fOS Part II – Whats Planning Got to Do With It? The Manufacturer’s Paradox

fOS Graphic - Planning

fOS Part II: Planning & Procurement Analysis

I’ll begin this post by sharing my top 5 quotes about planning:

5. “If you don’t know where you’re going, you’ll end up someplace else” – Yogi Berra

4. “Someone is sitting in the shade today because someone else planted a tree a long time ago” – Warren Buffet

3. “The time to repair the roof is when the sun is shining” – John F. Kennedy

2. “By failing to prepare, you are preparing to fail” – Benjamin Franklin

1. “Give me six hours to chop down a tree, and I’ll spend the first hour sharpening the axe” – Abraham Lincoln

In my experience working with manufacturers, planning is often the most overlooked, yet is an immensely crucial aspect to execution. Planning is not just what happens before the factory starts making stuff, its happening constantly throughout the life of the process. When I started working for Nestle Prepared Foods in the Jonesboro, Arkansas factory where we made Lean Cuisine and Stouffers frozen dinners, the management team sent a group of us on a 4-day team-building trip facilitated by an organization called Team Trek in the Ozarks of North Central Arkansas. It was a fantastic experience for myself as a young Industrial Performance Engineer and the five others who attended with me. As with most other team building exercises, we were tasked with overcoming some challenges that none of us could have done alone and forced us into an environment that required us to work together to succeed. There were about 6 or 7 challenges over the four days in which we progressed from complete chaos and disorganization in the initial challenges to a well-oiled unit by the end of the four days. The one key thing that made the difference between chaos and near-perfect harmony was planning.  Since every challenge was done under time pressure, which is often the same as in business, we initially just jumped in and tried to solve the problem as individuals. By the end, we took our time to develop a solid and well facilitated plan, then executed that plan. The challenges became more challenging and we became more organized, with planning and facilitation becoming the predominant skill-set for increasing effectiveness. The same rule applies in business…especially in manufacturing.

There are four key elements of an effective planning process for a manufacturing organization:

1: Establishing Goals – Determine what key objectives must be met for World-Class Execution

Manuficient Consulting - Goal Setting

You don’t become a business leader without being goal-oriented. Yet, I frequently find that the goals of the manufacturing organization are mis-aligned with or fall terribly short of the goals and expectations of customers and other stakeholders. In the case of the fOS Methothology, the performance goal for a manufacturing facility is 85% OEE. This goal should permeate throughout the organization to the point where every employee can tell any visitor what the goal is, the current performance to goal, and the gameplan for closing the gap in their respective area.  There should also be supporting targets set for each production area that roll-up to the overall goal of World-Class execution.

2: Procurement and Securing Required Resources – Predict resource requirements and perform sourcing analysis to maximize reliability while minimizing cost. Procure or schedule all required resources as needed for production.

Secure Resource Snapshot

In order to make stuff, you need stuff. To take that a step further, you need the right stuff at the right time, right quantity, right quality,  right price, etc, etc,…because that’s exactly what your customers expect from you. Unreliable suppliers make you an unreliable manufacturer. Likewise, expensive suppliers make you an expensive manufacturer. Thus the goal of an effective sourcing / procurement system is to maximize reliability while minimizing cost. This includes procurement of raw materials, supplies, and services (including labor, management, and contracted services). In order for you to perform at World-Class levels, your suppliers need to be marching to the same drum beat. There are two ways to achieve this…you can either work with your suppliers to improve their performance or re-source with suppliers who can get it done. This is a tedious process of vetting, qualifying, and negotiating, but can produce dramatic results for you and your customers if executed well.

3: Allocate Resources & Responsibilities – Assign mutually exclusive and completely exhaustive functions to all human and capital assetsAllocate Resources Snapshot

In the manufacturing environment, life happens every day…often several times a day. A leader who expects everything to go exactly as planned is sure to be disappointed. Not having a Single-Point of Accountability assigned for every aspect of the business can quickly become a very frustrating environment, especially for frequently occurring issues. An SPA is the person who is ultimately accountable for the performance of an asset, process, or entire system. While its not difficult to assign an SPA for any gaps in the management system, there should also be a process for granting that SPA the authority to make the decisions or access resources needed to be successful in their accountability. Careful steps should be taken to ensure that all bases are covered and that the authority is fairly distributed. As you can imagine, this can be a delicate process and can create a politically charged environment if not handled with an experienced hand.

4: Establish Controls – Conduct risk analysis to determine likely failure points and implement protocols to monitor and effectively respond to process deviations

Process Controls Snapshot

Last but definitely not least, process controls need to be established to prevent failures, monitor key processes, and respond effectively in the event of a failure. Through risk assessments, you can identify potential problem areas and take preventative action or establish process controls to enhance process reliability. Process Controls and reaction protocols are discussed in depth during the Part IV: Health-check phase so I won’t go into great detail in this section. The fundamental concept is that a robust health-check system can quickly alert you when a process is either out of compliance or out of control…at which time there needs to be systematic responses built into your fOS that your plant personnel (who should be well-trained), is expected to execute according to pre-established failure protocols.  These protocols should be designed to not only resolve the issue at the remedial level, but take action to prevent future occurrence of this process failure.

Manuficient Consulting can help reduce your manufacturing costs by conducting a thorough, data-driven analysis of your planning and procurement practices and working collaboratively to develop an executable roadmap to improvement.

Visit the Manuficient Consulting website for more details on this subject.

Visit my Excelville.com Profile page to find tools to help you along the way in your continuous improvement journey.

Best Regards,

Calvin

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© Calvin L Williams blog at calvinlwilliams.com [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

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