August 10, 2017 / best practices, continuous improvement, employee incentives, Employee Morale, human capital, lean manufacturing, LIT, operator training, productivity, resource allocation
Continuous improvement and lean manufacturing are certainly not new concepts to today’s fabricators. The numerous benefits of “getting lean” have been widely accepted, which means that most shops have already undergone some type of improvement initiative. In many cases, understanding the benefits of lean manufacturing is not the challenge. The real challenge is making the initiative stick long enough to produce results.
Unfortunately, that is often not the case. Using a hypothetical example, an article from The Fabricator explains that it is not uncommon for a fabrication company to go through four or five different improvement initiatives, none of which end up successful. The problem, the article states, is that engineers and managers may make changes to the way employees do their work, but they really don’t spend enough time helping operators and other employees understand why or how to do it. Even if everyone is often willing to take on the lean transformation, managers need to teach everyone the “what, why, and how” behind the lean principles.
In addition, there are often employees that are hesitant to embrace improvement initiatives like lean manufacturing. Some may even actively fight against it, even while performing their assigned lean tasks.
The goal for any manager should be to not only get workers to adopt lean principles, but to fully embrace them. Getting everyone—from the top down—is the only way a shop will start seeing results. As explained in the eBook, Five Performance-Boost Best Practices for Your Industrial Metal-Cutting Organizations, for lean to be successful, “it must permeate the business silos and receive universal backing amongst senior management and employees.”
How can managers accomplish this? A recent article from IndustryWeek offers four ways fabricators can get even the toughest employees on board with lean initiatives:
- Don’t Gloss Over the Fact that Challenging Times Lie Ahead. Instead of minimizing potentially negative consequences of the looming change, state flat out that some individuals will face more adversity than others. Much of this has to start from the top. The unknown intimidates, frustrates, and creates emotional insecurity. If leadership communicates and exhibits its vision, then change becomes the catalyst for improvement.
- Evaluate Current Staffing. Lean management is not synonymous with layoffs. However, some team members are not open to working in a lean culture. They may not agree with lean philosophies, nor do they want to better understand these principles. If you retain these individuals as company culture evolves around them, you are not benefiting them by allowing them to continue working for a lean company. Consider respectfully transitioning recalcitrant team members out of their positions.
- Pre-plan Team Communications. Use rich communication mediums to announce change. Face-to-face communication cannot be overvalued as a means to convey positivity, commitment, and optimism. An “all hands” meeting is an appropriate venue for the initial announcement. Do not make a habit of distracting teams from their primary responsibilities with frequent updates.
- Highlight Empowerment Versus the Increase in Responsibilities. Team members accustomed to traditional workplace cultures will not readily evaluate their own actions and suggest process improvements. This type of self-evaluation may be completely foreign to them. Initially, many team members will find the concept of increased responsibility daunting rather than empowering. To teach lean thinking, strive to make lean ambassadors out of the organization’s influence drivers. Focus on those who can deliver change and who will become not only the informal leader on the floor, but also the industrial athlete of the cell.
While changing processes is certainly a huge part of any lean manufacturing journey, getting people to accept, embrace, and understand the changes is the first and most important step a shop can take. As many fabricators have discovered, missing this critical step could mean the difference between seeing results and hitting another dead end.
July 20, 2017 / continuous improvement, Employee Morale, lean manufacturing, LIT, maintaining talent, operator training, productivity, quality, strategic planning
Like most industrial manufacturing segments, metal forges have embraced lean manufacturing and the benefits it can bring. Although not every operation has the resources to undergo a total lean transformation, industry leaders like Jorgensen Forge have adopted simple lean tools and practices to eliminate waste, lower costs, and improve customer responsiveness.
One lean manufacturing tool that continues to gain popularity among operations managers is “going to the Gemba” or taking a “Gemba walk.” This practical lean tool gives management a clear view of what is happening on the plant floor and, more importantly, reveals areas for possible improvement. As explained in the eBook, Five Performance-Boosting Best Practices for your Industrial Metal-Cutting Organization, “Gemba” is the Japanese term for “actual place,” but has been redefined by lean thinkers as the place where value-creating work actually occurs. In a manufacturing environment, this is typically the shop floor. Many lean experts advise manufacturing executives to make time to visit this place—known as taking a “Gemba walk”—so they can see their operation from the front lines.
