Is Your Company Inadvertantly Putting the Breaks on its Own Continuous Improvement?

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Getting better at something can take a lot of work. As any change agent can tell you, change is difficult, especially when there are people involved. Change requires shifts in the power structure, disrupting old habits, and pushing people out of their comfort zone. The reason that’s a problem is because you simply cannot get better if you cannot change. The two are inseparable. In many cases, there are just as many forces at play to prevent change than there are to create change. Sometimes those forces are created by the way the company works, or its business system. The business system is the array of its policies, people, processes, suppliers, customers, culture, and technology. Sometimes, the business system is designed in a way that inadvertently discourages continuous improvement. But don’t fret. In this post, I will uncover a few of the culprits that are putting the brakes continuous improvement in your company.

At any point in time, a manufacturer can capture its current state situation. Although the current state is just a snapshot in time, it can reveal some very interesting information. This information could include throughput levels, process efficiencies, conversion costs and so on. It could also reveal recent trends that provide some indication of what can be expected for the future. Those trends provide some insight to how “primed” your organization is for a continuous improvement initiative such as Lean, Six Sigma, Agile manufacturing or anything else you’re trying to do. A positive trend over time indicates that the organization is more likely to embrace change or continuous improvement. A flat trend over a long time indicates that the organization may be stagnated with some degree of resistance to change or improvement. These are the most difficult ones because there may be gatekeepers who won’t see a need to change. Making the case for continuous improvement will take quite a bit more effort in this instance. If the trend is negative over a long time period…well there’s bad news and good news. The bad news is that if you don’t improve, you won’t stay in business. The good news is that if you don’t improve you won’t stay in business. Making the case for continuous improvement in this case is a piece of cake.

With that said, there are some arrangements where business systems have embraced their inefficiency. These systems have decided to implement practices that allow some inside the business to profit from their inefficiency instead of eliminating it. I’ll give you a few examples: the contractor who is paid by the hour has an incentive to consume more hours to complete a job. Another is the airline that allows passengers to pay for priority boarding and seating. Their incentive is to keep the “normal” process so cumbersome that people will pay to cut in line and circumvent their terribly inefficient process. In this case, the airline has created a nice new revenue stream from their own inefficiency. You see where I’m going with this. These would be examples of policies killing the culture of continuous improvement. Over time, the people of an organization grow to accept inefficiencies as “the way it is” and they learn to capitalize on them as well. Inefficiency leaves room for corruption, which only breeds more inefficiency. This is what leads to a culture of poor performance and resistance to continuous improvement.

As part of your continuous improvement initiative, it will serve you well to take a close look at the policies, people, processes, suppliers, customers, culture, and technologies that might be hindering your growth. You will need to identify who in the organization is profiting from inefficiency and create conditions where the only way to profit is by ever increasing efficiency (with outstanding safety and quality of course).

© 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.

When Its Smarter to Hire Consultants in Manufacturing

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Its time to change, either because you need to, or you just want to. You need to reduce operating costs to free up working capital to invest in marketing. Your leading competitor just went out of business and you need to increase throughput levels to meet a rapidly expanding customer base. You’re starting up a new product line and need to know the optimal manufacturing model. Your raw material costs are inflating and you need to get costs back in control to increase your profit margin. You need to know what something “should-cost” to make or buy…the list of possibilities are endless. In business, there are always problems that need to be solved. These problems come in all degrees of scale and complexity. Some of them can be handled by your internal team and some not so much. There are mainly three situations when its smarter to hire consultants to help you get something done:

1) You don’t have time to do it yourself. Your internal team is stretched thin with their current responsibilities. Business systems like to operate in a steady and predictable environment. Unfortunately, the world outside of the 4-walls (and sometimes inside) of a manufacturing facility is very unpredictable. When problems arise, management level work demands surge. As a manufacturing leader, you need to determine how you’re going to deal with the surge in demand. You can tax your current team, which works to an extent but can disrupt your business system, especially if you’re already running with a lean organization. You can just ignore the problems and hope they go away. Or you can bring in consultants to help capture the opportunities at hand.  You can expect a consultant to work at least twice the speed of your employees, and be happy to do it. Aside from a few meetings and data requests, you can also expect the consultant to work fairly autonomously to get a full understanding of the problem, potential solutions, and sometimes not-so-obvious opportunities abound. Additionally, hiring consultants for some services alleviates you from the management burden of hiring and maintaining an employee.

2) You don’t have the expertise in-house. Its just not realistic to expect to have 100% of the expertise needed to effectively run a manufacturing operation. Some knowledge or skill sets will only be needed less than 3% of the time; and sometimes just once ever. Other times, your internal team may have a good grasp on the subject but not to the extent needed to produce the quality of results you need at that time. For instance, if you want to implement a world-class continuous improvement process, chances are that your internal team has not seen very many world-class operations (if any) in practice. Consultants are in the unique position to have served many clients and often have an array of best-in-class techniques and methods for you to incorporate.

