Good news (productivity), bad news (poor supply chain management)
February 14, 2002
On the positive side, job shops continue to be innovative and improve productivity; materials and software are improving; entry-level positions normally can be filled.
On the positive side, job shops continue to be innovative and improve productivity; materials and software are improving; entry-level positions normally can be filled. On the down side, the author feels that supply chain management is partly responsible for the industry's recession. Inventory monitoring systems are only tools, he says, and must be managed wisely by people. Inventory is taxed and wastes floor space, which results in a stop-and-start business cycle. The author suggests working with other companies (outsourcing, contracting, etc.) in ways that are beneficial to all parties.
I had an opportunity to meet with dozens of folks at The FABRICATOR®'s Sheet Metal Forum in Las Vegas last April. Their comments, along with e-mailed queries, inspired me to address organizational challenges that are common in job shops. Business development, human relations, delegation, and planning are among the topics to be tackled.
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Job shops are wonderful. The working environment is in harmony with human nature. The business mission is clear to everyone. The entire organization is focused on making a living by capitalizing on specific skills and expertise. Each employee fills a key role and makes an important contribution.
A few years ago one of my customers hit me with the concept of the "high-tech blacksmith." The image of a blacksmith in his shop full of tools, each hammer stroke skillfully customizing the part to meet the application perfectly, is a romantic model for today's job shop. Now the hammer strokes are guided by computer numerical controls, and the parts are designed with solid-modeling workstations. Computers and technology are applied effectively in nearly every aspect of the shop.
I think that is good news. Productivity is up. More goods are produced with less expenditure of labor and material. Job shops are innovative and highly motivated to continue to improve their productivity. You probably don't have a research and development department in your job shop, nor do you have a director of technology acquisition and implementation on your staff. But every day everyone in your shop looks at work-in-process and tries to think of a better way to get it done.
Here in the U.S. we have a tremendous network of resources supporting the job shop industry. Magazines provide daily offerings of great new machinery and tooling. Materials and chemicals are constantly improving. Computers and software are nearly becoming useful (for years software was written for programmers instead of for people, but that's a gripe for another day).
It is sometimes difficult to appreciate the labor pool, but it is a genuine treasure. You deal with turnover without much pain (yes, people leave, but you are at least able to hire replacements). Nearly every one of your applicants has basic skills in hygiene, safety, and judicial responsibility. Most of them have a functional level of literacy. Enough of them are willing to learn, so that entry-level positions are relatively easy to fill. Apprenticeship is a fundamental process in the job shop world. Training and career development are features of great job shops.
I think that the recession in high-tech job manufacturing that started in early 2001 is due to ignorant (or at least insensitive) supply chain management. The powerful computer systems that monitor inventory and forecast production plans are merely tools and they completely lack wisdom. I believe that human beings are responsible for using these tools with reason, common sense, and devotion to high standards of ethics.
Inventory is viewed as an addictive toxin. If you have it, the government taxes it. It hides flaws in process reliability. It wastes floor space. It becomes obsolete. It dams up the flow of cash. Therefore, with our best software and data collection technology, we expend a great deal of effort in keeping our inventories near zero.
Instead of "faster and slower," we now work to "stop and start." The economic shock waves have become horrendous. Layoffs are an automatic and necessary part of business. It seems to me that this is very short-sighted—penny-wise and dollar-foolish.
To take full advantage of the benefits of the job shop network, someone has to coordinate (subcontract) the work. Manufacturing companies making the transition to outsourcing must become adept at being kind and considerate. If an open contract (demand pull, kanban, ship-to-stock) is in place, don't shut it off suddenly. Ramp up and ramp down with the long-term view in mind.
If you've got a herd of horses that need shod, don't drive them to the blacksmith once a year. String a few at a time on a consistent basis. Listen to the blacksmith. Ask him how many he can handle at one time. Make a commitment that helps you both prosper.
I'd like to write a book called Goldilocks Manufacturing—Not Too Lean, Not Too Fat. If you'd like to contribute suggestions for topics, you know how to reach me.