The More Things Change, the More They Stay the Same

What has surely changed is how we use these systems. Back when I started we used them because we could process more transactions more accurately and faster with a computer, than with the otherwise necessary roomful of clerks. Those clerks, schedulers, and various other clerical employees were the first generation of jobs computers rendered obsolete. Strangely, I do not remember anyone bemoaning those lost jobs. I will let others speculate on the reasons for that.

Individual companies could and did debate the decision about how much they automated. Yes, in retrospect, it is pretty clear that choosing not to automate was to accept a long, slow death for the business, but it is not that long ago when there were still lots of manufacturing managers and business owners who did not use, or like, computers.

Competition Changes Everything

Today a business system is just another piece of necessary infrastructures like an office, a phone, a lawyer, a bank account, and an accountant. The system remains the transaction processing backbone for the organization, but the way in which we use the information that flows from those transactions has changed drastically in this interconnected world. Back in the heady days when ERP was new, the focus was all internal, inside the four walls. Today that seems quaint – the Internet connects all systems and much of the unique incremental benefits (or competitive advantage, if you prefer) come from two deceptively simple concepts – how you connect with the rest of the world from your business systems, and how you monitor your business’s performance in real-time and adapt to what you learn.

I still remember a kickoff meeting twenty years ago for what was then a pretty large ERP implementation at an automotive supplier. Two comments struck me – the first was public. “I like to think of our business as a boat, and we have been steering it by looking out the back. This project will at least let us see out the sides.” The other was in a private meeting when we were discussing change management, and how they would deal with the resistance that would surely come. This same manager said simply, “I guess we will have to fire someone for it, and then the rest will get religion.”

Not terribly ambitious goals, but I give him credit for honesty.

Things have certainly changed a lot in terms of our expectations for the systems, and our approach to implementation, but despite these systems have become an integral and necessary part of the infrastructure of every business, they remain infuriatingly complex and the benefits we expect are often difficult to achieve.

Illusive Benefits = Bad Form

That should not be the case. My goal is to be your guide and share my insights and other good ideas, found across the web, as to how to make business system selection easier and how to get the most benefit from those systems. Because in spite of all the marketing folderol, it seems pretty clear that your friendly software vendor and expert implementation consultants are not going to do that for you. Not because they are stupid or evil people, of course, quite the contrary. They just cannot and will not make the decisions for us that need to be made.

Systems should work for us. Choosing and implementing a system should not be a high-risk proposition for a business, or the individuals doing the work.

The common elements made simple, efficient, and effortless with returns.

My entire career has been dedicated to those goals.

What do you consider yourself to be?

• internal expert?
• someone beginning the search and implementation process?
• an executive looking for a competitive advantage?
• an industry insider?
• or someone who finds this amusing for some reason?

All of the above? There is a better way to choose and use software and as someone who could fit into any and all of the categories listed (yes, I really do find business software entertaining in some weird way), I have some ideas I’d love to share with you, so feel free to ask questions.

About the author:

David Dickson is an itinerant generalist; his path to partner and CFO of Crossroads RMC has had its twists and turns. His first twist occurred when an employer needed a business system and picked him because he had three semesters of computer programming in engineering school -- an “expert” born. Somewhere along the line he helped to build and sell a company, which he bought back a couple of years later. Add in another acquisition, a merger, and about 30 years in manufacturing systems in various roles, and you might get a sense from where his real expertise might arise.

You dream of building a manufacturing powerhouse.

An operation with loads of throughput, profit, and efficiency in every process to make your products the best quality you can make them.

You want to be as successful as the factories and companies they write about in books like Good to Great, changing your operation and even motivating and inspiring your teams to do so too.

But you know you haven’t got a chance in hell of seeing that kind of success unless you can truly change and make significant differences over the long haul.

Of course, the big question is How? Optimization is an elusive creature.

