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Manufacturing Management Training

World Class Performance 


PART IV. 


 

Unclear vision and lack of understanding of project scope, steps to success and benefits

Often the difficulties in the project revolve around some very fundamental issues. An unclear vision by the senior management team of where the company is, where it can be, and the steps to take it to that level of performance is very detrimental to project progress. As discussed before, a technology or downsizing-driven project is doomed to small returns. Rationalization and ego cause difficulty in self-examination. But probably the worst fault and where the most opportunity is never realized, is taking a strategy and applying only the elements we want to do.

World Class Manufacturing and its elements, MRP II, JIT and TQM, are integrated, interwoven strategies whose elements combine to produce results greater than the individual elements. You cannot expect to address 50% of the individual elements of this strategy and get 50% of the results. For example, if you do not have data integrity, you will not have an accurate schedule and MRP II will fail. If you do not embrace total employee involvement, problem solving, and continuous education, quality at the source will be in trouble.

Companies cannot pick and choose what they like out of a menu—what is easy, non-threatening, or involves minimal time—and expect the big payback. To be successful re­quires a significant effort on the part of all people with senior management end responsibility for success.

The lack of understanding of the benefits of the project and a formalized return on investment greatly affects project results. A formalized return on investment is a powerful tool in getting the resources and priority justified based upon the large results that can be achieved.

Having a lack of a formalized cost justification and commit­ment of time and resources projects degenerate to a project-of-the-month or non-events. The people and project teams spin their wheels and don't make significant progress. Priority, resources, etc., are all earned by management's believing that the return on investment is higher than other priorities. If you do not have continual senior management visibility your world class manufacturing projects lose their management leadership. There needs to be recognition and visibility that the company will lose x amount of dollars per month by not achieving world class performance. In this environment you get the resources and commitment to get the job done right on time.

But all cost justifications are not equal. If that were true all we would need to do is hire an expert and have them evaluate our company's performance and assign a value to the changes associated with the project.

Hiring an expert to do a return on investment and a assessment process for your company is like hiring some­one to exercise for you while you drink a six pack - it may feel good now but wait until the morning! The commitment and priority is never developed by senior management through an analysis of the business and the opportunities available.

The process of developing a common understanding and commitment by working together as a senior management team to evaluate the value of the project to the company and developing a senior management action plan is very pow­erful. It builds teamwork and ownership of the project by senior management. The process earns the right to lead­ership and resources and also builds an understanding of the scope of the effort. A worldclass manufacturing project cannot be a one person or a ten person effort. In most cases, planning and direction account for 50% of the benefits. This is the responsibility of senior management. Conse­quently, they need to be directly involved. The best projects build an understanding company-wide and converts that understanding into activity. All members of an organiza­tion work together as a team to continually improve and challenge the status quo to produce results.

But, how do I get this process of senior management's understanding the return on investment to occur? The best way is to use an applied strategic level education process combined with performance benchmarks. Applied strate­gic education is best done by a professional-led education experience in a public or in-house venue. This type of course covers world class manufacturing concepts and their application. It also discusses the steps to be success­ful. The applied segment of the education requires that management teams "work" the understanding and develop a return on investment and action plans.

Not knowing a better way to run the business

It never fails to mystify me in visiting 50+ companies a year, the basic lack of understanding of fundamental issues in running a manufacturing business. In addition, many businesses use the "uniqueness" theory: We do something different; thereby, proven solutions used in many different industries will not work. There is always some small reason why common sense will not work in my environment.

What happens in these environments is that the funda­mental understanding that people's performance is depen­dent only upon the way we run the business, is lost.

Individuals—not management processes and culture— become the focus and are the reason for performance.

Having the best people in the world, a business will achieve greatness only if they have the environment in which to succeed. Based on their experiences and knowledge, people make logical decisions to meet the company objectives. If they lack knowledge and direction, or if their experiences show that politics are critical to success, for self-preserva­tion they will protect their performance and not take risks. This is a recipe for failure in a project dependent on change.

To be Continued


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