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MEs in the '90s: a new partnership with management.

MEs in the '90s: A new partnership with management

What's bugging MEs:

Management lacks vision, too timid and indecisive. High turnover in top management blurs goals. MBA managers don't understand manufacturing. Present manufacturing capabilities are being wasted. Limited capital-equipment funds are being poorly spent. Cutbacks create fear, distrust, job insecurity. Emphasis remains on production volumes, not quality. No rewards for risk taking, so why show initiative. Our engineering staff is too lean to do the job. Computer-terminal work is boring for hands-on vets. MEs should be considered cost reducers, not overhead. Experience is not properly evaluated and rewarded. No career ladder left, nothing to shoot for. Being an ME is not something I'd recommend to my kids.

The ME and the CEO. How many walls exist between you and the top person in your company--the one individual who can either bless of rebuff your best ideas for how to make your manufacturing world class? Too many walls? Fewer walls than five years ago? No walls?

As world competition gets tougher, let's hope this relationship is improving. In most companies, it is because it has to--top management is realizing the importance of manufacturing as a competitive weapon and a key long-term survival tactic. Even if their hands are tied momentarily by cash-flow or other cost pressures, most companies clearly intend to improve manufacturing, and the only way that this will be accomplished will be for the manufacturing engineer to play a far more important role than he or she has in the past.

What can the individual ME and the CEO do about addressing this challenge? The message here is simple: communicate, cooperate, and show each other a little more respect than in the past. That's the key to bridging the gulf to top management. What follows is a collection of some of the smart and dumb things people do to either promote the sharing of information to improve this relationship, or to cause the continuation of adversarial relationships and isolation tactics that prevent the free flow of knowledge that each will need to compete in the years ahead.

Key issues

Effective management of the manufacturing function requires good two-way communication between the MEs who know the process and how it could be improved and top managers who know what is really at stake and what risks must be taken. Here are some key issues:

* Who's responsible? What's the difference between a Honda made in Ohio and a Chevy made in Michigan? Management, says Martin Feldstein, former chairman of the President's Council of Economic Advisors: "The experience of the Japanese automakers in the US shows that American workers can produce autos that are every bit as good and every bit as appealing as the autos made by Japanese workers. This example makes clear that the key to improving the competitiveness of US industry lies with improved management. It is management that is responsible for the design of products, the organization of production, and the motivation of workers." * Goals come first. It helps to have direction. Management's first task should be defining clear, limited goals, and then articulating them to everyone in the organization. * Disappearing layers. An encouraging trend is that there are fewer people between the ME and top management--or soon will be. Says former Citicorp CEO, Walter Wriston, "In well-run corporations--those that will survive and create the future--layers of management are disappearing. They are disappearing for two reasons: First, because micromanagement from the top is less important than inspiration. Second, because information now flows to all levels of management, dispensing the same data at the same time to all. These changes make obsolete the extra layers of management--layers that once had to control and relay information. These managers would ask the people working under them what they were doing, then they would tell the people working above them what they said. They were transmission lines. But they spun not, neither did they weave, nor did they produce anything of added value. These are the layers that are coming out--and they need to come out."

Adds Mr Wriston: "They are coming out for still another reason, one that US managers should have known all along, but are learning now in company after company: The people who actually do a job, who are the closest to the work, know more about it than the managers." * Kneading knowledge. Today's manufacturing professionals are knowledge workers who want and need involvement. Thus, the challenge for manufacturing managers today is to win battles in the engineering office and on the factory floor where the combatants are knowledge workers--people whose loyalty is not the old-fashioned, shallow "just tell me what you want me to do," but rather those workers dedicated to doing the job right; who ask "What is it we're really trying to do here?" They want to know both what is to be accomplished and what they can contribute to how that work gets done.

This means managers must figure out how to motivate, coordinate, and conduct these collections of diverse (and sometimes adverse) individuals, whether they're from the factory floor, the engineering office, or the secretarial pool. * Seeking talent. Another important ingredient is talent--the number-one commodity in short supply. There can never be enough good people in any organization. Just as good people can make even a bad system work, bad people can ruin even the best system. So the job of the manager today is very simple and very difficult: To find the best people you can, motivate them to do the job, and allow them to do it their own way.

