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Manufacturing discipline: improving productivity with low capital investment.

Mention improving competitiveness to most manufacturers and they wince, automatically thinking of expensive new equipment (i.e. robots, computer controlled production machines) along with labor's opposition to new technology, and the challenge of retraining staff.

However, competitiveness -- yielding major savings -- can be improved without major expenditures in equipment through the introduction of a productivity improving technique called Manufacturing Discipline.

Once significant savings have been generated from the first stage of manufacturing discipline, they can then be used to pay for the "expensive" new equipment that will yield additional savings.

While manufacturing discipline can benefit all sizes of operations, it is particularly effective in the small to medium size labor intensive manufacturing environment where management works closely with workers, without layers of staff separating the two.

There are major changes taking place in management style show North American firms have not been that far off the mark in terms of achieving productivity improvement. What has been lacking to support North American management techniques was a good dose of manufacturing discipline.

Some of the major trends in management styles currently being re-evaluated are:

* The consensus style management introduced by the Japanese is being reevaluated. The Japanese are beginning to return to a North American style of management with managers being in the position to make decisions without a group having to participate.

This action is permitting Japanese firms to speed up decision making with faster decisions being made -- and put into action -- by the accountable executive, not the group.

* The participation style (or team approach) of assembling automobiles as introduced by Volvo is on the brink of failure with Volvo not converting any additional plants to this type of manufacturing. (This is not to say that the team approach is all wrong, it is that the approach as applied by Volvo is not working.)

* Companies are beginning to examine their costing systems with some firms introducing cost centers within their operations and where production is actually sold to the succeeding department. Again, accountability and manufacturing discipline.

This is not to say that the trends are all wrong, far from it, each has its attributes and some of each should be maintained and even expanded. It is just that we should not throw out some of the traditional systems used in North America without first introducing Manufacturing Discipline into the "mix" to see if substantial benefits cannot be obtained.

Manufacturing discipline is the first step required in a productivity improvement program - even those that eventually do involve the introduction of new technology. The term "Manufacturing Discipline" represents a renewed understanding of, and respect for, the manufacturing operation. It addresses the manufacturing process from initial planning through to final delivery.

Many companies have spent large sums of money on new technology without first applying manufacturing discipline, and these technologies have often failed to achieve their intended results. For example, Business Week reported, in the June 1986 issue, that a major U.S. auto maker had achieved a mere 5 percent increase in productivity after spending billions on robots, while their major competitor had achieved a 31 percent increase using conventional technology.

The article concluded that companies with poor management that automate end up with poorly managed automated plants. Lack of manufacturing discipline can have serious effects on a company -- no matter what the level of technology. It affects a company's ability to meet delivery dates, quality standards and costs.

Most current manufacturing philosophies, such as Quick Response, Just-in-Time, Flexible Manufacturing, MRP II, TQM (Total Quality Management) and Deming's quality assurance programs require the existence of manufacturing discipline to be successful. Without the umbrella of manufacturing discipline, these philosophies will not achieve their full potential.

Many of us know the story of the Japanese auto worker who, while on his way home, stopped at a vehicle made by his company and tightened a windshield wiper that had come loose. That commitment to quality is an example of manufacturing discipline.

Manufacturing discipline requires:

* Disciplined leadership; * Detailed and accurate planning; * The ability to adapt to change; * Participation; * Equipment to perform as specified; * Comprehensive training; and * Follow-up/Feedback.

Manufacturing discipline means creating an environment that is conducive to disciplined work. It means developing effective production systems -- planning. It means training employees to utilize these systems, it means following up to ensure that they are, in fact, being utilized to their maximum, and it means providing the opportunity for employees to share in the rewards resulting from productivity improvements.

Disciplined leadership

Manufacturing discipline requires leadership. It also requires top management to set an example that everyone else in the organization can respect and follow.

Unlike Japan and many European countries, where top executives in manufacturing firms can frequently put on coveralls, crawl under production machines and fix them, North American executives are generally unable to perform the manual operations on the production floor.

