New Shop Floor Management: Empowering People for Continuous Improvement

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9780029322659: New Shop Floor Management: Empowering People for Continuous Improvement

In this first comprehensive departure from the time-and-motion dictums of Frederick Taylor's "Shop Management" that have influenced management practices for most of this century, Kiyoshi Suzaki offers a framework for successfully conducting business at its most crucial point-the shop floor. Drawing on the principles of holistic management, where organizational boundaries are smashed and co-destiny is created, Suzaki demonstrates how modern shop floor management techniques -- focusing maximum energy on the front line -- can lead to dramatic improvements in productivity and valueadded-to-services.

The role of management today, Suzaki argues, is to eliminate its own responsibilities by thinking of the organization from the "genba, " or shop floor, point of view. In this challenge, Suzaki claims, organizations need to collect the wisdom of people by practicing "Glass Wall Management," where organizations become transparent, enabling employees to contribute maximum creativity as opposed to blocking their potential with what he calls "Brick Wall Management." Further, to empower individuals to selfmanage their work and satisfy their customers, Suzaki asserts that they all should learn to manage their own "mini-company," where everybody is considered president of his or her area of responsibility.

Front-line supervisors, Suzaki shows, must develop a mission and goals and share them both up and downstream. He cites examples of the "shop floor point of view" -- McDonald's Corporation's legal staff learning how to sell hamburgers and fix milkshake machines; Honda's human resource staff training on the assembly line -- that narrow the gap between top management and the shop floor. By upgrading people's skills, focusing on empowerment, and streamlining processes, Suzaki illustrates that an organization will realize concrete improvements in quality, cost, delivery, safety, morale, and ultimately, its competitive position.

"synopsis" may belong to another edition of this title.

About the Author:

Kiyoshi Suzaki, president of Suzaki & Company, is an internationally recognized consultant and educator on manufacturing competitiveness, having worked with hundreds of companies in over 20 nations around the world. He is the author of The New Manufacturing Challenge (The Free Press, 1987).

Excerpt. © Reprinted by permission. All rights reserved.:

Chapter 1

DEVELOPING A VISION OF SHOP FLOOR EXCELLENCE

In this chapter, we will try to understand the characteristics of today's business environment which have a significant impact on all of us. Then we will address the need to transform our organization to meet new challenges. And last, we will address the change processes we must each go through to prepare ourselves for the future.

SAILING IN TODAY'S BUSINESS ENVIRONMENT

Today's world is filled with change and uncertainty. As compared to even a decade ago, products or services become obsolete much more quickly. More and more new technologies and new companies emerge, and those that cannot cope with change often find their very existence threatened.

In spite of the fact that better products and services make our lives more convenient, a quickly changing business environment can threaten our companies and our jobs. This in turn may affect our relationships with co-workers, family, friends, and many others. In fact, changes happening in the business world may have a traumatic impact if they result in sudden layoffs or bankruptcy. If we are foresighted and prepared, however, these changes can provide increased opportunities for utilizing our potential. Instead of riding in stormy seas, we can alter our course and find a clear path through them.

To this point, someone once said, "Even if we cannot change the direction of wind, we can trim our sails to get where we want to go." In keeping with this idea, the purpose of this book is to prepare ourselves for such turbulent times by developing skills to manage the situation better and explore a better work life.

CHANGING ENVIRONMENT -- PAST VS. FUTURE

To begin with, let us study the environment in which we live. Exhibit 1.2 summarizes our changing environment, comparing the past to the future and listing major reasons for such changes. Of course, specific situations may differ from this table. Yet, if we look around us, we may find some interesting trends. Turning our eyes to the international scene, for example, as more countries join the Western world from the old Eastern bloc and developing nations, more and more people will participate in the free market, free trade, and free information exchange of our society. These people then become new members of our global society as suppliers of labor and brainpower as well as beneficiaries of goods, services, and knowledge.

Opening this gate is similar to conducting a brainstorming exercise on a global scale, with more people exchanging their ideas and values, and utilizing their collective wisdom. We may at times find this situation chaotic because of its massive impact on our political, social, and economic systems. As more people travel, watch TV, read, and exchange ideas, the process of change seems to take its own course.

So, even if the environment we live in seems chaotic, if we find more people contributing their talent as well as gaining benefits, such an environment is in fact, desirable. We should also note that this globalization of business activities follows the free market system of using everybody's ideas and values.

