Manufacturers who've been in business long enough know the industry goes in cycles. Earlier this year, we entered another and it's since turned into a slowdown. Factory managers need a strategy for making the necessary cuts to come without gutting operations and crimping growth opportunities.
Most North American producers are already struggling to book growth. In the U.S., April activity as measured by the Institute for Supply Management (ISM) held steady at 51.5 -- the same level as March and matching a low not seen since May 2013. In Canada, the RBC Purchasing Managers Index (PMI) registered 49.0 versus 48.9 in March. How can floor managers cope with this slowdown while still positioning for higher demand? These five tips may help:
1. Design "prove it" projects. In a slowdown, every factory and floor manager has recovery ideas. Heck, even line workers will want to weigh in. Let them. Set up an email account or anonymous survey and solicit responses. Pick the five best ideas to test with small investments and then track the results. Did productivity improve? Were there other tangible benefits? These sorts of "prove it" projects can help to focus effort when resources are running tight.
2. Set unreasonable goals. Don't act incrementally. Your "prove it" projects needn't be more than a test bed, but the ideas behind them should be big enough to make a difference. Say you want to use 3D printing to lower the cost of developing custom components when clients come calling with special requests. Rent an industrial printer for three months and then advertise the new capability with those known to have special needs. Did having the printer reduce costs dramatically or incrementally? Did the client order more as a result of your having this capability? If so, you've used a "prove it" project to kickstart what could become a whole new line of business.
3. Create a system of rewards. Workers are going to have to get deeply involved with your tests. Occasionally, that's going to mean overtime. Don't shy away from asking but also make clear that you aren't expecting volunteers. Create a system of rewards that pays off when projects outperform so that everyone -- especially the everyday workers on the line -- has a stake in the outcome.
4. Encourage workers to recognize their peers. Recognizing great work when it happens is key to getting more of it. But it also needn't be a top-down process. Reward those who consistently seek out and surface great performances. These are the cheerleaders in your business, and they're crucial for keeping morale high even as markets turn south or projects go sour.
5. Stay focused on the long term. Don't wait for circumstances to turn dire to roll out "prove it" projects. Make them a regular practice instead. Also, try to avoid exceptional, one-time rewards and recognition. Spend daily time looking through reports of exceptional work and then recognize it as it happens. That way, you're cultivating a culture that appreciates, rewards, and most importantly, enjoys high performance.
In manufacturing, tough periods come and go. Tough companies work their way through by setting up "prove it" projects and then recognizing and rewarding the behavior that feeds success.
John Mills is executive vice president of business development at Rideau Recognition Solutions, a global leader in employee rewards and recognition programs designed to motivate and increase engagement and productivity across the workforce.