The Detroit area is home to hundreds of manufacturing plants. One of the newest is the Operations Leadership Factory in Ann Arbor, MI. However, instead of producing products, this factory turns out people—the next generation of plant managers and supervisors.

The innovative facility is run under the auspices of the Tauber Institute for Global Operations at the University of Michigan. The 23-year-old organization combines the expertise of the university’s top-ranked business and engineering schools.

The 7,200-square-foot Operations Leadership Factory is located in an industrial park just a few miles south of Michigan’s main campus. But, when it comes to teaching real-life principles, it’s worlds away.

“The world of business has changed,” says Alan Woodliff, a former Ford Motor Co. engineer who serves as industry co-director and an adjunct professor at the Tauber Institute. “New ways of thinking and new leaders are needed.

“That’s why the Tauber Institute for Global Operations was created,” adds Woodliff. “Today’s leaders must manage the larger scope of operations, from the plant floor to the boardroom. This kind of leader doesn’t just happen.

“The Tauber Institute offers students a team-based, cross-disciplinary learning environment covering operations management and related areas, thereby deepening their knowledge and preparation to help solve the problems leaders face,” Woodliff points out. “The solutions to these problems usually require great teamwork and people who can apply learning from a number of disciplines.”

According to Woodliff, the Operations Leadership Factory, which opened last year, features two things present in every manufacturing facility, but rarely incorporated in lean training: humans and machines. The highly collaborative environment combines a learning lab with a factory floor that’s just a few short steps away.

“Integrating classroom instruction, including leadership principles, with a factory environment allows the students to immediately put into practice key learnings about operational excellence and the leadership characteristics needed to effectively initiate change,” says Matthew Potoff, director of the Operations Leadership Factory and an assistant professor at the Tauber Institute. “This active, team-learning approach allows participants to develop effective solutions in a realistic setting.”

In the classroom half of the factory, business and engineering students discuss lean manufacturing principles, such as kanban, level production, line balancing, quick changeover, standardized work and visual controls.

In the shop, students test out and evaluate various operations improvement ideas. As part of the hands-on learning, they manually assemble turbochargers supplied by BorgWarner Inc. Each device has about 25 components and takes approximately four minutes to build with hand tools and battery-powered screwdrivers. Equipment in the facility was supplied by Ford, General Motors, Steelcase and several other companies.

“It’s a fun way to teach,” says Potoff. “This is much better than a bunch of PowerPoint slides.”

“By learning in an environment where they can directly apply classroom instruction to a real-world environment involving both physical and personnel issues, students develop the confidence to develop solutions and take action,” notes Potoff. “The factory is real. The machines are real.

“The ‘employees’ are making a real product and acting as they would if they were employed in a real business,” adds Potoff. “The students see, learn and effect change in the operations in a safe environment, giving them skills they can employ later in their real-world position.”

 When students enter the Operations Leadership Factory, they are required to act differently than they would in a traditional classroom. “When the students arrive, they need to change how they approach learning for a few hours,” says Potoff.  "They can't just sit back and listen to the instructor lecture.

"From the interactive environment on the classroom side to the hands-on factory floor, students are forced into an active-learning role at all times," explains Potoff. "The factory encourages us to experiment–to be noisy and messy–and to repeatedly try and fail until we succeed."

Would this facility be just as successful if it was located on campus? "Probably, but having our real-world factory located next door to other real-world factories helps to build credibility with our students," says Potoff.