9

Procter & Gamble Crailsheim: The Management

Quality Heptathlete

“I have three tasks: training, taking initiatives, and supplying the market.”
Herbert Grad, Plant Manager

“I truly believe that people development and delegation is one of the major
strength of this organization. When I speak with old college friends about
the companies they work for, I am amazed by the number of decisions I (as
well as my workers) am allowed to take here. What you should take home
with you is the feeling for the culture, the openness, and our deep wish that
the technicians decide.”
Oliver Geuther, Ultimate Supply System & Materials Operation Group
Manager

“No idea is ever rejected.”

Suzanne Minkwitz, Process Engineer

In a country where engineering and machines are revered, and where la-
bor costs are the highest in the world, automation is a ubiquitous strategy to
reduce labor content in manufacturing. Procter & Gamble’s Crailsheim plant
is no exception: the plant is committed to a goal of increasing revenues with
a constant headcount. But what makes it special is that this strategy is explic-
itly built on increasing the skills and capabilities of its workers. Automation
plays a crucial role, but it is the workers who are the center of it all. This is
a textbook example of how Management Quality across the board unlocks
knowledge and initiative in people’s hearts and minds.

9.1 Background
Procter & Gamble (P&G) is one of the world’s leading consumer products
companies. As of mid-1999, the firm was headquartered in Cincinnati, Ohio,
USA, and had 110,000 employees located throughout the world, revenues of

C. H. Loch et al., Industrial Excellence

© Springer-Verlag Berlin Heidelberg 2003
158 9 Procter & Gamble Crailsheim

Fig. 9.1. The Crailsheim plant

$38.1 billion, net income of $3.8 billion, and assets of $32.1 billion. Although
the firm was organized around four geographical areas (Asia; Europe, Mid-
dle East, and Africa; Latin America; North America), it can also be classified
by its six product groups: baby care, feminine care, beauty care, fabric and
home care, food and beverage, and health care, tissue, and towel.
The best P&G European plant is located in Crailsheim, Germany, a small
town situated about 100 km northeast of Stuttgart (see Fig. 9.1). Founded in
1979, the plant started to manufacture diapers (Pampers) in 1981, and added
female hygiene products (Always and Alldays) in 1989. At the beginning of
2000, it had 1,400 employees and its product mix consisted of 30% Pampers,
50% Always, and 20% Alldays. The plant delivers to 27 countries, most of
them in Europe.
The plant is the world’s leading plant for female hygiene (referred to as
“femcare” in this chapter) process improvements, a feat it achieves through
its research and process development laboratory. Diaper process improve-
ments are led by the Euskirchen sister plant located about 35 km southwest
of Cologne, Germany. At P&G, new product developments are initiated by
the marketing departments, and thus take place at headquarters in Cincin-
nati.
 9.2 Strategy 159

Demand for diapers has been decreasing in Europe due to a decline in the
number of babies as well as the economic crisis in Russia. The number of di-
aper lines, therefore, was reduced by 15% in 1999. The European market for
femcare products has stagnated in parallel with demographic trends. Hence,
revenues from traditional product lines at the plant have stagnated over the
last few years. Management has aggressively sought to develop new markets
and has been awarded the opportunity to produce a new cleaning pad for
P&G – “Swiffer” (a dry pad made of electrostatic micro-fibers which, when
in contact with surfaces, catch the dust). Despite having high labor costs,
the plant won the new business because of its high productivity, process im-
provements capabilities, the seven-day running of the production floor, and
the available space.

9.2 Strategy
Crailsheim has established the following strategy in order to thrive in the
P&G world, where plants compete against each other:
• Grow revenues with constant headcount – by increasing automation and
the skills and capabilities of all employees so they can progress from man-
ual work to maintaining machines, and analyzing and improving pro-
cesses. Since this policy has been implemented for the last 11 years, man-
agement has tried to hire people with this upward potential.
• Lead femcare product upgrades in Europe, that is, to remain the manu-
facturing-process lead plant in this area.
• “Fight for every case” (the production unit in the plant’s jargon) – a pol-
icy which means accepting all production requests, even if they represent
small volumes and cause large set-ups (e.g., an extra order with special
packaging for Turkey), in order to establish company’s reputation of al-
ways being able to deliver. In a system where plants compete against
one another for attracting volume, this policy helps Crailsheim increase
revenues.
• Win new business.
• Be the best at manufacturing.
• Reduce costs through continuous process improvements based on new
technology and worker optimization.
• Live the Integrated Working System (IWS), a personnel management sys-
tem designed to get the best from the employees in making the plant
progress. The IWS itself undergoes continuous improvements and is a
refinement of a previous system that was in place in 1997, as explained
by Ingo Schimmelpfennig, the plant’s Human Resources Manager:
“In the old system, we had action plans, training, and people han-
dling, but very detailed safety and quality aspects were missing
and how to combine them. So we took the same principles but
160 9 Procter & Gamble Crailsheim

