Inalfa Roof Systems, the Netherlands: Towards a balanced flexibility
Inalfa Roof Systems designs, produces and sells roof systems for the automotive industry. Roof systems are optional items for cars and are subject to substantial fluctuations in demand: therefore, the company needs flexibility in its production process and in the labour force. Inalfa has succeeded in creating a ‘smart’ organisation with a highly flexible production process and workforce. Both organisation and employees benefit from the flexible structure and accompanying terms of employment.
Globally, Inalfa is the second leading supplier in roof systems, with revenues, in 2005, of about EUR 150 million and 500 employees. The roof systems are assembled in the production department, where approximately 300 employees work. Of these 300, 75% have permanent contracts, 15% are on fixed-term contracts and 10% are agency workers. The production department has grown from 80 to 300 employees over the last seven years, by further developing its flexible work system. The turnover of staff in production is minimal; the average age is quite high and a relatively large proportion of women work there.
Inalfa has strong and exclusive ties with one temporary employment agency. About 50% of the company’s agency workers have a permanent contract with the agency. Inalfa discusses terms of employment with the works council; unions are involved primarily in negotiations concerning the collective labour agreements. (Union density is low, at less than 20%.) The works council is also involved in protecting the interests of agency workers. The terms of employment of agency workers and employees working directly for Inalfa are broadly similar: temporary workers receive the same salary as permanent employees (secondary benefits being handled according to the collective labour agreements for temporary agencies). Inalfa trains temporary workers for the role of first-assembly operative – a worker who can carry out all the tasks within the unit.
Description of the initiative
Inalfa needs to respond quickly to changes in demand, both in terms of volume and in mix of products. Because of increasing pressure of global forces, the need for flexibility is likely to increase.
To meet this need, Inalfa has implemented a flexible production structure. Prior to putting flexible systems in place, Inalfa realised that when things don’t succeed, it is often because of poor organisation. That is why Inalfa Roof Systems has put a lot of thought into ‘smart organisation’, which means creating the conditions that allow people to operate in a flexible manner.
The production department operates four lines: one traditional line, two modern lines and a mixed line. The traditional line can be characterised as a conventional conveyor belt: different employees perform different tasks at different work stations for the same product. The modern lines consist of an automated and a manual section: in the automated section, the basic frame is assembled with a lead time of approximately 15 minutes. After this, the employee walks a basic frame along different work stations where spare parts and tools are reachable from a standing position. The lead time of the manual assembly is from seven to 14 minutes, depending on the product. Between one and four people can work alongside each other on the automated section, while between one and 14 can work simultaneously on the manual section.
With the modern lines, Inalfa has created a flexible production structure. Without major adjustments, a great variety in terms of mix and volume can be handled. To operate this flexible production structure, Inalfa has implemented three forms of labour flexibility: contract flexibility working time flexibility and functional flexibility.
The contract flexibility is based on a layered model: the core workforce, 75% of all employees, are on permanent contracts; these workers can be employed on a range of functions. Another 15% of employees are on fixed-term contracts, which vary from five to 12 months, depending on the intake portfolio. Around this, there is a ‘layer’ of temporary agency workers. Inalfa is keen to hold on to agency workers as long as possible. Inalfa has a policy of offering a fixed-term contract to agency workers quite early in their employment, if they have the potential to work as a first-assembly operative: that is, if this person is willing to work overtime on some Saturdays and has a history of low absenteeism.
A number of employees (15%) work part-time on their own request; these are mostly women who are combining employment and caring activities. All employees in production work in two fixed shifts with a weekly rotation. The two shifts run as follows:
- Monday to Thursday from 06.00 to 15.00 on the first shift;
- Monday to Thursday from 15.00 to 12.00 on the second shift.
On Friday, the shifts are two hours shorter – from 06.00 to 12.30 on the first shift and from 12.30 to 18.45 on the second shift. These shorter hours are compensated by working an extra 30 minutes on the other weekdays.
This weekly rotation offers employees the option of starting early or working late. For the organisation, this offers greater flexibility of working hours during the day. Friday night is free for all workers. Sometimes, overtime is worked on Saturdays. Regulations on working overtime are stipulated in a collective labour agreement.
Inalfa has also implemented functional flexibility, both horizontal and vertical. There are three functions in production:
- assembly operative, who performs a limited number of tasks;
- first-assembly operative, who can carry out all the tasks within the unit; it takes around two months to settle into this position;
- all-round operative, who can carry out all the tasks of the three units; around 15% of employees are all-round functionaries.
These units also have a number of supporting and preparatory tasks. For example, they are responsible for testing, supplying and conveyance end products, and for a part of the maintenance. Rotation between the different units enriches jobs and offers workers the chance to increase their employability.
The flexible production structure of Inalfa has enabled ad hoc flexibility without requiring radical measures to be taken. The different forms of contract flexibility and working time flexibility enable the company to deploy extra capacity quickly, while the skills acquired and the routines remain in the company. It is not exactly clear, however, how the costs relate to the layered model of staffing.
In the yearly employee satisfaction poll, employees speak highly of the flexible production structure and the possibilities it offers them for part-time work. The ‘smart’ organisation means that they are not affected if their colleagues take sick leave. The part-time option means that employees with small children can continue working. The two-shift system with Friday night free is rated positively. In addition, the system gives workers the possibility to look after personal tasks that need to be handled during office hours, without requiring them to take a day off.
For employees, one of the advantages of being broadly employable is that their work has more variety. Permanent employees appear unconcerned about the number of temporary agency workers in the company.
Exemplary and contextual factors
Inalfa operates in an international market with a highly fluctuating demand, in terms of both volume and mix. To remain competitive, the company needed to develop a flexible production structure and workforce. Inalfa succeeded in this objective by creating a ‘smart’ organisation and a win-win situation in labour relations, in which both the organisation and employees benefit from the flexible production process and the terms of employment.
Inalfa has established a close relationship with one temporary employment agency. This enables the interests of agency workers to be monitored and protected, in the same way as the interests of permanent staff. Temporary agency workers can consider working for Inalfa as on-the-job training experience, with the possibility of getting a permanent contract with Inalfa or with another company.
Mariska den Hoedt, TNO, Hoofdorp