Process Prescription

Scaling down to bare bones is a key strategy for today’s manufacturers.

This means that operations is making changes in the name of optimal efficiency. But are those changes strategic, people-centered and positioned to handle the increased demand that generates growth?

Bare bones minus one is good, but don’t get too myopic, because when the company grows, it will take significant effort to scale back up. What happens when we’ve stripped down so much we cannot meet growth? A self-fulling prophecy of contraction.

Streamlined and consolidated operations keep things simple and that’s a good thing. Often, finding ways to get the most out of automation is a place to start. Taking a hard look at technology sounds obvious when it comes to cost reduction, but it isn’t always clear where to find savings. Unlike some of the enormous equipment that is essential on the shop floor, waste in the technology that supports the business may not be apparent.

If we just answer the “Why?” with, “That’s the way we’ve always done it,” technology isn’t going to help the organization, and in turn, the business.

So, another way to look at efficiency is to focus on anything that is more than “two steps” away from the shop floor. If it’s innovating, it may be worth a look. Manufacturing technology should be focused on R&D to ensure innovative products get to market in the shortest time. This takes some artistry and balance of people, process, technology.

A good place to start is usually with the technology that supports any shared services function like HR and finance. Investing and simplifying things through technology here is great because it is indeed two steps from the shop floor. But it isn’t the same as the aluminum roller – which either works or it doesn’t. The indicators of success in simplification of cost reduction and bare bones isn’t as immediate and isn’t as apparent.

Many IT and HR teams are dealing with overly-complicated systems. Sometimes you must simplify and avoid implementing on current conditions. We had a client whose payroll was so complex, they had multiple pay cycles across the business. They had acquired companies over time and didn’t roll them into the fold – and kept doing it the way that these other companies did — without ever questioning if it made sense. To simplify, they had to find any duplicative technology. Look at your existing technology contracts and think about renegotiation for less use or sun-setting some of it.

If we just answer the “Why?” with, “That’s the way we’ve always done it,” technology isn’t going to help the organization, and in turn, the business.

To strive for bare bones minus one, it is important to streamline out of technology first and take the leap of faith on non-shop floor investments. Assuming you ask “Why?” all along the way, you don’t have to touch your people and you are building capacity.

By John Huckle, Business Forward