translated them: that became the IWS. There are six items on the
roof which we call PQCDSM: production, quality, cost, delivery,
safety, and morale. And the roof is built on 10 pillars, which de-
scribe the organization and its tasks: leadership, organization, fo-
cused improvement, autonomous maintenance, progressive main-
tenance, education and training, initiative management, quality,
administration and support, and health, safety, and environment.
Within these pillars there are various specific tasks that need to be
implemented. Luckily, we have 10 group managers in the plant.
Thus, every group manager has one pillar and is called a pillar
leader. We also changed our scorecards where we write the re-
sults according to what’s in the IWS. Every single technician has
received training on the applicable parts of the IWS. Each pillar has
an action plan and so on. In the ideal world you will change your
old structure, which has production modules, technical support
modules, a warehouse department, and so on, to an IWS organi-
zation in terms of having only a pillar organization. We are just at
the stage of how to implement the transfer. I think this will take
two to five years. The classical production and operations man-
agers will disappear and we will only have a pillar organisation.”
Consistent with this strategy, the plant has created the “Crailsheim vi-
sion”, targeted at employees, which states: everyone contributes to the busi-
ness goals; our customers are important to us, we make sure that they are
100% satisfied; we want to have the lowest costs compared to our competi-
tors; we work on the principle of “zero losses”. Stretch goals are included in
the Crailsheim vision, and contain two key plant measures used by corpo-
rate: manufacturing cost per unit and productivity. Manufacturing costs (all
plant costs plus logistics to the customer dock for delivered costs) are formu-
lated in statistical units (SUs) reflecting the mix of different brands. Produc-
tivity is measured in million SUs (MSUs) produced per employee and year
(excluding apprentices). There is also an output number per production line
(in cases, per line and day). In terms of productivity, the stated goal corre-
sponds to an index performance of 180 compared with the benchmark of 100
established in 1993/94. At the beginning of the year 2000, the plant was at
about 170.
In addition to hard measures, the corporation runs an annual survey of
“soft factors” across its plants which ranks different items on a scale from
one to 10 (such as capital management, quality, and safety). Crailsheim has
an overall average of 8.7 and is thus in the top group worldwide.
Crailsheim reports to the firm’s worldwide and European headquarters
which send out specific goals through what P&G calls OGSM meetings (Ob-
jectives – Goals – Strategies – Measures), held in March of each year, deriv-
ing action plans from these goals for the Crailsheim plant. Meanwhile, every
module manager develops individual goals for his/her area during work-
 9.3 Supplier Management 161

shops. These proposals are handed to Mr. Grad, the Plant Manager and his
team, who aggregate them and check whether or not the plant goals are cov-
ered. If there is a gap, negotiation takes place: “Why can’t we achieve this?
With what additional support or resources can we achieve it?” Once a feasi-
ble strategy for achieving the targets is reached, the plans are communicated
in detail to every employee and deployment follows in June.
Consistent with the overarching plan, every employee develops a per-
sonal development plan for the year with his/her supervisor (e.g., the line
coordinator, module manager, or production head). These form the basis of
the annual personal evaluations (see below). Moreover, every line has goals
in terms of productivity and cost (as for the plant), volume (case rate of the
line), machine efficiency (including the effects of machine downtime and set-
ups), scrap, quality levels, and safety record. Daily performance is publicly
posted at the end of every line.
This highly developed communication and problem-solving process has
resulted in every worker knowing the overarching plant goals and being able
to explain how his/her individual performance measure contributes to them.
Every level has a chance to give input as support groups have measurable
goals relating to the plant’s targets. For example, the electricians’ group must
ensure production lines are not down more than a certain percentage due to
electrical problems. In addition, group members are evaluated by line coor-
dinators for speed and quality of support service rendered. The electricians
thus understand why their work is important for the plant and this serves to
motivate them.