If we understand this point, the strains caused by these changes may be better understood. Yet, as democracy requires everyone to contribute ideas and values to the whole, as opposed to blindly following someone who happens to be in a position of leadership, each of us should seek the answer for ourselves. In other words, collectively, we are the reason for the change. And at the same time, therefore, it is up to us to become either a beneficiary or a victim of such changes.

OUR VISION

History has shown us that many factors influence progress. Clearly, creativity in overcoming hurdles seems to be one major factor. Further, when creativity is tied with survival or prosperity, we find ourselves even more driven.

Now, if we look back on our personal experiences, we may find that our vision and actions have changed over time as well. By assessing these changes further, we may see if we are deepening our understanding as to what is important in our (work)life and how creative we have been to grow continuously. The organization as a whole may also go through a similar process. So, we might ask: (1) Is our organization growing to meet new challenges? and (2) Are we moving forward to create our own future?

In order to respond to these questions, we need to consider many factors, such as intensified competition, changes in management or unions, shifts in customers' taste, changes in working relationships with peers, guidance from leaders, level of accomplishments, or new insights gained from newspapers, TV, and the like. Since vision is something individuals or groups of people within the organization create, each of us should examine how these factors might impact our collective vision.

Then we may further ask ourselves: (1) Is our vision changing in a positive direction or negative direction?, and (2) What can we do about it?

CREATING AN ORGANIZATION WITH SELF-MANAGED PEOPLE

Of course, if we move to a remote mountaintop and live as hermits, we might find a different solution to our question. Yet, most of us find ourselves in an environment where change is the norm. Therefore, we need to develop self-management skills so that we can sit in the driver's seat and chart our own course into the future.

To do this, however, each of us needs to:

* Understand our business environment better
* Be more alert to forthcoming changes
* Share and utilize information effectively
* Take initiative to continuously improve our skills and position

If we use sailing as an analogy again, this situation is similar to sailing in a stormy sea (Exhibit 1.3). Unpredictable waves, wind, and rain may make it most difficult to steer the boat and get to where we want to go. We must have good knowledge of our environment, read the forthcoming changes, share information well among our crew members, and continuously upgrade the skills of the crew. Like today's business environment, there is not much room for misjudgment.

If we consider that this sea of change in our society is the result of good intentions, such as a free exchange of information, a free market economy, better utilization of people's talent, and so on, and we see that we ourselves are the cause of the changes as well as the ones impacted, then we should be able to find ways to steer the boat to get where we want to go, by practicing the same principles.

To do this well, however, we need to be self-motivated, self-thinking, and self-controlled. In other words, we need to be self-managed. Whether we work in an organization or not, and regardless of our title or rank, each of us should accomplish a certain mission as a part of our job.

OWNERSHIP AT THE SOURCE

In contrast to a military- or power-based society, what we see now when we look around is that people's individual abilities are becoming the major driving force of these mass changes in society. As more information is made available, more people's talents are utilized, and the free market economy provides greater opportunity for more people. This allows more people to excel than before. Within this self-induced chaos, we find an opportunity-filled world for those willing to test their potential.

While increased self-management skills will give individuals closer control over their destiny, they also provide major benefits for the company and the society, as summarized below:

Addressing problems at the source. Even if there are capable people who can solve our problems at the top of the organization, there would certainly be limits as to how much information could be absorbed by them as well as how fast it could be converted to action. If instead people can solve problems at the source, additional resources, such as support staff or extra layers of management will be unnecessary. Also, addressing problems at the source saves a precious resource -- time.

Serving the customer better. As we solve problems, we can better control the process so that we can continuously serve our customers better. Here, the customer is the person in the next process, not only the end user of the product or service. Since each person on the shop floor is adding value to the process, total customer satisfaction, or total quality control of all company processes is only achieved when everyone in the organization is involved in addressing the problems at the source and maintaining good standards.

Developing highly motivated people. Self-management puts people's destiny more in their own hands. It will give them increased responsibility and allow them to utilize higher-level skills. By applying creativity to solving problems, people will develop greater pride and confidence in their abilities. In other words, companies can prosper by unleashing the potential of highly motivated people as they grow with the company.

LOOKING OURSELVES STRAIGHT IN THE MIRROR

We know that without ownership of what we do, it is hard to accomplish things and have pride in ourselves. Also, without ownership, we may simply find ourselves drifting as the business situation changes. However, as we also know, looking at ourselves in the mirror and reviewing our progress is not easy when we are too busy with day-to-day activities, or even consciously trying to avoid facing the issues. We may be living in the past and trying to ignore new competitive threats.

