Effective Management of Change (Part 1)
As more and more companies commit to the digital age in computerisation of their factory floor data, the management of such radical change becomes even more important.
We have been installing systems now for more than 40 years, with our own continuous developments enabling much more of the factory paperwork to be eliminated to a point where the hitherto elusive Paperless Factory is now a reality.
Does this mean then that we have no further challenges or developments to improve still further?
Definitely not! Though our system grows continually, so do our clients’ requirements, due to their own internal improvements in risk management and efficiencies and/or increasing demands from their customers, the retailers, caterers, and product end users. Consequently, we always have a backlog of several months of development projects on the go.
For FMCG manufacturers, producing consistently high-quality products has long since ceased to be a game changer or a reason for preference, but is now an absolute expectation, a given.
Consistently high quality, therefore, cannot be relied upon to generate extra income through greater sales volume, so price for comparable products on the supermarket shelf becomes the biggest, if not the only true differentiator.
So, with rising raw material costs, increases in the living wage, forced increases in pension contributions, the depressed value of the pound, coupled with little chance of the retailers being willing to accept price increases, how do you remain competitive and sustain, even improve the Bottom Line?
By continuous improvement and reduction of risk and wastage wherever they raise or could raise their ugly heads.
Agreed, this is much easier said than done. If it was that easy, you would have done it already. Doubtless, you have already made many improvements in order to get this far and to stay in business. You’ve gobbled up all the low hanging fruit, or at least we hope you have, so now it’s about challenging the less obvious or even the invisible losses.
Whenever we help a client carry out a Value Stream Map or similar process cost/value evaluation they are usually surprised at how much additional wastage the business supports of which they were hitherto unaware. One simple example is when we start to scratch the surface of production line efficiency, we invariably find that the cumulation of loss due to slow running (below target or machine plate speed) and short stops (stops of less than 2 minutes, which are virtually impossible to collect manually) represents no less than 20% of lost throughput. Obviously extended breakdowns and product changeovers are easy for all to see, but again, could those breakdowns or changeovers be done more quickly without impairing product quality, contamination, sterility, etc? If the answer is ‘no’, how can you be sure? Where a breakdown occurs, or the cumulation of short stops or slow running causes you to miss your production targets, does your paper-based or computer system have sufficient granularity to quickly reveal the root causes?
Then, there is the other main controllable input within each conversion process – materials utilisation. Are your measurements sufficiently good and instantaneous for you to reduce wastage through overfills to the bare minimum? Does your mass balance calculation between raw materials in and finished products out add up to near zero waste? If not, why not?
Turning to risk, can you sleep easily in the knowledge that today’s production will go out and stay out with no batch rejections and no customer complaints? If not, what has your risk analysis shown up as potential hot spots? How can you ensure, for example, that you’ll have no complaints about underweights or violations under Average Quantity Law?
How can you ensure that all products went out correctly labelled and that an operator under pressure during a production run didn’t incorrectly switch to similar looking labels? How can you ensure that your coders were set up with the correct date code (especially following end of month or year)?
These are just a few of the areas covered by our integrated information management systems that are now helping an ever-increasing number of clients across the food, drink and associated pre-packaged product areas.
So far so good. But why is it that some systems are installed and don’t solve a problem or fail to show a return on investment?
Two major systems related problems are:
- lack of granularity, necessary to determine root cause and
- a lack of clearly visible, analysed and prioritised information (from collected data) that is instantly actionable.
Even when these two things are in place and the information is reliable, this is still no guarantee of success. Much of the above highlights the need for a good system as a prerequisite to finding the hidden costs and wastage within your manufacturing process. An inadequate system cannot do this (you can’t make a silk purse out of a sow’s ear!) but even a good quality system still needs buy-in from the management and operational teams, from top floor to factory floor, otherwise even a good system will fail to deliver expected benefits.
Where good fully integrated systems are installed, any failure is usually due to either a lack of support from the highest level or an unrealistic expectation for an instant return in investment. Just as common, however, is that the operational personnel, especially those on the factory floor, fail to buy into the system as they do not appreciate the need for change (‘we’ve always done it this way, why change now?’)
Much of this reluctance is brought about through poor communication and lack of understanding as to why the change is necessary and how the new system is simply there to help operational personnel achieve their objectives, rather than to pose a threat to their existence or to make their lives more difficult.
Next month, we will talk in more detail about how these levels of communication can be improved and how greater levels of buy-in throughout the manufacturing process can be achieved.
Roy Green, Harford Control Ltd.
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