9.3 Supplier Management

The management of suppliers falls under the Materials Operations depart-

ment, led by Oliver Geuther. The department has three managers, 10 clerks,
and 100 technicians and together they manage the plant’s 57 (mostly Eu-
ropean) suppliers. This number has slightly increased over the years due to
more product variants. For example, the number of SKUs nearly tripled from
1998 to 1999.
Each supplier is assigned a logistician (either a clerk or technician), who
is in charge of managing the relationship and handling any problems that
occur, somtimes with help from the quality engineers. “I rarely hear of
problems because of our delegation practices,” explains Mr. Geuther. More-
over, the Crailsheim plant regularly audits all of its suppliers and rates
them monthly on deliveries (both time and quantity) and quality level. Mr.
Geuther’s team works closely with the purchasing team (via monthly meet-
ings) to resolve issues with below-average suppliers and whether to replace
them or not.
Supplier integration is perhaps the area where the P&G plants, including
Crailsheim, can improve the most. In response, P&G has started a program
162 9 Procter & Gamble Crailsheim

called Ultimate Supplier Systems project (USS) designed to forge deeper re-
lationships with suppliers as well as customers. “P&G is increasingly aware
that it can only remain competitive if it looks more to all areas of the supply
chain and that includes suppliers and customers. This requires a mindset
change for the company,” explains Mr. Geuther.
The lead USS team is located at P&G’s headquarters in Cincinnati and
there are six additional global learning sites including Crailsheim. Teams
work with pre-defined suppliers on how to decrease inventory, reduce costs,
and speed up information exchange. Results have been encouraging. For ex-
ample, the Crailsheim plant reduced inventory with one large German sup-
plier by 80% and with another by 60% in 1998. This is a shared benefit: a
decrease in stocks for the client as well as the supplier. “Just by speaking
with them, and with our test models, we believe we can easily achieve a 50%
inventory reduction for all suppliers if we apply the same tools,” explains Mr.
Geuther. Another example of the USS model involves a large Finnish tissue
supplier. The five European P&G femcare plants standardized ordering with
this supplier which led to fewer format changes (e.g., width standards), re-
duced the supplier’s waste and downtime, and meant a 2.5% price decrease
for P&G – its share of the improvements. Thus, “low hanging fruits” are
being picked, but there is a potential for more ahead.

9.4 Customer Integration

The plant’s supply chain includes P&G’s distribution center, the wholesaler
or retailer’s distribution center, the retailer, and the end consumer. Crail-
sheim delivers 60% of its output directly to customers’ distribution centers
and 40% to wholesalers. Customer integration is another area with signifi-
cant improvement potential.
Production forecasts are derived weekly from P&G’s European head-
quarters in Geneva, Switzerland, which consolidates country sales forecasts
supplied by the brand managers into Europe-wide data. The data is shared
with the plants every Monday. The following day, the plants use the data
to plan their production. The logistics department’s workers plan the raw
material and packing on Wednesday. This weekly process is done in great
detail (by SKU) for the next 12 weeks (three months) and less thoroughly (by
product families) for the following four to 18 months.
The volatility of this data in terms of total volume is less than 10%. On
an SKU basis, however, the changes can vary by 100% from one week to
another either positively or negatively. This can happen, for example, when
a retailer decides to launch a promotion but informs P&G too late, or if the
firm’s salespeople do not pass on the information to the plants. This is an
issue for P&G and it is addressed in the USS project. “We are thinking about
integrated planning systems that would allow us to plan daily on a category
basis, automatically creating raw material orders for femcare Europe-wide.
 9.5 Production 163

We are also working on getting the point-of-sale information, although we

cannot do that right now because of technology constraints,” explains Mr.
Geuther.

