Managing Manufacturing

Thursday, January 21, 2010
Adaptive organizations tune the Organization Characteristics continuously

Vision & Strategy
  • customer first
  • value people
  • quality
  • premium return
  • entrepreneurial behavior
  • the process way
 Structure & Functions
  • production
  • purchasing
  • product development
  • focused cells
  • workplace organization
  • layout
Culture & People
  • shared vision
  • ownership by people
  • problem solving at the source
  • self-management
  • skills
  • personal growth
Systems & Methods
  • process mapping
  • control systems
  • finance
  • measurements
  • logistics
  • problem solving

Not tuning the Organization Characteristics properly results in slack in time, costs and inventories in the total chain

supplier ----- THE SYSTEM ----- customer

Clues :
  • extensive information exchange
  • data redundancy and rekeying
  • arbitrary fragmentation of a natural process
  • many exceptions and special cases
  • inventory and buffers
  • high ratio of contral to value-adding
  • rework and iteration
  • waste
  • high turnover of people
  • high level of absenteeism

Manufacturing should play a key role
  1. Internally Neutral - Make the stuff "get it in, get it through, get it out"
  2. Externally Neutral - Meet the standards - Copy competitors
  3. Internally Supportive - Manufacturing tuned to specific competitive strategy
  4. Externally Supportive - Manufacturing is playing key role in whole company - World class
  5. Internally/externally innovative - Leading edge - Breaking old rules - Creating new rules in the industry

You belong in Stage 1 or 2 if these Characteristics apply to your orgaization
  • "Command and Coltrol" mentality
  • Organization is considered a collection of specialists who operate within fairly narrow job descriptions
  • Sevior management makes major resource allocation decisions (with help of staff and external experts)
  • Role of line managers is simply to operate the resulting configuration of facilities, systems and personel
  • Values specialists, missing capabilities are bought outside
  • Management's primary task is orderly assimilation, exploitation, and coordination of separate sources of experise
  • Organization is hierarchical, primary relationships between people are vertical

You belong in Stage 3 or 4 if these Characteristics apply to your organization
  • Workers and managers are so skilled and effective that other complnies are continually seeking to attract them
  • Equipment suppliers are continually seeking one's advice
  • Being more nimble than one's competitors in responding to market shifts or pricing changes, and in getting new products into the market faster than they can
  • Intertwining the design of a new product closely with the design of its manufacturing process; competitors can only "reverse engineer" with major retooling and redesign expenses
  • Continually improving facilities, support systems, and skills that were considered to be "optimal" or "state of art" when first introduced, so that they increasingly surpass their initial capabilities
  • Horizontal relationships throughout the company
  • Vendor management coupled with production scheduling and quality management
  • Great emphasis on R&D decisions, experimentation, training, building general organization capabilities

How can we create and maintain a Stage 4 organization?
Look around "Vision & Strategy" - Environment - Structure, Functions, Systems, Methods - People & Culture

The Journey starts with re-framing your activities : The Process Way


A tightly coupled process of subsystems
Reduction of Cycle time:
  • processes that create value
  • no fragmentation of work
  • one process owner
  • processes have multiply versions
  • checks and controls are reduced

Rigid execution of the process
Elimination of Waste and Variations:
  • market based cycle time
  • only added-value work
  • fast feedback
  • simplicity in product design and materials and information flows
  • disciplined housekeeping
  • standardize
  • improve process capability

Developing a progressive, people oriented organization
maximize the potential of the people;
  • mini company
  • trainng
  • glass wall management
  • self management
  • develop clarity of vision (core values)
  • develop customer orientation
  • promote involvement of everybody
  • increase problem-solving capability
  • provide adequate leadership
  • clarify the management support system

Three Engines of Change towards Manufacturing Excellence
  • The Process Way Cycle time reduction of business
  • The Quality Way Elimination of Waste and Variations Improvement of product yield reliability
  • The People Way maximize the potential of people

Standardize and Improve;Cycles of improvement
Manufacturing Strategy
  • maintain standards/ways of working
  • improve process/ways of working
*Rigid flexibility


Performance Measurements

  • Shop Floor Mgt. incremental improvements and control (quality, delivery, cycle time, waste)
  • Manufact. Mgt. redesign business process renewal (flexibility, customer satisfaction, productivity)
  • Industrial Mgt. rethink strategy (market, financial)

Journey towards Manufacturing Excellence
  • Managerial Technology concepts/methods/tools/techniques
  • Human Resources skills

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