There is a variety of systems proposed to help in improving a factory. Each of them focuses in almost every aspect of factory activity being that quality, reliability, safety, productivity, waste reduction, stock reduction, process management, assets management, maintenance … you name it. They offer a systematic approach helping the factory to support the business in a sound and sustainable way. At the same time they create a confusion to management, when it comes to choose one of them.....

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How to find the resources?

The everyday reality in a factory involves a lot of firefighting. Off spec batches, machine breakdowns, off spec raw or packing materials, late delivery of materials etc. pose challenges, which demand quick reactions that absorb the biggest chunk of management time and attention.

The first and utmost important issue to resolve is to find time for strategic thinking. If you want to differentiate as a leader you’ve got to make time for strategy. This is a time management problem, which requires proper prioritisation of issues. If firefighting and micromanagement get always top priority, then there is 

no time for strategic thinking. Connected to that is the delegation culture that is strictly related to the trust and the employees’ involvement status. Let’s clarify. In the absence of trust there is no chance for employee involvement to resolve even the trivial, everyday issues. There is no delegation, which in turn leads to the absence of commitment and finally results in a command and control environment.

Trust building backed up by proper training – preferably on-the-job training – greatly facilitates delegation of tasks and responsibilities. This proliferates participation among the employees and creates the opportunity to improve commitment and morale in the factory. Besides, it boosts productivity, quality, product safety and reduces the cost. The result is that factory management can afford to devote time and effort in thinking more strategically and getting a helicopter view of the factory status.

Where to start from?

All the above is the beginning of the story, however it is a sound start of a virtuous circle. But then, if managers have the available time to think on a long term strategic basis, where should they start? Should it be wise to focus in quality improvement or product safety? Or would it be better to focus in productivity or innovation, or rather adopt a new and promising technology?

There is indeed no preferred or standard answer, unless management dives deep into the reality looking towards their customers, because they are the reason for the existence, survival and success of the company. It would even be a lot better, if management succeeds in taking a look into their organisation and their products from the customers’ perspective. The best way to do that is not by rushing to do what any customer is suggesting. Instead management should meticulously select and prioritise their projects by listening and deeply analysing what are their customers’ real requirements. This should be done by deciding whether there is room for improvement in their product portfolio that will exceed customers’ expectations and whether there is a reasonable need for big investment in additional resources.

A pivotal shift in the way management thinks is already under way. Putting the customer requirements in perspective, revolutionises the culture across all levels of the organisation, which introduces a new way of thinking. Once this happens, it starts getting obvious that:

• Proper production planning is customer and not factory oriented and should result in dramatically reducing the lead times, increasing the flexibility and boosting the customer service.
• Customers’ complaints are not a curse but an opportunity for improvement and should feed the continuous improvement masterplan or even the investment and the innovation plan.

The whole effort of choosing what to do and how to implement it, boils down to deeply analyse the requirements from the customers’ perception, face the challenges, involve the employees, devise a plan that is connected to reality and set mutually agreed challenging targets. It is wise in this approach to borrow best practices, to adopt well known systems like lean management, 6-Sigma, TPM, TQM as long as they fit with the situation and to also ask for consulting support. Always bear in mind that external ideas, best practices and consulting are very helpful but they are not a substitute for management effort and commitment to improve the factory in a way that directly and substantially improves the business. Failing to do that, I am afraid, will sooner or later lead to a factory closure, with all the troubles incurred to the society through unemployment, loss of investments and finally loss in prosperity.

The road map to convert a factory to a profit centre.

Making the long story short, the road map proposed here reads as follows:

• Start by proper training, trust building and employee involvement in the everyday problem solving.
• Carefully analyse all customer complaints.
• Organise interviews with your most important customers eliciting their perspective about the products and services you produce.
• Compare your factory to the current and potential competitors.
• Define the areas of improvement and priority, according to your customers’ requirements, the existing room for improvement and the ease for improvement.
• Identify how exactly the factory contributes to the company strategy and put all your effort in maximising it.
• Put together a list of KPIs with challenging but achievable targets.
• Look for outside help by selecting a proper system and methodology and / or using consulting support to come up with a masterplan.
• Communicate throughout the company the vision and the masterplan connected to that.
• Organise project teams supervised by a steering group to follow up the progress.
• Do it in a fast pace to outperform competition.

A profit centre is successful as long as it generates value. It is fundamental to consider that the factory doesn’t merely produce goods (many other factories can do this). If this is the case then the factory is regarded as a cost centre and sooner or later it will lose the game against competition. The factory, your Factory, should support and enable your company to better satisfy the needs of the customers. This is a major business development activity that the factory should put in all its efforts to contribute to the company vision and mission.

For any further information on the implementation of this business development concept contact us in the URL: leansolutions.gr or in LinkedIn.

14/8/2017

Alkis Charalambopoulos, leansolutions.gr

Keywords

Firefighting, strategic thinking, employee involvement, customers, value generation, business development, profit centre.