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?
May 15, 2016 / best practices, continuous improvement, human capital, KPIs, lean manufacturing, LIT, productivity, root cause analysis
There’s a well-known saying that a business is only as good as its people, and industrial metal-cutting operations are no exception. Effective teams are an essential component to the overall success of a business, especially one that aims for continuous improvement.
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.
Of course, the real challenge is building a strong continuous improvement team. As a recent article from IndustryWeek points out, just because a company works in teams doesn’t mean it is good at teamwork. Management’s goal has to be more than simply building a team; the goal needs to be building an effective team.
What does a successful continuous improvement team look like? An article from the Institute of Industrial and Systems Engineers provides nine best practices used by highly effective continuous improvement teams:
- Look at more than just numbers. Continuous improvement is very metric-driven, but don’t forget about inefficiencies that might show low numbers or those that aren’t easily quantified such as infrastructure, sanitation and preventative maintenance.
- Develop cross-functional teams. Expand your team to include more than just members from operations, engineering and quality. Cross-functional teams discuss and agree to solutions minimizing negative impacts before they happen.
- Define goals. Know what you want to achieve and how you are going to achieve it. More importantly, make those goals focused and achievable. Focusing on one set of challenges will allow you to see improvements quickly.
- Use automated KPIs. Collecting the right information at the right time will enable you to improve performance and eliminate inefficiencies.
- Utilize operators selectively. Operators are there to operate the line, not report data. While they can provide focused information when needed, don’t abuse their knowledge.
- Determine root causes. Whenever an issue arises, conduct a root cause analysis to find the real reason why it occurred.
- Focus on impactful, measurable change. You’ve analyzed the root causes, utilized cross-functional teams to prioritize issues and established a consensus for your process change. Now is the time to implement it and make sure it has the impact you thought by checking in with your team, tracking metrics and making adjustments as needed.
- Implement incentives that motivate. Reward hard work with an incentive program. Improve your operations by investing in your people.
- Benchmark. Competition is healthy. Know what others in the metal-cutting industry are tracking and their results. Use the comparison to further improve your operation.
Do you have a continuous improvement team? What habits do you feel make it an effective team?
April 1, 2016 / agility, continuous improvement, human capital, industry news, lean manufacturing, LIT, maintaining talent, operator training, preventative maintenance, quality, strategic planning, supplier relationships, supply chain
Although many hoped that 2016 was going to be a year of full recovery and growth, expansion in the industrial manufacturing sector has been slow moving. High inventory levels, a strong dollar, falling commodity prices, and a slowdown in China have left many industrial metal-cutting companies disappointed and more than a little cautious.
Evidence of slow growth started at the end of 2015. According to estimates from the Manufacturers Alliance for Productivity and Innovation (MAPI), manufacturing industrial production was unchanged from the third to the fourth quarter of 2015. Monthly data has shown erratic patterns of growth and decline that have pretty much cancelled out any movement forward—a trend that is expected to continue.
“We expect the volatility to continue through the first half of 2016, a situation that will result in essentially no manufacturing production growth,” MAPI stated in a recent report. “Manufacturing production should be flat in the first and second quarters of 2016 before accelerating to a 3-percent annual rate in the second half of 2016.”
For the entire year, MAPI expects manufacturing production to decelerate rather than accelerate compared to 2015. “Production increased 2 percent last year, and we forecast only 1.1-percent growth in 2016,” MAPI states. The good news is that MAPI predicts growth in industrial manufacturing of more than 2 percent for both 2017 and 2018.
Unfortunately, the forecast for steel demand also shows little to no growth, although 2016 is expected to be an improvement over 2015. According to the Short Range Outlook 2015-2016 from the World Steel Association (worldsteel), global steel demand decreased 1.7 percent in 2015 but is expected to grow by 0.7 percent in 2016.
“It is clear that the steel industry has, for the time being, reached the end of a major growth cycle which was based on the rapid economic development of China,” Hans Jürgen Kerkhoff, chairman of the worldsteel Economics Committee, said. “Combined with China’s slowdown, we also face low investment, financial market turbulence, and geopolitical conflicts in many developing regions.”
The only bright spot is that steel demand in developed countries is expected to show positive growth of 1.8 percent this year. The U.S. in particular should see demand increase by 2 percent in 2016, worldsteel predicts.
