Generating 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 over achievement of soft
   targets. Someone who just fails to meet a stretch target is rated lower than
   someone who just over achieved a soft target.
  2. Good reasons are excuses for bad performance. Benchmarking usually
  invites responses on why it is easy for the other plant/line to achieve higher
  efficiencies and lower costs- fewer changeovers,a 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 the
  enterprise profitability is not visible. 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 an equipment gives
  quicker and more visible results than a robust maintenance program that
  preserves equipment value in the long run.
  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 means 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 the best practice
  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 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 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 behavior, 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”?