The Hierarchy of Manufacturing
I recently attended a management meeting at a manufacturing facility in Michigan as part of a group monthly meeting on lean manufacturing. Coincidentally a former supervisor of mine, Dave Ballard, leads this plant. Dave is the consummate mentor and coach, something of a father figure to all those who work for him. His warm demeanor and quiet, folksy way of explaining things is an effective communication style that facilitates learning.
The presentation that day included something that had Dave's name on it, but in deference to its more likely creator, Maslow, I like to call it the Hierarchy of Manufacturing.
The very word hierarchy conjures up images of elaborate formulas, intricate processes, and an understanding of the universe beyond mortal managers. The concept Dave presented that day was anything but complicated. In fact, its simplicity stunned me. The Hierarchy of Manufacturing is a structure of practices, each layer providing a foundation for the next, and each layer dependent upon the lower one for support. How could such a rudimentary design teach such an important element of business? The Hierarchy of Manufacturing is just that, a lesson in being clear or uncomplicated as an approach to success in manufacturing.
The hierarchy is actually a seven-layered pyramid depicting the foundational steps to profitability. The intention is that each interdependent layer leads up the pyramid. The layers look like this:
Visualize an imaginary horizontal line between Housekeeping and Accountability. This line of frequent impasse is the turning point to understanding, the same serendipitous truth that hit me that day in Michigan with Dave.
Business is about making a profit and profit is the ultimate goal, hence it sits at the top of the pyramid. In our normal rush to achieve it we overlook all the foundational issues below the imaginary line. During the daily course of managing we get caught up in the special interests or the constraints that put outside pressures on this pyramid and forget the simple path we should follow. If you're the Chief Executive Officer, your primary focus is on the top layer, knowing the board of directors and stockholders will hold you responsible for achieving it. If you're the Quality Manager, there's no mistaking where your focus will be. All those programs like ISO9000 and Six Sigma push you to help the organization drive those defective parts per million toward zero.
Clearly we all respond to different masters in the corporate world, each with demands that often are at odds with one another. Recognizing this problem and realigning your focus back onto the hierarchy is the task. I don't have an example, but I suspect the company with the best quality isn't always the most profitable, though I imagine they're darn close. Some of the safest places in industry are being mothballed each day, victims of foreign competition. So, how do we get back on course, serving the needs of the organization, and headed toward profitability?
The answer is to look to the base of the hierarchy where we typically glide over these elements of the foundation, succumbing to constraints, pressures, and other issues. They are, however, the most important part of the foundation. At the very bottom of this structure is Process. Without a proven and effective process for manufacturing our organization becomes unstable. This includes giving people the right tools, perfecting the process so that it flows, and continuously improving it. In this category I'm confident that if you see an unprofitable company, in most cases you will find an ineffective or broken process for manufacturing.
The next two layers after Process are Expectations and Accountability. These two layers of the hierarchy deal almost exclusively with people. So often today we fail as managers to inform people what our performance expectations are. It goes beyond production run quantities and quality standards. Everything we expect from an employee needs to be clearly defined and communicated, preferably in more than one format, such that there are no questions on even the smallest of details. Leadership involves giving direction. Don't assume the team understands what you want. Tell them, then ask for feedback to be sure they understand.
The natural outgrowth of Expectations is Accountability. We have to hold people accountable for the expectations we have set. If you have children, you know exactly what I'm talking about here. A part of accountability means rewarding the expected behavior when you see it. This part of the Hierarchy of Manufacturing veers from Maslow's perspective of human needs to Pavlov's conditioned response theory in the industrial psychology textbooks. What's great about all this is it works just like the textbooks said it would. We usually receive the expected level of accountability we ask for and reward: both good and bad.
We should also practice this type of accountability among ourselves as managers. If you promise me a report on Thursday, I should hold you accountable for the results. It's all about commitments and how we keep them with each other.
By now we've laid the three most overlooked layers of our foundation and the hard work is over. I see you scratching your head, thinking about those four other layers. Old habits are hard to break. These first three layers are the most important part of our foundation and if we do them right, the upper four layers will arrive with the utmost ease. Now you're really wondering how could this be - this hierarchy thing?
Housekeeping is just a basic issue of discipline. If you have the first three layers under control, enforcing this discipline requires only minimal effort. One of the things you have to do as a manager is provide the workforce the time to do it. If everyone knows the expectation and is held accountable, housekeeping will become a habit. It wouldn't hurt to also develop a good 5S/Workplace Organization system with cleaning checklists and a method of celebrating success to insure the longevity of the program.
With a clean and orderly manufacturing environment you will find something else that happens, almost accidentally, (no pun intended). That would be safety. Where the workplace is clean and clear of hazards, less accidents happen. Trip hazards like hoses or liquids on the floor don't exist to encourage that potential fall. Organized workstations will promote safe work practices by everyone. The efforts of cleaning each day will also serve to uncover even more potential perils before they injure one of your employees. In addition to improved morale, there are the financial rewards for a company who follows this course of action in reduced workers' compensation claims and lost production time.
Housekeeping and Safety are now firmly in place. What can we expect with Quality? Surprisingly, this clean, safe work environment will do more to encourage quality than any T-shirt program you ever introduced. Call it the Hawthorne Effect, where cause and effect from a change in the work environment aren't always easily discernible, but it works. Portions of this success do rely on that first layer Process to achieve results. With all the other positive changes in place, things like error proofing, statistical process control, and visual systems are easily implemented and enjoyed by employees, especially when they are allowed to be part of the solution.
Last but not least is profitability. Instead of struggling for profitability and then going backwards to deploy all the layers of manufacturing in the pyramid, we have reversed the formula, driving from the bottom up and achieving results through the path of least resistance. If I had to write the secret ingredients for World Class Manufacturing, this would be it.
Dave's presentation that day was indeed profound and yet simple in its unveiling of the obvious. I'd like to go on at length, writing the best selling management book that changed the world telling what I learned that day, but this is it. It doesn't get any more complicated than this. Follow the hierarchy from its lowest level upward with a little patience and some heart-felt caring and you will have created a solid pyramid of value in your manufacturing organization.
John Albion is a middle manager in Supply Chain Management and a Lean Manufacturing Implementer, with over twenty years' experience in manufacturing and assembly. He is the author of several articles on Leadership. He holds an MBA degree from Northern Illinois University and has achieved the CIRM certification from APICS. John can be reached via email at firstname.lastname@example.org .