While no one wanted the year to start off slow, most manufacturers aren’t too surprised. In a roundtable discussion with Metal Center News (MCN), Michael Bush, a vice president at Esmark, Inc., was quoted as saying that he didn’t expect the market to pick up until at least May. “Even though it will pick up in the second half, we expect 2016 to be down 1 percent for the year,” Bush told MCN. “That’s our general feeling going into the market.”
Bush isn’t alone. The American Metals Market annual survey of metals executives showed that 30 percent of respondents in the steel, aluminum, and other metals sectors expected business to be worse in 2016, and 70 percent predicted that the domestic economy would not fully turnout until 2017 or later. (You can read the full report here.)
The reality is that the U.S. is still in the middle of an economic recovery, which means that metal-cutting companies and other manufacturers won’t likely see any major growth this year. According to MAPI, manufacturing industrial production must grow another 3 percent in order to reach the pre-recession production level achieved in the fourth quarter of 2007, which means a full recovery is expected in the third quarter of 2017. Non-high-tech manufacturing production is 5 percent below the prerecession level and will not be fully recovered until the third quarter of 2018.
On a positive note, the latest numbers from the Institute for Supply Management (ISM) show some improvement. As reported by Plant Engineering, ISM’s monthly Purchasing Manufacturers’ Index (PMI) jumped 2.3 percentage points in March to 51.8 percent, putting the index solidly above the 50-percent growth threshold for the first time in 2016.
Out of 18 manufacturing industries, ISM says that 12 reported growth in March, including Fabricated Metal Products and Primary Metals. One survey respondent from the Primary Metals segment stated, “Our business is still going strong.” Another respondent from the Fabricated Metals Products segment said, “Capital equipment sales are steady.”
The big question, of course, is will this momentum continue? Analysts believe that continued growth will depend largely on continued strong employment because it creates new income growth and a solid base of consumer spending. MAPI says that another impetus is easy credit availability, which propels big-ticket spending for motor vehicles, residential housing, and nonresidential construction.
While the overall data is certainly sobering, there are a few signs that suggest the metals sector can still snap out of the lull. As Modern Metals recently reported, “The average age of a vehicle on the road still exceeds 10 years; construction season is coming and Congress passed a long-term highway bill in December.”
Metal executives participating in MCN’s roundtable believe that automotive—which is predicted to top 17 million vehicles this year—will be the big market driver, as well as residential and nonresidential construction, white goods, and anything associated with “green energy.”
A report from Fabricating & Metalworking says that surviving 2016 will require manufacturers to use the current market conditions to their advantage. “U. S. manufacturers should be aggressive to take advantage of falling costs while at the same time finding new opportunities created by these economic forces,” the report says. Specifically, the article states that companies should consider employing two key strategies:
- Target those markets that benefit from lower energy and commodity prices such as transportation.
- Modify supply chains to reflect the new realities.
From an operations standpoint, continuous improvement activities will continue to be critical for industrial metal-cutting companies as they push through this slow period. Finding ways to optimize what is happening inside your shop doors is perhaps one of the most effective ways to balance the uncertainty of what is happening outside your doors. What does that look like? An eBook from the LENOX Institute of Technology’s lists five performance-boosting best practices that can help metal-cutting companies improve internal operations:
- Get lean. Although lean manufacturing is not a new movement, it is evolving. Companies that “got lean” years ago are focusing on continuous improvement, and a growing number of high-mix, low-volume operations are tweaking traditional lean methodologies to fit their specific situation. Regardless of your organization’s size, lean manufacturing should be at least part of your operational strategy.
- Invest in human capital. Industry data indicates that metal executives tend to invest in technology over people, but the tide is changing as the manufacturing industry deals with a serious shortage of skilled production workers. Managing this skills gap will require changing the way companies train and maintain talent, whether by beefing up training programs or rethinking their hiring tactics.
- Focus on quality as a process. There is no question that speed and agility are critical in today’s fast-paced market, but managers need to make sure that meeting demand doesn’t come at the expense of accuracy. To meet this challenge a growing number of market leaders are putting practices in place to ensure that their quality goals are met and maintained.
- Embrace preventative maintenance. In almost every manufacturing operation, machine breakdowns are one of the top causes of lost productivity. While some downtime is inevitable, proper maintenance and proactive care of equipment and tooling can reduce its occurrence. One benchmark survey revealed that 67 percent of industrial metal-cutting operations that follow all scheduled and planned maintenance on their machines also report an upward trending job completion rate.
- Form strategic supplier relationships. In today’s competitive marketplace, it is easy to base supplier relationships on price. However, a growing number of manufacturing leaders are placing more value on their supply chain. By leveraging the knowledge and services of trusted suppliers, companies can turn vendor relationships into strategic partnerships that have a real impact on the bottom line.
