Lean Manufacturing: Productivity

The last resource to evaluate, and one of the most important, is management. Management is the group of people within your business who are responsible for setting clear goals, and making commitments. From this group we expect a mission statement that includes operating goals for at least one year. We expect them to have a general business plan that is reduced then to a production plan, which in turn becomes the master production schedule. Management is required to lead, not simply to tell. We cannot have management operate as authoritarians, who only focus on power, and do not lead or support. On the other hand, we can't have management that is overly permissive, because they only want to be liked by the people. Permissive managers tend to give away power, make no decisions, and yet accept all the responsi­bility. This is an untenable position as well. We want our management to be like a coach. One who is interested in our success, who will give us very honest and critical feedback, and help set goals that we participate in. Good management should be leaders and supporters. They should jointly establish common objectives and certainly share the responsibility for those objec­tives. We want to believe that our management is always striving for the best. You are part of management if you participate in any of those activities.

A second area of management that is essential to successful business operation is the sharing of information. From the day we begin establishing common data base systems, the focus has been that the information should be correct, the system should be open, and it should be truthful. We have always fought the issue of the informal system versus the formal system, recognizing that only though formal operation of a business can we be efficient and productive. At the same time, we fail to stringently focus on good information. When the information through the data base fails the people, the informal information system will once again establish itself. If our people utilize this methodology to gain information they become very unproductive and ineffective. We must mandate that there is a good, common data base.

Third, management must make things happen. You must make things happen within your business. Any business that is standing still is actually going backwards. We all need to be movers and shakers. We cannot tolerate, nor accept the status-quo. We must learn the techniques and support the people of our company. We look to management but we should also look to ourselves to create a vision and support the people as we go forward in our quest for productivity and efficiency. And we must make sure that a system exists to reward us for those accomplishments or else we will have little motivation to do so.

What of the future? What does it hold for us? Gene Hanson in his annual newsletter for the Small Manufacturing SIG group said when looking to the year 2000, "As the labor force ages, wages and total compensation reflected in the additional cost of benefits are both expected to increase significantly relative to increases in labor productivity. Since productivity per worker is lagging well behind wages, nominal wages will increase. This reflects the general increase in inflation expected to average about 4% per year through the year 2000. All business will face rising nominal wages and those businesses that succeed in raising productivity to a greater than average extent, will clearly be able to compete more effectively because their total cost and presumably their prices will be rising less rapidly than average." Productivity in the 21st century will be the key. It will be the source of economic and political power throughout the world. No longer will weapons be a source of power for nations. If you doubt this, simply lookat the events in Russia today.

The United Sates needs continued increase in productivity. We need this to insure that the standard of living will once again begin to increase in this country. We need productivity to insure future opportunities for our children and our grandchildren. We also need productivity increases to offset the effect of shrinking human resources in the future. In other words, we need productivity increases to survive.

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