There are several ways managers can “go to the Gemba.” According to a Target Online article from the Association of Manufacturing Excellence, there are three types of Gemba visits:
- Leadership Gemba Visits. In these visits, the focus is on the culture, developing trust, learning more about the operations, and finding ways to improve the working conditions of the team members. These Gemba visits are typically conducted by managers and executives (individually or in pairs). They don’t usually have an agenda or follow a prescribed process. The leader simply goes to the Gemba to engage with the team members in a meaningful way and searches for opportunities to make their work less frustrating and more fulfilling.
- Leader Standard Work Gemba Walks. These Gemba walks typically have an agenda or a theme and occur on a regular cadence. These are structured and can be done individually or in groups. Many management teams have standard processes for visiting team huddles, checking hour-by-hour charts, doing 5S audits, or doing safety observations. Others visit the Gemba with a specific theme in mind for the walk, such as reviewing autonomous maintenance practices, learning about kaizen activities, discussing safety procedures, reviewing visual management practices, etc.
- Problem-Solving Gemba Visits. Typically, the purpose of a problem-solving Gemba visit is to go to the source of a problem in order to observe it first-hand, talk to those closest to the problem, and determine if countermeasures are needed while working to determine the root cause of the problem. This is also a great opportunity for leaders to talk to team members about the problem-solving process and root cause analysis.
Why are Gemba visits so important? This article from The Leadership Network lists a few ways Gemba visits can be beneficial:
- First-hand knowledge is the highest form of information. A regular Gemba walk will give managers transparent and unmediated knowledge that is needed to challenge and validate assumptions made by data.
- Perspective is gained through experience. A regular Gemba walk allows managers to understand the challenges employees need to overcome on a daily basis to deliver the results that are being promised in the boardroom.
- Both people and process matter equally. A regular Gemba walk will help develop a culture that fixes the problems in a process and not one that blames the people performing the process.
If Gemba visits aren’t currently part of your management strategy, perhaps it is time to explore the ways in which it could improve your operation. To read more about this lean manufacturing tool, check out the slideshare presentation, Gemba 101, or read this overview article from iSixSigma.
February 28, 2017 / best practices, Cost Management, Employee Morale, human capital, industry news, LIT, maintaining talent, operator training, ROI, skills gap
The idea of investing in your employees sounds good in theory. In fact, many would say that this is a trend among manufacturers as they try to find ways to address the widening skills gap.
But as any metals executive knows, theories don’t pay the bills. Resources designated to employees may offer some “soft” benefits like improved morale, but is there any financial benefit to investing in employees?
Research shows that the answer is yes: Investing in employees does offer a good return on investment (ROI). In an article published by Harvard Business Review, Alex Edmans, professor of Finance at London Business School, says that research of stock market data clearly reveals that the benefits of investing in employees outweigh the costs and that employee satisfaction improves firm value.
“I studied 28 years of data and found that firms with high employee satisfaction outperform their peers by 2.3% to 3.8% per year in long-run stock returns—89% to 184% cumulative—even after controlling for other factors that drive returns,” Edmans writes in HBR. “Moreover, the results suggest that it’s employee satisfaction that causes good performance, rather than good performance allowing a firm to invest in employee satisfaction.”
According to Edmans, the findings have major implications. “For managers, they imply that companies that treat their workers better, do better,” he writes. “While seemingly simple, this result contradicts conventional wisdom, which uses cost control as a measure of efficiency.” (You can see all the details of Edmans’ findings here.)
Research conducted among forges and other industrial metal-cutting organizations show similar results. A benchmark study conducted by the LENOX Institute of Technology provides evidence that investing in human capital is critical for improving on-time customer delivery and driving higher revenue. Specifically, the survey of 100 industrial metal-cutting operations found the following:
- 64% of organizations that cite their operator turnover is decreasing year over year also report that on-time job completion is trending upwards—a critical correlation.
