While it may be acceptable in the short term to proceed with any particular tool that is deemed appropriate by management, there are more strategic issues that also must be addressed to assure that the organization can effectively apply the tools and sustain their benefits. These issues include leadership, alignment, teamwork, innovation and managing cultural change. If you do these well, the tools are much easier to apply, and far more successful. If you do not, success with any tool will, at best, be fleeting. Let's consider these issues briefly:
Leadership. There are numerous books on leadership, but my favorite definition is:
"Leadership is the ability to inspire ordinary people to consistently perform at an extraordinary level." - Ron Moore
How? They must feel that they are part of something greater than themselves. This enables a certain pride that goes beyond their personal performance and reinforces and sustains that performance. They also must enjoy their work, perhaps not as in seeing a good movie, but more so as in taking satisfaction in a job well done, particularly the difficult ones. They must be given the time, tools and training to be effective in their work. Finally, and most importantly, they must trust that their leaders are acting in the best interest of every employee and are always dealing openly and honestly with them, particularly during the difficult times. The opposite of this is believing that management is only interested in management and shareholder well-being. So pride, enjoyment, and most of all, trust, are paramount in a good leadership model.
At the highest level of the organization, leadership requires vision and a greater sense of purpose, yet being grounded in reality. Leaders put people first, treating them with dignity, respect and appreciation. Leaders have a passion for excellence, set high work and ethical standards, and create a caring, disciplined and proud environment. Leaders are demanding and supportive, simultaneously. Leaders set the example and have the courage to support and defend their basic values and principles. As you get closer to the actual work, management principles also must be applied - managers must administer and maintain, get things done right, manage to budgets, measure and control, hold people to standards, and constantly look for ways to improve. Leadership and management can require a very different skill set. The higher you are in the organization, the more you must be a leader.
Alignment. As Edgar Schein observed, "Alignment is critical where task inter-dependence makes collaboration essential for organizational effectiveness," for example, between production and maintenance; between shifts; or between marketing and manufacturing. Most organizations are not well aligned, exhibiting excessive "silo" behavior within each division or department. Granted, some of this is appropriate, but when the behaviors damage the overall performance of the business, then it becomes clear that an organization is not aligned. A few examples, among hundreds, include the purchasing department buying cheaper material, for which they are rewarded for "saving money," but which then results in greater costs to production; or production running equipment poorly to make production schedules, for which they are rewarded, but which results in additional downtime and maintenance costs. To counter the tendency toward "silo" behavior, the corporate strategy, along with superordinate goals, must be clearly defined and communicated repeatedly, and lower levels must give deference to these higher level goals and focus on system level performance. Moreover, misaligning issues, such as CEO pay and initiative overload pay, must be addressed. CEO compensation must be perceived as internally equitable and as a fiduciary of the corporation. The CEO must put corporate and employees' interests above his or her personal interests by building trust with employees. Initiatives must be consistent with the overall strategy and purpose of the organization, and must be introduced at a rate that the organization can absorb and effectively implement and sustain.
Teamwork. Teamwork, under-penned by the organization's superordinate goals, is a must. Teams must have a clear purpose and direction - a sense of meaning - aligned to corporate vision/ direction and to individual interests; boundaries for the team's goals and self-determination within those boundaries; openness and a willingness to share conflicting views; the skills to achieve the goals or training needs thereto; discipline and measurement of their effectiveness as to the impact on the business; continuing feedback and support; and flexibility to address changing needs, e.g., boundaries, training, measures, etc.
Innovation. This must not be something that is only done by the R&D function. Within the organization, and particularly at the shop floor, everyone must be constantly doing "little innovations," that is, looking for ways to do things better, applying rigor to the change process. This will lower costs and help fund "big innovation" in the R&D that creates improved products and processes. Our people are indeed our most important asset and we must treat them as such - they are our human intellectual capital and are more valuable than our equipment.
Managing Cultural Change. In this Darwinian world of capitalism, constant change through adaptation and improvement is a must. The heart of managing cultural change lies in routinely engaging all employees in the change process. It's often said that "people don't want to change." I disagree with this. People don't want to be changed, but they do want to change, IF:
Given compelling reasons for change.
There's something in the changes for them, e.g., less stress, less risk, better pay, or a more secure future.
They participate in creating the changes, so they have a sense of ownership and purpose in the change process. This means, for example, that we must have periodic, structured improvement time; routinely solicit and act on their ideas for improvement; and remove obstacles to their success.
All three IFs must be met to effectively manage cultural change.
Addressing these issues and getting good in each area is a must. These must be considered enabling activities to assure organizational readiness for effectively applying and sustaining the tools. With this in mind, we're now ready to look at a nominal hierarchy for applying the most popular tools.
