(FORTUNE Magazine) – To glimpse the kind of fast but effective training 21st-century manufacturing workers will require, visit Westt Inc. of Menlo Park, California, a privately held supplier of parts for chipmaking and other equipment whose sales will more than double this year, to $12 million. In a spotless production facility that looks more like an office than a factory, senior assembler Thomas Yoe, 48, is putting together an indexer, a $1,500 mechanism that precisely controls the movements of silicon wafers.

What's remarkable is how quickly Yoe, a newcomer to Westt only 12 months ago, was able to learn his job. Following a short briefing about the company's business, he went through four weeks of on-the-job training with a supervisor, but with a difference. His traditional apprenticeship was enhanced by industry's newest and hottest training aid: an interactive computer program that spells out step by step with color graphics how to put together Westt's machines. Produced in-house, the program cuts way down on the time the supervisor must spend teaching. It's always at Yoe's side later to answer many of the questions that arise while he's assembling indexers and other parts, and it provides the information in an easy-to-grasp way no old-fashioned printed manual can match. Says Yoe fondly of his electronic mentor: "It's right there. I like it a lot."

Some industry people refer to this type of training as on-demand or activity-driven. Whatever the label, it's the leading edge of a revolution that seeks to bring instruction at the lowest possible cost as close as possible to the worker and the exacting tasks immediately confronting him. Faster and better training is needed in manufacturing today, says Westt CEO Brian J. Westcott, 39, because "it's not manual labor anymore. The workers are now technicians. In our operation, they have to be able to build a product, manage some maintenance, keep track of inventory, do quality control by measuring their own output, adapt to change, and look at documentation--all with minimum supervision."

Jerry Jasinowski, president of the National Association of Manufacturers, says that increasing the productive potential of America's factory employees is "challenge No. 1." The total number of U.S. factory workers is expected to remain flat or increase only slightly in years to come. But because of impending retirements, teaching new recruits--by live instruction or, increasingly, by computer--will be a monumental task. Despite the growing numbers from community colleges and technical institutes, most new hires have only a high school education. They need to learn ever faster, increasingly sophisticated production methods as well as OSHA safety rules and the process and quality controls required of companies that want certification under the ISO 9000 standards.

A recent University of Michigan study estimates that half of today's automobile workers will start drawing pensions by 2003, leaving 240,000 vacancies to be filled. In growth companies like Motorola, which expects to hire 120,000 production workers in just the next five years, the task is not only to teach waves of newcomers but also to retrain those already on board to make redesigned products. Patricia C. Barten, vice president and general manager of Motorola's cellular phone and pager division in Arlington Heights, Illinois, says that about 5% of her work force is constantly in training. Says she: "If I can't move somebody to a new job within a week, we won't survive."

In the quest for efficiency, industry is making some of the biggest changes in traditional classroom instruction, still a must for many types of training. At companies like Westt, classroom teaching has been stripped down to a bare minimum of ad hoc problem solving. Not long ago a question arose: how to machine parts to an accuracy of 0.0004 of an inch in three dimensions and measure the accuracy? In a small classroom, Craig Lewis, vice president for engineering, spent about an hour explaining the general principles of 3-D measurement to three machinists by drawing diagrams on a whiteboard with colored markers. Then he accompanied the machinists to the quality-control room, where they tested their newly learned measuring ability on parts they had already made. End of short course.

At Motorola University, the electronics company's big education and training facility in Schaumburg, Illinois, boring lectures are out, and instructors play a passive role in many classrooms. Assemblers are essentially self-taught on 3-D virtual-reality simulators, in which production machinery quits functioning if the trainee fails to supply it with enough virtual parts; instructors are on hand mainly to answer questions. In an adjoining classroom, an instructor stands ready to help would-be software writers who are learning by the method that educator John Dewey said a century ago was best: by doing. In this case, the trainees practice writing instructions for tiny working robots, similar to those used to assemble pagers and cellular phones, which can pick up plastic cubes and build structures from them. Says Sanjiv Patel, Motorola U.'s manager of advanced manufacturing technology training: "Traditional classroom instruction is giving way to active, laboratory-like training by the learners themselves."

Teaching is changing even more at Ford Motor Co. "There isn't a traditional classroom anymore," says Renee S. Lerche, the company's director of education and training. "It's now everywhere at Ford. It's on the line; it's actually in the workplace." Some subjects still require teacher and classroom and always will, Lerche says, but the setting can be anywhere. Right now, for example, Ford is informing workers about its new product-development system in meetings that allow them to react and ask questions. To overcome some workers' deficiencies in basic skills, Ford bypasses the classroom by sending instructors right to the assembly line. At its Dearborn engine plant near Detroit, public school math and English teachers help workers on the spot with math-based quality-control problems and in writing suggestions.