9.5 Production

The 60,000 m2 plant is divided into three parts: office space, manufactur-
ing, and storage of finished goods inventory. It is P&G’s largest European
plant and serves as an internal benchmark to other factories for some of its
operating processes. Figure 9.2 provides pictures of the plant floor.
Production is organized into three separate shops for diapers, pads, and
panty liners. Within each shop there are flow lines converting raw material
to packaged product. Workers form teams responsible for a whole line. Their
responsibilities include loading (at the front), checking for quality (sampling
between and at the end of the lines), filling out statistical process control
(SPC) charts, and analyzing and fixing problems. When a problem occurs
(e.g., a routine test shows a fault), the worker stops the line, looks for the
error (including upstream if necessary) and fixes it. If no error can be found
the fault is treated as a statistical incident within the control limits of the
process.
The employees cover three shifts with four teams. Teams overlap by 30
minutes in order for the incoming team to be briefed by the outgoing coor-
dinator and discuss what needs to be done. Workers have their own meet-
ing rooms where management guidelines are posted for work rules, quality
management, safety, and environmental management. In addition, there is a
production meeting room.
Line performance such as quality and reliability is continuously posted at
the end of each line. Accidents (including minor ones) are centrally posted
by line. A benchmarking graph highlighting costs of P&G plants in Italy,
Spain, Eastern Europe and other countries serves as a constant reminder to
the workers of where their plant stands.
One important performance measure for production is what P&G call
“utilization” – real productive machine time as a percentage of theoretically
available time (24 hours 365 days a year). This has increased by 15% over the
last three years which includes many weekends worked. It is broken down
into planned work time (scheduled shifts) and what P&G calls “reliability”,
which is productive work time divided by 100% of planned work time, the
difference being downtime, rework or scrap, and set-ups. The Crailsheim
plant has the best reliability mark in Europe.
Increases in utilization have led to a 22% unit cost reduction. The most
important programs to reach these utilization goals were:
• Introduction of Sunday operation, which alone increased utilization by
5%.
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Fig. 9.2. Pictures from the plant floor

• Taking on small volumes for the Eastern European market, despite the
cost of long set-ups, helped to find the corresponding volume increases.
• Targeted increases in automation have reduced the workers’ load and al-
lowed them to be spread over more machines. For example, packaging
automation and better material movement among machines (less worker
intervention) have reduced worker load per unit by 15%.
• Set-up times have been reduced by 50% by making the switch between
sizes and packaging types simpler, with less capacity loss.
• Workers are more flexible, both in terms of the complicated shift pattern
as well as work assignments, in order to achieve the highest utilization
possible. Worker training is critical both in terms of mastering multiple
 9.6 Quality Assurance 165

machines and of shifting their tasks from operation to monitoring and

troubleshooting.

9.6 Quality Assurance

The plant measures customer satisfaction via product availability at retail

stores and the number of end consumer complaints. Product availability
stood at a 99.3% service level at the beginning of the year 2000. This rat-
ing, however, is less useful because it is not fully under the control of one
plant (several plants supply stores). Thus, the plant relies more on PPM
ratings, which are derived from customer complaints (individual consumer
complaints divided by the number of products manufactured). The rating
stood at less than 60 PPM for feminine care products at the beginning of the
year 2000. This rating is publicly posted at the production floor entrance
Each complaint triggers an inquiry into what went wrong. There is a
toll-free number on every package sold that customers can use to complain.
Some decide to write letters or emails. Whatever the means used to reach
P&G, the customer service employee in charge of recording the information
will be as thorough as possible. This data is aggregated and sent to the rel-
evant plant within 48 hours of receipt by P&G. “Depending on the severity
of the issue, we have to personally answer the customer within 48 hours”,
explains Mr. Geuther. In all cases (except those that are design-related), the
plant is required to write a report. Examples of problems include a product
that has dirty spots or is not folded right. A frequent problem involed pads
sticking too strongly to women’s underclothes leaving glue behind when
taken out. This triggered a change in the product (glue formulation) as well
as the manufacturing process (adaptation of machine and settings).
While most customer complaints relate to product design rather than
manufacturing quality, not everybody that has bought a defective product
complains, particularly as these are perceived as “sensitive”, especially fem-
care. “As far as I know, we only hear about one out of 20 product faults on
the femcare side,” explains Uwe Rehbein, the QA Group Manager.
Customer service gives the failure data to the line managers every month.
The already low complaint frequency means they trace every incident back to
the exact moment on the line where the problem occurred, via the numbers
printed on the diapers/pads. During a monthly consumer complaint meet-
ing led by the operations department, the line managers present root causes
of defects and plans to prevent the reoccurrence of errors. For example, when
an operator found a defect but did not remove enough units from the out-
put, the manager checked the operator’s training and took remedial action.
Another example involved the introduction of foreign bodies (i.e., from a
machine) in a product, resulting from inadequate cleaning of the machine.
Management took preventive action by increasing the frequency of cleaning.
“When people ask me what is your most important tool for reducing quality
166 9 Procter & Gamble Crailsheim

