Whitepaper:

Why Most American Continuous Improvement

Initiatives Fail

And What Manufacturing Leaders Can Do to Cultivate Operational Discipline

Copyright © Manuficient Consulting [2015].

Why Most American Continuous Improvement

Initiatives Fail

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2 Why Most American Continuous Improvement Initiatives Fail | Manuficient Consulting

Why Most American Continuous Improvement Initiatives Fail

And What Manufacturing Leaders Can Do to Cultivate Operational Discipline

By now, many companies who have attempted Lean, Six Sigma, Agile Manufacturing or any other Continuous Improvement initiative have realized that it is a massive undertaking. It’s so much more than making a few process changes out on the production floor; it means undergoing an entire organizational transformation. Albeit a much needed transformation in many cases. Deciding to become leaner is almost always a good idea (as long as you’re not too lean already). The challenge lies in overcoming the sometimes overwhelming opposition to the changes needed to become leaner. There are a set of common conditions that erode factory performance, resulting in wasted time, money, and other resources for American manufacturers. Fortunately, there is systematic approach that addresses all of these conditions. It also provides a clear roadmap that prepares an organization for a successful Continuous Improvement implementation.

Common issues that erode manufacturing and supply chain performance

There are always problems to be solved in a manufacturing environment. Some big, some small; some unique to the factory or process and some are present in just about any factory you walk into. These issues are created by the very nature of human beings in manufacturing and are sometimes magnified by culture and other influences. In the absence of systematic management protocols, these issues are left to evolve into beings of their own that feed on resources that could be put to more productive uses. These issues include:

Competing interests and misaligned agendas:

In order for a team to win, they have to be playing the same game. Also, all players on the team also have to be acting in the best interest of the team. In the absence of clear goals and performance targets, people tend to form their own agendas and fail to see the bigger picture. This only leads to infighting and unnecessary conflict. It’s better to engage all stakeholders in collaborative goal-setting to align efforts behind the team’s objectives.

Not having sufficient manpower, machines, material or other resources available to meet demands:

How frustrating is it to run out of material halfway through a production run? Or have 10% of the workforce not show up to work the day after a holiday? Although it’s easy to write these issues off as the cost of doing business, they are all

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addressable by taking the appropriate corrective action and improving your planning processes.

People not being accountable for their areas of responsibility:

The easiest way to set someone up for failure is to form an expectation of them without clearly communicating that you have this expectation. The easiest way to ensure the failure of the business system is by not assigning clear lines of accountability for system deliverables. Once the lines of accountability are drawn, leaders must consistently and systematically execute corrective action protocols when failures occur.

Issues that could have easily been resolved evolving into expensive problems:

Issues are often fixed relatively inexpensively if they are caught early enough. Unfortunately, many issues are ignored when they can most easily be resolved. These issues are allowed to manifest into expensive problems. It’s better to have systems in place to catch problems early and resolve them before they escalate into more serious issues.

Improper machine or system operation driving up manufacturing costs:

Running too fast increases costs. Running too slow increases costs. There is such a thing as a most economic operating method for a manufacturing system. Not having clear engineered standards that align with machine and system design specs make it nearly impossible to optimize system operation. Determining your manufacturing system’s economic throughput rates helps optimize performance and minimize cost.

Uncertainty about how much time systems are down and why:

Without reliable data around machine or system uptime, determining the cost of uptime failures is just a shot in the dark. Waste hides in the absence of light. Downtime erodes system performance and the bottom line. It’s better to keep downtime information in the forefront so issues can be addressed before they escalate.

Planning Systems

designed for meeting

immediate

production needs

but not for

Continuous

Improvement

No clear

understanding of

system capability,

what is driving

throughput losses,

and why

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Uncertainty about how much throughput loss is due to rate loss and why:

Rate loss is the silent killer of a manufacturing system. The reason it’s so deadly is because it’s nearly impossible to see without a trained eye. Rate loss is so common that it is often overlooked for more immanent problems. However, this type of loss can account for 20% or more of total OEE losses. Making this type of loss highly visible is only the first step in bringing this silent killer to justice.

Uncertainty about how much throughput loss is due to yield loss and why:

Every bad unit takes away an opportunity from a good unit. This opportunity loss drives up manufacturing costs. If you’re lucky, the bad unit is caught and reworked; in the worse case, the bad unit ends up getting to the customer and causing some serious problems. The best case is to make the investment to eliminate the opportunity for bad units to occur. Without understanding true losses, it’s impossible to know the return on investment for improvement ideas.

