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Working in the business vs. working on the business

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Operations Excellence by Sepp Gmeiner
Sepp Gmeiner is a partner with Lignum Consulting. For feedback, questions and/or suggestions please email s.gmeiner@lignum-consulting.com
LIGNA 2017 just ended and for some of the visitors, like me, it was like being a kid in a candy store. We were excited to see all the possibilities the vendors laid out for us.
Now that we are back in our offices, we are overwhelmed by work that’s piled up on our desks and it will take some time until we are caught up and back to our routines.
We are back to “working IN the business.” We are doing our daily job - getting orders in and getting orders shipped out.
Larger companies have dedicated people working ON the business. These are the manufacturing engineers, Lean manufacturing managers, corporate business development staff and the like. Their main purpose is to improve and grow the business.
But in small and medium size companies, especially in our industry, who’s job is it? Often it is the owner, general manager, the operation’s or plant manager’s job – part time. In a world of insufficient resources - what gets short changed?
It often starts with good intentions such as this: A plan is made to address the project next week. The time for the meeting is set to Friday afternoon, “when the pressure slows down and we have completed our customer orders.” We can imagine what happens next. Friday comes, a few emergencies develop, everybody rushes to complete the orders, and by the time the group can meet, the day is over and the participants are mentally exhausted. “Why don’t we meet on this next week!” – saves the day but does not get us closer to a solution to the problem. There is also the possibility that the same scenario will repeat again next week… and the week after.
Management must realize that doing things the same way will not bring change. Change will only happen if there is management commitment and if there are reasonable resources provided to start the process.
Small and medium size companies have the challenge of too many issues depending on the owner and senior management. They must find a way to leverage their knowledge and efforts and have the ranks working on business improvements.
Something needs to give. Either management frees themselves from enough routine work to have time to work ON the business, or management challenges the employees to work on improvements. A balance of both promises better results.
There are a few methodologies available to support improvements:

Lean manufacturing
Lean manufacturing is a great tool box to work with. A key element is that most initiatives have a large component of employee participation from all levels. Some are even employee driven. In a simplified way, management must only launch the process, ensure training, and maintain commitment. The challenge for management is often to let go and delegate the responsibility.
One of the many benefits of Lean is the fact that you involve the employees in the improvement process.

Continuous 
improvement method
This methodology is related to Lean manufacturing. It also teams up the employees to solve problems. An important side effect of the continuous improvement process is that the employees must find the solutions. Having employees involved in establishing the solutions will make it much easier to implement the solutions.
Change is always difficult. But change is necessary.
As we walked the trade show and saw the leading-edge technology we realized how much North America has fallen behind in the use of leading technology. It is a generalization, as we have seen individual companies keeping up with the challenge.
The comparison is also not fair because as we compare Central Europe with North America there are some significant differences.

Skills development
Europe has a superior method of skills development and job training, developed over centuries.  In North America companies are relatively left alone as to if and how they train their employees. This often leads to short-term thinking.

Labour cost
The labour rates in central Europe are significantly higher than here. This forces the manufacturer to consider labour saving technologies. The higher rates will also provide shorter payback periods.
It should also be mentioned that the level of customization is much higher by Canadian manufacturers vs. European manufacturers.
Considering all these differences may explain some technology delays; the fact remains that we are behind. And with the Connected Factory or Industry 4.0 the risk is that the technology lag will intensify.
When looking at the machines at the show we recognized additional challenges. As one operations manager once said to me: “It takes me four months to buy and install a CNC machine, but it will take me six months to find a good CNC Operator.
We see the equipment and think ‘how do we keep this equipment running and how do we provide the data the machine needs to run?’
We realize that finding the money to buy the equipment might be the smaller challenge.
In addition to the technology there are several categories to be fine tuned: Strategy, product, logistics, data integration, organization and human resources.
Technology only works when these seven categories are aligned. If just one does not measure up to the rest, the overall performance is reduced to the weakest link.
LIGNA, and similar shows, inspire us and demonstrate the potential for growth and changes in our businesses.  These changes can only occur when management decides to work ON the business.

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