I sometimes find it difficult to describe what I do to friends and acquaintances who have careers outside of manufacturing and rarely give much thought to how things actually get made.
To the uninitiated, if I were to say “I help manufacturers to implement continuous improvement models” or “I support companies in their production system journey,” I might as well be speaking a foreign language because, while these statements resonate with those of us who live and breathe CI every day, they don’t mean much to the rest of the world.
And, in fact, terms like “continuous improvement,” “operational excellence,” “production system” and “lean manufacturing” are often not well understood by the very workers who we are attempting to engage and empower. So like many of you I’m sure, I’ve looked to more commonly known examples in the world to analogize these concepts.
Production Systems and the NFL
I’m a big pro football fan. As a child I followed a team that was quite successful for many years but, to my dismay, has been much less so for much of the past decade (or two), so I’ve had the opportunity to see first-hand what differentiates a successful NFL franchise from one that struggles. And while there are lots of factors that contribute to a team’s success (or lack thereof), I want to point toward three specific factors that parallel the production system journey.
Factor 1: Know Your Identity
In the NFL, the best teams have a clear identity that drives all aspects of the organization from talent evaluation to the selection of coaches and front office personnel, to marketing and even to stadium design.
For example, certain teams want to be identified as exciting and high scoring. These teams will often draft and sign players known for their speed and explosiveness, hire head coaches with backgrounds as offensive coordinators, and hire defensive coaches who like to blitz and create turnovers. Often these teams play either in warm weather cities or in domed stadiums with field turf because the playing conditions favor speed.
Alternatively, some teams prefer to be identified as tough and physical. They will target players with tremendous size, hire head coaches with a defensive background and teach the importance of time of possession and field position. These teams often play in cold weather cities with outdoor stadiums and traditional grass fields.
The reality is that both identities can be successful if the entire organization is aligned and the decisions support that identity. The franchises that struggle tend to be the ones that aren’t aligned around a clear identity or who change their desired identity too frequently to have any organizational continuity.
Virtually every organization has a vision statement of some kind, but very few have defined a vision that's meaningful and clearly establishes their desired identity.
So what does any of this have to do with production systems? Well, like an NFL franchise, your business needs to establish a clear identity that serves as the backbone of the production system journey.
Define a Clear, Unifying Vision
Establishing that identity starts with defining a clear, unifying vision for the organization. The truth is that virtually every organization has a vision statement of some kind, but very few have defined a vision that’s meaningful and clearly establishes their desired identity.
Not too long ago I came across the following vision statement once used by online retailer Zappos that I think does a tremendous job of capturing this concept of enterprise identity:
One day, 30% of all retail transactions in the US will be online. People will buy from the company with the best service and the best selection. Zappos.com will be that online store. Our hope is that our focus on service will allow us to WOW our customers, our employees, our vendors, and our investors. We want Zappos.com to be known as a service company that happens to sell shoes, handbags, and anything and everything.
This vision statement is effective because the identity that Zappos wishes to cultivate is both memorable (i.e., “Zappos.com will be that online store”) and explicit (i.e., service company first, retailer second). But establishing the right identity extends beyond the vision statement and into the strategy deployment process, which is where it intersects with the production system journey. Simply put, continuous improvement must reside within the shadow of business strategy.
When the workforce sees the opportunity in financial terms, it becomes more real to them and often increases their desire to improve.
When I start a deployment process at a site, among the first questions I ask is, “What does the business require of this operation to be successful?” It’s a straightforward question that has proven to be deceivingly difficult to answer in more than a few cases. But if the operation can’t answer this question, then it will be extremely hard to focus on the right priorities and the risk of rework or wasted effort in the production system journey is significant.
I’ve led several production system deployments at sites that had, in the recent past, operated under the belief that one or more processing departments were going to be shut down, thereby requiring layoffs. As you might imagine, this belief caused a certain amount of paralysis in these operations … the message that employees received was that the company was de-investing in the site.
In these situations it’s incumbent on site and above-site leadership to send a clear message that the site is important to the business and that the production system effort represents an investment designed to help keep the operation competitive for the foreseeable future. What can’t happen under any circumstance is for employees to be getting mixed messages. They need to know with certainty what it is that the business needs from the operation before they can embrace a production system journey.
Factor 2: Identify Your Gaps
In the NFL, at the end of every season each team goes through a formal and thorough process of evaluating the talent on their roster and prioritizing team needs. Perhaps they need more speed at the linebacker position, or better depth at quarterback, or more size along their offensive line. Or maybe they’re projecting one of the wide receivers to leave in free agency, and they don’t have anyone capable to fill his position.
