In all manufacturing companies, it goes without saying that there are problems. The work of leadership should be to create an environment that enables and supports problem-solving at the lowest level of the organization. The job of managers is to solve big/systemic problems and to allow employees on the shop floor to solve many of the smaller problems that arise daily.
What you see in most companies, though, are managers working at least one level below their title, trying to solve problems that should be resolved at lower levels. Employees are allowed to push problems up to the next level for resolution. Human behavior shows that once someone has told you about a problem, they feel better and it then becomes your problem to solve.
This chart is an aid to help you define and solve plant problems.
One of the primary challenges is how to get your team to think - rather than just do their jobs - and more importantly, how to get them thinking about what you want them to think about (business problems).
The best way is to ask them questions, allow them to answer, and give them the resource and responsibility to implement the solution. That's easier said than done, but the positive result of this effort is at the heart of the Toyota Production System, where hundreds of problems are identified and solved each day by hundreds of people.
At most companies, there are limited resources to apply to problem-solving, both from the perspective of time that people have available to work on them and for the capital available to spend on fixing them. Therefore, problem identification becomes key. How do you know where the problem is? How do you know which is the right problem to be solved? How do you know which is the right tool or process to solve it?
The best way to start is to create a visual work environment that makes problems very easy to see. This requires: the creation of a standard, making it visible, and then auditing the standard on a regular basis. Being able to monitor what is good, what is bad, and what is an abnormal vs. normal condition is the key to improving them.
Sometimes, too many metrics are measured, but in a manufacturing company, the most important ones fall into four categories: quality, throughput, cost and your business model.
On this page is a chart that can help guide you to a problem and then identify where to look for potential causes and solutions. Beneath each major attribute is a key indicator (metric) that, if used correctly, should allow you to monitor the state of health in each aspect of your business performance. As you begin the diagnosis, it is best to start on the left side and move to the right. Once a problem is identified, the next step is to understand its boundaries and root cause. As Boss Kettering once said, "a problem well-defined is a problem half-solved."
Since quality is always your highest leverage point, this should be the place to begin. When you improve quality, you gain at least four benefits: customer satisfaction, productivity, cost and, in many cases, improved safety. The best metrics to monitor as quality indicators are: first-time quality, scrap dollars, and customer complaints or returns. If these indicators show poor results in the area of quality, the chart lists some of the best places to start looking to find your deficiencies.
Do you have a quality system? Is your process capable (cpk)? Are your people trained? Are you collecting and monitoring key input data and output attributes? Answers to these questions will usually lead you to tools such as control plans, error-proofing or one of the many problem-solving methodologies.
If you get on top of your operation's quality and you still are having problems, you need to move from left to right on the chart and begin to focus on throughput. The most common indicator for throughput is operational availability. Can the process deliver the output for which it was purchased? This is always directly related to the uptime of the process. If your equipment is not performing at rated levels, you need to begin looking at why it isn't running. Are there mechanical breakdowns? Does the process run out of material? Does the process run the right job at the right time? Do the operators use efficient work methods? Are there lengthy changeovers? Answers to these questions will lead you to tools such as Total Productive Maintenance, standard work for operators, pull systems and single-minute exchange of dies (SMED).
As you demonstrate operational excellence in quality and throughput, you should continue to move across the chart further to the right. At this point, if your manufacturing costs are still too high, there may be some underlying issues that need to be addressed. The simplest to fix would be excessive overhead expenses. Or, you may have to tackle more difficult issues like a wage and benefit package that is uncompetitive for your industry. Or, you may not have capacitized in increments that allow you to efficiently follow your customers' demand curve.
Another place to look is at the product design. It may be sacred and difficult to change for many reasons, but has it been engineered for manufacturability? Or, is there too much model proliferation at the beginning of the process?
And lastly, we move to poor cash flow, which requires a fundamental look at your business model. This demands more of a commercial focus, which is different than the operational perspective used for the previous attributes. If your product and process are efficiently designed and operated, but your cash flow is negative, your problems are generally outside the factory.
You need to re-examine your company's basic value proposition as it relates to the market. What is the value of the product to your customer? Are you late to market? Have you overcapitalized your business and are being crushed by debt service every month? Do you have poor business practices as they relate to terms and conditions, billing and receivables? Should you make vs. buy? None of these problems are easy to solve, but if you follow the chart, you will move to your problem area through the process of elimination.
Having good metrics to monitor the state of health of your business is a key. Shop floor/operational issues should always be solved from the left to the right. Senior leadership/commercial issues should be solved from the right to the left.
It is easy for the senior leadership to cherry-pick at operational problems, but the challenge is to support a problem-solving environment, with many problem-solvers working on the right problems. This chart will help you figure out the identity of your problem(s).
Curtiss Quirin is the director of operations for The Stanley Works’ production plant in Indianapolis. You may contact him at firstname.lastname@example.org.
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