Manufacturing Execution Strategy: Technique vs Speed

Manuficient - Swimmer

In manufacturing, there is an optimal point where you have achieved the ideal balance between technique and speed for a process. The trick is knowing when you have struck that balance; and the answer may not be what you think.

I have a son and a daughter who are just shy of two years apart in age. They have a completely different approach to learning a new thing. Swimming, for example, is one of the things they are learning to do at the same time. My son’s approach is to go as fast as possible. He doesn’t care how much energy gets wasted in the process or if he has nailed down the proper stroke or anything like that. He just wants to go fast. In the manufacturing setting, he would be like the supervisor who speeds up the production line to the point where it begins to take a toll on quality, morale, and even machine lifespan; all for the sake of getting the most units produced for that day. For my son, the budding swimmer, the consequences are not so severe. His agility and strength will quickly improve, especially while he is young. He will achieve a pretty good speed early but potentially peak out before he reaches his potential, especially if he remains in the same sport. He will then either need to unlearn all his bad habits and improve his technique in order to get better or he’ll pick up something else where he can win. In the manufacturing environment, speed can be a little more dangerous. For one, running the line faster than it is capable of running reduces machine uptime, quality, and morale. These things cause the production crew to create work-arounds to sustain the increased speed that over time turn into bad habits. You may be able to get some pretty strong results early on but cannot be sustained over the long run due to the amount of wear that it places on the system. Also the higher-ups get “drunk” off of the increased rates (even if they are short lived) and that supervisor finds himself in a position where he is expected to produce ever-increasing throughputs with a declining production system. This approach is best suited for an environment where sheer strength and agility are the predominant requirements such as places with frequent changeovers, constantly evolving product offering, and shorter production runs. However a much higher investment in production system maintenance, and training is required.

I have a daughter who is also learning to swim. She makes little to no effort to go fast, but her inclination is to master the technique of swimming. She will swim laps across the same stretch of pool for the entire time. If you give her a tip to improve her technique, she will incorporate immediately and continue her laps. As such, she is constantly evolving her method and developing good habits. She is also gradually increasing speed as she becomes physically stronger. In the manufacturing environment, her approach would be akin to the craftsman or master artisan, patiently working to perfect the craft. This approach is perfect for environments that experience infrequent change and mastery of delivery is the predominant requirement. Fewer changeovers, longer production runs, and longer SKU lifespan would be the ideal state characteristics. This approach is great for long-term growth but less than ideal for short order production runs.

In manufacturing, you will find both approaches winning the day depending on the needs of the business. However there is a fundamental approach that applies across all types of manufacturing environments. The key is to analyse the perimeters of the specific manufacturing environment and identify those elements of the business that will probably not change for a long time and those elements that change frequently. For those elements that are long-lived, the slow and steady approach to management should be applied. For those elements that are constantly changing, techniques of speed and agility should be mastered. There are four core elements to every business: people, processes, products (or services), and technology. All of these elements evolve at different rates within the company, therefore the management strategy should be selected to fit the rate of evolution for the given element.

© Calvin L Williams blog at [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.


Plant Profits: The Whole that is Greater than the Sum of Its Parts

Manuficient - Man Drawing Bar Chart

In a healthy product-driven business environment, value is created in the manufacturing process. In fact, the entire value chain lives within the manufacturing (and supply chain) process. Case in point, if you take the of raw materials, conversion (labor utilities, maintenance, etc.), and overhead and total that all up for one unit; then compare that value to the market price for one unit, the difference is the amount of value created. Now some of that value is real and some of it is perceived which is created by dynamics in the market such as scarcity and other factors. For the focus of this post, lets focus on the concept of real value.

For many people (depending on the product), its just more practical to go purchase something than it is to try to produce it themselves. Lets look at a car for example. If everyone had to build their own car from scratch, the road would be a much scarier place. Not everyone has the time, talent, resources, or desire to build their own car – and there’s nothing wrong with that. By having auto-makers that we can trust to deliver a quality vehicle at an affordable price gives us all the freedom to focus on the things that we are great at or love to do. In other words, having skilled mechanics / technicians, robust quality assurance, and reliable and scalable manufacturing processes to build our cars for us, they are creating value for our lives. And because of this, we are happily willing to pay them more than the combined cost of raw materials, conversion, and overhead for our car. This is the real value that is created by the manufacturing process.

By creating real value for the end user, the manufacturing process is also creating wealth for the company. One of the most important roles of marketing and sales and some of the other demand-side business functions are to transform the value created in manufacturing into cash.

In the previous post titled: Measuring Plant Performance by the Common Denominator in Business, we discussed the importance of measuring plant performance in terms of cash and then having the tools in place to communicate performance as frequently as possible, if not in real-time, down to the value creators themselves, the shop floor operator. In order to do this, you have to understand the value of finished working capital on a unit by unit basis (or series of value-added steps). This allows you to identify the amount of value created in real time, which can be measured against conversion costs in real time. The difference can be viewed as manufacturing profits. This creates the possibility of allowing the manufacturing executors to understand and share in the success of playing their role in driving wealth into the company. This also lays some of the ground work for a culture of continuous improvement since it enables greater financial incentives for increasing plant profitability, which we’ll dive into for our next post.

© Calvin L Williams blog at [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.