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Factory Management 


PART V. 


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The reengineered organizational team is dependent on any number of external support organizations. The small chart indicates that all three functions have a major role in interfaces with support groups. Engineering interfaced with Purchasing on material quality issues, Materials Management interfaced with Purchasing on supplier selec­tion, quotations, extraordinary expedites and de-expe­dites, and Operating interfaced with Purchasing in many cases by direct contact with our suppliers. I will spend some time on reviewing our Purchasing activities. Because of our high level of material content, our Purchasing group is critical to success. The roles of Materials Management and Purchasing have changed significantly and provided new opportunities in this environment. Interfaces between the organizational team and Purchasing could not survive with the communication delays of the past. Purchasing was not always a willing participant, but we went through the re-engineering process, nevertheless. An example of the econo­mies that can be gained are displayed in Figure 5. Figure 5 outlines the process which we reengineered in the Guadalajara factory by taking order placement activities out of Purchasing and performing that activity in the Materials Management function. The savings are obvious just from observing the degrees of step complexities in the chart.

Without boring you with the lengthy process involved in each step on the Functional side of the above figure, the simplicity of the Planner/Buyer process is relatively appar­ent as are most of the activities (e.g., APVL=PLANNER'S APPROVAL, RCMD=BUYER'S RECOMMENDATION PROCESS, etc.). Suffice it to say that we actually were performing each and every step in the 18 Step process every time we placed a direct material purchase order. Actually we were performing some of them several times over, when someone would have a question, or an error would occur.

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Advantages and Disadvantages

This paper reviewed the organizational reengineering ac­tivities that were put in place to redistribute functional resources directly into the operating shop floor manage­ment organizations. The author has been involved in this process in three factories over the past several years, and the results can produce breakthrough levels of perfor­mance in the organizational activity.

There are some distinct problems that arose as a result of this realignment in some cases. In particular instances of limited resources or critical skill sets, while internal orga­nizational teaming was strong, the willingness to share with other focused factories was not always present. Since focused factory managers were evaluated and compen­sated based on their particular results, there was limited sharing when these shortages occurred. Some expensive duplication of resources occurred from one line to the next, and a certain mentality existed in some managers, that if one line had a particular "bell and whistle," then he/she needed one also. This inter-line communication and shar­ing takes an artistic director to orchestrate cooperation. Individual performance appraisals, compensation, and career pathing become much more difficult with this reengineered responsibility configuration. It becomes very subjective to judge an engineer's contribution, and evalu­ate it against the performance of a line supervisor or the Materials Management person that heroically saves the day by getting the part in at the very last minute. These become hard issues to solve. With the loss of some of our more innovative managers, some of the improvements began to dissolve over time and the new organizational structure began adopting some of the characteristics of the original functional silos. One. possible solution to this is to maintain a nucleus organization to further functional expertise, while distributing and rotating resources to avoid this situation. We are currently doing this for some specific functions, but the jury is still out in this case.

There are some specific advantages to this reengineered, cross-functional management group. Priorities are consistent and easy to manage. Communication is fast, direct and seldom misinterpreted. Decision making occurs at a very low level in the organization, most frequently by the people that are working with the issues on a daily basis. This opportunity to become part of the decision making process is re-energizing to m any employees who have been divorced from the process in functional hierarchies. There is a much clearer understanding of common goals as people with other functional skill sets in other disciplines work together.

Summary

Despite the many other attempts and approaches that we used to accomplish cross-functional teaming, the author's opinion is that putting people on the same team, in the same organization, in the environment explained in this paper, and providing a performance management structure that rewards success for each organization and equally rewards overall operational success, still offers the most significant advantages for success.


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