Ready and Waiting
All things considered, 2016 won’t likely be a banner year for industrial metal-cutting organizations. However, not all hope is lost. Recent upticks in manufacturing may indicate some positive (albeit slow) momentum, and many experts believe growth is in the long-term future, even if we have to wait another year. Until then, metal-cutting companies can continue to apply strategies that address external trends while also improving internal operations, putting them in the best position possible when the market finally turns around.
February 29, 2016 / best practices, continuous improvement, employee incentives, Employee Morale, human capital, LIT, operator training, productivity, quality, skills gap, strategic planning, workflow process
As ball and roller bearing manufacturers strive for continuous improvement and optimization within their operations, there is no question that process improvement is a top priority. Leaders know that today’s competitive environment requires them to invest time and resources in finding new tools, technology, and strategies for increasing productivity and reducing waste.
However, managers need to be sure they are not so wrapped up in process improvements that they are neglecting the other half of the continuous improvement equation—people.
As explained in the white paper, Accounting for Operator Inefficiencies in the Metals 2.0 Environment, people affect process. “Mechanical inefficiencies can often be solved with technology, but industry leaders are finding they can no longer ignore the human variables that contribute to productivity,” the paper states. “A lack of skill sets, business knowledge, and employee morale can affect vital areas of an operation, from inventory and parts costs to output and safety.”
When managers fail to focus on their operators, they are likely hurting their processes and, even more so, missing out on a prime opportunity for improvement. According to an article from The Manufacturer, a valued workforce can make the biggest impact on a factory’s efficiency. “Creating an environment where your workforce feels valued and respected results in motivation and loyalty,” the article states. This, it adds, can add up to tangible benefits, including higher output and lower absenteeism.
“Studies have found if employees are engaged, they put in twice as much effort, and will take just two-and-a-half sick days/year instead of six-and-a-half,” the article states. “This involvement leads to staff identifying with the company, its products, and sharing the corporate values.”
Indeed, a growing number of manufacturers are finding employee engagement can be just as critical as skills training when it comes to operator productivity. According to the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, operators who take ownership of their process or work area can positively affect all aspects of an industrial metal-cutting operation, including quality, productivity, and in the end, the bottom line. “Similarly, when employees feel disconnected, those same business areas can be negatively affected,” the eBook states.
The following are three key ways managers can better engage operators and make them feel valued:
- Listen. Operators that work with equipment every day are a valuable source of information. Collect 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.
- 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.
A recent article from the Liquid Planner also encourages managers to be intentional about creating a positive work environment by simply engaging in meaningful in-person conversations. “We’re all human, and most humans respond well to the real thing—in-person communication that says ‘you matter,’” the article states.
Perhaps an article from IndustryWeek states it best: “Most employees don’t need a $10 gas card; they just need to know that they can have an impact, their ideas matter, and they are appreciated.“
Yes, the idea of engaging and empowering employees sounds a bit cliché, especially as technology advances and competition intensifies. However, managers are finding that operators who feel valued are able to bring more value to the business.
In what ways could you better engage your operators?
August 25, 2015 / best practices, Employee Morale, human capital, industry news, LIT, operator training, Output, productivity, quality, Safety
Almost every manufacturer understands the importance of maintaining a safe operation. Although high safety scores won’t typically win an operation more customers, low incident rates are often a sign that an operation is efficient and that workers are well trained. A good safety record can also result in lower maintenance and insurance costs, as well as higher quality and employee satisfaction. As a previous blog revealed, some forges even consider safety a strategy.
However, as recent headlines have shown, even the most successful manufacturing operations can let their standards slide. If managers don’t continue to put safety first—or have audit processes in place—the reality is that a shop may find itself in a full-blown safety crisis that could have been avoided.
To help forges maintain a safety-first operation, the LENOX Institute of Technology (LIT) researched some of best practices being used by industry leaders. Read below to discover some simple safety strategies that can easily be adopted by any forging operation:
- Implement Ongoing Safety Training. Almost every manufacturer requires new hires to undergo initial safety training; however, it doesn’t take long for an operator to take safety for granted and minimize its importance. That’s why many companies are starting to expand their safety training requirements. For example, McInnes Rolled Rings, a forging operation featured here in Forging magazine, says that instead of just requiring new employees to have basic safety training session on day 1, it now requires additional safety training on Day 8, Day 30, Day 60 and Day 90. In addition, the company tells Forging that it conducts annual safety training for all associates (including office personnel) and has team leaders conduct “Toolbox Talks” throughout the year.
