Twice as smart. Really?
When the pointy haired boss in a pep talk urges Dilbert to be twice as smart to survive in this economy, he says, “ I look forward to a spontaneous increase in my IQ from 200 to 400.” But even Dilbert occasionally learns something he didn’t know. In real life, to work smarter, we can obtain better information and use better decision making as we apply it.
A. Better Information
1. Best practices
Avail yourself of best practices that you may not know about; don’t reinvent the wheel. In this internet age, learning is so much easier than ever before. Listen to the pros you have on your staff, what useful techniques have they used previously? Pardon me for a little self promotion, but consultants often bring experience that bears directly on your situation.
2. Cut waste
Twice as smart is another way to say “cut waste”, a primary tenet of the Toyota Production System. Remember that successful companies address waste all the way through the company and not just in production labor; in materials, supplies, facilities, the organization chart, pay practices, overhead.
3. Constraints management
Know where constraints exist in your business that impede output, delivery, cash flow. In order to manage and improve the constraints, you must know where they are. A constraint may appear in the process, equipment, staffing, paperwork, lab tests, shipping, billing, receivables. One may be within a vendor, or distribution, or a regulatory system. Remember the old saying, that from observation most often bottlenecks are at the top.
4. Measure work
Work measurement is the first step in, an objective basis for, many management tools. Define the time required for work elements in order to quantify expectations from people and processes and communicate them; determine staffing levels as output levels rise or fall; assign and schedule work to people and equipment based on expectations; identify and manage constraints in equipment, process, facility; balance individual workloads in lines or work groups for more performance and less conflict; perhaps you will want to offer pay related to output through labor incentives.
Work measurement also provides tools to manage your business better, to: calculate actual capacity the operation can produce; develop standard cost models for products and services;
justify equipment and automation acquisition; meet the Sarbanes Oxley Act for financial understanding of costs; adjudicate disagreements about workload; analyze variances to find problems; estimate potential benefit from changes beforehand.
Allocate overhead correctly, don’t smear. Else you will not be able to make correct decisions about profitability of products, plants, operating groups.
6. Product prune
Product pruning, as ITT called it when I was there in the Geneen days, required plants to judge each product annually for profitability, and act accordingly. Please note that such a comparison is not possible without accurate overhead allocation.
For maximum capacity, remember that you can use multiple shifts and not just more equipment. Think tree farms as your role model.
Economic Order Quantity is still effective in this time of Just In Time. We know of course to reduce the need for changeovers, and to reduce the time required, but the formula for economic order quantity still applies. Dave Piasecki makes a fine case for EOQ at http://www.inventoryops.com/economic_order_quantity.htm
B. Better Decision Making
1. Let the data drive the decision
Let the data drive the decision. That’s an engineer’s mantra, and me being an engineer I’ll lead off with it. Yes, there will be subjective aspects, but try to quantify them and get a performance commitment; if someone says a change will mean market share, get a commitment as to how much and when, and put a job on the line.
Don’t delegate a decision to someone who has his own ax to grind without close oversight.
3. Strategy upsides and downsides
Strategy can have both upsides and downsides. For instance, a purchase from a local vendor helps Just In Time but may have a higher item price. In time of a storm, which bridge will wash out and keep the component away? Another example is that two strategies may be basically incompatible; JIT is not really effective within an MRP environment.
4. Physics and “work smarter and not harder”
In physics, mechanical work is the amount of energy transferred by a force acting through a distance. Automation, smarter work, puts the hard workload on machinery. A good thing. Automation helps labor productivity, as one individual turns out more work, but total productivity (dollar output / dollar input) may or may not be better after figuring in the costs of equipment and maintenance. Be sure to use a calculation and payback model that yields the correct answer.
Thanks for the attention. Perhaps these thoughts will be useful. Give us a call if you like the way we approach productivity; after all Productivity is our middle name.
Jack Greene Jackson Productivity Research Inc.