- 51% of organizations that reported reduced levels of operator turnover also said their revenue per operator had increased.
With data like this, it is hard to argue against the value of investing in employees. And while most executives think of pay raises when they think of employee investment, the good news is there are several ways forges can invest in employees. The following are just four possible approaches that go beyond pay:
- Listen. Operators that work with equipment every day are a valuable source of information. Be intentional about collecting feedback and implement some of their ideas.
- Equip. Invest in an employee’s future with incentives like continued education or management training. This shows employees that you value their personal success and provides them with new skills that can benefit your operation in the long run.
- Communicate results. Regularly share performance reports with employees by either posting them or discussing them in staff meetings. According to the white paper, Accounting for Operator Inefficiencies in the Metals 2.0 Environment, sharing report results encourages accountability, provides motivation, and reminds operators that they are a critical aspect of the company’s success.
- Reward. Studies continue to show that goal setting and incentives are effective motivational strategies. Empower your operators by letting them set their own goals. This also holds them accountable for their work and promotes long-term “buy-in” and loyalty.
Investments of any kind usually present some risk, but in the case of human capital, it seems unlikely that there are any real threats or disadvantages. As research confirms, pouring resources into the very people that keep your company running is just good business—in theory and in practice.
How is your forging operation investing in employees?
January 25, 2017 / best practices, continuous improvement, emplo, Employee Morale, lean manufacturing, LIT, maintaining talent, productivity, skills gap, strategic planning
Teamwork is essential to any manufacturing operation. Most experts agree that it is the cornerstone of any successful improvement initiative, and many of today’s industry leaders understand that collaboration and decision-making go hand in hand. From the shop floor to the executive office, everyone’s input carries value.
Unfortunately, building strong teams isn’t as easy as sitting a bunch of people in a room together once a week. As one article from IndustryWeek points out, just because a company works in teams doesn’t mean it is good at teamwork. Simply building a team isn’t enough. The goal has to be building an effective team.
What does this look like in a forging environment? For many companies, it starts with creating a sense of unity. According to an article from Reliable Plant, the goal is to remove the barriers that often exist between the departments by taking a one-plant, one-team approach. Specifically, the trade publication suggests removing any team or function name that directs the function of the team to one specific department or function. For example, change the name of total quality management to total quality manufacturing and then develop improvement teams consisting of personnel from each department within the plant. “This begins to create a common workplace interest and supports a one-plant, one-team environment,” the article states.
Another important step is for managers to consistently ask employees for input and, more importantly, to make some of their ideas a reality. According to the white paper, The Top Five Operational Challenges for Forges that Cut and Process Metal, communicating with shop floor employees and actively including them in operational decisions promotes a team atmosphere, and, therefore, motivates employees to achieve company goals. To see this principle in action, check out this video, which shows one manufacturing floor operator’s reaction to implementing a high-performance team culture in his organization.
An article appearing in the Harvard Business Review confirms that effective teams are hard to build, especially in today’s diverse, dispersed, and digital world. However, it is possible. Quoting research from J. Richard Hackman, a pioneer in the field of organizational behavior who began studying teams in 1970, HBR says there are three “enabling conditions” that lead to strong, thriving teams. The following is a quick summary of those conditions, as described by HBR (You can read the full article here.):
- Compelling direction. The foundation of every great team is a direction that energizes, orients, and engages its members. Teams cannot be inspired if they don’t know what they’re working toward and don’t have explicit goals. Goals should be challenging enough to motivate, and they also must be consequential: People have to care about achieving a goal, whether because they stand to gain extrinsic rewards, like recognition, pay, and promotions; or intrinsic rewards, such as satisfaction and a sense of meaning.
- Strong structure. Teams also need the right mix and number of members, optimally designed tasks and processes, and norms that discourage destructive behavior and promote positive dynamics. High-performing teams include members with a balance of skills. Every individual doesn’t have to possess superlative technical and social skills, but the team overall needs a healthy dose of both.