Nominal Hierarchy for Application of Strategy and Tools
Figure 1, below, is offered as a model for the order in which the most popular tools should be applied. It is based on decades of experience in working with many, many companies, some of which applied these tools effectively, but, sadly, most did not, primarily in my view because they were poor at addressing the enabling issues and practices discussed above. Let's review this hierarchy.
In this model, an additional part of organizational readiness is applying an overall philosophy and strategy patterned after the Toyota Way, that is:
Long term thinking is the beginning and the foundation of business excellence, even if it is at the expense of short term profits.
Mapping and understanding your processes is key, including having a clear picture of where value is added and where waste is incurred and driving out the waste.
Engaging and challenging your people and suppliers. Being simultaneously encouraging and demanding of your people is a big challenge, particularly in getting the balance correct. Doing so is a requirement.
With these kinds of enabling activities in place, the tools for improvement can be more readily selected and effectively applied.
In my view, initial priority should be given to Kaizen principles, with a focus on 5S - sort, straighten, scrub, systematize and standardize - so you can sustain. Most companies do 4S, that is, they sort, straighten, scrub and stop, making their improvement unsustainable. More importantly, the focus of 5S is not housekeeping. That, along with a safer work environment, is a byproduct of 5S. Rather, the 5S focus is defect detection and elimination, workplace discipline and mistake proofing. Along with 5S comes standardization, or standard work. For example, every shift operates the process exactly the same way; every coupling is aligned to a strict standard, and so on. "Go and see" assures that supervisors and managers understand the details of the processes, and more importantly, they get a first-hand understanding of the problems being encountered by the workforce. The Five Whys method is a simple, easy way to engage the entire workforce in thinking and problem-solving, not just a select few who are trained in the more comprehensive forms of root cause analysis. Quick changeover reduces lost production time. Having a visual workplace makes it easier for the workforce to spot defects and manage them. Of course, having Kaizen or improvement activities assures that people have structured improvement time for problem-solving. In these improvement activities, it's a good idea to use Deming's Plan, Do, Check, Act management method and/or Imai's modification of it - Standardize, Do, Check, Act - to assure rigor in the improvement process.
Next, priority should be given to Total Productive Maintenance, or more accurately, Total Productive Manufacturing, or TPM principles. That is, measuring your overall equipment effectiveness, or OEE, with a specific focus on managing all losses from ideal so they can be minimized. TPM includes having operators apply TLC (tender loving care) doing tightening, lubricating and cleaning, monitoring equipment and process condition, and having consistency of operation, particularly across shifts. It includes having best practices in preventive maintenance (PM), predictive maintenance (PdM), and planning and scheduling, which are an inherent part of maintenance excellence. It includes restoring equipment performance to a like-new condition or better. No patching is allowed in TPM. When functionality is still insufficientfor business requirements, equipment and process design changes are made. Training and continuous learning are an ongoing part of TPM. The last priority is given to Six Sigma, reliability centered maintenance (RCM) and root cause analysis (RCA), as appropriate, for the more complex problems. The appropriate tool is selected based on the nature of the problem or issue at hand. For example, if we've applied the Kaizen principle of standard work but still have excess variability, then Six Sigma would typically be used for the more complex process and system level problems. Or, if after applying 5 Whys the problem becomes more complex than anticipated, or requires a more comprehensive review, then a more comprehensive RCA method would be used, including Ishikawa diagrams as necessary. RCM would be used to identify failure modes and consequences, allowing for the optimization of PM and PdM practices, and for greater operator involvement in tasks related to minimizing these failure modes and solving more complex equipment problems. Each of these tools requires a feedback loop to foster and sustain continuous learning and improvement on the use of the tools. Unfortunately, most people start with something like Six Sigma or RCM before they get the basics in place, making the use of these tools more problematic, particularly with regard to sustaining the results of their use.
Doing all this supports excellence in supply chain management, particularly when suppliers are treated with respect and as a partner in your business. This is particularly true when it is combined with an alignment effort between marketing and manufacturing for rationalizing various products, and even customers, to the marketplace, and truly addressing supply chain issues - suppliers, manufacturers and customers working in a "chain" to optimize supply chain performance.
Finally, it's important to highlight that these are nominal priorities for the application of the tools. In any given circumstance, it may be appropriate to apply RCM, Six Sigma, or RCA to a problem as part of applying Kaizen principles, TPM, or a combination of tools as needed under the business circumstance. However, the hierarchy and priorities shown will best serve most companies in their improvement efforts.
Ron Moore is the author of Making Common Sense Common Practice: Models for Manufacturing Excellence (in its 3rd edition) and of What Tool? When? - A Management Guide for Selecting the Right Improvement Tools (in its 2nd edition), both from the MRO-Zone.com, as well as over 40 journal articles. Books by Ron Moore
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