Build velocity to attract and retain the best people

An operator comes to work at the plant, fires up his machine or takes over from the previous shift, and starts running parts. Load, push the button, unload, check the part, put it on a cart, load. Change over, run the next job on dispatch list. Same thing as yesterday, same thing tomorrow.

Seems to be running well. If it stays that way, he might get more stock and run extra parts that weren’t on the schedule. That seems to make the boss happy. “Now we’re making money!” he says.

It may be boring, but it’s better than running out of stock or a machine breaking down. If that happens, he will be sent to some other job he doesn’t know; this is the only machine he has run since he was hired. He knows they are trying to automate his job and trying to get rid of him anyway. It might be time to look for something else. Seven and a half hours to go.

Another machine operator arrives at a different fabricator. He first meets with his team to decide how to run the schedule and determine who will do what. They discuss who will cover for another team member who will be on vacation next week. Who needs cross training? Who will call the supplier to release more material? Who will talk with toolroom personnel to solve a problem and make sure they are aware of the schedule? Who will call the customer back to clarify a question? How about that report to senior management—when is it due? And how much progress have they made this month on reducing lead time? The operator goes to work and interacts with others all day, dealing with problems and making numerous decisions to ensure the schedule is met.

Which job would you rather have?

How to Build Engagement

Since the Industrial Revolution we have given people repetitious work. It’s all an attempt to attain efficiency to a declared standard and achieve the lowest unit cost as defined by an accountant. Managers seemingly work to eliminate people from the day they are hired and tend to lay them off at the first sign of a downturn or missed budget. Employee involvement is limited. A manager’s attitude has typically been, “We pay you money. You should be happy you have a job. Now do what I say.” Well, that doesn’t cut it with people today.

What good workers want today is a job like the second one described previously, not a boring, repetitious one. They want an interesting, challenging role in which they can make a difference while perfecting their current skills and learning new ones. In a way, they want a job like the founder had when starting up: a few people working together doing whatever it takes to get the job out. They want that same energy and excitement. And it turns out that this is the best way to run a larger company. It not only makes people happier, but also improves financial results and grows market share.

Creating a company culture of participation and communication is not just a matter of declaring good intentions and putting up posters with idyllic photos and exhortations. It requires a clearly stated, overarching strategy focused on building part-flow velocity through the entire operation, by designing work in the most effective way.

This should be at the core of every strong continuous improvement program. People should know they can make a difference, even in the complex world of high-product-mix, low-volume manufacturing—the world of the typical custom fabricator.

A QRM Primer

One method of continuous improvement is tailored for just such a high-product-mix operation. The method has been around for almost 25 years and is used today by highly successful businesses. It’s called quick-response manufacturing, or QRM.

Developed by Rajan Suri in 1993 and described in his books, QRM is based on one simple but powerful concept: Shorten the total lead time of your business processes from the time you hear from customers until they get everything they expect. It’s a metric Suri defines as manufacturing critical-path time, or MCT.

What makes QRM and any improvement program effective financially? In short, they boost available capacity using the same or fewer resources. Shortening MCT can get more jobs out the door in less time. In other words, you increase capacity. Fill that capacity with additional sales (which may come easily, thanks to a stellar reputation for on-time delivery and short lead times), and you increase revenue and profits. This is why MCT can be used to cover everything from purchasing of raw material, components, and services all the way through order processing, production, and shipping (see sidebar).

About People

One key element of QRM is to create cells that are multifunctional and, most significant for this discussion, self-directed. In custom fabrication, a cell may have a laser cutting center next to several press brakes and hardware insertion presses—all dedicated to a specific group of jobs that share certain attributes, like similar materials or customer requirements. Watch these cells in action, and you can see how they boost velocity, as parts are passed quickly from cutting to bending to hardware insertion. It’s as if three manufacturing steps have been compressed into one.

The people who work in these cells require resources and assistance in tearing down roadblocks, but they do not need constant supervision. Most enjoy working in what becomes like a mini-business within the company. Today’s workers have much more knowledge to contribute than we typically ask for. If given a chance, they truly are a company’s greatest asset.

A team can best respond to the highly variable demands of high-product-mix work. They don’t know what is coming each day but learn to handle the variety of orders and the variability that comes with the job.

By working in such an environment, people find the work more rewarding. They are happier and more likely to recommend their company to others. They take pride in meeting the schedule while finding ways to shorten lead time. When it comes to scheduling, an enterprise resource planning system can work on a high level, such as provide a list of orders that need to be completed by a certain time. But workers in the cell know the equipment, so who would be better at scheduling the equipment in that cell?

People in a QRM cell are asked to perform tasks that are traditionally performed by indirect labor. Such tasks include material releases; why wait for someone in an office to notify them that they need something and then send a request to another desk? They increase business velocity when they do quality checks, schedule tooling, or even talk with customers. Such a strategy unlocks people’s talent. They don’t get slotted into roles but grow to use all their skills.

In QRM cells, supervisors don’t have all the answers. Rather, they become facilitators that help people in the cell solve their problems or overcome barriers outside the cell. That frees up the most experienced people to work on improving the business.

As QRM cells are implemented throughout the business, teams contribute to more effective flow of products and information. This reduces another major source of worker frustration: failures by other departments that keep them from doing their job. Once people in QRM cells throughout the business start reducing their cell-specific lead times, the total lead time to the customer drops dramatically. This means more on-time deliveries, which then leads to greater market share and a growing business.

When a company places a primary focus on velocity by implementing QRM cells, employees spend much less time on extraneous activities such as rescheduling operations, apologizing to customers, working overtime, and handling inventory. Since these are overhead costs, a company that improves velocity sees financial improvement. That additional job that ships without added overhead is a very profitable one.

Getting Started

Adopting a companywide strategy that focuses on velocity is a big task, and it begins by knowing where you are today. Survey people to learn what they like and dislike about their jobs. Find out why people have left to work elsewhere, even if you must call them to find out. Get honest responses, perhaps using a third party to ensure anonymity.

Ask key people how much time they spend in production meetings. How much time do they spend tracking orders and talking with customers about rescheduling those orders? All that time is a big part of your overhead cost; it’s time people could otherwise use to improve the business.

Take a new look at your performance. Measure the lead time of some recent orders, from initial receipt to shipment. How long does it take? Try to determine how much touch time was used on that job—that is, the actual time spent entering and processing the order, cutting, bending, welding, grinding, etc.—compared to the total lead time for getting a job through the business. Don’t be surprised if it is less than 3 percent. In many operations, work spends most of its time as WIP or on a shelf.

What do your customers say about your company’s lead time? Go beyond the typical metrics to get their feelings about working with your people and processes. What would it mean in your market if you cut your lead time in half? What would it mean to your company if your main competitors cut their lead time in half? That information will help build a database to evaluate future progress and success.

Most important of all will be the reaction from your employees. Talk to them regularly. Hold townhall meetings in which you take the time to answer questions honestly and thoroughly.

The companies that are most successful and grow in the future will adopt a strategy of velocity through self-directed teams that make the best use of people’s skill. Employees will begin to see their jobs as a career. These effective people will work to sustain the culture and lead the company into a more secure and better future.