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Straightening out the learning curve ... and other manufacturing myths.

Straightening Out The Learning Curve . . . And Other Manufacturing Myths

it's time to rethink some accepted methods and norms of manufacturing if anyone is going to increase their paper thin margins in the disposables business "The times they are a-changing . . .," prophesized Bob Dylan, back when most of us were in high school and pursuing interests that had little to do with profits. I dare say, however, that profit seems to be increasingly more elusive in the non-wovens industry, particularly when accompanied by antiquated thinking.

Over the last few months, I've seen three commonly accepted "norms" set themselves squarely in the path of improved performance and profitability. Challenging these practices, and developing a new mentality, are the only way to overcome the performance malaise that accompanied their use.

The Learning Curve

In one operation, I agonized while this was used to explain poor machine performance (production, waste and quality results) for the last three years! "The equipment is good, but we can't get good people, so we're not over the learning curve," lamented the senior executive. Not surprisingly, margins were atrocious and the business, in all likelihood, would not survive the year.

In another disposables plant, a new machine languished in production mediocrity for seven months because it "wasn't time" for it to emerge from its artificially imposed learning curve. Fortunately, in this case, the overall business was not mortally wounded, but tremendous costs were incurred and the organization's energy was sapped.

In the nonwovens industry (as in most these days), the definition of "learning curve" needs to change to keep pace with the shortened product life cycles and accelerated return-on-investment (ROI) criteria. With wafer-thin profit margins in the disposables products lines, it's practically impossible to recover financially from six months of poor machine performance, let alone three years.

I see the root cause of the problem as analogous to the novice jogger who fastidiously researches the market for high-tech running shoes and shows up at the race without the benefit of a personal conditioning plan. He fails to finish, usually gets injured and then retrospectively wonders what happened. Many production operations are managed the same way.

The systematic progression of machine performance over a given period of time--for example, a learning curve--must give way to a more realistic definition based on a profitable operating position. For diaper and sanitary napkin machines, this profitable operating position can and should be achieved in 90 days or less from a completed installation. Following a few fundamental principles, successful "conditioning plans" can be developed for any production asset. For example:

* Define as goals, the necessary profitable operating criteria--typically, production rate, percent waste, efficiency and quality levels.

* Work backwards from these goals by developing action steps and practical "job actions" that will permit machine operators and support staff to accomplish the goals. In this exercise you will specifically define the training and staffing needs (i.e., the conditioning plan), required to successfully compete in the race. Think about it--a personal conditioning plan for a five minute mile is heck of a lot different than that for a nine-minute mile. Worse still is not recognizing there's a race or any time requirement to finish.

* Finally, make an intelligent investment in the means to achieve the goals. In the case of my executive friend, he invested nearly $4 million in equipment and facilities and practically nothing in the methods to capture its productive capacity. It almost seems that executives buy hardware with their company's money and training and support with their own. There's always plenty of money in one pot and very little in the other.

`Promotion' of Skilled Operators

I grimace everytime I see the continuing practice of "promoting" the very best machine operators into staff positions where their contribution is halved and where they often become disillusioned and stale.

But who can blame them for wanting to move off the machines when many pay systems don't reward operating proficiency?

Take a minute to think how your pay system is designed. Does it reward a higher operating proficiency--or does it contribute to a pecking order of limited specialized skills?

For example, the most innovative pay system (and not surprisingly, one adopted by a very successful plant) resulted from a pay system philosophy that focuses on machine operating skills. In this plant, machine operators could continue to earn more money by adding quality maintenance and leadership skills to their operating expertise. Pay progression was enchanced by a personal development plan that rewarded tenure on the machines, rather than "day shift" jobs.

Most pay systems don't work like this. In many, maintenance technicians are the highest paid hourly people and, by and large, they can't run the machines. In the system I speak of, maintenance technicians would have to rotate to operating positions to make more money. The pay system would recognize their added contribution in terms of operating skills, since they can run, diagnose and fix many of their own problems.

Can't be done?

Not so, it can and does work, but requires a re-orientation of traditional thinking and roles.

And, by the way, an added benefit--in an operator-centered pay system, maintenance staffing can almost always be reduced as these skills are vested in operating personnel.

Machine Efficiency

"Figures lie and liars figure," advises a trusted colleague, and how true when comparing machine (or production) efficiency results.

I enjoy the benefit of seeing a wide range of efficiency measurement systems, yet I find many deficient. In some cases, their design inadvertently masks problems and a required sense of urgency to take corrective action.

For example, in one operation, management was proud to point out machine efficiency results "above industry standards." But while the production manager was enjoying the glow of his 85% efficiency, his production volume was in fact 20% below machine capabilities and industry averages. And no one was working on this!

The problem was two-fold. First, allowances and deduction for a myriad of downtime causes were excluded from run-time calculations. Second, and more importantly, machine speed considerations were not a factor in developing efficiency results.

Both of these problems are representative of a "100% time based" system. Measurement of time utilization is important and necessary, but if an operation really wants to measure its performance it should include machine speed considerations and include an additional measurement based on "productive capacity."

Machine efficiency, based on this productive capacity, is often an eye-opening and jolting experience for production managers. The denominator of this efficiency equation is based on the product rate at a standard machine speed, times 480 minutes a shift. The numerator is "actual" production volume. Using 480 minutes a shift--eight hours--will also make you focus on the capacity lost due to shutdowns for breaks and lunches. Even if you must legitimately adjust the eight hours for work rules requiring lunch/breaks, you probably will see a dramatic change in your efficiency figures, which are much more representative of the profitable operation of the equipment.

To illustrate, the 85% efficiency alluded to earlier really was 69% when measured on a productive capacity basis. Needless to say, the organizational impact and sense of urgency changed substantially with this data.

I can only scratch the surface in this article regarding the details of execution required to debunk these myths that stalk our industry, but a creative leader and manager can delve deeper into these issues and realize that he or she can have a measurable impact on the profitability of the operation. And isn't that what it's all about.

Tom Schuler, Richard Ducote and Jay Frankenfield, of the consulting firm Schuler Ducote Frankenfield, write a series of monthly articles on Profitable Manufacturing--Using Manufacturing Leverage to Gain A Competitive Advantage in the Nonwovens Industry. These "how to" articles feature practical operations and engineering applications from their 30 years combined experience with Procter & Gamble and private label manufacturers. SDF's offices are located at 6855 Jimmy Carter Blvd., Suite 2400, Noncross, GA 30071; (404)447-9750; Fax, (404)448--7722. Reprints of earlier Nonwovens Industry columns referred to in any column are available from SDF.
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Title Annotation:Profitable Manufacturing
Author:Schulaer, Tom
Publication:Nonwovens Industry
Article Type:column
Date:Sep 1, 1989
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