defects, I tell them it is this monthly consumer complaint meeting,“ explains

Mr. Rehbein.
To ensure that quality standards are upheld in new lines which are in-
troduced every one and a half years, management has developed a detailed
reliability engineering procedure. The tools in the system, borrowed from
the airline industry, are used to qualify the line for convertibility and quality.

9.7 New Product Development

Product development itself takes place at P&G’s engineering centers. How-
ever, early integration and involvement of the plant in the process is becom-
ing ever more critical. Technological sophistication and pressures on quality
and cost are increasing. Moreover, Crailsheim spends over 30% of its capac-
ity on new product introductions in its role as global lead plant for pads so it
is absolutely essential that introductions succeed.
A number of changes and improvements to the new product introduc-
tion process have been made in recent years. Organizationally, a bridging
function has been put in place to achieve cost optimization of existing prod-
ucts through modifications on upgrades – for example, design changes in
raw materials (such as thinner tissue) and packaging. The group coordi-
nates product tests with the cheaper material, performs the specifications,
and transfers it into production. The group is comprised of representatives
from development and manufacturing (e.g., two engineers from the plant)
and is meant to bridge the gap between production and development.
Moreover, the company introduced Launch Teams during the mid 1990s
which involve all relevant parties in the NPD process, including the plants’
process engineering departments. These are responsible for detailed devel-
opment and market introduction. Team leadership rotates among the mem-
bers from marketing, development, industrial engineering, and production.
Through these programs, the plant gets involved much earlier in product
development than in the past. Systematic tools such as Failure Mode and
Effect Analysis (FMEA) are being introduced – for example, contamination
risks for a pad are systematically anticipated and countermeasures taken in
the design of the pad and of the manufacturing process.
Line people from the plant take part in prototype testing – for example,
three line technicians currently work at the site of a machine supplier to test
and debug the machines, one of them with experience of the last new product
introduction. A new line is tested and debugged by a line pair manager and
his/her team, with support from engineering. The line team takes ownership
and establishes operating standards which are key to fast ramp-up and rapid
achievement of high quality levels. It is considered an honor to have the
responsibility for such testing and ramp-up activities. Once the line is stable,
they turn it on and roll it out to other lines.
 9.9 Employee Development and Delegation 167

However, the management team realizes that they still have considerable
potential for improvement, as manufacturing cost and quality concerns are
still not considered sufficiently early on in the design of a new product –
for example, the majority of customer quality complaints are still caused by
inadequate designs, although this is not completely in their hands.
“Our strength is the capability of our people and their Schwabian thor-
oughness – you can trust what they promise.” The Operation Manager of
Alldays panty liner, Andreas Vogel, walks down the lines several times per
shift to give honest feedback and encouragement. Staying in touch motivates
people.

9.8 Process Development

The process engineering group in the plant has the responsibility for in-
troducing new process features as well as improving existing ones. New
machine specifications are developed centrally for Germany in Schwalbach
(located 150 km southwest of Frankfurt), with input from Crailsheim. Ma-
chine improvements, however, are initiated in Crailsheim, sometimes with
the supplier and sometimes without. Suppliers are involved in the design if
they can be trusted not to use the improvements for their other customers –
the rationale being that they have the privilege of working with the largest
diaper and pad producer in the world.
In order to facilitate process improvement, an “area” concept has been
orthogonally overlaid with the line organization on the plant’s production
floor. The line is divided into four areas according to process steps. Each
area is assigned an experienced process worker across lines, who advises
the other workers on problems and carries out the more difficult changes
himself/herself. After several years, he/she may return to the line either as
higher skilled worker or a coordinator, reporting to the industrial engineer-
ing department. This support organization has been instrumental in increas-
ing the machine running speeds without sacrificing reliability.
For new material, new products, or process improvements, workers run
tests on the machines themselves. This causes short-term stress because it
disrupts production and makes it harder for them to achieve their targets but
has been accepted by all employees since it is necessary to ensure continuous
improvement in the medium-term. The competitive spirit among the lines
comes into play as the best win the honor of being the first to pilot a process
change or a higher machine speed.