In many cases, this means finding out what talents the people really possess by giving them more challenging assignments. Thus, a critical management decision is: "Do we have sufficient talent in-house to tackle a major manufacturing innovation, or must we go outside and hire high-tech consultants? Would someone on the outside really understand us--our processes and our people--better than we do ourselves?" * Broader views. Top management people are beginning to realize that to do the big manufacturing jobs they need something more than caretakers and specialists. They need a generalist--someone with the skills of an architect, who can see are big picture, pull out a fresh sheet of paper, and design something new, something custom tailored to the task at hand, and, hopefully, something that will work after a reasonable amount of debugging. * Blurred vision. Some attitude adjustment is occurring, spurred by today's competitive pressures, but a lot of misunderstanding still exists between the CEO and his or her ME team. Explains Harvard's Robert H Hayes, coauthor of Dynamic Manufacturing: "Just a few years ago, we used to hear this complaint from manufacturing managers: Top management doesn't understand us. They don't understand the pressures we're under, the constraints we have to deal with, or the limited resources we can draw on. If only they would give us the authority and resources we need, we could achieve the goals they set for us.

"Today, it's top managers who are complaining: Our manufacturing managers don't understand us. They don't understand the seriousness of the competitive situation we're facing or the magnitude of the improvements we must make if we're going to survive. We tell them, `Let us know what your ideas are, and what new resources you need.' But all they come back with is more of the same. They don't seem to see that this new environment requires new approaches."

High-tech roadblocks

So what's holding up high tech? The consensus is that the key roadblocks in management's mind are:

1. A technology vacuum--"We don't have the people skills."

2. A cash-flow phobia--"We can't afford a quantum leap to that level of investment--it just doesn't fit into any of our ROI formulae."

This differs from the conception MEs have of what's holding up high tech:

1. MBA ignorance--"Management doesn't understand the technology and what it could do for us."

2. Too tough a sell--"It's too difficult to sell a capital expense of that magnitude to short-term-thinking accountants with their burden-rate-biases."

There are other factors, of course, impeding progress toward higher levels of technology:

1. Vendor overkill--too much self-puffery and braggadocio, not enough reliable data and verifiable results.

2. Technical illiteracy--the technology is admittedly heavy sledding for everyone, and training is expensive and of inconsistent quality.

3. Tunnel vision--too many are still hiding from the competitive realities of world competition, and too few in large organizations are gutsy entrepreneurs--they let good ideas get swallowed up in marshmallow committees.

Communication barriers

A little communication would go a long way toward clearing up this basic misunderstanding. Top management's excuse "Forget it! We don't have the people or the cash for this," is too easy to hide behind. Yet, if the CEO really pursued the issue, he might well find that he's wrong on both counts.

Meanwhile, the ME is mumbling, "That man simply doesn't understand technology." Maybe so, but who's fault is that? Probably yours for not doing a good job of making your case, or even attempting to.

CEOs will listen; the question is will they act? Says retired Chrysler executive Stephan Sharf: "I have an uneasy feeling that as individuals, we are not as spunky as we used to be. We seem not to take personal chances, without which our common American goal is in danger of becoming mediocrity."

Yet, you must know when to speak up and when not to, advises a T&P survey respondent. "When you have a real concern, not just a complaint, you should talk to the right person. If something's out of whack, you need to address it, and if it's terribly out of whack, you need to make major noises about it--that's the only way things will change.

"But you need to also know when to stop rocking the boat and let things calm down. If the seas are already stormy, and you start rocking the boat, you will tip it over and you'll all drown. Just like singer Kenny Rogers says, you need to know when to hold 'em and when to fold 'em."

Undoing a wrong turn

What do you mean you don't have the people you need; you did a short time ago, says Jack Hickey, editorial director, Instruments & Control Systems. "During the past few years, many companies tried to become as `lean and mean' as possible, primarily through layoffs and by encouraging older workers to retire early. Yet, many of these same companies are telling market researchers that there's a critical shortage of knowledgeable people!

"Could it be that, instead of becoming `lean and mean,' these companies became `lean and stupid' by pushing people they really needed out the door? To boot, they spent a lot of money for early retirement incentives, unemployment benefits, out-placement service costs, and so on. Instead of paying people not to work, wouldn't it make more sense for companies to invest this money in more education for their most important asset--their people? And why not rehire some of the retirees and those previously laid off, instead of complaining about a people shortage that they probably created?"

Backward students

One of the misguided solutions we've seen is a tendency for top management to hire a bunch of bright young minds fresh off the campus, give them a batch of computers, and ask them to create a whole new factory. "Fresh thinking, that's what we need around here" goes the justification. "They understand this new-fangled stuff and what to do with it."

