Volkswagen Lays Foundation For Innovative Work And Process Organization

Wolfsburg, 24 July 2006 – The Volkswagen Board of Management and Group Works Council have agreed on far-reaching changes in workflows, processes and in cross-divisional cooperation. Both parties signed a plant agreement to this effect on Monday.

“This agreement between the management and workforce will make Volkswagen faster and more efficient. It is an important element in restructuring the Volkswagen brand,” commented the Volkswagen Aktiengesellschaft Board Member for Human Resources, Dr. Horst Neumann. The Chairman of the Volkswagen brand Board of Management, Dr. Wolfgang Bernhard, underlined: “With this instrument, we have the chance to enhance our quality, raise our productivity and increase satisfaction among employees and customers alike. And we can avoid waste. This ‘Volkswagen way’ will become firmly anchored in company strategy.”

As Michael Riffel, Executive of the General and Group Works Councils of Volkswagen AG, emphasized: “The goal of the Volkswagen way is to secure the quality, innovation and economic efficiency of the Volkswagen brand over the long term as well as improving work conditions. This is the prerequisite for stronger competitiveness and long-term job security at a high level.”

The agreement marks the beginning of a sustained process and represents the first step towards a new, standardized production system for the brand’s German sites with effect from August 1, 2006. Following its implementation in production, the agreement will subsequently be introduced in all divisions from product creation to customer service.

According to Riffel: “Our understanding of innovative work organization does not merely involve a specific production system or a clearly defined division. Our aim is to further develop workflows in all divisions of the company by subjecting them to permanent scrutiny.”

The production system prescribes targets, standards and methods for the sites while also making provision for local conditions. Benchmarks establish comparability, for example regarding workflows. Tracking includes process indicators such as the time it takes to complete a specific work step or product as well as indicators for customer satisfaction and employee response as regards the quality of management, job satisfaction or workplace organization. This procedure lays the foundation for identifying the most efficient workflows which can then be realized on a lasting and binding basis across the company. At the same time, employees are being asked to identify every form of inefficiency. “We are creating more efficient structures to ensure that the company can profit from the potential and know-how of every single employee,” said Bernhard.

The new work organization calls for the continuous scrutiny and optimization of workflows and structures. Employee qualifications and team solutions become more important and systematic knowledge management makes ideas accessible to everyone. Neumann commented: “For employees to participate proactively, we must define and agree targets and transparent performance criteria at all levels. The whole team is called on to participate in the process. If each of us joins in, we will be successful.”

To achieve this goal, the General Works Council is to agree binding conditions and codetermination rights with the company. As Riffel stated: “These will apply to everyone, from top managers to colleagues in direct and indirect production. Optimization can only be effective if everyone fully appreciates the direction in which our company is to develop.”

Bernhard stressed the considerable potential that lay in improved work organization: “We recently achieved a 28 percent improvement in productivity at a Volkswagen exhaust systems production facility in Kassel by implementing 36 suggestions from employees. This represents a major contribution to economic efficiency and thus towards job security.”

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