- Initiate Safety Audits. According to an article published by Modern Machine Shop, one of the most effective means of assuring a safe workplace is to conduct an audit of the area. “The purpose of an audit is to discover and record potential safety problems or violations of current safety practices,” the article states. In most cases, management assigns a team to complete the audit on a regularly scheduled basis. This is critical for ensuring that current safety standards are met. However, in the spirit of continuous improvement, it also offers an opportunity for the team to discuss any new ideas and find the root cause of any violations. Once an audit is complete, Modern Machine Shop says the key is to prioritize the findings so that the most critical issues are addressed first. It also suggests posting the results for all employees to see. “Posting the results of the safety audit along with the corrective actions planned is an effective means of assuring safety consciousness throughout the organization and promoting that much-needed culture of safety,” the article explains.
- Create Visual Reminders. Another strategy for keeping safety at the forefront of everyone’s minds is to create visual reminders. This tactic has been especially effective for the LENOX team. About a year and a half ago, LENOX implemented the Safety Sticker program, which visually displays whether or not its operation has had any safety incidents. Sticker dispensing stations and a safety calendar are located at every entrance to the facility, and every employee is required to put on a green sticker with the number of days “accident free” written on it. When a recordable accident occurs, everyone in the facility changes from a green sticker to a red sticker for a seven-day period. After seven days, everyone reverts back to the green sticker. According Matt Howell, senior manager, the program has been effective in several ways. “This system is a good rallying point for the facility and builds energy around safety,” Howell explains. “It has a strong behavioral impact as well. It puts safety on people’s minds when they put the sticker on at the beginning of the day and when they take it off at the end of the day. This ultimately promotes thought on safety and prompts people to think twice before engaging in an unsafe behavior or act.”
July 15, 2015 / best practices, Employee Morale, human capital, industry news, LIT, maintaining talent, operator training, skills gap, strategic planning
Over the last few years, manufacturing experts and industry leaders have been discussing the shortage of skilled production workers. From Forbes and IndustryWeek to the Harvard Business Review, everyone is weighing in on the “skills gap” and how the manufacturing industry should be addressing it. In fact, the LENOX Institute of Technology has written a white paper and several blogs about the hot-button topic.
However, with all of this “talk,” one has to wonder if the so-called “skills gap” truly exists, or if it is just an industry trend that is being fabricated or blown out of proportion. To dig into this issue, the LENOX Institute of Technology turned to a few industrial metal-cutting companies to discuss the skills gap, whether or not it is affecting their organization, and, if so, how they are handling it.
The Gap is Real
All three organizations we interviewed agreed that there is indeed a skills gap in the industrial metal-cutting industry. “I have felt the impact of this,” says Matthew Dobratzl, production supervisor at Thyssen Krupp. “It seems that as more of the skilled guys are retiring, they are being replaced by employees who have not had the proper training.”
Barry Grider, operations manager at Standard Locknut, LLC, and Brandon Dodds, operations manager at EMJ, part of the Reliance Group, admit they are also feeling the affects of the skills gap. Specifically, Dodds says it is getting harder and harder to find workers that meet the level of quality his company expects.
To tackle this issue, Dobratzl, Grider and Dodds say it is imperative for companies to be both proactive and strategic. Below are three ways they are addressing—and filling—the skills gaps within their own organizations:
- Screen New Hires. According to Grider, bridging the skills gap starts with making quality hires. He accomplishes this at Standard Locknut by putting potential employees through a “very thorough screening and interviewing process.”Dodds of EMJ says he also relies heavily on screening. “In this current climate, we usually choose potential employees from temporary agencies and put them to work for several months to ‘feel’ them out and see if this is the right fit for them,” Dodds explains. “We usually see potential or non-potential in the first three days and then make decisions based on performance and work ethic.
- Focus on Training. The most critical aspect of filling the skills gap is training, according to Dobratzl of Thyssen Krupp. “Our strategy is to provide the best hands-on training with our new hires and teach them best practices,” Dobratzl says. “This is extremely important to our success, as we need our employees working error free.” Grider of Standard Locknut agrees, adding that his company actively invests in internal and external training for both new and existing employees.Dodds believes training should always be a focus for manufacturers, skills gap or not. “If your organization does not focus on training, then you can’t expect your employees to produce a quality product,” Dodds says. “Building a strong organizational team to meet the ever-changing customer demands will go far, but in the end, it all boils down to quality training.”