- Supportive context. Having the right support is the third condition that enables team effectiveness. This includes maintaining a reward system that reinforces good performance, an information system that provides access to the data needed for the work, and an educational system that offers training, and last—but not least—securing the material resources required to do the job, such as funding and technological assistance. While no team ever gets everything it wants, leaders can head off a lot of problems by taking the time to get the essential pieces in place from the start.
The HBR article goes on to describe a fourth condition—shared mindset—which is similar to Reliable Plant’s suggestions for creating a one-plant, one-team environment. This condition requires managers to facilitate shared information among departments and to be intentional about building bridges among team members.
Like any company-wide initiative, building an effective manufacturing team takes time, intention, and a little trial and error. By encouraging unity, fostering collaboration, and implementing strong foundational elements such as diversity and incentives, today’s forges can create a team-centered manufacturing environment that truly benefits everyone.
How are you creating a team environment in your forging operation?
Engaging Employees Is Key to Continuous Improvement in Your Ball and Roller Bearing Manufacturing Operation
December 30, 2016 / best practices, continuous improvement, Employee Morale, LIT, maintaining talent, operator training, strategic planning
There is no question continuous improvement is critical to succeeding in today’s market. Case in point: two of the three industrial metal-cutting companies featured here in a case study on top performers listed continuous improvement as an imperative operational strategy and best practice that sets their operations above the rest.
It’s also widely accepted that continuous improvement efforts require “buy-in” from the top-down to truly be successful. This isn’t always an easy task. Articles like this one from IndustryWeek discuss the challenges improvement teams face in getting upper management on board. Perhaps the larger challenge, however, is getting operators and other employees committed to improvement efforts. While upper management support is needed to secure resources, employees are the ones carrying out the efforts, making them absolutely critical to success.
The key, one expert states, is to intentionally engage employees. “For any effort directed towards continuous improvement or innovation to succeed, your employees must feel that their suggestions…are genuinely wanted and in fact encouraged,” Chris Ruisi, leadership expert, writes here in a blog published by the Association for Manufacturing Excellence (AME). “They must willingly take ownership in the future of their organization—continuous improvement is everyone’s responsibility.”
To facilitate this, Ruisi offers the following strategies:
- Review Outcomes. Ruisi suggests that managers adopt his “study your game films” approach. At the end of every important project, regardless of the outcome, teams should meet and ask questions that encourage improvement: If we had to do this again, what would we start doing; stop doing; do more of or do less of? This simple process ensures that you learn something from every event to make you better the next time.
- Explain the Big Picture. Most employees know what they must do, when to do it, and how to do it. Many do not know why they do it, who they do it for, and where it fits in to the total picture. Armed with the “why, who, and where,” they are better able to identify and suggest ways they can improve and contribute to the company’s larger goals.
- Gather Feedback Regularly. Start meeting with small groups of your team members on a regular basis to actively solicit their feedback on how their work is produced. Start with only one question: What’s one thing we can do today to produce a better result tomorrow? Take the same approach with your better customers. They have a lot to offer as long as you ask and show them that you sincerely want their feedback.
- Encourage Ownership. At the end of every staff meeting, ask “what’s one thing we could do better?” Once an idea is identified, ask the person who suggested it to “own” that project. This encourages feedback and empowers your team members to take ownership in the continuous improvement effort.
If your ball and roller bearing operation is dedicated to continuous improvement, it may be worthwhile to consider some of Ruisi’s suggestions. In addition to helping continuous improvement efforts stick, taking the time to engage employees often builds new levels of trust among employees and management—trust that can provide invaluable benefits like improved morale and employee loyalty.
Does your current continuous improvement plan actively engage employees?
October 5, 2016 / best practices, continuous improvement, Cost Management, customer satisfaction metrics, Employee Morale, human capital, lean manufacturing, maintaining talent, operations metrics, operator training, productivity, ROI, Safety
Industrial metal-cutting companies know running an efficient and productive operation is imperative to keeping up with and, more importantly, staying ahead of the changing industry and customer demands. However, in industrial metal cutting—as well as any manufacturing process—an operation is only as good as its operators.