Similarly, because of the way things have been done, it may be difficult for people at the shop floor to speak up with a new improvement idea to the boss. Also, cleaning up our own area may not seem worthwhile if nobody else practices it. Yet if we are to be honest with ourselves, we may have to act upon our belief. An organization without people's ownership is similar to a nation without true democracy. We must be convinced that by practicing what we believe in, we can accomplish our vision.

As we look at ourselves in the mirror periodically, we should review our organization's progress or lack of progress objectively. For example, we may ask if the people on the shop floor are gaining more ownership in running the business, or if the gap between management and workers is narrowing.

ACHIEVING EXCELLENCE IN SHOP FLOOR MANAGEMENT (SFM)

To answer these questions, we need to look at a business with the idea that the shop floor is the most crucial point of conducting business, where the tire hits the road. It is where values are added, goods are produced, and services are provided to satisfy our customers. We need to address problems and explore opportunities at the source, rather than looking at the company, say, strictly from a financial point of view. Even though numbers are important in developing a perspective of the total situation, the company cannot function without addressing reality on the shop floor. From this perspective, each customer and each employee are respected for their values.

Instead of finding better ways to do things right and control the process at the point where value is added, we see that the traditional way of conducting business has created an environment which encourages just the opposite. Exhibit 1.4 lists some of the problems that we find at the shop floor, and shows that we need to look at our work in more detail.

Whatever we do, any company's operations may be broken down to a chain of processes as shown in Exhibit 1.5. Here, the higher the effectiveness we can achieve at each process, the better the end result as measured by defect rate, performance against a standard, or on-time delivery.

If we measure defect rates, Company A's rate is 23070, while Company B's is 5%. So, if Company A is competing with Company B, it requires more than four times the resources of B to fix the problems. If we also consider all the fire fighting Company A needs to do as well as the impact of these on customer relationships, we can easily see the advantage Company B enjoys over Company A.

Here, we should note that the process may represent (1) a manufacturing process to make goods, (2) a service process dealing with people, (3) an information process dealing with paper or computers, or (4) a management process to share information, get things done, and lead people effectively.

The point is, if we cannot control the process or ignore the basics of SFM, chaos will be created. Exhibit 1.6 describes the typical impact of lack of SFM on a company's key performance. As shown in Exhibit 1.5, even though the impact of each process across the system seems small, when compounded, the total impact can be enormous. Furthermore, increased product diversity and introduction of more new products will magnify the situation. In order to improve customer satisfaction while minimizing waste, therefore, we should find ways to control each of these individual processes better.

CONTROLLING THE PROCESS

As we try to control a process, then, we need to develop some kind of feedback system, as shown in Exhibit 1.7. The premise here is that proper feedback of information allows us to take corrective action and thus control the input or process itself better.

If we measure productivity as representing performance of the process, it may look like this:

Productivity = Output/Input = Output/Minimum Input + Waste
or
Productivity = Value Created/Values Invested = Performance in QCDSM (Quality, Cost, Delivery, Safety, Morale)/Man + Machine + Material + Method + Measurement

In other words, we need to control these 5Ms to eliminate waste and provide high-quality products on time to our customers at low cost while providing a safe environment and high morale for people in the organization. An important question that we will address throughout this book, therefore, is how to provide adequate feedback and control the process most effectively and efficiently.

Reflecting on Exhibit 1.5, we should recognize that even 99 percent effectiveness is still unsatisfactory. If we put ourselves in the shoes of the customer who receives that remaining 1 percent, this should be quite obvious. We need to remember that one defect represents a total failure on the part of the organization that provided the good or service to the recipient.

TRADITIONAL AND PROGRESSIVE ORGANIZATIONS

If we are to control the process at the source and have the whole organization prosper, we cannot depend solely on certain people who are "responsible" for doing this. Rather, we should seek to involve everybody in the organization, utilizing their talent so that the whole organization and everybody in it performs better and benefits.

Of course, many hurdles must be overcome if everyone is to be involved in this process. Oddly, however, a very common hurdle is the idea that improving their own work is still foreign to many people. This is especially true when it comes to solving problems as a group. Without encouragement from their managers or peers to make improvements, this hurdle may seem higher than it really is.

To better understand the benefits of a progressive organization, two models of organizations are compared in Exhibit 1.8. The spindle-shaped model on the left represents the traditional organization where skill and knowledge are concentrated in a small number of management or staff people. There is division of labor between those who think and those who do manual work. This type of organization is common in feudal societies or centrally planned econom...

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