With all the brilliant minds that write books and coach manufacturing leaders, there is still a high rate of failure each day in the industry. I still hear managers and corporate leaders blame the workforce for poor performance. When I walk into union shops, that’s the first thing I hear. Now, to be clear, I am all about the company. But the union is just an entity. The workforce is still made up of people. They have the same needs and wants as managers. I’ve had the opportunity to transform several businesses and it all starts with people (going to the Gemba, where the work is done). This doesn’t mean taking a monthly tour with your entourage - it means getting down on the floor and asking questions. Look at where you have safety and quality issues. There’s probably a correlation between the safety and quality with cost and delivery. Hmmm, you say…. of course there is, we know that, why read any farther? Well, if you know you have these issues, and you’re not able to fix them, there’s a leadership problem. If you’re a leader, look at yourself. Although there have been several studies indicating leadership as a key factor in continuous improvement implementation success and that leaders may have a direct effect on their employees buy-in and involvement in implementing change, we still have a 70% implementation failure rate in the US. If you think everyone other than the guy in the mirror is an idiot, you’re dead wrong. People (employees) want to have accountability. But more than anything, they need to feel that you have their best interests at heart, meaning safety. Several decades ago Abraham Maslow developed the hierarchy of needs. Notice where safety is. In many businesses we have a problem: we think we can move around all the stuff that’s hard, and then when it fails we say, “well, that doesn’t work here, we’re different.” News flash, it works in businesses just like yours someplace else in the world, the difference is, the leadership. For instance, the traditional hierarchical structure of leadership in manufacturing keeps problem solving and implementation of process improvement initiatives at the management level. Autocratic management practices mean that leaders make decisions independently with little or no input from employees, which in turn means initiatives and decision-making are less creative and further removed from what is important to the employee. Most often, we hire people out of college or promote them from their jobs to be supervisors and we don’t train them. I often hear of companies afraid to send people through training because it raises the chances those people will leave. However, if you don’t train them, what do you have? Think about the lack of leadership skills, problem solving expertise and experience, just to name a few. The cycle should be to train, coach, and mentor. In addition, if you take care of employees, they are less likely to leave (even if they are offered a little more money elsewhere). The result of failing to train people to be better supervisors and managers causes a multitude of issues that lead to poor relationships and attitudes between the people doing the work and the supervisors. This further leads to poor production as well as high turnover. I recently had the opportunity to meet Ritsuo Shingo, son of Shigeo Shingo (creator of SMED and co-creator of the Toyota Production System). It was a very humbling experience. He truly is a leader. What’s makes a leader? Well, you’d follow them into anything knowing they have your back. Ritsuo gave several lessons on the Toyota Production System and leadership. Leaders are developed. I was so impressed, I asked Ritsuo to do a week long leadership workshop in July in Santorini, Greece, and he accepted (www.leantac.com for details). Not only is he a leader, he wants to share his experiences with others to better prepare the next generation of leaders to be successful.
by Tom Lawless, PhD, MBA, MCE, CLSSMBB
Facing with a balancing act between the seemingly unending need to satisfy Customer demands while reaching and sustaining Corporate Profitability. By determining the apparel company’s true asset and properly adapt to the new changes, the company will be in a better position for continuing to grow and to meet ongoing operating needs. In this context, workers are the most valuable assets of any apparel company to maintain this balance act.
Currently the workforce development both in Nationally and Internationally is still based on some old development methods copied across the apparel industry, where it was once possible to meet financial goals basically, through motivation and hard work, mostly this has started in the days of quotas where things were simple and easy but not anymore.
With the ongoing changes in the marketplace and new business trends, success in today's apparel industry depends on workforce flexibility to meet the non-ending change in business trends and a willingness to learn and adapt. If Apparel Industry is to succeed, it requires workers who have a range of technical and business knowledge to understand and adjust in meeting corporate goals.
Since the new lean manufacturing era requires different skills and place new expectations on its workers, the companies and development programs that train those workers have to change and adapt as well as per company needs and new lean structure. When correctly implemented, this will transform low-skilled individuals into focused, quality trained workers. Also, since workers are the most valuable assets; it is obvious to adapt in order to quickly replace an asset during a given time (labor turnover) to reduce an inexperienced workforce and many additional expenses for a company related to labor turnover.
Factories must develop and implement an effect Human System to adapt workers to the concept in order to maintain and improve practices and processes meeting factory's core objectives otherwise productivity collapses.
Business organization requires an unified management system where Core Strategic objectives are defined and set, assisting people to target the cost at initial stage, to evaluate results and take appropriate action as necessary in order to meet core strategic objectives that covers companywide activities to acquire profit in the short and long - term. This illustrates the importance of the right areas and activities being targeted, measured and improved. In summary, the ultimately purpose of performance management being to drive future improvements meeting the core objectives.
Currently, manufacturing industry is composed of group of six primary resources such as: services, work-methods, people, equipment, infrastructure and raw materials; the six resources are interrelated and the level of optimization and the performance of these resources yield to the performance of the business towards the core strategic goals. The saying is easy to understand; practically, it is complex to measure results in the purpose of improving causal factors. In this regard, factories have developed and implemented series of KPIs to monitor results some of them have no link to the strategic goals or independent; measuring results only without action is not enough as opposed to the purpose of performance measurement.