This team evaluation process is extremely important because the talent and depth gaps identified through this process inform all of the team’s decisions regarding the draft, free agent acquisitions or trade targets. What needs to be understood is that this evaluation process is done by every franchise ever year, no questions asked.
The operational equivalent to this team evaluation process is what we call the “gap to perfect” analysis. Simply put, a “gap to perfect” analysis is designed to identify the addressable performance improvement opportunity at a site by comparing current performance to a perfect or ideal standard.
The comparison to a perfect standard is critical because, without it, sites tend to evaluate their performance against historical benchmarks, which can leave them with the impression that the addressable opportunity is quite small when, in fact, it is often significant.
It’s also important to financially value the opportunity across multiple performance categories such as productivity, quality, yield and inventory among others. The financial valuation offers two key benefits to the sites. First, by translating the opportunity into financial terms, the operation can do an “apples to apples” comparison across the various categories. Second, when the workforce sees the opportunity in financial terms, it becomes more real to them and often increases their desire to improve.
The value of a financially based gap to perfect to the larger production system journey is that it highlights in clear terms what the financial opportunity is to the business from a step change in performance (i.e., the sum total of the opportunity calculated across all sites), which only reinforces the business case for systematic continuous improvement.
Returning to the the football analogy, we recommend that all sites follow a similar approach to NFL franchises by formally analyzing their gap to perfect at least one per year, typically to coincide with the organization’s strategy setting and budgeting process.
To be clear, this analysis does not replace the metrics tracking and reporting that each operation should perform throughout the year (NFL franchises don’t wait until the offseason to make roster changes…they have to adapt based on player injuries, team performance, etc.), but operational reporting is not the same as detailed analytics, so the sites need to do both.
Factor 3: Focus on the Fundamentals
In the NFL, establishing a team identify is crucial (see factor 1). Yet at some level, regardless of team identity, there are certain things that every team needs to do well. For example, it doesn’t matter what your favorite team’s defensive scheme might be if those players can’t tackle well. Similarly, whether the offense is supposed to be high scoring or ball control focused, the offensive line needs to be able to both run block and pass block and the skill position players need to hold on to the ball.
And because these fundamentals are so important, every team practices them religiously. Players have to work through countless hours of drills and meeting in training camp and throughout the season to perfect these fundamentals so that, when they get into a game, they block, tackle, catch, run and execute the game plan as intended.
The same concept applies to manufacturing. There are certain fundamentals that need to be in place in every operation or performance will be sub-optimal. Examples include:
- The operation needs to be a safe place to work. Employees can’t be getting injured on the job.
- The work environment needs to be organized so that employees can find the parts, tools, materials and supplies they need when they need it.
- The equipment needs to function as intended and when needed.
- Employees need to know what products to run and in what quantities.
- There needs to be a method for determining whether finished product meets customer specifications.
- The operation needs to undergo a shift change without disrupting the production process.
I could go on, but you get the point. In the CI world we teach concepts like 5S, standard work, structured problem solving, autonomous maintenance and visual management (among others) because they help to create a stable, reliable, efficient operation. But it’s not enough to teach these concepts. They need to be reinforced constantly and employees need to be held accountable for implementing them in a meaningful way.
Unfortunately, many organizations don’t have a mechanism in place to facilitate the implementation of the fundamentals. They seem content to offer some training and throw a couple of CI experts into the mix and hope that things work out. Worse yet, because it’s sometimes difficult to quantify the business benefit of investing in the fundamentals, some organizations deprioritize them altogether.
And that’s a shame because a true production system journey requires an investment in the fundamentals. Companies can’t “projectize” their way to differentiated operational performance and no amount of Herculean effort can compensate for simply operating the plant the right way. They have to embed the work practices that enable long-term stable, reliable performance. The “blocking and tackling” aspects of continuous improvement are just as important as the rest of it.
Roger Price is the CEO of Phase 5 Group, LLC. Formerly P5G’s Manufacturing Practice Leader and Senior Director for New Business, Roger is currently leading the effort to develop and commercialize new product-based solutions for current and future manufacturing clients. Roger has led client engagements for DuPont, Land O’ Lakes, NOVA Chemicals, SunCoke Energy, and AB Mauri Food Inc. among others.You can contact Roger directly at [email protected].