This is why operator accountability is so important. As reported in the white paper, The Top Five Operating Challenges for Metal Service Centers, as more metal service centers rely on automated technology, managers need to work closely with machine operators to ensure their knowledge and skill sets align with the company’s technology assets and productivity goals. The objective is to encourage employees to take ownership of their impact on the operation so they not only care about the quality of their work, but also understand the role they play in the company’s overall success. Working closely with employees to create a culture of accountability can help metal service centers achieve the operational excellence they desire.
According to an article from IndustryWeek, accountability can be a powerful manufacturing tool because it is a broad-based effort to define and track an organization’s standards. “Accountability systems serve to prompt and encourage people to keep their promises to each other,” Jon Thorne, senior consultant, Daniel Penn Associations, says in the IW article. “Accountability monitors whether promises are being kept and reminds us to hold up our end of the bargain. When we all keep our promises to each other the result is human reliability. And with human reliability, your organization can accomplish anything.”
While using accountability to improve your metal service center operations is not an exact science, it is systematic. In fact, accountability is a set of systems that overlap and reinforce each other, according to the IW article. The following three systems are just a few ways manufacturers can boost accountability (You can read the full list here):
- Customer satisfaction. Measuring your service to internal customers puts interdepartmental cooperation on an objective basis: You confront issues rather than people. The plant manager’s role is to insist that the organization seek out and satisfy its customer’s needs, but it is the customers and suppliers who decide how to do it.
- Weekly staff meetings. The idea sounds simple, but having a regular and consistent forum where information can flow both ways enables employees to hold management accountable by asking questions and discussing any issues. Two meetings per week are recommended.
- Action item lists. Many times, regular staff meetings result in new policies and processes, or changes to those that are existing. Keeping an action list or planner helps prioritize activities, highlights important information, and enables employees to hold each other accountable for keeping the agreements they’ve made.
Another simple strategy is to regularly share performance reports with employees by either posting them or discussing them in staff meetings. As stated in the white paper, Accounting for Operator Inefficiencies in the Metals 2.0 Environment, sharing report results encourages accountability, provides motivation, and reminds operators that they are a critical aspect of the company’s success. This approach falls in line with the culture of lean production environments, and research has shown it positively affects employee morale.
How does this help optimize operations? Although employee investments are often hard to quantify, the following two manufacturers have seen measurable results after implementing accountability practices:
- As reported here, a maker of bulked continuous filament carpet yarn recently realized an estimated $27 million in savings a full year ahead of schedule by focusing on accountability. According to the article, an eight-person team used a Six Sigma process to improve operator, equipment and product accountability by defining metrics, creating and following processes, tracking data and making improvements based on their findings.
- Ocean Spray, the largely known beverage and cranberry food product company, also saw huge improvements at its manufacturing facility in Kenosha, WI. The plant, which was nicknamed “Broken Down Kenosha,” was transformed into what the company’s executives now call “New and Improved Kenosha” due largely to its focus on company culture and workforce accountability. As reported by Training magazine, the tactic didn’t come without some financial investment, but the company said the cost far outweighed the outcome, which resulted in safety, cost, and material use improvements.
Running an efficient operation is essential to every metal service center, but far too many managers fail to understand the role their operators play in their optimization efforts. By implementing a few processes that hold operators accountable for their actions, managers can create a culture in which employees care about their jobs and, even more so, the long-term success of the company.
What accountability practices have you implemented at your metal service center?
August 1, 2016 / best practices, Cost Management, Employee Morale, lean manufacturing, LIT, productivity, quality, Safety, strategic planning
Over the last decade, the term “lean” has become synonymous with “success” in manufacturing. In today’s market, only the “leanest” survive.
This trend has hit almost every segment of manufacturing, although some have jumped on the bandwagon faster than others. At this point, most leading industrial metal-cutting organizations have incorporated some form of lean principle into their operation, and those that haven’t are starting to consider it. In fact, our eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Company, recommends that lean manufacturing should be at least part of your operational strategy.
However, is it possible for your metal-cutting operation to be too lean? According to a recent article from EHS Today, the answer to that question is yes. “The more you reduce costs – the more you do with less – the more you believe is accomplished and the closer you approach maximum efficiency,” the article states. “The drawback of this popular leadership strategy is that the line of acceptance is a moving target with the point of failure centered about the moment of imbalance.”