The selection of KPIs has a major impact on the operation and direction of the organization and information of the factors driving behavior and influencing performance; this becomes crucial. Each organization needs to be unique and KPIs should reflect its internal and external key-drivers. KPIs should focus on topics that are important and be at all-time clear about what is seeking to achieve – its core strategic objectives- and how is going to achieve them. KPIs should focus on the actions and services provided at each level in the organization to achieve its common objectives.
Conclusion - Performance Measurement is a system thinking to provide much important information for understanding and improving Standards especially at corporate and operational and day-to-day matters. Also an important rule is that organizations should be careful in defining the KPIs drivers and key – Factors. The best method been applied in lean organization is the use of “3D Box Score”; three dimensional information chart covering operational, Manufacturing Resources utilization and financial keys.
Factory managers find themselves trapped between steadily rising production costs and product requirements and the equally intense downward pressure on the prices their customers are willing to pay. At the same time, customers are putting heavy emphasis on the social compliance of their suppliers which is currently characterized by low and delayed payments for workers, excessive working hours and poor worker/management relationships. So not only are factories challenged to implement systems that enhance productivity, they must also make investments to satisfy social compliance requirements on a long-term basis.
Most workers have already acquired basic technical skills, factories can in fact make major improvements in their production lines once management and engineered thinking is in place. The irony here is that even when plant engineering improves, it is the line workers who are receiving the least recognition for their contribution and hard work. In most export-countries, workers’ wages have been frozen and management is turning a blind eye to the importance of happy employees.
Tomorrow’s factory can no longer rely on experience gained on the job. It requires a scientific approach where every second or minute of the hour must be analyzed and planned in order to ensure the maximum of value-added production. Given the current state of most garment factories today, it would be very difficult for most to satisfy the expectations and requirements of their buyers, whether current or in the future.
Lean manufacturing is the solution. But successful Lean implementation requires patience and tolerance from all involved. The reward will come in the development of not just sewing skills but the entire worker, an essential asset to any company which seeks to compete in today’s marketplace.
There are countless factors affecting the factory’s financial performance and buyers’ satisfaction. Relying on existing management and workers to improve those factors – as well as turn out daily production output – is virtually impossible. It also doesn’t help that in most garment factories today, management works to control rather than support. By focusing on the physical capabilities of the workers, management has actually taken away the ability of workers to think. The irony is that working around sewing operators to achieve improvement is the area where the least gains can be attained.
Monitoring manufacturing costs by controlling production line output is not enough to ensure plant profitability. Many other unnecessary overhead costs must also be controlled, including: additional space required for overproduction and inventories; excessive handling, evacuation and/or manipulation; underutilized labor and machinery; over-reliance on manual record-keeping; lack of flexibility; overly complex planning and synchronization of manufacturing activities; too many process stages creating too much work-in-process (WIP) and retention time; and unbalanced flow, to give the principle categories.
For a factory, selling price is currently established by the following formula:
Selling Price = (Actual Total Manufacturing Costs + Desired Profit)
In today’s buyer’s market, it is the buyers who are imposing the Selling Prices, leaving the factories with less profits but not less costs. Unless they make active efforts to cut costs, factories will struggle to find other ways to improve their bottom line or grow.
Selling Price is more or less established by market forces, in this case, the buyer. Desired Profit is derived from the factory’s internal accounts. The only variable element in the equation is Cost. Factories must start with accurate estimates for Selling Price and Desired Profit and then design, define and plan costs in order to meet those two estimates. The formula now reads as follows:
Manufacturing Costs = (Expected Selling Price – Desired Profit)
Without a comprehensive and aligned effort throughout the plant, it is currently simply too difficult for factory personnel to identify areas and opportunities for improvement. Today, most apparel factories are focusing on traditional key areas such as line output, bundle throughput time, lead time and end line quality to measure performance.
improvement objectives of the garment industry today revolve around lead time
and cost. Total lead time results from a
combination of materials and information flow and the overall efficiency of the
manufacturing processes. Cost is the
result of all value-added activities as well as a fluctuating quantity of
numerous non-value-added activities that occur anywhere in the manufacturing
chain. Put simply, if non-value-added
activities (hereafter known as Waste) are not adequately controlled and
minimized, profits are reduced. The
amount that manufacturing costs can be reduced is therefore a reliable
measurement of the financial performance of the plant as a whole.
The new wave of buyers and survival element to factory articulate around Just-In-Time. As we said previously 2 things can not be changed (your organization Profit and buyer selling price) Cost is the only variable left in the equation. How can factory control the manufacturing cost in the absence of standards? In the short run, buyers are on the moving-forward requesting factories to transform their manufacturing facility to Lean Structure.
In the garment-export-world today, there are many local consultants claiming to provide Lean Manufacturing consultancy services who do not completely understand the philosophy behind Lean nor its principles. Their clients accept them because they themselves lack sufficient knowledge about Lean. When the improvement efforts end in failure, these unqualified local consultants leave garment factory owners hesitant about Lean being suitable for their operations. The factory owners end up thinking that Lean might be all right for Toyota but maybe it’s not applicable to the garment industry.
To develop a successful change strategy for the entire factory