People having conflicting opinions about what the biggest opportunities are:

People tend to believe that the biggest problems for the company are the ones that cause them personally the most pain. In the absence of having reliable data to help quantify and prioritize opportunities, there is very limited objectivity and whoever makes the strongest case for the day sets the priority. A better approach is to increase granularity and visibility of system performance data to rank and pinpoint where the biggest gains can be made.

Lack of issue resolution due to insufficient accountability systems:

There’s a snowball effect when it comes to factory issues; especially when they aren’t being resolved completely and effectively. One day’s issues get absorbed by the next day’s issue, which get compounded with the following days’. Over time, you end up in crisis management mode with no clear understanding of what’s causing what. The older an issue gets, the more disconnected it gets from its root cause. An effective issue tracking and resolution system can help keep issues in the spotlight until they are resolved satisfactorily.

Unable to quantify

the impact of losses

to quickly determine

the return on

investment for

improvement efforts

Slow to effectively

respond to both

issues and

opportunities

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Changes lead to expensive problems due to lack of preparedness:

Good or bad, change itself is inevitable. These changes will have a direct or indirect impact on system performance. The degree of impact depends on the steps the organization takes to mitigate negative factors and leverage positive aspects of a change. Leveraging change is most effective when proactive steps are taken to assess threats and opportunities and execute appropriate action.

Opportunities missed due to insufficient commitment of manpower:

It’s easy to verbalize how much pain an issue is causing and not commit sufficient time or manpower to resolving it. It’s tempting to go for the minimum commitment of manpower and see if the right idea will emerge. This is a gamble that can erode leadership credibility if it doesn’t work (which it probably won’t work anyway). It’s better to play it safe by adequately staffing an improvement team with the expectation that a permanent solution to the problem needs to emerge. Then work to get everyone else to rally behind the team.

Solutions are implemented that sacrifice other key business objectives:

In manufacturing, anyone’s problem is everyone’s problem. Solutions developed in a silo are often developed with skewed interests, which can cause problems for those whose interests are not represented. Making improvements in one area without cross-functional engagement can compromise performance on other key business objectives.

Implementations are incomplete or delayed:

The improvement effort isn’t done after a few meetings to talk about the problem and a new Standard Work document is created. Often, leaders believe they have committed enough to an issue by investing man-hours and human capital. However, not long after the people go back to their normal work, any bump in performance achieved subsides if the necessary process engineering changes have not been made. With any improvement, it helps to make engineered modifications to the process to eliminate the chance of future failure. This requires the commitment of hard resources (and maybe cash) to get to a real sustainable solution. Not having those resources ready to go leaves the improvement effort incomplete or delayed; either of which only undermines the credibility of the initiative.

Insufficient due

diligence and

resource

commitment to

improvement

opportunities

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Implementations don’t sufficiently capture the opportunity:

The greatest risk to the implementation of any improvement is failure to sustain results. People like to celebrate the moment they see their idea starting to work and then go back to business as usual. This is a pivotal moment in any engagement since the system is broken and ownership of the new process is unclear. Leadership needs to draw new lines of accountability and manage the hand-off between the improvement team and the production team during this phase to ensure sustainability.

Creating a culture that enables Continuous Improvement

The issues (or conditions) mentioned above cannot be eliminated…only controlled. The most effective way of controlling these issues is by being systematic in the way the factory is managed. By this, I mean that the factory needs to deliberately implement and adhere to an Operating System that enables Continuous Improvement before undertaking a full-scale CI initiative. Implementing CI takes years but implementing an effective Operating System takes a few months, if not weeks. The Operating System lays the foundation to build the operational discipline needed to create a thriving culture of CI. Nothing endures without discipline, or consistency of action. Once the appropriate level of discipline is achieved, then Lean, Six Sigma, Agile Manufacturing or any other initiative becomes significantly more attainable. Fortunately, there is a system called the fOS that details the best practices of some of America’s most successful manufacturers. The fOS booklet can be downloaded from the following link:

The fOS – A Guide to World-Class Execution for American Manufacturers

The fOS, or Factory Operating System, booklet is a 30-minute read that provides solutions to the issues most commonly faced by American manufacturers trying to improve factory performance. It is an invaluable resource for manufacturing leaders embarking on or needing to accelerate progress of their Continuous Improvement implementation.

Contact: Calvin L. Williams, MBA, BSIE, LSS Principal / Continuous Improvement Strategist (404) 480-2307 calvin.williams@manuficient.com

Copyright © Manuficient Consulting [2015]. Unauthorized use and/or duplication of this material without

express and written permission from Manuficient Consulting and/or owner is strictly prohibited. Excerpts

may be used, provided that full and clear credit is given to Calvin L Williams and Manuficient Consulting

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