- Value Employees. With a small talent pool, it will also serve manufacturers well to intentionally work at maintaining and valuing their current employees. Grider says Standard Locknut does this by continually investing in employees and by “treating them with respect and providing them with all the tools necessary to perform their jobs.”Dodds echoes this sentiment and adds that good managements boils down to “training your employees well, treating your employees well, and compensating your employees fairly.”
As the above feedback confirms, industrial metal-cutting companies are feeling the effects of the manufacturing skills gap. With more and more workers retiring, this gap stands to only grow larger, unless companies start acting now.
Today’s managers will need to be strategic in the way they hire, train, and maintain their employees if they want to successfully move forward. These days, industry leaders are finding that human capital is not just valuable, but an essential part of success.
How is your metal-cutting organization approaching and equipping its next generation of workers?
June 10, 2015 / best practices, employee incentives, Employee Morale, human capital, lean manufacturing, LIT, operator training
While the idea of empowering employees sounds a bit cliché, a growing number of managers are finding that operators who take ownership of their process or work area are truly invaluable. As discussed in a white paper from the LENOX Institute of Technology, employee “buy-in” can positively affect all aspects of an industrial metal-cutting operation, including quality, productivity, and in the end, the bottom line. Similarly, when employees don’t “buy-in” or feel disconnected from their job, those same business areas can be negatively affected.
Unfortunately, the latter seems to be more common. According to ongoing research from Gallup, about 70 percent of American employees are not engaged. Based on Gallup’s definition, this means that the majority of U.S. employees do not feel involved in, enthusiastic about, or committed to their work and workplace.
As a manager, the data may seem a bit disheartening. However, the good news is that U.S. companies have a prime opportunity for growth sitting right underneath their noses, or in the case of fabricators, standing right on their shop floor.
Bob Du Fresne, CEO of metal sheet fabricator Du Fresne Manufacturing, discovered this firsthand. About five years ago, Du Fresne was struggling to keep his fabrication business afloat, and the executive needed a new way to stay profitable. The executive, featured here in the Star Tribune, found that his employees were the answer.
Instead of his typical top-down management approach, Du Fresne decided to adopt a more employee-centered strategy that included shop-floor suggestions and innovation, lean manufacturing, and continuous improvement. The results are impressive: Sales at the fabrication shop are growing, employment is up, old customers are returning, and workers are earning overtime.
“The employees focused their passion and talent and saved this company,” Du Fresne told the Star Tribune. “Employees have made thousands of suggestions, and we used 99 percent of them. That led to productivity and quality improvement.”
With results like that, it’s hard to argue against the impact employees can have on profitability. How, then, can you get your employees more engaged? While there are a variety of ways to accomplish this, the below strategies from EHS Today provide some solid best practices managers should follow:
- Communication: Consistent communication leads to greater engagement. Employees with managers who hold regular meetings with them are nearly three times more likely to be engaged. But the most engaged employees are those who have some form of daily communication with their manager.
- Performance Management: The most disengaged employees are those who aren’t clear about what their expectations at work are. Those employees, thus, often consider annual reviews to be superficial. Instead, employees need to understand what they’re supposed to be doing and how that work meshes with everyone else’s work.
- Strengths over Weaknesses: Managers who help employees develop their strengths are twice as likely to have engaged workers.
As the Gallup research shows, many managers are missing the mark when it comes to employee engagement, and as a result, they could be hurting the overall performance of their company. In De Fresne’s case, taking the time to engage employees built a new level of trust among employees and management—a trust that he says “opened doors to a transformation journey for the company.” Perhaps employee engagement is the key to your shop’s transformation as well.
May 15, 2015 / best practices, continuous improvement, Cost Management, Employee Morale, human capital, lean manufacturing, LIT, maintaining talent, operator training, productivity, quality
The clock is always ticking—the race to become a bigger, better, and faster metal-cutting company is never ending. Any competent manager knows the pressure to continuously improve; however, too many managers are focusing so much on processes that they are missing the other half of the equation—their human capital.
By focusing only on the individual processes, operations managers can only achieve one half of what continuous improvement is by definition. As this benchmark study of industrial metal-cutting companies confirms, investing in your operators is just as important as investing in process and technology; it’s the other half of the continuous improvement equation.
Even the late W. Edwards Deming knew this to be true. In his well-known 14 Points for Transformation of Management, more than half of Deming’s “points” are focused on the people (i.e., training, leadership, etc.), not process.