The article goes on to say that over time, “the reduce-reduce strategy” can stretch an organization beyond the elastic limit, usually without anyone noticing. “Like our bodies, organizations need minimal resources to function properly,” the article explains. “Year-over-year reductions compounded with additional performance requirements will cause the organization to rely on calories they do not have to burn.”
How do you know if your organization has reduced beyond its limits? Below are a few warning signs, according to EHS:
- Untimely and numerous early retirements by the most knowledgeable resources.
- Unexpected and voluntary separations from early and mid-career professionals.
- Organizational culture indifference to change.
- Missed commitments.
- Lower quality productivity.
- Higher injury experience.
- Lower customer satisfaction.
- Higher absenteeism.
- Lower standard of excellence.
- Loss of leadership credibility.
- Long working long hours.
- Organizational undercurrents of frustration.
Another dangerous outcome of being “too lean” is being unable to adjust to changing market conditions. An article from Lean Manufacturing Tools explains: “Too many people in the past have used a lean definition that concentrates purely on waste reduction and have created anorexic processes that fail as soon as customer demand changes.”
This is not to say that lean manufacturing tools are short-term and cannot be used over a long period of time. Instead, experts suggest that lean manufacturing tactics should evolve as a company evolves and improves. In addition, this article from IndustryWeek says that management needs to be sure they treat lean manufacturing as “a way of life,” not just a project.
Like anything, the key is finding a balance. Efficiency and waste reduction should be a priority, but they can’t come at the cost of safety, quality, or the overall financial health of the company. As the article from EHS explains, “Success comes in realizing how much ‘efficiency’ is the right amount to preclude organizational excellence from reaching the point of inevitable failure.”
Are there any areas of your industrial metal-cutting organization that have become too lean?
July 15, 2016 / employee incentives, Employee Morale, industry news, LIT, maintaining talent, operator training, productivity, skills gap
With more baby boomers leaving manufacturing jobs than entry-level candidates choosing a career in manufacturing, there’s no doubt that the manufacturing skills gap exists. However, a recent study by PricewaterhouseCoopers (PwC) and The Manufacturing Institute found that while some manufacturers aren’t feeling the gap yet, others are worried the gap will widen.
According to the June 2016 PwC study, 33% of manufacturers say they have little or no difficulty hiring talent while 41% have “moderate difficulty.” This doesn’t mean, however, that a worker shortage isn’t on the horizon: 31% of manufacturers see no skills shortage now but expect to see one within the next three years. In addition, another 26% believe the gap has already peaked and 29% think it will only get worse.
While no one knows if or when the gap will worsen, the point is that companies need to address it now. In most cases, managing the gap will require companies to change the way they train and maintain talent. According to the eBook, Five Performance-Boosting Best Practices for your Industrial Metal-Cutting Organization, companies are rethinking their hiring tactics and beefing up training programs to help bridge the gap.
Aluminum manufacturer Alcoa, for example, has quadrupled the number of its internships at its Technology Center in New Castle, Penn., in the past three years to ensure it attracts and retains top talent, according to an article from IndustryWeek. In addition, the company is partnering with a community college to train 60 students in additive manufacturing and 3-D printing.
The Fabricators & Manufacturers Association Intl. is also working to boost enrollment in metal forming and fabricating career paths. As reported here, the association developed a multi-media site to showcase stories, videos and interactive resources to raise awareness of technical education. Educators at 12 schools across the country will have memberships to the site (www.eduFACTOR.org) in an effort to attract and develop a new-generation workforce.
In addition to new hiring strategies, companies also need to be sure their training programs are designed to take on a new generation of workers. According to an article from American Machinist, there are a few ways to implement effective training to help bridge the skills gap:
- Make training mobile. As we discussed in this blog post, mobile technology is changing the manufacturing landscape. Besides increasing productivity, portable devices can be used as virtual textbooks. Create web-based training that is optimized for smartphones and tablets so your workforce can brush-up on best practices, learn new techniques, and develop new skills anywhere and at any time.