Ford has a better idea for another old training standby: using hands-on models of the equipment workers will operate in the plant. The company's training centers boast small portable versions of assembly lines and other production facilities. At the Huron training center in New Boston, Michigan, which Ford operates jointly with the United Auto Workers union, machinists and other workers train on full-size versions of the equipment they'll be using. To broaden its reach, the center is looking at the possibility of transmitting learning materials to remote plants by satellite.

One-on-one apprenticeship, another age-old training technique, is recorded on Egyptian wall paintings. But the search is on for ways to impart knowledge faster, even when computers don't play a big helping role as they do at Westt. In the past, says Vincente F. Estrada, the Cuban-born CEO of Manufacturing Technology Systems (MTS) in St. Louis, "the quality of training depended on how the mentor felt at 3 a.m. on the night shift." Founded 30 years ago, with clients ranging from AT&T to Texaco, MTS has made apprenticeship more systematic by devising a rigorous skills-assessment test that painstakingly measures each worker's knowledge and uncovers gaps to be filled.

Along with the test, now available in computerized form, MTS can provide both instructors and props for on-site training. It has been using all three to prepare 100 newly hired industrial technicians--Nineties-speak for blue-collar workers--to operate a plant that Eastman Chemical Co. is building in San Roque on Spain's Costa del Sol, within view of the Rock of Gibraltar. Since the workers have to be trained before the plant is finished, MTS has flown in Spanish-speaking instructors from affiliates in Mexico and Colombia, who have demonstrated actual pumps, control systems, piping, and motors that the training company air-freighted from the U.S. When the plant goes online this fall or next spring, MTS promises, the trainees will be ready to run it.

But increasingly, there's a cheaper way to train. In thousands of today's workplace situations, electronic teaching is supplanting both classrooms and elaborate programs like the one at San Roque. According to a survey by Training magazine, 92% of U.S. corporations rely on videos as their primary means of worker training. Not just newcomers but also employees seeking to know more are learning what they need to at an electronic screen. At its ink-jet printer plant in Corvallis, Oregon, Hewlett-Packard recently installed something akin to knowledge ATMs near the production area. The machines let workers "withdraw" information on their own initiative. "There are five different processes involved in assembly at that plant," says Claudia J. Davis, HP's director of education. "One way to advance is to learn additional skills, and you want to teach those skills as close to the need as possible."

Some of the plant's information founts are interactive PCs, which have taken the training industry by storm. According to a study by Frost & Sullivan, a market research firm in Mountain View, California, $7 billion of the $52 billion that U.S. corporations spent last year on training at all levels went into interactive materials, mostly in the form of CD-ROMs. Sales of these materials, Frost & Sullivan estimates, grew a torrid 40% last year, vs. a 3% to 4% growth rate for all training expenditures.

The content of these teaching programs is multimedia, meaning that it has at least two of the following--text, graphics, sound, video, or animation--and sometimes all. As anyone familiar with CD-ROMs knows, they have a huge instructional advantage over conventional videocassettes because they make it much easier to replay a segment, skip around, or pick from a menu of choices. The trainee can use the materials at his or her own pace, leaping ahead of familiar matter and spending more time on the hard parts. An interactive PC can be a surrogate teacher, grading the learner's progress.

Not all CD-ROMs live up to their promise, to be sure. "It's a new technology with a substantial learning curve for people who design programs," says publisher Brandon Hall of the Multimedia Training Newsletter in Sunnyvale, California. "When these programs are not designed well, they are not going to meet your needs." But as soaring multimedia sales show, industry is generally pleased as punch. The equipment for multimedia, moreover, is getting cheaper all the time. At the minimum, a trainee needs a PC with a built-in double-speed CD-ROM drive, a 16-bit sound card, and a video card with at least one megabyte of RAM. Total cost: under $4,000. In the next few years multimedia training is expected to become available on the Internet, reducing the need for CD-ROMs; companies like Sun Microsystems are already installing it on their internal networks.

The PCs save money by the fistful. In a survey last year of eight companies using interactive training--including Intel, American Airlines, Kaiser Permanente, Pacific Gas & Electric, and Storage Technology--Hall of Multimedia Training Newsletter found that they did the job for 50% less than traditional classroom training, and in half the time. The quality of learning, Hall says, was as good or better. At Storage Technology, whose experience was typical for the companies studied, the biggest savings came from compressing training schedules, eliminating the transportation of 1,500 repairmen to a central teaching facility, and reducing the number of live instructors.

Simulation is computer-based training's most spectacular feature. Multimedia programs allow an aspiring plant operator to play a kind of computer game, which he "wins" or "loses" depending on whether he follows the routine that's being taught. Unlike dull written manuals, the simulation programs can be enlivened with arresting sounds and images. At Alabama Power Co., which uses a CD-ROM produced by Nolan Multimedia of Novato, California, a talking, mustachioed, light-bulb-shaped head named Russell praises trainees with exhortations in a Southern drawl like "Keep going, you got it!" The trainees learn how to overhaul a giant $750,000 pump that supplies steam to a turbine, to tolerances as tight as 0.001 of an inch. Onscreen, the students can strip down the pump layer by layer to see interior views that would otherwise be difficult to convey.

