Over the last 20 years I visited numerous manufacturing plants in the United States, Canada, Mexico, Venezuela, Peru, Spain and China to evaluate performance issues and workplace organization. I had the opportunity to look closely at their operations and see both the positive and negative aspect of those operations.
While each plant had its own strengths and weaknesses, one fact was clear: many of the plants had undertaken some form of workplace organization, some had implemented 5S. None were obtaining the results they desired when undertaking the effort. Some only practiced it when Upper Management was scheduled to visit, others only made half hearted attempts to implement 5S and few had any serious and lasting follow up
They were in effect merely going through the motions such as writing it into their mission statements, management loudly proclaim its virtues but taking little interest in the day to day mechanics, and claiming to have created a visual workspace when in reality all they did was little more than create signs. Clutter and unneeded items were for the most part still evident and employee had little apparent understanding of the need to keep it free of unneeded items
The fact of the matter is that we know what needs to be done. 5S is a lean manufacturing approach to manufacturing based on the Toyota Production System. The job of management in lean manufacturing is to identify and eliminate all forms of waste, including:
- Over production – producing over customer requirements
- Inventory – holding or purchasing excessive materials
- Transportation – unnecessary handling
- Waiting – time delays or idle time
- Motion – actions of people that do not add value
- Over-processing – unnecessary processing steps
- Correction – producing scrap or parts that require rework
- Not using human resources – not implementing the ideas / suggestions of employees.
- There are many impediments to the implementation of lean manufacturing and especially to proper use of 5S principles and practices:
- Incorrect plant performance measures
- Wrong focus – too much attention to results, not enough on improving the processes
- Lack of confidence in worker’s abilities to recognize and resolve problems;
- Unwillingness to invest time and resources into correctly implementing 5S
- Failure to recognize their survival obligation to all stake holders and that change is the key survival.
Incorrect plant performance measures
Performance is impacted by many factors, especially when the focus is on the short term. Most of these factors are beyond the immediate control of management. Cash flow (the life blood of any company) is impacted interest rates and can have a dramatic impact on your plant’s profitability. Government policies and over regulation impact profits in many ways. In addition, sales volumes or product pricing impacts the profit level of a plant. When these factors positively impact profit, the operation is viewed as successful, and generously rewarded even if management practices are ineffective and wasteful. When they have a negative impact on profits, even the best managers are often viewed as abysmal failures and removed from their position.
Worst of all, profit measurements are easily manipulated through “cooking the books”. In most of the facilities that I visited, it was very common and obvious that management was manipulating inventory levels in one form or another. One plant manager told me that while he wanted to reduce inventories, to keep his efficiency ratings high, he was had to over-produce during slack times. This led to higher inventory levels which if reduced to proper levels would have a negative impact on his profitability measure. Too great a focus on Profitability as a performance measurement typically results in short-term thinking. What incentive is there for a company that driven by profitability measures to invest in a 5S project which might have higher costs in the short-term has the potential for significant savings in the long term?
People tend to do what they get rewarded to do. If their focus is on equipment utilization rather than on customer demand, the equipment will be run at full capacity, despite actual demand. The result is overproduction, which is the basis of virtually all manufacturing waste. Focusing on accountability for machine utilization has the undesirable effect of increasing waste.
In order to effectively and continually improve performance and eliminate waste, all processes need to be analyzed understood and then controlled. The measurement of process effectiveness will shift the focus to long-term improvements like 5S and will allow companies to reward managers for real performance. Measuring results on the other hand only promote manipulation and short-term thinking.
Lack of confidence in worker’s abilities
When management is unwilling to develop their employees and allow them the freedom to manage their own processes, they will miss the opportunity to capture the full potential of the organization. I am a firm believer that the solution to every problem that a company or plant faces, is currently located with in the four walls of that facility.
Unwillingness to invest time and resources into correctly implementing 5S
Management is driven by two things:
Anything that interferes with either one is seen as an enemy of management, as a result many managers only give half hearted support to new ideas and projects they are not familiar with. This is compounded by the fact that most people who propose a lean initiative such s 5S don’t take the time to encode it the language of the business. They speak to generalities and the successes of other organizations. They fail to make a legitimate business case for the change. Managers have legitimate questions like:
- How will this impact the budget? Is it a legitimate investment opportunity or just another flavor of the month?
- How can we minimize the impact on the schedule and still provide the people to plan and implement 5S? Where do the extra people come from? Etc.
Many managers simply do not believe in the effectiveness of lean manufacturing and 5S in particular. Many of the managers I talked with defended poor manufacturing practices they routinely employed in order to keep their productivity numbers high and their bonuses on track.
Failure to recognize their survival obligation to all stake holders
Many managers feel that change is unnecessary. The company made money before the recession, and the good times will return when it is over. The focus is often on job security rather than employment security, the problem is, there is a sea change taking place in the world economy and companies are facing global competition like never before. Many managers fail to see the change that has occurred and the threat it brings to their very survival. They prefer to stick their head in the sand rather than address the need for their very survival – after all, the government will bail them out! The fact is jobs (including those of managers) are changing and managers better shift their focus to securing their employment and let the job change as needed.
One of the key elements of the manager’s job was control, which has been modified to include empowerment. In order to survive and remain employed, managers must give up a portion of their control to employees by letting them control more of their work area and work flow. 5S is an prime example of how to effectively empower employees while retaining necessary control over budget and schedule.
Producing Desired Results
If the plant is operating effectively (and you have properly linked operational measure to financial goals), profitability will follow. The key to making 5S produce the desired results is to link it to the goals and strategic objects of the company. The primary goal for most companies is to make money by producing a product or service that meets the needs of its customers. This fact often gets lost in the vision statements and lofty purpose statements of management. The vision should be what your company is going to do in order to meet that goal of making money. The Mission statement is how you will meet it. Typical purpose statements uttered by various levels of management that do not reflect the vision and mission statement merely confuse and divert the attention of the people who have to carry out the mission. The solution to this problem is the use of strategic thinking in order to define the needs of the business according to the stated vision and mission.
The next element in ensuring success, is to refocus the workforce on a new set of measurements and processes that are focused on increasing throughput, decreasing inventory and reducing operating costs. This means totally abandoning many of the traditional measure like efficiency and looking more to effectiveness instead. This will require analyzing your processes for the value they add to your products or services. In the short-term, this may lead to an increase in non-productive time. Smart managers will take advantage of this slack time to develop better uses of this non-productive time such as training, Total Productive Maintenance, team building, and continuous improvement activities. Proper training and management will alllow workers to spend their downtime improving the processes that they work on as well as their workplace. By eliminating wasteful, non-value added activities like overproduction and empowering and training your workforce, your company can improve their competitiveness and ensure its survival.
Your employees and their supporting staff will need all the tools and techniques of lean manufacturing and 5S practices to sustain, self-audit and continuously improve the workplace and their jobs. They will need a well thought out and planned program that is supported by management at all levels. Keep in mind that the most commonly missing element is often management commitment. If you invest everyone’s time and commitment in 5S, and a few individuals fail to maintain the standard, the program will collapse. Management must support the program with policies and procedures that are enforced.
Regular oversight also is required to ensure that the processes are working as intended or changed in a controlled fashion when needed. Management must not only commit the resources, they must commit their time to get involved. They must lead from the front and have a high visibility in the workplace.