- Make it easy to digest. Keep training content short and sweet, especially given that manufacturing and engineering subjects can be detailed and, let’s be honest, not the most exciting to read. Create training content that is streamlined, divided into short chapters or sections, and that is clear, concise, and geared toward employee engagement.
- Teach skills they won’t find somewhere else. Training, in general, will help your industrial metal-cutting operations run more efficiently, but it can also help you edge-out the competition when it comes to attracting and retaining talent. Provide training that equips employees with the skills unique to your operation and products, especially with entry-level employees. Custom training will not only boost operational productivity, but will also create an incentive for those employees to grow along with your operations.
Proactively attracting new talent and investing in training can help bridge the skills gap within your industrial metal-cutting operation, but they are only two pieces of the puzzle. Cultivating a company culture that actively and continually invests in its employees can have a long-term effect on not only the quality of your workforce, but the quality of your operations as well. People affect process and can play a huge role in an operation’s success.
Do you think the skills gap is affecting your metal-cutting operations? What strategies are you implementing to bridge the gap?
June 10, 2016 / best practices, continuous improvement, Employee Morale, human capital, lean manufacturing, LIT, maintaining talent, strategic planning
For the last few years, manufacturers have touted continuous improvement as a top priority and company goal. Case in point: two of the three industrial metal-cutting companies featured here in a case study on top performers listed continuous improvement as an imperative operational strategy and best practice that sets their metal-cutting shops above the rest.
However, the truth is while many managers understand the theory of continuous improvement, many are still unsure of how to successfully put it into practice. In fact, research has found that the success rate for continuous improvement efforts is less than 60 percent.
What is continuous improvement? Is it simply a set of tools to adopt and implement—or is there more to it than that? Below is a brief overview of this often over-used, misunderstood term, and some tips for putting it to work in your fabrication shop.
Defining Continuous Improvement
Continuous improvement (CI) is defined by ASQ as an ongoing effort to improve a product, service, or process. Most companies achieve this by either adopting one of the well-known continuous improvement methods or through the combination of two or more tools.
According to ASQ, the most widely used tool for continuous improvement is a four-step quality model—the plan-do-check-act (PDCA) cycle, also known as Deming Cycle or Shewhart Cycle. Other widely used tools include Six Sigma, lean manufacturing, and Total Quality Management.
Even so, as an article from Canadian Metalworking points out, it’s important for managers to remember that continuous improvement is more than just a collection of tools. “Many people mistake the individual tools of continuous improvement for the most important part of the program,” the article states. “The tools are just the most visible part that we can see, and subsequently adopt.”
Personnel development, the Canadian Metalworking article continues, should actually be the central focus of continuous improvement. This means that people—not tools—need to be the primary focus of your CI efforts.
People before Process
When focusing on personnel development, there are three areas in particular that managers should focus on. As the following explains, teamwork, management, and culture all play critical roles in a successful CI program:
- Teamwork. According to the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Company, “continuous improvement initiatives need to be a team effort to be sustainable.” In other words, to improve your industrial metal-cutting operations to its fullest potential, you need to have the right people with the right skills to keep your plan on course. Without a team backing the process, the very notion of any continuous improvement program is impossible. (You can read more about building an effective CI team here.)
- Management. Managing an effective CI team requires a unique set of skills. As another article from Canadian Metalworking explains, because CI systems are a set of integrated systems, the management implications also are a set of intertwined values and approaches. “Organizational improvements very rarely take the form of massive, sweeping change,” the article explains. “Competent managers seem to have their fingers on all of the smallest details, and effective leaders are often described as “doing all of the little things” that make people feel appreciated, challenged, and engaged.” (To learn more about managing a CI team, read the full article here.)
- Culture. As any shop manager knows, employee “buy-in” is critical to the success of a shop. An operator who cares about his performance and understands how his job affects the company’s overall success is invaluable. The same principle holds true in CI programs, except that everyone needs to buy-in. It needs to be embedded into the company culture. “Building an effective continuous improvement culture is not just about executing a handful of process improvement projects,” explains a report from Deloitte. “That’s a good place to start—and companies may reap tangible rewards from those projects. But more is required to drive sustainable results over time and embed continuous improvement into the very fabric of the organization. That’s when the kind of real, transformational changes take place that can generate hundreds of millions of dollars of opportunities.” (For more information, you can download the full Deloitte report here.)
