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Growth and expansion - more than just the right equipment.

Growth and Expansion--More Than Just The Right Equipment the inevitable growth of a small or medium size nonwovens business does not have to be the nightmare many believe it to be; an emphasis on the `human' side of the equation is essential There used to be a time when the president of a small nonwovens company walked around and chatted with the line people ... when one person in the plant would willingly help out his neighbor to fix a particularly sticky problem ... and when everyone seemed to know everyone, and their families, at the company picnic.

Those times, however, inevitably change as a company inevitably grows.

Yes, recognizing that a growing plant needs a simultaneous investment in people, technical know how and operational systems--as well as equipment--is the key to taking advantage of market conditions that lead to the successful growth of the business.

But frequently, "growing" the company actually results in a management and financial nightmare. Production efficiencies decline, waste levels increase, communication suffers, morale ebbs, training gets "deemphasized" and the company begins to wish for the day when things were simpler, a day when everyone was not at each other's throats.

Remembering The Human Side

Too often, management views growth narrowly, only in terms of hardware and equipment capabilities. When the human side of the growth and expansion equation goes to zero, the transition to a business nightmare is not far behind.

Often, the plant loses its ability to focus on priorities that have successfully guided the company in years past. Additionally, plant activities become crisis-oriented and reactive, rather than positioned to influence results and performance.

Over the years, I've seen this growth scenario play out in many disposables plants around the world:

[The growth of the business stretches people and rudimentary systems, which control the operation, beyond their effective limits. Systems, procedures and time requirements that were adequate with one or two machines cannot effectively "expand" to satisfy the needs of four, five, or more machines.

Frequently, no corresponding "scale-up" of business methods accompanies the addition of new equipment. Basically, this scale-up involves recognition that the operation is evolving from one primarily utilizing machine operating skills to one requiring an additional management and coordination skill set.

For example, over a four year period in one operation, a production supervisor's area of responsibility grew from two machines and 16 people to seven machines and 68 people. Unfortunately, production rates declined more than 20% during this same period because few operational methods (priority setting, production reporting) grew with the plant to coordinate and manage the new levels of complexity.

In another plant, the maintenance team expanded its coverage from two machines (two shifts) to five machines (three shifts) without any additional training or staffing. The preventive maintenance program vanished and production efficiencies declined 11%.

[Information systems that generate management reports and identify performance variances get overwhelmed, producing data that is too old to be useful. "Tombstone" reports tell what happened in the past, providing little "actionable" data that could be used to influence results today or this week.

[The organizational structure inhibits the plant from successfully managing new priorities and technical change. Small companies generally staff with resources to handle routine priorities and some degree of incremental work. When existing resources are tapped to take on major new priorities (installation and start-up of new production lines), generally the "old" responsibility area suffers to some degree. This is particularly true in the disposables industry, where the pace of change plays out in new equipment that is increasingly complex and sophisticated. Purchasing equipment and properly planning for an efficient start-up can be a full-time job in itself.

[Training and personnel development takes a "back seat" to hard asset issues (where the machine is going, power requirements, warehouse space). Available skills actually get diluted by spreading limited expertise over more shifts and machines. The effect is predictable. Operating personnel are unable to solve routine problems effectively or run the equipment at design speeds or efficiency. The graphs for production and waste results tilt the wrong way--production heads down, waste goes up!

No Hocus Pocus Required

Reversing this scenario does not require an army of experts or any hocus pocus. Instead, it requires disciplined and pro-active management choices to insure that short term results continue to improve while investing in the future. The basis for these choices is recognizing that a pro-rata investment in people, technical know how and business systems in necessary to realize the full potential of new production equipment.

Plans to maximize the profit potential of new equipment must include the following actions:

1) Use the six P's (censored from seven for print)--Prior Proper Planning Prevents Poor Performance! Planning for growth and expansion begins early and should include specific steps to augment the skill base of machine operators and maintenance personnel, as well as the support needs of production and reporting systems. Designating a plant trainer, within a highly effective role definition, is an excellent means of addressing incremental plant training needs.

2) Clarify and communicate organizational roles, responsibilities and expectations. Bringing new equipment into a plant is like bringing a new baby home--it has its own special schedule, needs and demands. It will compete with and for existing resources and attention. Recognizing this before the equipment arrives on the loading dock is essential.

3) Protect the core business by recognizing that major new priorities require an investment in technical resources to achieve the full potential of equipment additions. Performance declines in the "base" business should not be tolerated. Attach a condition to the success criteria for the new equipment start-up, stating that performance levels on other equipment in the plant must be maintained. You will find that this simple concept will force you to consider actions and plans necessary to protect the core business.

4) Evaluate the flexibility of existing operational methods, procedures and systems. Growth means change--and operational methods must be evaluated to determine whether they can flex to the demands of more people and machines. If the "flex" test fails, these systems can rapidly become impediments to performance improvement.

In one plant, for example, the administrative duties of the shift supervisors ballooned to three-and-a-half hours a day as the plant grew. No one ever challenged the procedures of collecting and reporting production data that effectively removed the supervisors from their mainstream duties for half of each day.

5) Finally, keep the focus of the plant on its intended purpose and insure that management (including the resources involved in the expansion or start-up) continue to work as a team. Communication is often a casualty of growth and expansion, causing individuals to set their own priorities, which are not always consistent with the plant mission or focus. It's easy for people to cease working on fundamental manufacturing issues (solving production problems, reducing waste, improving materials usage) when distracted by expansion activities. Maintaining continuity and momentum towards broad-based plant goals is critical and requires strong, cohesive leadership and direction.

Growth and expansion can be an exciting and rewarding experience for a company and its employees who have done their homework well. But in order to enjoy the intended benefits, management must invest in both sides of the people/technology equation.
COPYRIGHT 1989 Rodman Publications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Title Annotation:growth of a small or medium size nonwovens business
Author:Schuler, Tom
Publication:Nonwovens Industry
Article Type:column
Date:Jun 1, 1989
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