The fallacy here is to believe that they can know your factory with little or no significant floor experience. So, they design a "dream factory" that's actually a nightmare--impractical and unsuitable to mesh with the existing equipment, people, and organization already in place.

That vital floor experience is something that's not being taught anywhere. In a memo to his students on the future of work, Harvard professor Robert Reich made a case for on-the-job training over academic degrees: "American students have it backwards. The courses to which you now gravitate--finance, law, accounting, management, and other practical arts--may be helpful to understand how a particular job is now done, but irrelevant to how such a job will be done.

"The intellectual equipment needed for the job of the future is an ability to define problems, quickly assimilate relevant data, conceptualize and reorganize the information, make deductive and inductive leaps with it, ask hard questions about it, discuss findings with colleagues, work collaboratively to find solutions, and then convince others. And these sorts of skills can't be learned in career-training courses."

Here's a contrasting view from the new CEO for Honda Motor Co (USA), Nobuhiko Kawamoto. He favors hiring young engineers--some as young as 18--and giving them great responsibilities (after they get floor experience, yet while they're still in their twenties). "You cannot expect good technology and advanced engineering from a fat and lazy engineer. You get nothing from a couch potato."

New management frontiers

It's strange to believe, but "non-profit" organizations are becoming leaders in developing management structures best suited to tap the talents of their people. In a Business Week article, management guru Peter Drucker concludes: "The best nonprofits are on the cutting edge of management techniques, particularly in developing and implementing strategy, responding to constituents, motivating and training workers, and exerting leadership."

Remarkably similar economic forces to those now squeezing manufacturing (shrinking funding, ballooning labor costs) are forcing these institutions to streamline their organizations. As in manufacturing, when they examine their structures, they find no easy textbook solutions. Says, Vartan Gregorian, president, Brown University: "Each institution has its own-culture, identity, and traditions, and you cannot presuppose outside formulas on it. You have to develop this from within. You can't bring textbook solutions to organizations."

Frances Hesselbein, former director, Girl Scouts of America, attacked their military chain of command. Instead of boxes piled up in a pyramid, she put in place a circular management structure at headquarters. She was the hub of the wheel-like chart, and all other jobs radiated out from her. Managers call this the "bubble chart."

Although largely symbolic, the difference conveys a message: that everyone's role is crucial. "We don't talk about moving up or down," she explains. "We move across. It's how we liberate the creative spirits of people."

And these forward-thinking organizations are unique in a willingness to invite criticism. Franklin Thomas, president, Ford Foundation, did what few corporate CEOs would ever dare: He invited seven teams of prominent outsiders to review his operations and report directly to his board of trustees.

A new integration role

G David Spengler is a young industrial engineer (IE) at HCC Inc, a small employee-owned plant in Illinois. "One of the outstanding challenges today is the integration now required of the IE. It reaches into all facets of the organization: accounting, data processing, quality assurance, marketing, etc. It's our job to bring these functions together to focus on solving a manufacturing problem. IE will soon stand for Integration Engineer.

"I have to sell the idea of new equipment to everyone in the organization. From the people who will use it to the guy who signs the check for it. I must assure that there will be no surprises.

"Our CEO is presently pouring over various organization charting techniques to evaluate how to set up a more responsive organization. He's getting his house in order so that we will have standards for improvement and for individual behavior. We can no longer be a fly-by-the-seat-of-your-pants organization.

"This is an old company bought out by employees two years ago. Although the changes have been fantastic, we have to evolve further before we become world class. We have a flat organization now, and are trying to develop a pyramid structure that will not inhibit that.

"This will require a unique solution! If your work teams include representatives from every level in the organization, you don't have quite the conflict with the pyramid structure that you do if you form teams arbitrarily.

"I'm very excited about all this. I want to see just how well it will actually work. We've used the team approach to a limited extent with good results so far."

Is employee ownership the key here to employee involvement? "You betcha! Present management has seen other improvement efforts fail, and has done research into why they failed. We've given them some hints. Basically, it was because people didn't perceive a true management commitment in the past. Commitment is everything!"

Selling management

Education is what sold his management on high tech, one ME tells T&P. "I see a lot of our managers and upper-level people in continuing education. They are bringing me case-history articles on new equipment and what's being done with it. They are becoming more enlightened on what it takes to run a good manufacturing operation.

"They have taken out levels of management. We now report to people much higher up, and our influence is much greater on capital-budget priorities. They know now to include many more factors in the justification process than they ever did before--to get a bigger picture, think longer term, etc. Instead of going through two or three levels of management, you go right to the controller. You can get what you feel is important put into the budget, and the money is appropriated."