In theory, the concept of constantly improving a business sounds good. However, the truth is that many managers don’t fully understand what it takes to implement a successful CI program.
To be effective, continuous improvement needs to be about more than just a set of process improvement tools. While a tool may help you achieve short-term improvement, it is the people behind the effort that will help you realize continuous, ongoing improvements. Managers who focus on building a strong team and company culture fully devoted to continuous improvement will see long-term, sustainable results.
June 1, 2016 / best practices, Employee Morale, human capital, LIT, maintaining talent, operator training, skills gap
Like any fad, management trends come and go. However, that isn’t to say that they aren’t valuable and worth considering. In fact, most of the time, management trends are in direct response to shifts in cultural expectations and work attitudes.
The incoming millennial generation is a good example. As the manufacturing industry attempts to fill the widening skills gap, experts and manufacturing giants like IBM have been suggesting several ways companies can attract this new generation and get them excited about careers in manufacturing.
One trend that continues to gain ground is the push for transparency. In fact, Forbes lists this is as one of the top management trends of 2016 based on research. “Simply put, people like and appreciate being dealt with openly and honestly,” Forbes notes.
According to an article from the Harvard Business Review, there are several terms that describe this trend, including open-book management (OBM), economic transparency, and ownership culture. “Whatever you call it, it means encouraging employees to think and act like businesspeople rather than like hired hands,” the HBR article explains.
In other words, today’s managers should treat employees in a way that engages them and encourages them to take ownership of their jobs. “At open-book companies, it’s part of everyone’s job to contribute to the success of the business,” the HBR article states. “Managers help employees understand, track, and forecast key numbers. They welcome ideas for improvement. They reinforce the ownership mindset by sharing profit increases with everyone, usually through bonuses funded by the increase itself.”
LeanWerks, a contract manufacturing shop featured here in Modern Machine Shop, has instituted an OBM style that allows operators to readily see how their performance affects the company’s bottom line. Reid Leland, president, uses OBM in his shop to facilitate a better line of communication and understanding between management and employees, creating a more transparent and “flattened” organization.
According to the MMS article, Leland’s shop bases its OBM style on three key elements:
- Financial Training. New employees are formally trained on topics such as the time value of money, project management, income statement, balance sheet and cash flow, and ratios such as debt to equity and gross profit to operating expenses (GP/OE).
- Shared Information. Leland’s shop has a large viewing monitor located in a prominent area of the shop that displays a spreadsheet that is updated regularly. The spreadsheet includes company financial information, a list of all shop machine tools, and the gross profit that individual machines produce each day of the month.
- Profit Sharing. At the end of the month, if the GP/OE ratio reaches a certain level, part of the monthly profits is shared with the employees. This information is readily available on the spreadsheet for employees to view so they can monitor profit levels themselves.
Of course, not every shop owner will feel comfortable sharing financial details and may not be able to share profits, but there are certainly benefits to actively engaging employees and creating more of a reciprocal relationship between the executive office and shop floor. According to the eBook, Five Performance-Boosting Best Practices for your Industrial Metal-Cutting Organization, a growing number of managers are finding that operators who take ownership of their process or work area can be invaluable assets to the company.
“Employee “buy-in” can positively affect all aspects of an industrial metal-cutting operation, including quality, productivity, and in the end, the bottom line,” the eBook states. “Similarly, when employees feel disconnected, those same business areas can be negatively affected.”
As the eBook points out, operators who feel valued are more likely to value their jobs and their employer. Even if you aren’t ready to open up your books for the whole company to see, strategies such as collecting feedback, investing in continued education, and setting goals and incentives can all help encourage employee ownership, foster better communication, and improve morale.
How transparent is your industrial metal-cutting organization? In what ways could you encourage employee ownership and facilitate better communication?