It’s all about the data
I’m a big believer in measuring what you want to improve. Measuring gives you data, and trends emerge from the data. The trends can be good or bad. Figure out what is causing the good trends, then keep doing that. Maybe you can even find ways to make the good trends better. Figure out what is causing the bad trends, and find ways to stop doing that; or at least minimize it.
I can’t imagine anyone arguing with the logic stated above; yet most companies I work with don’t do this. In fact, they are nowhere close to doing this. They manage with emotion: This process feels right; I think that employee is a good employee; this job is a real money loser, etc. I’m not against emotions when it comes to evaluating a process, employee or job; I’m against only using emotion. Feelings should be developed based on data, and feelings should fill the gaps where it’s not practical – or it’s impossible – to have data. For example, how many pieces an employee produced an hour is data; how you feel about the employee’s attitude is a feeling. This is a balanced, appropriate look at an employee.
So, on one hand, the logic of the need for data is sound. On the other hand, many companies don’t follow the logic. Why does this condition exist? It’s culture. If a company is running without the proper data and they are successful, that success reinforces the bad habit of not having data. This could go on for years; constantly reinforcing the bad habit and forming the culture. Once it’s the culture, it’s hard to change because people don’t like change. Change is unsettling; people like consistency.
This can’t go on forever though. Eventually, the lack of data catches up with companies. It manifests itself in declining on-time delivery, quality, revenue or profit. These bad trends help management focus on what had been there all along: a lack of data.
Enter the Weekly Manufacturing Production Report
Fix the lack of data by creating a Weekly Manufacturing Production Report. This report is broken down into two categories per employee: Direct time and indirect time. On the direct side, efficiency is calculated by comparing how long the work an employee completed should have taken, to how long it actually took (estimated time/actual time=efficiency). On the indirect side, how much indirect time did the employee have compared to what their budget was.
The weekly detail is summarized for each employee. The summaries are rolled up to departments. Departments are rolled up to supervisors. Supervisors are rolled up to the next level of management; all the way up the chain of command.
If all you do is create this Weekly Manufacturing Production Report and distribute it every week, you will see it has zero effect on the plant’s performance. The magic isn’t the report, it’s what you do with the report. This entire process I’m about to describe is designed to help supervisors understand how the actions of their employees affect the department’s performance. It’s a “scoreboard” for the supervisors and employees. If there is no scoreboard, what is the motivation to improve? How does anyone know if changes help or hurt performance? How do employees know if they are doing better or worse? Seriously, what fun is it when there is no score? Sure, you don’t feel the pain of a loss, but you never experience the thrill of a win either. The scoreboard provides facts; and that’s the goal – working with facts.
How to use the Weekly Manufacturing Production Report
To engage the supervisors in this process, they need to provide weekly feedback to the person they report to. The feedback is pretty straightforward:
- For any department that falls below 100% efficiency, they need to provide the top three reasons why. There may be a dozen reasons, but just focus on the top three.
- If more indirect time was reported than was budgeted for, explain why.
This feedback creates a list of what to focus on. They’ll find labor estimates that need to be revised, employees that need to be trained, procedures that need to be sharpened. They are usually surprised how much indirect time is reported. The whole experience is eye-opening for everyone. This is how companies use data to improve. They keep chipping away at it.
A word of warning: None of this is done to punish anyone. If upper management turns this data into a weapon, the magic goes away. It becomes confrontational, not instructional. Instead of becoming a solution to problems, it becomes another problem.
This is part of a bigger picture
The purpose of this blog post is to introduce the high level concept of what should be in a Weekly Manufacturing Production Report. You may have some roadblocks that get in the way of doing this. For example, do you have standard rates for operations? Are you collecting labor data? Do you have one integrated system to keep all the data? Maybe you just don’t know where to start. Whatever the case, this is how we help companies. You can start with a free 30 minute conversation with me. I assure you, it won’t be a sales pitch.