However, unlike equipment money, training money is improving more slowly. `They don't spend, much on training on the shop floor, but the company is paying for those getting advanced business degrees--their MBA training has convinced them that there's money to be made in high tech."

Liberating the work ethic

Jerry Norton is president of Tooling Systems Division, Frankenmuth, MI. "When I first came here," he recalls, "I sent out a questionnaire to all our people, asking `What do you think this company needs to do? Forget about cost, just let your spirits soar.' There were predictable responses--throw out old equipment, streamline, get costs down, get productivity up, etc.

"While cost and productivity are two cornerstones on which we subsequently built our turnaround, the biggest opportunity for productivity doesn't lie in spending millions on machine tools. What we must attempt to do every day is to grow a new work ethic. Call it what you want, but all companies provide service, and an important ingredient in their future success will be liberating the awesome productive energy that we know resides in our workforces.

"We believe that the best effort we get out of our best people is probably only 35% to 40% of their capabilities, myself included. Our productivity growth will be measured by that basic equation of our ability to increase our output from a given degree of input. Those who apply their best efforts to their companies will experience not incremental, but revolutionary change. The degree of that effort will determine who wins or loses in the key issues of global competition and product development."

Norton feels companies must be strong both inside and out. "There was a time when people were comfortable just opening their doors and selling something--that was enough. But just as aggressively as we externalize this new competitive effort, we must internalize it. We think we have one of the most profitable tooling companies in the world today, a strong statement that I do not make lightly. This could not be said a short time ago."

Contrast that situation with this one. John Doe's company was acquired by a German parent organization a few years ago. His main problems today are getting the machine tools he requested and putting up with those he didn't. "I'm just getting equipment I ordered in 1978--that's slow!" he laughs. "On the other hand, the new stuff we're getting from Germany is not going to improve production at all. I already have as good or better equipment here, but our German parent tells us when we need new equipment. So they are loading me up with a lot of equipment I don't need--brand new, specially built, but actually slower than the special equipment I have now, largely homemade and invented here. All they did was take those ideas and make the equipment `tankier.'

"A coating machine that cost me $150,000 to build is being replaced by one built for the parent company by a Swiss company for more than $1 million, and it won't do anything better than my present machine."

Why are they doing this? "I have no idea," he chuckles again. "We have a special sawing machine we built from an old lathe bed. They found a company in France to convert a grinding machine to replace it for about $3/4 million. I spent $45,000 on the one I have now.

"These decisions are being made for me, without any of my input. They make no sense. These machines won't increase production one bit, but they feel that if they didn't make it, it isn't right. That's the German machine-tool mentality!"

But you're taking it well. "What's to get excited about. They don't seem to care what anything costs. They're not publicly held. They're set up as a trust fund, with nobody to report to, and the money they make is either reinvested or given to charity. It's not the real world! They will build buildings for you that are way too big, and than come along next year and tack on additions--just a lot of wasted space. But ask them to add people, and it's no way!"

So they have an open checkbook for buildings and equipment, but not people? "Yes, that's about it."

This reflects a different European philosophy on skilled labor--that labor's valued much more highly in Europe than here? "Right," he admits. "It's crazy!"

Aren't there any reason for your organization to try to be more practical and competitive, "Nope, not at the moment," he shrugs.


An important first step is to establish focus--a clear set of priorities that guide the actions of everyone at every level. Leaders must both set and communicate that focus, helping employees to concentrate on doing what they do well and to turn to partners in adjunct activities when they need technical help.

To maintain a competitive edge you must be fast in both decisions and implementation. Smaller companies unencumbered by bureaucracy can often beat bigger rivals slowed by endless review committees or communication channels. Companies can move quickly when they have autonomous teams with total project responsibility and every skill needed represented on the team.

Next, you need flexibility, which means fully developing your resources to respond quickly to change. To do this, workers need broader skills, fewer job classifications, and open-ended assignments that permit them to solve problems without worrying about jurisdictions. Internal competition is replaced by collaboration.

Finally, you must export that same spirit of collaboration within the company to your external partners, whether combining forces with other companies to gain advantages of size or teaming up with suppliers to increase quality.
COPYRIGHT 1990 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:manufacturing engineers; includes related articles
Author:Sprow, Eugene E.
Publication:Tooling & Production
Date:Aug 1, 1990
Previous Article:Five steps to better presentations.
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