Why should today’s metal-cutting companies invest in human capital? Because people and process are so closely related. In its list of “Deadly Wastes,” leanProduction.com has added an eighth waste—unused human potential—to the more recognized list of seven deadly wastes. According to the web site, managers who don’t focus on improving their workforce produce low employee engagement, which ultimately leads to lower production, quality, and profits.
Part of the problem is that many managers don’t understand what it means to be a good leader. They don’t know how to properly engage and encourage their staff. For example, number 10 in Deming’s 14 Points for Transformation suggests the following: “Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce.”
There are several other common behaviors that managers should be avoiding. Consider the following list from IndustryWeek, which highlights five behaviors of toxic leaders—those that result in unmotivated and unengaged employees:
- Inability to conceptualize or commit. When you can’t (or refuse) to understand anything based on theory, you lose your ability to make decisions and ultimately toss your authority and trust to the wayside.
- Distrust and a compulsive need to control. Without trust, there is no cooperative effort and it is truly every person for themselves. Congratulations, you’ve just promoted backstabbing, corporate maneuvers and finger pointing across the shop floor.
- Lack of empathy. When you don’t treat people like they are people, they harbor resentment and hostility—bringing production down with them.
- Prejudging and pigeonholing. Ensure a bad reputation with the entire operations floor by making assumptions, and good luck trying to change it later.
- Jekyll/Hyde personality. You make an effort to walk the shop floor, learn about people’s home lives, but when it gets down and dirty with meeting the bottom line, so do you. This is sure-fire way to destroy any fruits of your well-intended labor. Be genuine in both your motive and everyday actions.
To truly continuously improve operations, managers need to first understand the importance of investing in people and then learn how to effectively do that. In other words, you need to believe in the potential of your workforce and then find ways to nurture that potential. Only then can you expect to see any real improvement.
May 5, 2015 / best practices, human capital, industry news, KPIs, LIT, maintaining talent, operations metrics, operator training, productivity, quality
According to data from the Metal Service Center Institute, service center shipments of steel were essentially flat in March 2015 compared to the prior-year period while aluminum increased slightly by 4.6 percent from the same month in 2014. With less than stellar shipments, metal service centers are focusing on business conditions they can control.
As this white paper from the LENOX Institute of Technology points out, one area that many companies are focusing their time and efforts on is training and maintaining talent. According to a recent article from Forward, Chicago-based service center Ryerson Inc., for example, has created a formal training initiative called The Ryerson Academy, which is a six-month program that trains up to 40 employees per year with a dedicated curriculum covering operations, supply chain, and more. Attendees also visit one of the company’s facilities to receive hands-on training with products and equipment.
Smaller service centers are also taking note. Westfield Steel, a service center also featured in the Forward article, has created on-the-job training to improve retention and skill rates. Based on each person’s existing knowledge, the training program lasts from four weeks up to four months. Workers observe best practices and also learn with hands-on work under the observation of their trainers.
With many skilled workers preparing for retirement, it’s no surprise that companies like Ryerson and Westfield are investing in training to improve operator capabilities and ensure their technology and equipment investments are used properly. In fact, the trend seems to be stretching across every industry. Citing data from Deloitte’s 2014 Corporate Learning Factbook, Forbes reports that U.S. spending on corporate training grew 15 percent in 2013—the highest growth rate in seven years.
How does your training program stack up? Is it time for some investment in this critical area? Using experiences from Ryerson, Westfield, and others, Forward offers four best practices service centers should use when implementing or enhancing their training programs:
- Test Before Implementing. Pilot the program with leadership or a pilot group of employees. This allows time to solicit feedback, make incorporate changes and fine-tune subject matters.
- Link Training to Business Goals. Training is an ideal way to ensure every employee knows and understands the company’s goals. This helps expose workers to areas outside of their expertise and helps retain new hires.
- Find the Right Method. Once you determine the training subject matter, decide how to implement and deliver the training. Some companies prefer e-learning courses to minimize travel expenses while others prefer in-person workshops or classroom training to help build team relationships. Determine what works best for you whether it is a webinar, video recording, or in-person sessions.
- Measure Impact. Treat training as any investment and measure results. While the impact of training may not be immediately evident, ask for feedback on the overall effectiveness of the training courses and presenter performance. Then after a few months, compare quantitative metrics such as quality, production rates, and efficiency to gain insights.
As the industry adopts advanced technologies and sees a shift in its talent pool, the need for skilled operators is increasingly important. Have you invested in your people lately? Doing so may just have big pay offs.