Sure, you get the occasional bump in numbers, but it’s not like consultants and writers are seeking you out to rave about your New, New Thing, or secret method for manufacturing nirvana.  

You worry that you’re not doing enough of those “bumps” in numbers consistently, but damned if you can figure out the magic formula.

But there is a way to do this pivot to success at the highest level, even if you’re a beginner, and even if you’ve tried before with limited progress.

It’s a game-changer, one that can take your operation from teetering on the brink of mediocrity to achieving the success you dream of.
 

The Real Reason Your Factory Floor is Operating at a Snail’s Pace

You know the feeling. You’re ready to try and implement creative ideas and plans to make things better. You know that bump in productivity and throughput was not an outlier and we can make that work consistently.  

The result of data-oriented feedback is miles better than the trumped-up, creative writing your hand-written reports show.   

You speak to colleagues at other operations like yours and try to figure out what they are doing differently. You may have even read about them in The Breakthrough Company. You may have clipped articles, shared blogs, and dug deep into Drucker, Peters, and Senge and read about the manufacturers they listed as “superior.”

Then you wonder how they do it?

The answer is they had a handle on their Manufacturing Optimization (M.O.) Score.

Knowing your M.O. is the master key to all doors leading to manufacturing greatness.

Simply stated, the better you understand your operation, the more you’ll know what to do to make things better and better. Constant, never-ending improvement is the goal. Without this kind of optimization, your operation’s chances to be great are deeply diminished. Think “snowball’s chance….”

But what if you’re not blessed with the market drivers or a “hit” product? Don’t worry, you can develop these greatness skills no matter who you serve, what you build, or how mature the business, but only if you ignore some of the most common advice about operational improvement.
 

The Problem with Popular Advice about Developing Greatness in Manufacturing

Pre -conventional wisdom says that to control your operation you should create a command and control approach to the factory floor, putting in layers and methods to organize things down to the last detail.  

Now, conventional wisdom says to let things loose to “flow” and creating accountability and standards-based performance for both man and machine. Output measures and quality levels are the new language of our current standards in operational efficiency and the applied management of it.

What if you actually try to maximize with Six Sigma or Kanban, using your ERP and Logistics as a tool? Two problems surface right away:

   1.  You spend way too much time obsessing about getting those processes “right.”

   2.  You end up concentrating on information that is suspect from the beginning.

Of course, if you are serious about improvement, you need a process and information, and sometimes bad data is the only information you have -- so you go with it.

Attention to the processes that make your operation better and the data that supports real insight is an important differentiator to success at the greatness level.

Instead of trying to improve the current plant operations, turn your attention to the things that are ripe for growth and dig deep into the potential found hidden there.
 

Where to Focus Your Attention if you Really Want to move from Good to Great  

Here’s the big idea…

You can only develop operational greatness in your manufacturing plant if you have a deep understanding of the real numbers, not theoretical “standards” or human reported histrionics.

That means understanding the people, process, and systems that already work at high levels and gleaning insights into those scores and numbers their output represents.

But what if you don’t know your M.O. score? Then you must play detective.

Follow the people, processes, and systems closely and notice what else is happening. Then, when data shows up directly, without filters or massaging, gather this up as it is the treasure trove of useful information about your operation you need.

Will this data deliver the exact methods and steps to greatness and growth? Probably not, but if you know your stuff, or have people around who do, you will likely find you have a lot in common with the great ones already, and they keep score too. Even if you have to rely on educated guesses in the beginning, the more details that emerge, the more you can reveal evidence instead of crystal-ball gazing.
 

How to Become a Master of Greatness by Stepping Inside Your Operation’s True Nature

The key to greatness is knowing exactly where you are now and where you want to be next. You cannot make the leap in one effort. You have to truly understand every aspect of the part you manage or the components to effectiveness and improvement.

The basis for this is not some collection of ideal business book strategies, or some manufacturing philosophy gone viral, but real, tested results with real data behind the outcomes.

