Latest / The Manufacturing Podcast with Fexingo: Factories, Supply Chains, and Industrial Business / How a Small Factory in Nebraska Scaled to 100 Employees Without Adding Managers
Transcript
- Lucas: There is a factory in Fremont, Nebraska, population about 26,000, that has done something you almost never see in industrial manufacturing: it grew from 18 people to over 100 in five years, and it didn't add a single new manager. Luna: Wait — zero managers? Not even a shift supervisor? Lucas: Not a single one. The company is called Prairie Precision Components. They make machined parts for agricultural equipment — hydraulic fittings, valve bodies, brackets for sprayers. The kind of stuff that has to hold up to years of dirt and vibration. And they run the whole plant with a self-organizing team model that's closer to a tech startup than a midwestern machine shop. Luna: So who decides what gets built first when there's a rush order? Who handles a quality issue on the line? I mean, someone has to make those calls. Lucas: They do — the workers themselves. Every team elects what they call an 'anchor role' for a three-month rotation. That person is the first point of contact for scheduling, for customer communication, for shift coverage. But they don't have authority to fire or discipline. They're more like a designated facilitator. After three months, someone else takes the role. Luna: So the person making production calls today might be back on a CNC machine next quarter. Lucas: Exactly. And that's the whole point. The CEO, a woman named Dana Hartwick who bought the company in 2018, told me she was tired of seeing operators tune out because their only job was to load parts. She wanted everyone to understand the business side. So she also mandated that every employee — including the machinists — spend six months in sales. Luna: Six months in sales? That's a huge commitment for someone who was hired to make parts. Lucas: It's a rotation, not a permanent move. A machinist spends Tuesday and Thursday afternoons on the phone with dealers, learning what customers actually complain about — late shipments, wrong threads, surface finish. When they go back to the machine, that knowledge changes how they work. One guy told me he used to run the fastest cycle time he could. After a sales rotation, he started running a slightly slower feed rate because the parts came out more consistent and he got fewer returns. Luna: That is remarkably specific. Do you have the numbers on how this affected quality? Lucas: Scrap rate went from 4.2 percent in 2019 to 1.8 percent last year. But the more interesting metric is what they call 'escalation time' — how long it takes for a problem on the floor to reach someone who can solve it. Luna: And that dropped? Lucas: From an average of three hours — waiting for a supervisor to come down from the office — to about twelve minutes. Because the person who can solve it is already on the floor. They just send a message in the team chat, and whoever's in the anchor role that week handles it. Luna: A team chat. So there's software holding this together. Lucas: A lot of it. They use a platform called Thena, built specifically for self-managing teams. It tracks who's in the anchor role, who's on leave, what backlog items are overdue, who needs cross-training. The system sends nudges automatically — 'Hey, your rotation starts next Monday, here's your checklist.' No manager has to chase anyone. Luna: But what about the hard stuff? Firing someone, or resolving a conflict between two operators? In a normal factory, that's the supervisor's job. Lucas: That's the part Dana was most nervous about. Initially, she tried to keep hiring and firing herself. But by year two, the teams had developed something they call a 'peer accountability board.' If someone is consistently late, or isn't meeting quality standards, the team votes on a corrective plan. If that doesn't work after two cycles, the team can recommend termination to Dana. She says she's only rejected that recommendation once in three years. Luna: So peer pressure is the performance management system. Lucas: Peer pressure with a formal process. It sounds softer than it is. One machinist told me he'd rather be yelled at by a boss than get a calm, one-on-one chat from a teammate he respects — because the teammate's disappointment stings more. And because everyone knows everyone's production data, you can't hide. The system publishes a daily board of each person's throughput and defect rate. Not for punishment. But so the team can see who needs help. Luna: That level of transparency would scare a lot of managers. Lucas: It scares a lot of workers too. Dana said about 30 percent of new hires wash out in the first 90 days because they can't handle the accountability. They'd rather be told what to do than have to coordinate with seven peers on a schedule. But the ones who stay, stay for years. Turnover among employees who've been there more than a year is under 5 percent. Compare that to the industry average of around 30 percent annually. Luna: So this works in Fremont, Nebraska. Does it scale? Could a 500-person factory run without managers? Lucas: Dana is not sure it does. Her plant is a single shift, single building, mostly day work. They produce about 800 unique part numbers, but the variety is narrow — mostly steel, aluminum, and brass. If you had multiple shifts, multiple sites, hazardous materials, or union contracts with strict job classifications, the model would need serious adaptation. But there is one larger example worth mentioning. Luna: Who else is doing this? Lucas: Buurtzorg — the Dutch home healthcare company with 15,000 nurses organized into self-managing teams of twelve. They've been doing it for nearly twenty years. And in manufacturing, there's a company called Morning Star in California, the tomato processor, that's run without managers for decades. Their model is different — they use individual 'personal mission statements' and peer contracts — but the core idea is the same: push decisions to the people doing the work. Luna: OK, but Morning Star is famously an outlier. What's different about Prairie Precision? Is there a financial incentive that