The MBA approach to management, in the past, did not equip managers with the hands-on type of skills used on assembly line positions. However, there is a glimmer of hope since more and more MBAs are shifting into manufacturing.

While it is generally not necessary for executives to be able to repair equipment on the plant floor, or work in the production line, they should be self disciplined sufficiently to have taken the time to learn about and understand the equipment, what it does, how it works, and its capabilities and limitations.

Leadership means more than just getting up in front of the troops and making speeches, it means setting an example that people can respect. Management participation is proof of commitment.

Accurate planning

There is no substitute for thorough and accurate planning. Realistic planning requires a detailed understanding of current capabilities. In the manufacturing environment, this means management must understand how work flows through the plant and where the bottlenecks can, and do, occur.

Management must understand what their current equipment is capable of producing under maximum loads and high operator efficiency. They must be able to measure output, by machine and worker, and be able to address problems in scheduling, (i.e. efficiency, quality, work flow, layout and costs) anticipating the effect a change in one area has on the other areas.

The concept of concurrent engineering is being put into practice by many companies. Concurrent engineering involves all departments in a manufacturing organization working together. This includes engineering, financial, design, suppliers, etc.

Planning in advance enables the company to solve problems before they occur. It means planning ahead.

TABULAR DATA OMITTED

Adapt to change

Business must constantly respond to changing market conditions and customer feedback. This is especially so as they change to TQM, rather than to quality control as a separate function within the organization. Flexible Manufacturing, Quick Response and JIT philosophies have all helped accelerate the need for change.

The ability to change, without causing major disruptions, is disciplined change. Though inevitable, many people fear change. Introducing change in a disciplined way, that will not cause major upheavals, is one of the supreme tests of an organization's ability to plan and to exercise discipline at all levels.

Training -- or learning -- is the key to helping the employee change. Once people learn, they have changed. Training reduces the fear of change. However, resisting change can lead to greater losses including jobs and even industries.

The dinosaur is a good example of resistance to change. They did not change; how many do you see today?

Participation

Implementing manufacturing discipline means that all involved in the program must participate if manufacturing discipline is to be successful. Top management must be clear in what they expect from members of the middle management team and middle management must be clear about what they expect from their employees.

Participation can take the form of feedback from the shop floor. Management can create an atmosphere where everyone is expected to participate in a disciplined system of quality improvement, in increasing productivity and in reducing costs through participation.

Functioning as specified

Implementing manufacturing discipline requires that existing equipment be capable of operating at maximum capability.

Is it responsible for management to expect the operator of a computerized fabric cutter to meet production and quality requirements if the system has "glitches" and does not operate as required?

To pursue this example, the manufacturer purchased a CNC low-ply fabric cutter that cost over one third of a million dollars. By low ply it means that the cutter could cut up to approximately one inch of fabric pulled down to .75 inches under vacuum. Accuracy of the cutter was constantly questioned with the mechanics and the operator frequently being blamed on the problems.

Finally, the company was fortunate to be able to add to its management team, a person intimately familiar with the mechanical operation of the cutter, he recommended some fairly simple solutions in settings and the computer program that corrected the problem. The CAM machine now operates at maximum capability and the mechanic and operator are off the "hook."

Unlike the military, which can train soldiers for years to do a job that may take only a few days, businesses cannot afford to spend inordinate amounts of time in training personnel. Desert Storm is a good example of an extensive training program in preparation for short term action. Training was superb, but the cost would be unattainable to most manufacturers.

Businesses need to accomplish similar results but with less costly training for staff who may be with the company less than two or three years. However, without training, manufacturing discipline will fail. For example, is it realistic for a supervisor to ask the operator of a CNC drilling machine to run a piece that requires re-programming of the machine when the operator has not been trained to do the programming?

Is it realistic for management to expect workers to increase output by using existing equipment more efficiently, if the employees are not trained to use the equipment effectively in the first place?