If you know your Manufacturing Optimization score, you now have the controls to do something different. You hold the steering wheel to an engaged shop floor, machines that spit out good information, technology, and processes that deliver consistently and effectively.

This model of thinking is so effective that whole industries have sprouted up to support it: ERP, Data Collection, MES, and a slew of services to boot.

And here’s the kicker – the job is never done!

It’s tough, and each project takes a while to complete, but it’s one of the most valuable things you can undertake as a manufacturing operational manager.

But where do you find the information to figure out your M.O.?
 

Where to Find the Clues You Need to Become a Master of Greatness

Filling your score box with the treasure of which I speak requires a combination of educated speculation and careful research.

But start simple, write down some goals, plans, fears, and hurdles based upon your current understanding of your plant.

For example, no matter what you make, your shop floor is probably gathering data poorly. People rarely take the time to report well and often take shortcuts in this part of the process. They probably worry that if you are measuring the data, you are measuring them and there are consequences to output measures that report less than optimal throughput. These are high-level fears that get in the way of true performance superiority. Drill into people management too. It is a must.

Think about what failure or mediocrity means specifically to your team. Things can look bleak if the scores are low in the beginning, so we shy away from even looking at them. People can work hard and yet never get to greatness. They can fail at one task or attempt and then sell you short on future outcomes because “what’s the point?” They fail to grow because they don’t believe it’s possible.

The Aberdeen Group Analysts created Insight Reports and have a great article about this very topic. We based our Infographic for M.O. score management using some of its main points: Operational Risk Management: Building a Framework to Identify, Assess, and Remediate
 

Three basic points emerge so that you can build and track your M.O. Score:

   1.  Measure Downtime

   2.  Track Effectiveness

   3.  Score the Margins

Think how each of these measures is found in your operation, and how failing to track them could be the source for why you have yet moved from good to great.

For example, if you are tracking downtime, is this done manually, or are you using some time of automation or application to gather this information in real-time, or based upon history?

If you are measuring team effectiveness by shift, you know there are significant differences between them. Have you bothered to figure out why?

In one case, an automotive customer of ours was experiencing significant inefficiencies and difficulties with their receiving operations. They hired us to help them analyze their operation, and we discovered a disconnect between how they were tracking their incoming goods and what their ERP system thought was on hand. This disconnect created numerous time-consuming manual steps to process incoming material and determine where the material was needed. The manual process slowed production, caused additional staffing needs, and hindered their ability to effectively get needed material to the assembly line. They chose to implement our data collection solution to automate the process. Since implementing the software, receiving and moving material was quicker, more accurate, and efficient. This enabled the addition of another assembly line which increased production volume – all without the need to add staff.

Many manufacturing managers have a strong desire to leave a legacy. So in my “Leave a legacy” advice, I include becoming known for doing great work, moving the operation forward towards greatness if not gaining actual greatness in kind.

Changing the operation can be done more easily if you have the tools, the measures, and the goals in place to know where you stand now and for when you arrive. It helps to achieve real measures forward as compared to a set of known good peer levels and grades.

Once you’ve made a start on tracking M.O. by using this method, you can start to flesh it out with data from the real world.
 

3 Simple Ways to Gain Access to M.O. Score Data

1)  Observe and take notes
Watch the interaction between people in your operation. Post numbers that are real. Gather the data that is true and ignore the data that is manipulated and based upon false histrionics.

2)  Listen to the shop floor and the smart people you hire to interpret what you hear
Not enough can be said about the art of authentic listening skills and the ability to find insights into moving from good to great that can be gathered from those who are doing the tasks, breaking things, fixing them, and really trying to make it all work better.  

Don’t be afraid to bring in an outside perspective and help to interpret the information you gather or to help you set up the measures and scores you wish to keep. The partners you pick are invaluable if used well and allowed to be an integral part of the team.