Before long, paper mill trainees who screw up will be punished--onscreen, at least--with boiler explosions, which are sometimes fatal in their industry. David Shaw, CEO of Computer Enhanced Learning of Slippery Rock, Pennsylvania, says his company will incorporate the mock disaster into some of its Process Control Training programs, which are already used in the paper industry and elsewhere. At present, the worst that can happen in the company's software is a thunderclap-like "cavitation" noise when, in an unrelated situation, a trainee damages a pump by allowing insufficient water flow.

Fred Nolan, who works at a paper plant owned by Canada's Abitibi-Price, learned the ropes using Computer Enhanced Learning's software. The program showed him the right way to manipulate valves and other instruments to control liquids flowing through a network of pipes that appears on the PC screen. "This presentation was quite a revelation to me," says Nolan. At Abitibi-Price's mill in Iroquois Falls, Ontario, human-resources manager Don McCroome says that by using U.S. consultants and training tools, the company expects to break out of the middle of the pack and become a top player in the paper industry. Says McCroome: "Today everybody can buy the same technology and make high-quality products. Your better-trained work force is your only competitive edge."

CD-ROM training programs don't come cheap. Depending on how elaborate a show your company wants to put on, an hour's worth of instruction can cost $15,000 to $200,000 to prepare, and design companies charge accordingly. For a relatively modest $15,000, a company can buy "authoring" software from Warren-Forthought in Angleton, Texas, that enables it to write its own programs in-house. One enthusiast of the do-it-yourself approach is Wayne Huckeba, training manager at Citgo's huge petroleum refinery in Lake Charles, Louisiana. Huckeba says he's saving $250,000 a year by substituting interactive PC training for classroom instruction.

Another user of Warren-Forthought software, Amoco's big Cooper River chemical plant near Charleston, South Carolina, created a program to teach OSHA safety standards. Dennis J. Charles, the plant's maintenance training coordinator, says it has eliminated on-the-job injuries. Linda Casey, who until recently was a maintenance technician at Amoco, found its software superior to the training she received at a Navy yard, her previous employer. At the Navy yard, Casey recalls, "you had to sit in a classroom for three or four hours, even if you didn't need the information. At Amoco, if you're familiar with some of the material, you can move on to other things." While some of her training took place in the classroom, Casey says, "in my first two weeks at Amoco, I learned all the OSHA safety regulations on the computer."

An even cheaper alternative is a remarkable new teaching system that harnesses a VCR to a computer, thereby turning passive videotapes into interactive teaching materials that a trainee can easily skip around in. Developed over 22 years by British-born computer whiz John Peers and his engineers at Unilearn Corp., a company in Wilsonville, Oregon, that he founded, the system works by entering digital commands onto an analog videotape. The price, including all the software and equipment needed to create and use an interactive video, with step-by-step directions, is $25,000. But a client can lease key equipment and video-manipulating software for as little as $800 a month.

The system has several advantages. The PC can be a relatively inexpensive one with just the power of a 486 microprocessor. The trainee is able to see full-motion video of TV quality--still difficult and expensive to provide with a CD-ROM system. And Unilearn users can convert libraries of passive videotapes into interactive ones.

"John's magic machine," as one user calls it, still can't match the speed and flexibility of a CD-ROM system in accessing large sets of numbers and big blocks of text. But since the Unilearn system hit the market last January, 30 companies have bought or leased it, including such biggies as Chase Manhattan and British Airways. At Portland General Electric, an Oregon utility that is trying out five Unilearn systems in regional centers, interactive videos show trainees such vital things as how to enter an unmanned utility substation. At the centers, says Richard E. Susee, the utility's manager of safety and health resources, a worker can stop by half an hour before quitting time to learn something new or upgrade his knowledge.

That hardly exhausts the ways in which electronics can teach faster for less. It can broaden the reach of live instructors, who will never disappear entirely. Researchers at SRI International, a not-for-profit research institute in Menlo Park, California, are developing a "distant mentor" system that would allow employees anywhere in a company to transmit problems to mentors by linked PCs. SRI wants to extend the system so that a company can reach employees anywhere in the world. Says program director Earl J. Craighill: "We want to make accessing experts as convenient as making a phone call."

Interactive Learning International Corp. (ILINC), a two-year-old company in Troy, New York, has shown what's possible in today's world of limited telecommunications bandwidth. ILINC's interactive training programs can be transmitted to users' PCs over local- and wide-area networks, as well as high-speed communications links such as ISDN (integrated services digital networks). A live instructor can appear in a window on the screen and address students in dozens of locations. He can launch video and audio clips for all the "class" to see and hear. And at discussion time, a student can click on a "raise hand" icon to get the floor.

In the new world of training, in short, computers and teachers needn't be enemies. Given those legions of raw recruits who will be swarming into industry, both will have their work cut out for them.

REPORTER ASSOCIATE Alicia Hills Moore