Workshops, seminars, interactive video and on-the-job training are a few of the techniques that can be used to address these issues. The incentive to learn can be instilled during the introduction of the manufacturing discipline program.

Training has been very effective in establishing industries in prisons, areas of high unemployment and aboriginal communities.

Follow-up/Feed-back

Follow-up and feed-back are an integral part of manufacturing discipline. Each stage of the program must be monitored and measured with results being made available to management and the workers in daily easy-to-read reports.

Production results can often be compared to standards established by the IE department, or equivalent, for most production operations in the company.

A good example of this component is a situation where a large aircraft manufacturing company wanted to set up a training program for its lead hands. However, they were unsure of how to measure the results.

The company had an excellent industrial engineering department that had developed standards on all of the production operations. It became an easy matter to measure the improvement in actual to standard earned minutes for the section for which the lead hand worked.

Training became easily measurable when compared with section efficiency. Obviously, other factors effected efficiency, but a definable number was quite helpful in evaluating the training program.

Results

Results of manufacturing discipline must be examined based on the total implementation of a "Comprehensive Productivity Improvement/Manufacturing Discipline" program. The individual components of manufacturing discipline will not, in themselves, enable a company to reap benefits.

The greatest improvements are obtained when most, or all, of the manufacturing discipline components are involved.

Case study

The implementation of a manufacturing discipline program is best demonstrated by reviewing the actions taken in an actual manufacturing operation. An apparel manufacturing firm that produces western shirts and outerwear was selected to demonstrate what can be accomplished.

Condition of the company at the start of a productivity improvement/manufacturing Discipline program to up-grade productivity was as follows:

* The company was located in two multiple story buildings in the heart of the city requiring walking up and down many flights of stairs;

* Supervision was untrained and not held accountable;

* There were no daily, or even weekly, production reporting systems;

* Equipment was obsolete and in poor operating condition;

* Workflow was inefficient;

* Quality specifications were nonexistent;

* Production goals inadequately defined; and

* The incentive system was ineffective.

Activities undertaken in the initial stages of the productivity improvement/mfg. disc. program included:

Stage I

* Evaluate, re-assign where necessary, and train supervision;

* Install daily production reporting system;

* Bring existing equipment up to operating standards;

* Review work methods of operators, retrain where necessary;

* Develop accurate standards leading to an effective incentive system;

* Provide feed-back of results of program to operators and supervision;

Savings from implementation of Stage I were 34 percent of direct labor cost.

Stage II

The company began investing in sophisticated equipment that reduced training time, deskilled manual operations and increased operator interest in the workplace.

Purchase of the CAD/CAM, etc. equipment was accomplished from the savings realized in Stage I. Savings resulting from implementation of Stage I and Stage II totaled 44 percent of direct labor.

Stage III

Upgrading of equipment continued along with a sophisticated material handling system to transport work-in-process.

All components -- or sub-assembly -- were transported on a belt conveyor. The components were transferred to an overhead material handling system -- Unit Production System -- where the assembly operations were performed.

Total direct labor savings reached 48 percent as a result of work done in Stages I, II and III.

Stage IV

The direct labor costs have gone up slightly as a result of up-grading product construction to improve quality. The increase in cost, however, will enable the client to increase sales due to improved quality.

Gene Barbee, P. Eng., CNC, is a professional engineer registered with the Professional Engineering Association in Canada, is a graduate of North Carolina State University and a Certified Management Consultant (CNC). He has served as a technical advisor to the National Research Council Canada and has conducted extensive studies for the Canadian Department of Industry Science and Technology, The Northwest Territories' Government and for private industry. In addition to implementing productivity improvement programs, resulting in significant savings for the clients, he has also presented numerous seminars on technical topics such as work measurement, product costing, quality control and materials handling.
COPYRIGHT 1992 Institute of Industrial Engineers, Inc. (IIE)
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Strategies for Competitiveness
Author:Barbee, Gene
Publication:Industrial Management
Date:Sep 1, 1992
Words:2376
Previous Article:Training supervisors to work effectively with a changing workforce.
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