BMW Aging Workforce Productivity Initiative

• In June 2007, the head of BMW’s power train plant in Dingolfing, Nikolaus Bauer, was concerned about a potential decline in productivity due to an aging workforce.
• Bauer, along with production managers Peter Jürschick and Helmut Mauermann, developed a bottom-up approach to improve productivity, now being tested in plants across the US, Germany, and Austria, with plans to implement it throughout BMW’s global manufacturing.
• The central issue was the expected rise in the average age of the plant’s workers from 39 to 47 by 2017.
• Older workers generally require more time off for illness and must exert more effort to maintain their output.
• Traditional solutions like firing older workers or forcing early retirement were not viable for BMW due to their commitment to employees and potential political ramifications in Lower Bavaria, where BMW is a major employer.

The Pilot Line

• Jürschick and Mauermann initiated a pilot project on one of the plant’s production lines.
• The line was staffed with workers averaging 47 years old to simulate the workforce composition projected for 2017.
• Foremen Günther Stadler and Kurt Dickert collaborated with the line workers, senior managers, and technical experts to implement productivity improvements.
• The changes focused on health management, skills enhancement, workplace environment improvements, part-time policies, and change management processes.
• The direct investment in the pilot line was approximately €20,000, but the 70 implemented changes led to a 7% productivity increase within a year, matching the output of lines with younger workers.
• The pilot line produced rear-axle gearboxes for medium-sized cars and consisted of 42 employees.
• The line started with a per-shift volume of 440 gearboxes in 2003, with plans to increase to 500 in 2008.
• There was initial resistance, with the project nicknamed the "pensioners’ line".
• Younger workers worried about the impact of less productive colleagues, while older workers feared being moved from their usual roles.
• The Workers Council was consulted, which led to the team using a previous study on worker productivity as a framework for change.
• The earlier study identified five dimensions: health management, skills, workplace environment, retirement policies, and change processes.
• The study utilized the Work Ability Index (WAI) to assess the fit between worker abilities and job demands, which indicated productivity decreased with age but with increased variation.
• Stadler and Dickert reassured workers that the pilot line would maintain the same productivity and quality standards.
• They emphasized the importance of their experience and skills for the plant's future.
• Eventually, 20 workers on the line stayed and 22 more joined, with the option to return to their previous roles after a year.
• By October 2007, both shifts on the line were staffed with a mix mirroring the projected 2017 demographic.

The Process

• The project integrated with a company-wide health awareness day.
• Over 10,000 workers participated in the health awareness initiative.
• The project team included a self-assessment component, awarding points for healthy habits and deducting points for smoking or being overweight.
• Stadler and Dickert held workshops where workers could voice concerns and suggest changes.
• Workers felt secure sharing ideas, which were written on cards and prioritized using a point system.
• Management refrained from evaluating or rejecting ideas, allowing employees to rank them.

The Changes

• One change involved installing wooden flooring, which reduced joint strain.
• Management acted quickly on the workers ideas.
• Weight-adapted footwear was also introduced to reduce joint strain and static electricity.
• Special chairs were installed to allow workers to sit or relax during breaks.
• Workers improved the design of the chairs by replacing the plastic cover with leather.
• Adjustable tables were installed to accommodate each worker’s height and facilitate job rotation.
• Flexible magnifying lenses helped reduce eyestrain and errors when working with small parts.
• In total, 70 small ergonomic improvements were made to the line's design and equipment.
• Job rotation was introduced to balance physical strain on workers.
• A physiotherapist led strength and stretching exercises with the workers which lead to teasing from the other lines
• One worker volunteered to lead the exercises daily.

The Results

• The capital investment for the project was around €40,000, including the wages covering attendance at workshops.
• The line achieved a 7% productivity improvement within a year, matching lines with younger workers.
• The target output increased to 500 units per shift in mid-2008 and to 530 units per shift in February 2009.
• Four workers were reassigned to other lines due to the productivity increase
• The quality target of 10 defects per million was met in three months.
• Current quality performance stands at zero defects.
• Absenteeism dropped from 7% in 2008 to 2% by June 2009, below the plant average.
• BMW highlights the 2017 line as a model of productivity and quality in internal communications.
• Follow-up projects were launched in Leipzig, Steyr, and the U.S. plant.
• BMW adapted the approach to suit specific workplace conditions while maintaining the worker-led approach.
• The extended tests yielded results similar to those in Dingolfing.
• The 2017 line project exemplifies distributed organizational problem solving.
• Top management identified the issue, production managers conducted an experiment, and line workers developed the solutions.
• This approach is considered critical for global companies.
• Frontline employees need the freedom to experiment in order for solutions to emerge, which makes them a good source of solutions
• The brainpower of the workforce is important, which can differentiate factors within the company.