3)  Go right ahead and do what’s best
A lot can be said about fear in the workplace. Often a place is still wrapped up in the old pre-conventional world of command and control. Or more often than not, there is simply no budget for expanding the conventional approach to data collection and other “advanced” schools of thought.  

That should not stop you.  

Many free, easy, and clear data points can be built starting with our Crossroads RMC's M.O. Score infographic.  

The first steps are the hardest to begin but in many ways the easiest to accomplish.
  

Do You Want an Operation That’s Thriving or Just Barely Surviving?

It’s not magic. Even though we like to believe we're all completely unique individuals and our work challenges are ours alone, many have gone before and used tools, techniques, and talents to go from being ordinary to being truly great.

Follow this process and you’ll see that the closer you get to your M.O. score and what it really means the “hidden” secrets will reveal themselves simply and easily. The reactions you’ll elicit from stakeholders and the entire team will guide your next steps.  

A cheering squad will form as you achieve each step along the way and report movement towards the outcomes you see as critical to success and that will help you leave that legacy, indeed.

And you’ll know you’re on the right track when you get comments like this:

•  “Thank you so much; this is perfect timing for this!”
•  “This is exactly what we need around here.”
•  “How’d you think to track this in this way?”
•  “We’ve been hoping to improve, but just didn’t know how.”

So revisit the M.O. score tracking method often. Toss out your old notes and start over again. Each time, you come up with new perspectives, more information, and more ideas and insights into how to collect, connect and communicate data and process to be truly good to great.

You don’t have to settle for an operation that’s met with modest enthusiasm and lukewarm achievements. M.O. tracking data points might be learned in school but it is in the operation and on the shop floor that this world lives.

So put this M.O. score idea in your manager’s toolkit – this is as important as your MBA, Engineering School Certificate, and your years of, manufacturing experience, and by doing this it might make all the difference. You’ll understand your operation so well that they’ll wonder if you are some kind of wunderkind. When will they write stories about our operation?

So grab some paper and get started. Your greatness awaits.

Question Number One: Compared to the truly great what is my current grade on my M.O. Score?
 

About the author:

David Dickson is an itinerant generalist; his path to partner and CFO of Crossroads RMC has had its twists and turns. His first twist occurred when an employer needed a business system and picked him because he had three semesters of computer programming in engineering school -- an “expert” born. Somewhere along the line, he helped to build and sell a company, which he bought back a couple of years later. Add in another acquisition, a merger, and about 30 years in manufacturing systems in various roles, and you might get a sense from where his real expertise might arise.

 

No one cares how hard you work. Sure, some people will notice if you seem to be working hard. Your spouse or companion might note that you seem tired, stressed, not as much fun, or just aren’t around much, but they care about the consequences, not how hard you work. Your boss might note happily that his staff seems busy, things are humming along, but you can be sure that when it is review time she gets no credit for “keeps staff very busy.” Nor will the boss give you extra points for being busy. It is about results.

People outside your personal life, beyond your coworkers, might notice that you are hard to contact, perhaps because you are so busy. But trust me, customers do not care why they can’t get hold of you, and they will not see it as a positive.

Nothing is Good about Busy

No one cares how busy you are unless it inconveniences them.

If you could get all your work done in 15 minutes a week, do it better than anyone else, and then spend the rest of your time amusing yourself, maybe helping suppliers, customers, and coworkers, what would that make you?

A hero.

I know, I know, being really busy makes us feel good, if in a perverse way. We feel important, secure in our jobs, and after a while maybe even a little addicted to the chaotic thrill of it all. At some point, “I just don’t know how I am going to get it all done” goes from being a lament to a declaration of pride. After all, you will get it done, will bust your butt to do it, and quite possibly do it better than anyone else would. Or maybe not.

Get over your addiction to working hard, do it now. Work smart, work less, do better. Optimize.

People Care about the Benefits

What you deliver and how great the quality you provide them is what counts -- nothing more or less. 

