of utilising a high level of introductory skills and the provision of training and development opportunities to allow employees to acquire and utilise further skills. Based on a "learning organisation" approach, the classification structure directly links training plans for departments and individuals.

The new structure comprises four skill levels

1. Introductory - employee able to carry out introductory activities and skills identified in the recruitment criteria.
2. Competent
   1. Dependent - employee understands the activities and skill requirements but needs some assistance to carry them out.
   2. Independent - employee functions independently and requires minimal direction and supervision to carry out the activity list
   3. Support - employee operates independently and is capable of and actively offers advice to peers
3. Mastery - reflects proven ability to carry the employee profile and activities, as well as ability to train others, provide basic leadership in a team and exercise accountability for work performed in that team.
4. Expert - reflects not only the requirement that the employee masters activities but also that he/she has the ability to understand and modify work systems, to undertake projects, to provide effective leadership of a number of teams, to implement knowledge gained in other work areas and evaluate needs and train employees in a particular work area.]

At present approximately 90% of workplace training at MMD is provided by in-house trainers. These trainers are usually at Competent Support levels or higher, and all of whom have been trained and assessed as recognised workplace trainers.

More recently, all staff at MMD participated in a Principle Centred Learning (PCL) course designed to reduce conflict at the basic interpersonal level. A series of workshops were held during 1995/96. Each of these workshops was attended by a vertical cross-section of managers and shopfloor employees. These workshops, says Barry Stevenson, an operator in the manufacturing department, helped break down some of the barriers. This helped everyone understand their different roles and responsibilities and how to work better together.

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Results - the New Workplace

The integrated approach of training, developing a teamwork culture and open communication at MMD over the last few years has produced some interesting outcomes.

Departments now work more closely together. Free flowing communication, training and sharing of information between the manufacturing, packaging, planning and quality assurance departments has resulted in an improved work flow and consequent improvements in productivity and quality. For individuals there is a greater awareness and understanding of the whole production process. That, according to Barry Stevenson, has been "the greatest change of all".

"The level of accountability has changed" says Tony Pusic, Manufacturing Facilitator. There is a feeling of ownership over the process. Reconciling of inputs and outputs and the use of technology to track materials has led to reduced wastage in the production process. The open communication and the sharing of information has also seen the removal of the "domino effect". Instead of shifting the blame or covering up costly mistakes employees are now aware of the outcome, learning from mistakes made in order to avoid them in future.

The team environment has also accommodated those sceptics and individuals wary of, or resistant to, change. They unwittingly become drawn into the culture by the enthusiasm of those around them.

People learn at a pace they are comfortable with. As Barry Stevenson points out "if you want to become involved you will be involved. It's O.K. to be who, and where you are..."

In the course of all the changes over the last three years the differences between management and the shopfloor have been significantly reduced. Greater technical knowledge and skilling up of operators has led to a shift in control over the production process from line management to the shopfloor. "Equality has risen to a new level" says Debbie Samoley describing the new work environment where many of the barriers which existed before have been blurred, and eventually eliminated, over the last few years.

The management approach has been to stand back and provide support and allow operators to operate the areas they know best.

The elimination of demarcation barriers through training and sharing of information has had mixed results. It has sometimes resulted in the disaffection of some supervisors/line managers who feel insecure in this new environment. In response to this, senior management are presently formulating a deliberate strategy to provide support for managers to involve them in the restructuring process.

In the new work environment at MMD, where increasingly technical skills and knowledge rests with the shopfloor, Debbie Samoley identifies a need for managers to develop new skills, particularly in people management, to provide the support needed to facilitate continuous improvement.

In the words of a long term employee:

"Everyone's opinions are now considered. No more closed doors and barriers. We are becoming a team of individuals that contribute to the company and each other. (There is) an environment of shared responsibility, openness and confidence. You feel like you belong".

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The Future

Tony Pusic, Manufacturing Facilitator sums up the future of change at MMD best as he describes it as a "snowball which is going to get bigger and bigger".

As the shopfloor staff move up the levels to Competent Support and beyond, others at Mastery and Expert levels will be released to work on projects. Already the changes have enabled facilitators like Tony Pusic and Debbie Samoley (who was formerly a Packaging Facilitator and is now Workplace Change Facilitator) more time to review existing work systems - something which Tony Pusic has found gratifying.

"They (MSD) have promoted a team concept to fit everyone's lifestyle, providing for hours of work to suit employees. They have also taken the change process slowly to accommodate everyone - slowly and in steps. MSD will be one of the few companies which will advance into the next century with a good work attitude and salary." - Keith Eadie, Australian Workers Union Organiser