3) You need an objective perspective. Within any organization, there exists varying degrees of internal politics. Underneath the surface, everyone is competing for a larger share of the company’s spoils. This comes in the form of bonuses, pay raises, stock, promotions, or just having more say over what gets served at the company picnic. Because of this, everyone operating within the confines of the organization has a personal agenda. As such, all employees look at the situation from their own perspective, which is influenced by alliances, past hurts, and personal ambition. All of these things cloud your employees’ judgement and blind them to opportunities that would otherwise be very obvious. A consultant who has seen many manufacturing operations and who is not embedded in to the internal politics can help develop unbiased solutions and see opportunities that everyone else is conditioned not to see.

Combining the objective perspective with a high degree of expertise and a high workload capacity, a consultant can often provide you with very high quality solutions in a much shorter time-frame placing minimal strain on the existing business system.

© 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.

Why American Companies Struggle with Lean Implementation

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Its no secret that American companies have had their share of fits and stalls with the implementation of Lean Manufacturing. Why is it that some companies are able to generate so much steam and momentum with their Lean efforts while some can’t even create the slightest inertia? As a Manufacturing Efficiency expert, I’ve had the privilege to lead several Lean implementations myself and support clients who were in desperate need of a Lean initiative. Here are some of my key observations for why American companies struggle to implement Lean:

1) Lack of true Lean expertise – Many companies simply staff lean roles in the factories and leave them to sink or swim. They either select people who already work at the facilities who have generally done a good job or they bring in someone from the outside who seems to have a grasp on the concept on Continuous Improvement. Granted just about anyone can learn the basics of Lean, it takes an experienced hand to navigate the politics and shape an palatable strategy for a true and sustainable implementation. These people not only need to have a strong grasp (and good experience) with executing lean tactics, they also need to have a strong competency for change management and political savvy.

2) Lack of leadership buy-in and support – At the lowest level, the factory manager needs to have a strong grasp of Lean and be fully bought in to leading an implementation. It needs to be a prerequisite for the job of managing the factory. At the highest level, Lean competency would be a strong consideration for any job or promotion within the supply chain division of the company (especially manufacturing). The VP of Operations would be a former implementor of the Lean initiatives. The Directors would be Black Belts (or at least Green Belts) with experience leading significant OEE improvements. The factory manager’s job performance would be heavily dependant on hitting milestones against Lean performance metrics. At that point, you’ve got a winning recipe for success.

3) Lean is counter-intuitive for American culture – Lean was developed and honed within the Japanese culture. Japan has a very strong culture for discipline, order, and process optimization. In contrast, America has a strong culture of instant gratification and individualism. Imagine the sumo wrestler or the samurai in Japan. Their characteristics are discipline, focus, endurance, loyalty, and control. This is reflective of the Japanese (and Lean) culture. Then imagine the cowboy or rock star in America. Their characteristics are rapid gratification, individualism, and heroism. These are reflective of American values as well. Lean is a discipline of manufacturing that is founded on the systematic elimination of waste. It is tailored to Japanese culture. In America, when something goes wrong (ie machine breaks down or materials don’t arrive), it is natural to point the finger at the person standing there holding the bag. We assume that someone messed up and we quickly move to take disciplinary action. Rarely do we take a step back and ask what conditions exist for this type of issue to occur and how can the system be designed to eliminate the possibility of this type of error. Fixing the system takes time, trial, and error. Its just easier to discipline or replace someone when there seems to be a problem. Also, since many corporate managers only stay in a critical leadership role for a short amount of time (often less than 4 years), their promotion is dependant on immediate and dramatic results. A thorough and sustainable Lean implementation takes at least 5 years – and that’s with skilled implementers and competent / dedicated leaders at the helm.

Most companies think of Lean as a manufacturing process improvement initiative. They see the tactics such as 5S, Kaizen Events, Root Cause Analysis, and Andon Systems. What they don’t see is that Lean also requires an organizational adjustment. This includes changing the rules of the game and what is required to get ahead in the company. The desire to get ahead is the driving engine for the American economy. No single American company will change that. Therefore, as in sumo wrestling, American companies need to leverage the desire to get ahead – to drive manufacturing efficiency. Lean has a fantastic set of principles and tools for driving manufacturing efficiency. For starters, manufacturers should align their employee performance management systems with Lean implementation requirements. The people capturing the greatest gains in savings, efficiencies, and productivity improvements need to be regarded as the rock stars. Even those unsuccessfully attempting to drive positive change should be recognized and appreciated for their efforts. For a company that is serious about a Lean implementation, there should be a direct connection between promotions and compensation to impact on factory efficiency improvement for all factory employees.

© 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.