Except for your Mom, who loves you just for being you, customers, colleagues, and stakeholders want to know what for goodness sake have you done for them lately despite the accumulated hours to do it.

You manufacture things and provide them to customers. They are good things, things customers need, and are willing to pay good money for. Customers and prospects want those things at a good price, at the time and place they need them. They want them to work well, every time. Am I missing something, or is that pretty much it?

It is hardly news that there are three types of competitive advantage – pricing, innovation, and execution. For a long time people thought you had to choose one and win based on that, but lately a lot of people have started to believe you need to be very good at two, or maybe all three. Sorry, I can’t give you any tips on innovation, beyond this – maybe if you had a little time to sit, breath, think a little, you will have some good ideas. It could happen. But I can give you some tips on how to keep prices competitive and execute better.

What is your M.O.?

I’m not talking “Modus Operandi,” which is a fancy way to say: “what’s your plan to get stuff done”.  I’m talking about Manufacturing Optimization.  That MO isn’t rocket science. 

It is all about efficiency, and by that, I mean doing more with less. Less labor, less time, less materials, while still delivering a high-quality product on time.

As a CFO, this is a subject that is near and dear to me. So I spend time “encouraging people” to be more efficient. There are lots of ways to do this, and different ways work better than others.

We all know some of the nastier CFO tricks, like losing expenditure requests, setting budgets unrealistically low, or just the simple “Really?” with a look of total incredulity when the staff tells me they need another new computer and more storage. I happen to be very good at that last one because I have a lot of practice. Not terribly constructive, but who’s perfect?

The Three Secrets to Improving your MO

What is really insightful about MO, as defined here, is this:

1.  Identify the key metrics.  You need benchmark data so you know what realistic goals are, then track them and publish your performance along with a brief comment from time to time on how things are trending and how you compare with others, particularly your primary competitors. The best thing about this is that it is a system that develops a life of its own.

2. Measure it.  Automatically, people start to think about improving things. Then the fun part, stuff begins to improve by itself. Once in place, the system just hums along and the benefits appear because it has motivated people to think about it and figure out what they can do to make it better.

3. Communicate it.  So I publish gross profit numbers, explain to people how what we do affects them, they start to modify their behavior and I do not have to say “no” anymore. And I really like it when I can do less. Try it and you may like it, too.
 

How to get started

At this point you might think this is easy until you begin to think about where to get started. Don’t worry, we are here to help. The way I see it, to make gains on your MO, you have three choices:

a.    Buy

b.    Hire

c.    Network

If you want to buy the information, there are a lot of databases, just search for manufacturing benchmarking.

You can hire a consultant who is good at talking to you, using one or more of the databases, and then making specific suggestions as to what and how. Consultants can be wonderful, just keep in mind three more things – they cost more, you have to pick one who is qualified to help your company (painful admission – being willing to take the executive team golfing does not make a consultant ‘qualified’), and you must be ready, willing and able to act on the recommendations.

Let me say that again because it is important:  You must be ready to listen and ready to react to improve your MO.

Or you can pick the brains of people you run across every day, coworkers, customers, vendors, people you meet at conferences. As a good CFO, I admit to having the bad habit of picking the brains of potential vendors. If I want to improve something I might contact a few vendors who promise to improve our efficiency in that area and listen to what they would propose to do. I do not lie to them or set any unrealistic expectations, and they do not give me anything for free beyond a little bit of their time and wisdom. Maybe the end result is we do something ourselves, or with one of the vendors – either way, it is a good place to start.

And I just happen to know where to find some smart people who know an awful lot about MO – that being the manufacturing optimization kind.

They work around here actually, and they sure are great!

You can call and pick our brains if you like.

About the author:

David Dickson is an itinerant generalist; his path to partner and CFO of Crossroads RMC has had its twists and turns. His first twist occurred when an employer needed a business system and picked him because he had three semesters of computer programming in engineering school -- an “expert” born. Somewhere along the line, he helped to build and sell a company, which he bought back a couple of years later. Add in another acquisition, a merger, and about 30 years in manufacturing systems in various roles, and you might get a sense from where his real expertise might arise.

