From Firefighting to High Performance in Manufacturing
In today’s world, as manufacturers we have learnt that we must manage multiple disruptors to minimize supply chain problems. However, whilst many profess to be agile and in control, often when you look beneath the surface the fact is they simply have a great team of firefighters.
Disruption can come from multiple areas, examples of which include technological change, events like Covid, inflation, environmental concerns, as well as self-inflicted problems such as poor-quality demand intelligence and under-investment in maintenance. Whatever their source, they cause significant volatility that needs to then be controlled. The question must be ‘how many of these disruptions could either be avoided or better managed?’.
Managing a disruption in real-time is firefighting, and it is a time-consuming, costly distraction even when done well. Avoiding the disruption, so management can focus on strategy and driving higher performance, is what being High Performance is really all about.
What is in question is how we deliver excellence by moving from firefighting to high performance mode. Several things need to change to allow this to happen.
The first element is looking at your whole end-to-end supply rather than simply focusing on your own business assets. Lean manufacturing does not equal having a Lean Supply Chain.
Whilst manufacturers may in their own rights be excellent, often failure will come from external resources like suppliers, logistics etc. For high performance, manufacturers need to set up end-to-end visibility of their whole supply chain, with a planning approach also based on end-to-end taking into account critical constraints.
The second area is being laser-focused on what the future customer requires and how this relates to new capabilities, new supply chain designs, re-optimization. Optimization in terms of the portfolio, but also in terms of equipment, supply chain partners, and potentially people who do not have the required future capabilities.
It’s critical that visibility is sufficient to make significant changes. An example is the change that the tobacco industry has gone through in the last few years where many are struggling with the move from making a traditional cigarette to now making an electronic device.
Related to this is the need to see technology as a disruptor, and to deliver high performance manufacturers need to understand how to embrace this disruptor successfully.
Finally, manufacturers mustn’t lose sight of the basics in terms of measuring to improve and drive end-to-end performance improvement, rather than measuring to confuse with lots of metrics with no clear purpose.
Measurement has a key role to play when it comes to delivering high performance, particularly as too often measurement is used to justify a position rather than drive business improvement.
The starting place must be an aligned hierarchy of measurement that truly drives the desired business outcome and not one focused on functions. Ensure a balance between leading and lagging indicators, where the leading indicators provide visibility required for decision-making, and lagging ones focus on real improvement.
The challenge on lagging is that I still see too many companies that are focused on a percentage outcomes headline (eg: ’97 percent manufacturing schedule adherence to the day’) and whilst this looks good it hides opportunities for improvement as percentages are misleading when it comes to parts per million defects.
It’s time for manufacturers to ensure they are seeing beneath the surface as this would lead to greater predictability and hence lower cost to serve. It’s critical that manufacturers have visibility across multiple horizons to ensure sufficient information to make change when change can be effective. Poor visibility leads to short-term disruptions that arguably should have been avoided.
By Les Brookes
Les Brookes is a partner at business transformation consultants Oliver Wight EAME. Oliver Wight is a world leader in IBP consulting (Integrated Business Planning). Its approach is quite different from other consultancy firms. Change isn’t something it does do to you, or for you. Instead, its industry experts transfer their knowledge to you through coaching, mentoring and education workshops, so you learn how to make improvements yourself, and continue to do so long after it has gone.