9.9 Employee Development and Delegation

It is easy for a CEO or high-level manager to devise a strategy of involving
employees to a greater degree. We have all heard about empowerment, one
168 9 Procter & Gamble Crailsheim

of the buzzwords of the 1990s. But to implement this strategy is extremely

difficult. It requires a deep commitment from management in order to let go,
a change in culture including the employees’ willingness to take initiatives
and responsibility, and a defined system that lets employees assume greater
control while reducing the likelihood of errors. We have interviewed sev-
eral managers at this P&G plant in order to describe how it takes place at
Crailsheim.

9.9.1 Employee Development and Delegation in the Materials Operations

Department
It is Mr. Geuther who perhaps best explains delegation in the Crailsheim
plant: “I truly believe that people development and delegation is one of the
major strengths of this organization. When I speak with old college friends
about the companies they work for, I am amazed by the number of decisions I
(as well as my workers) am allowed to take here. What you should take home
with you is the feeling for the culture, the openness, and our deep wish that
the technicians decide.” The following examples are used to illustrate what
Mr. Geuther means:
• He set a goal of having 50% of the material delivered in JIT mode. He
put two technicians in charge of the project, who negotiated with truck
haulers where to store the material and what trucks to use. No managers
were present.
• He set another goal of having the real-time material control system that
the plant is introducing completely implemented by February 2000. Three
technicians took charge of every phase of the project and decided how to
implement the system (e.g., how to train the other employees).
“We go to the limit of the ability of our workers,” explains Mr. Geuther. To
make sure no errors are committed, he holds frequent one-on-one meetings
with the technicians in charge of the project (about once per week). “They
give a status report and I ask them if they need my help. The follow-up
is close so I have great confidence that they will not make major errors,”
explains Mr. Geuther. The combination of monitoring and helping not only
reduces errors but also makes the employees progress. P&G pushes its entire
leadership team to work this way.
But Mr. Geuther believes the plant can go further: “The best thing in the
plant is the motivated workforce but we should be further ahead on delega-
tion. I am still taking decisions that I almost know my technicians should be
taking. We need to educate more. Applying this to my own group, I don’t
think I need three managers. Our goal is to act as owners.”

9.9.2 A View from a Process Engineer

This delegation practice is embedded in the plant’s culture, as witnessed by
Susanne Minkwitz, a young process engineer in the Pampers operation. “The
 9.9 Employee Development and Delegation 169

technicians participate and take initiatives. They are creative, they dare to try
even when the line manager is absent. They never give up, they get the nec-
essary help when they are stuck,” explains Ms. Minkwitz. When the side
panel material posed problems on one of the Pampers lines, the technicians
performed all kinds of tests (e.g., cleaning, adjustments) and found nothing.
With no known diagnosis, they called in other line coordinators and together
changed the cutting mechanism of the machine. That are three hours of ma-
chine downtime and this went outside of standard operating procedures,
but the exchange did get the machine running again. “As a line leader I was
happy because they searched for a final solution, they didn’t just tinker with
the problem. No idea is ever rejected”, adds Ms. Minkwitz.
Ms. Minkwitz sums up her thoughts on the plant: “Everyday, a new prob-
lem comes up. No one says you have to do it this way. You can try out many
things to improve but if you are not strong enough to stick with your idea,
then it may get lost in the system. You must take initiative, push forward,
and be persistent. The support is there if you ask for it.”

