Will Corporate Obesity Delay Economic Recovery from Covid-19?
We hear so much about obese people taking a lot longer to recover from an attack of Covid 19, but could this also be true of Corporations?
Entering the lockdown, the government’s initiatives to try to protect the economy and jobs, threw a much-needed lifeline to UK companies to help them survive. Many took up these initiatives, whilst inevitably, some abused them.
Some honest companies like Doc Marten’s used the furlough scheme, only to find that their sales increased during the ‘lockdown’ and, therefore, repaid the money received, a great inspiration to us all!
The food and drink manufacturing sector is faced with enormous challenges as it continues to meet all the retail quality demands, whilst attempting to improve or even sustain a healthy bottom line.
Such challenges were obviously present long before lockdown, and those manufacturers with the most lean operations should be in the best position to recover, especially with the end of the furlough scheme.
In getting back to some semblance of normality, each company will face different challenges, but those carrying the most ‘fat’ may find recovery the most challenging.
Some had already started their Lean journey, prior to Covid, whilst others were fairly well advanced. A huge number of manufacturing companies, however, were still suffering through lack of visibility of their operations, due to the intense use of paper recording. Because paper recording gives no immediate indication or awareness of performance and is, by nature, unreliable, the danger is that such lack of visibility camouflages ‘the fat’ and lack of efficiency contained within the business. It follows, therefore, that the greatest benefit enjoyed by those companies, who have eliminated paper recording, is the instant visibility they have provided through more immediately available information.
Almost without doubt, it is impossible to act upon issues that cannot be seen. Of course, it is also true that visibility alone doesn’t guarantee ‘improvement actions’ will be taken. However, if such visibility is done well enough, in that it is visible to the whole operational team and the information provided is instantly actionable, then it can become embarrassing if those actions are not taken. Instant visibility, therefore, virtually guarantees improvement actions will be taken to avoid the unsavoury consequences of ‘no action’.
Making a Start
Those companies who had barely started their Lean journey face the biggest challenges as, when the protection from furlough ends, the full effect of running costs will again fall to them. Such companies, carrying too much fat, are less likely to be able to absorb these additional costs in an increasingly competitive market that is still recovering from the lockdown and from the loss of market share, due to the migration towards on-line buying.
These companies may struggle to recover quickly enough to guarantee a profitable future, unless they make a rapid commitment to eliminate fat and wastage, whilst improving the efficiency of their operations. Obviously, this cannot be done simply by replacing paper with computerisation. The quality of what’s measured, analysed and displayed, in real-time, drives performance improvement.
Though there has been considerable expenditure on Continuous Improvement, within the food and drink industry during the past few decades, much of this has been focussed upon increasing production output and automation. This will doubtless continue, but we believe that, from some examples we have witnessed, that it must be done more effectively in future.
The Quick Fix
We have seen so many examples of short-termism i.e. ‘a quick CI fix’ to an immediate problem, which both over-simplifies the problem, often to costly effect, and fails to take into account the more extensive corporate Lean needs. Problems such as an on-line vision issue, might meet with a response ‘bung a camera on the line, that’ll fix it.’ Then it’s often followed by a ‘search on-line’ to find either the cheapest camera or the cheapest vision system’s expert, or both. Then, when it doesn’t solve the problem, the cost simply becomes ‘added fat’.
Even when it works exactly as intended, the next CI initiative might be ‘let’s install an automated coding and labelling verification system’. Once this initiative starts, the CI manager quickly finds that the first on-line vision fix doesn’t integrate with the second requirement. Couple with this, a desire to solve the immediate problem as cheaply as possible, and the CI manager soon finds that he now has a dubious vision system and an on-line label verification that works (most of the time), but still no integrated visibility or traceability.
Having dealt separately with two serious aspects of risk management, the CI manager might then be encouraged to look for an automated OEE system to improve operational efficiency. If he is fortunate to find one, which links with the previous risk-averse initiatives, then it is unlikely to be the cheapest available. And so the search for integrated and effective information management continues. Sometimes, this piecemeal approach works well, but rarely turns out to be the most cost-effective in the long run.
The Corporate Vision
To prevent this, the CI manager and the whole management team, from the CEO downwards, need a clear vision of the overall factory floor requirements, covering all aspects of risk, quality, compliance and efficiency. In effect, they need to set out their ‘roadmap’ that will eventually take them to their desired objective, Operational Excellence.
To minimise the risk of costly problems and failed integration projects, the corporate vision must be geared to minimise wastage and to show a full payback within a predesignated period. The work to create this vision will often include, or even begin with, an input to output ‘value stream map’ of the entire factory floor process, so that all the areas of cost, wastage and potential performance improvement are clearly defined and measured. Then it’s necessary to put together a comprehensive performance improvement plan to minimise the wastage, the fat and to optimise operational efficiency. This takes time and effort and needs a good, preferably Lean Six Sigma trained, performance improvement systems integration partner.
The vision and road map in place, coupled with the right CI partner, the Lean journey can continue with confidence, as priorities and finances dictate/allow.
But how to find a good, knowledgeable partner? Choose one qualified in Lean Six Sigma, with a proven track record, who will share in your risk (payment by results).
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