keeps people engaged? Lucas: Yes. They have an open-book management policy. Every month, the financials are shared with the whole team. And when the company hits profit targets, everyone gets a share — not as a bonus, but as a percentage of base pay. Last year, that added about 12 percent to each employee's annual income. So if the team makes good decisions, they benefit directly. If a team member slacks off, they're dragging down everyone's paycheck. Luna: That changes the conversation. It's not just about pride or teamwork. It's about real money. Lucas: Exactly. And that brings us back to the sales rotation. When a machinist understands that a faster setup time means the team can take on more urgent orders, which means higher revenue, which means a bigger payout, they start treating setup time like a personal metric. One team reduced average setup time from 22 minutes to 9 minutes over eighteen months, without any Six Sigma project or lean consultant. Luna: And I suspect that's also how they scaled to 100 people without needing managers — because every person was thinking about the business, not just their machine. Lucas: That's the whole thesis. Dana's view is that adding a manager is a signal that the system isn't designed well. Her goal is to make the system so transparent and so aligned with incentives that the next layer of coordination emerges naturally. She told me, 'If I have to hire a production supervisor, I've already failed.' Luna: I love that quote. But I do wonder: does this model only work because Dana is the CEO and owner? What if a PE firm bought the company and installed a traditional CFO? Lucas: That's the big risk. Dana is 58 and has no succession plan that preserves the model. She admits that if she sold to a private equity firm, the first thing they'd do is install a plant manager and a quality manager and a shift supervisor. And within a year, the whole culture would revert to command and control. Luna: So this might be a one-generation experiment. Lucas: Possibly. But it's a successful experiment while it lasts. And it offers a concrete counter-example to the assumption that growth requires hierarchy. If a 100-person factory in Nebraska can run without managers, the burden of proof shifts. You have to justify why you need that supervisor role. Luna: That's a really useful way to frame it. Before we wrap, I want to take a quick step back. This kind of conversation — real, specific, no bs examples of how businesses actually work — it's exactly why people listen to this show. Lucas: Yeah, and honestly, if today's episode was worth a coffee to you, that's the link — buy me a coffee dot com slash fexingo. Smallest ask possible. It's what keeps the show ad-free and lets us spend the time to visit places like Fremont and sit down with factory owners. Luna: Agreed. No pressure, but if you find value here, consider it. Now, back to Dana's model — one thing I've been wondering: what happens when a team member simply doesn't want to rotate into sales? Is that optional? Lucas: Not optional. Every employee signs a commitment to the rotation system as part of their contract. Dana says two people have quit specifically because they didn't want to do sales. But the majority find it valuable — even the ones who dread it at first. One older machinist, fifty-seven years old, told me he'd been on the floor for thirty years and never once talked to a customer. After his sales rotation, he redesigned a part that was causing chronic warranty issues because he finally understood what the farmer was dealing with. Luna: That's the kind of outcome you can't get from a supervisor's directive. So the model is working. But for someone listening who owns a thirty-person shop, how would they start? What's the first step? Lucas: Dana says the first step is to stop filling the next supervisor vacancy. When your shift lead quits or retires, don't replace them. Instead, form a small team — three or four people — and give them the authority to schedule themselves for a trial period. Tell them it's an experiment for three months. Most people will rise to the occasion if they know it's temporary and reversible. Luna: And the software? Lucas: Start with a simple shared calendar and a group chat. Thena is helpful but not necessary at small scale. The hard part is cultural, not technical. You have to be willing to tolerate a few weeks of chaos while people learn to coordinate without a boss. Dana says the first two months of her experiment were a disaster — orders went out late, machines sat idle. But the team figured it out because they had no other option. Luna: So it's about forcing the muscle to develop. Lucas: Exactly. And once it develops, it's surprisingly resilient. During the supply chain disruptions of 2021, when raw material lead times tripled, the Prairie Precision teams collectively decided to build a buffer inventory of 30 days of common alloys. No manager ordered it. They just saw the data, discussed it in their weekly stand-up, and changed the purchasing parameters. Dana found out about it two weeks later. Luna: That level of initiative is remarkable. It makes you wonder how many factories are sitting on untapped capability because their workers are trained to wait for instructions. Lucas: That's the most important takeaway from this episode. The people running the machines have the most granular knowledge of what's working and what's not. The question is whether you're willing to redesign your organization to let that knowledge drive decisions. Luna: And the answer from Fremont, Nebraska, is yes. Lucas: Yes. At least for now. I'll be curious to see whether the model survives Dana's retirement — and whether other factories start copying it. There are signs it's spreading. I know of five other small manufacturers in the Midwest that have visited Prairie Precision and started their own experiments. Luna: That's something to keep an eye on. Maybe we can check back in a year and see how those experiments are going. Lucas: I'd like that. For now, thanks for listening to The Manufacturing Podcast with Fexingo. We'll be back next week with another story from inside the world of factories, supply chains, and industrial business.