Creating Real Value at the Shopfloor

“Price is a customer’s opinion. Cost is a producer’s fact. The ability to influence the opinion grows with more control on the fact.”

Cost Effectiveness Programs have been at the core of every business, as they seek to improve competitiveness, attract and retain more and more customers. Companies like Toyota have made this a critical differentiator and a strategic advantage. Yet manufacturing excellence is mostly a top down exercise forced down the shopfloor’s throat, with more failures than successes. Why is this so? I call this the seven sins of management.

1. Rewarding and recognising the “whats” and not the “hows”. Performance assessment practices tend to reward overachievement of soft targets. Someone who just fails to meet a stretch target is rated lower than someone who just overachieved a soft target.

2. Good reasons are excuses for bad performance. Benchmarking usually invites responses on why it is easy for the other plant or line to achieve higher efficiencies and lower costs, fewer changeovers, better technology, etc. The underlying reasons are always in the sphere of influence and never in the sphere of control.

3. Efficiency over effectiveness. Incremental improvements of ineffective processes do not impact the bottom line. Typically, cost benefits are tracked on Excel sheets by the manufacturing team, and the overall effect on enterprise profitability is not visible. A classic case of players becoming their own umpires too.

4. Technology is an enduring asset. An engineer’s belief that technology is a better enabler than people. A capex spend to replace equipment gives quicker and more visible re

5. If it ain’t broke, don’t try fixing. The lure of the comfort zone. A fear of failure prevents making a change to improve. After all, consistency matters, even if it means being consistently less efficient.

6. A lack of bias for action. A culture that places a premium on knowing rather than on doing would mean armchair engineers who can tell you what went wrong rather than act to prevent it. After all, “I demonstrate expertise by diagnosing something that has gone wrong.”

7. Discovery over implementation. A premium on discovering best practices rather than “copying with pride what works elsewhere”. Any best practice shared usually invites a response: why is our apple not an orange?

A culture of continuous improvement thrives on aligning people’s passions behind the right targets. It involves leadership at the Gemba, prioritising methods over results, ruthless intolerance of mediocrity, everyday curiosity, practice over perfection, celebrating “failing fast and learning better”, prioritising effectiveness and efficiency equally, and above all, a discipline for execution.

Leaders enable this by asking the right questions:

1. Instead of who is wrong… are we having the right skills?
2. Instead of what went wrong… what are we learning from this?
3. Instead of how can we do this better… are we doing the right thing?
4. Instead of are we winning… do we have a winning team?
5. Instead of are we hitting our numbers… are we getting better than yesterday
6. Instead of what we plan to do… what are we doing?

Culture flows from the top. By demonstrating consistent leadership behaviour, you turn belief at the shopfloor into conviction. Values need more demonstration than articulation. They need to go beyond the mere symbolism of “Star performer” notice boards and “well done team” messages. It means holistic performance appraisals, robust benchmarking, a ruthless commitment to removing anything that is not value adding, a belief that people are the enduring assets, unsettling the comfort zone, a bias for action, and freedom from fear of failure.

The ultimate test of leadership’s change agility is a chess analogy. How many times have you asked, “Is it time to sacrifice the queen?”