To remain competitive in the global marketplace, North American manufacturers are constantly seeking ways to improve their processes and lower the labour component of their product costs. One way to accomplish this is through automation. Investing in automation can either reduce the amount of manual labour required or increase the productivity of employees.
Either way, investing in automation usually means investing significant amounts of money in production machinery or equipment. However, if increased productivity without staff reduction is truly a viable cost reduction alternative, a smaller equipment investment may result in a far better return on investment.
A few years ago, my company installed a “production scoreboard” in a local manufacturing facility to try to boost productivity.
The manufacturing company had seven identical production lines making the same product, and the production scoreboard was only installed on one of them. The function of the production scoreboard was very simple: it had to let everyone on that line know how that line was performing, in real time.
This multinational company had identical plants in two other countries, and the plant manager of the local facility was assessed on his plantÃs operating efficiency compared to those other plants. The manager reported that his plant was operating at an 84 per cent efficiency rating, and that the corporate mandate was to increase that number by one per cent over the next year.
In a followup meeting about a month later, the manager was excited to report that the line with the production scoreboard had in fact risen to a 94 per cent rating, while the other two lines maintained the previous yearÃs number.
Sensing a buying signal, I immediately asked when he wanted production scoreboards on the other six lines.
What followed was a surprising, but all-too-typical, response. The manager stated that because of the increased efficiency on that one line, his plant was now operating at an 86 per cent efficiency rating Ã³ one point higher than the corporate mandate. He had no additional funds in his budget for capital purchases, and there was no need to spend any more money since he had already exceeded his goal.
Fast forward to a couple of years later and the multinational company closed the local plant. All three plants were performing reasonably the same, but because of an overall industry downturn, one plant had to close. I often wonder if the plant would still be open today if the production scoreboards had been installed on the other six lines.
Production scoreboards work for one simple reason: people instinctively like to measure their own performance and take pride in doing so. People like feedback. They like to know the score.
Consider for a moment the typical hobbies and pastimes in which people choose to participate in their spare time. Many choose to play golf. Some choose to watch golf. Others prefer to watch or play baseball, football or some other sport. All of these are performance-measuring pastimes. Whether people are measuring their own performance and participating themselves, or living that experience vicariously through their favourite athletes and teams, they are eager to measure and know all of the performance-related statistics in the hopes of ending up on top. We love to measure performance; we love to compete; and we love to win.
Why is it, then, that so many North American companies seem to want employees to check their brains and pride at the door?
Management will measure their performance and management will let them know the score when they think itÃs appropriate. This brings up a second perplexing question: Why tell employees the score when itÃs too late to do anything about it? Once the month is done, or the week is over, or even when the shift is finished, it is too late to improve upon the time that just transpired. Imagine playing basketball without keeping score, and at the end of the game being told that you lost by four, six or 10 points. If the team knew the score during the game, they would still have a chance to improve their performance, and by doing so, improve the end result. Imagine a game in which one team knows the score the entire game while the other team is only told at the gameÃs end.
Which team would you bet on?
A good production scoreboard should tell the score in real time. It should compare what has been accomplished to what is expected.
The cost of production scoreboards is relatively small compared to the cost of replacing or updating most production equipment.
Considering that the biggest continuing investment most companies make in their production facilities is the wages they pay to their production staff, doesnÃt it make sense to make sure they are self-motivated? If the production teamÃs performance is improved only a couple of percentage points, how long will it take to pay for that investment?
People have an innate desire to strive to achieve a goal. It shows up naturally in their hobbies, their sports and their recreational activities. DonÃt require them to check this pride at the door of your manufacturing facility. You want all of them when you hire them Ã³ their skill, their labour, their brains and their passion to achieve results.
Manufacturing is a competitive game. Employees should know the score and be given the opportunity to improve.
Paul Hogendoorn is president of OES, Inc., of London, Ont., and past chair of the London Region Manufacturing Council. OES specializes in quality and productivity improvement solutions for the automotive manufacturing industry. Paul can be reached at email@example.com or (519) 652-5833.