The More Things Change, the More They Stay the Same

What has surely changed is how we use these systems. Back when I started we used them because we could process more transactions more accurately and faster with a computer, than with the otherwise necessary roomful of clerks. Those clerks, schedulers, and various other clerical employees were the first generation of jobs computers rendered obsolete. Strangely, I do not remember anyone bemoaning those lost jobs. I will let others speculate on the reasons for that.

Individual companies could and did debate the decision about how much they automated. Yes, in retrospect, it is pretty clear that choosing not to automate was to accept a long, slow death for the business, but it is not that long ago when there were still lots of manufacturing managers and business owners who did not use, or like, computers.

Competition Changes Everything

Today a business system is just another piece of necessary infrastructure like an office, a phone, a lawyer, a bank account and an accountant. The system remains the transaction processing backbone for the organization, but the way in which we use the information that flows from those transactions has changed drastically in this interconnected world. Back in the heady days when ERP was new, the focus was all internal, inside the four walls. Today that seems quaint – the Internet connects all systems and much of the unique incremental benefits (or competitive advantage, if you prefer) come from two deceptively simple concepts – how you connect with the rest of the world from your business systems, and how you monitor your business’s performance in real time and adapt to what you learn.

I still remember a kickoff meeting twenty years ago for what was then a pretty large ERP implementation at an automotive supplier. Two comments struck me – the first was public. “I like to think of our business as a boat, and we have been steering it by looking out the back. This project will at least let us see out the sides.” The other was in a private meeting when we were discussing change management, and how they would deal with the resistance that would surely come. This same manager said simply, “I guess we will have to fire someone for it, and then the rest will get religion.”

Not terribly ambitious goals, but I give him credit for honesty.

Things have certainly changed a lot in terms of our expectations for the systems, and our approach to implementation, but despite these systems having become an integral and necessary part of the infrastructure of every business, they remain infuriatingly complex and the benefits we expect are often difficult to achieve.

Illusive Benefits = Bad Form

That should not be the case. So my goal in this series of posts will be nothing less than to be your guide as I share my insights and other good ideas, found across the web, as to how to make business system selection easier and how to get the most benefit from those systems. Because in spite of all the marketing folderol to the contrary, it seems pretty clear that your friendly software vendor and expert implementation consultants are not going to do that for you. Not because they are stupid or evil people, of course, quite the contrary. They just cannot and will not make the decisions for us that need to be made.

Since I have a letter C in front of my title, you can expect this to be a high level discourse, and not a detailed list of project management tips. High level concepts are important at every level of the organization and should be kept in mind whether your role involves a ‘C’ in the title, the lead purchasing agent, or otherwise doing a hard day’s work.

Systems should work for us. Choosing and implementing a system should not be a high risk proposition for a business, or the individuals doing the work.

The common elements made simple, efficient, and effortless with returns.

My entire career has been dedicated to those goals.

I trust that gives you a flavor of what is to come. What do you consider yourself to be?

• internal expert?
• someone beginning the search and implementation process?
• an executive looking for competitive advantage?
• an industry insider?
• or someone who finds this amusing for some reason?

All of the above? I would like to engage in a dialogue along with my discourse. There is a better way to choose and use software and as someone who could fit into any and all of the categories listed (yes, I really do find business software entertaining in some weird way), I have some ideas I’d love to share with you.

About the author:
David Dickson is an itinerant generalist; his path to partner and CFO of Crossroads RMC has had its twists and turns. His first twist occurred when an employer needed a business system and picked him because he had three semesters of computer programming in engineering school -- an “expert” born. Somewhere along the line he helped to build and sell a company, which he bought back a couple of years later. Add in another acquisition, a merger, and about 30 years in manufacturing systems in various roles, and you might get a sense from where his real expertise might arise.