9.9.3 Operations Manager of Alldays Panty Liner

Andreas Vogel, Operations Manager of Alldays panty liner, has many exam-
ples of delegation in his department. One of them concerns a new process
qualification. The shift coverage (responsibility) that traditionally belonged
to a manager is now performed by a technician. This is possible because the
technicians run test series during qualification so they become active par-
ticipants in the process introduction. The area support is still present but
performs different tasks than before – it used to take over the job when there
were problems, now it only supervises standards. Team members help tech-
nicians trouble-shoot. “This will be pushed even further to the point where
the support team performs mainly skills training. The limit is that we will
always need specialists to help the technicians trouble-shoot,” explains Mr.
Vogel.
Process improvements regularly occur in technician-led teams. Such a
team performs analysis and problem-solving and puts measures in place.
Only the resource authorization still has to be given by a manager. “We look
for people who can responsibly manage a budget,” explains Mr. Vogel. In-
centives for suggestions can include a good evaluation, more money, a day-
shift job, a better job, or a wage increase. Fundamentally, the culture is driven
by recognition and respect, not disciplining or money.
More broadly, Mr. Vogel believes that the Crailsheim plant needs to de-
velop this delegation policy in order to maintain the gap with the other
plants: “We need to use the skills of our people and their creativity to stay
ahead of the other plants. The air is getting thinner.” This is due to the
fact that headquarters has recently instituted a new policy regarding process
improvements – a global process standardization of the IWS management
170 9 Procter & Gamble Crailsheim

system. Each plant desiring to implement an improvement has to gain ap-

proval from headquarters. The new policy might seem, at first glance, to run
contrary to the interests of the Crailsheim plant – it spreads their new pro-
cess improvements faster through the plant network narrowing the gap, and
it slows down the plant when it comes up with new ideas. However, the
policy has the effect of reducing process inconsistencies across plants and
thus spreading knowledge faster – which is important for the company as a
whole. “This is a challenge, and it gives us the incentive to further work on
our creativity,” says Mr. Vogel.

9.9.4 Motivation

Peter Maghei, formerly a maintenance worker, is now an Autonomous Main-

tenance Leader in the Always department. He explains his motivation: “I
was given the opportunity to have a leadership role. I feel that I am needed
as well as having the opportunity to achieve something and progress.” He
describes how he motivates employees in his department:
“I explain that, when the machines are turned off, the company is
willing to invest money in the employees in order to make them
progress. I tell them that they now have an area under their respon-
sibility. They have the opportunity if they want to progress to a day-
shift or another job. I appeal to their personal wishes. Some don’t
care; they are difficult. I tell them not to complain and wait for oth-
ers but to do something themselves. I am happy when one of them
changes attitude and starts to take initiative. I give them a chance to
progress, but there are some who will never pick it up – it’s a minor-
ity of about 5%. Most, sooner or later, can be motivated.”
It took the organization time to fully accept the practice of delegating and
developing employees. “For Pampers, the plant is very aggressive in tak-
ing managers out of their jobs after two to three years and filling them with
technicians,” says Mr. Schimmelpfennig. “They bring line experience and
are trained in people skills,” he adds. But the line-leader jobs that used to
be done by line managers are not accompanied by a promotion. The em-
ployees are still technicians, although they improve their salaries. It caused
some problems with the first two or three line-leaders. They were suspicious
about being asked to do more “without the title”. But as they saw this being
done everywhere in the plant as well as their salary increase, it went away,”
explains Mr. Schimmelpfennig. “It’s not important what we call somebody,
what’s important is the work that they do and the results that they deliver.
Of course, we still hire managers because we need them for broader assign-
ments where different thought processes are necessary,” he adds.
 9.10 Conclusion 171

9.10 Conclusion

The Crailsheim plant offers a perfect example of how to succeed in a high

cost country such as Germany. Automation is an economic necessity. This
might support the classic argument for engineering-driven processes, where
implementation is pure routine. However, we encountered the opposite of
routine in this plant:
• Constant changes.
• Responsibility for the changes is delegated all the way down. All prob-
lem-solving is in the hands of the lines.
• Management provides a clearly communicated strategy, divided into op-
erationalized goals and structures.
• Supported by excellent measurement and communication, people are
constantly growing and learning, pushed “to the limits of their skills”.
The reader may note that there is an interesting parallel to a consulting
firm, that symbol of professionalism, where people are also stretched to
the limit of their knowledge and “move on to the next responsibility when
they know the current job” – not a parallel that one usually detects in a
manufacturing plant!
In summary, P&G Crailsheim has understood that mastering technology
is important but that the key to managing that technology lies in tapping the
potential of the people. As an outstanding example of the power of manage-
ment quality mastered across these processes and six quality dimensions, we
call it the management quality heptathlete.