More simple ways to help your company function like one of the best.

By Thomas F. Ribar, CFPIM

Welcome back. I hope you have found time to digest the first five commandments that appeared in the last issue. Did it stimulate any new thinking? Did it bring up some things you already knew to be true, but maybe were not doing? Good! That is the feedback that I have received from the people who have called or e-mailed me. If you are one of those people, thank you.

The purpose of Part II is to further stimulate your thinking. Now a warning - these next five commandments are more difficult and challenging, especially if you have ignored commandments one to five. By following all 10 of the commandments together, you will simplify achieving all of the objectives. Manufacturing is a lot like baking a cake. Without all the ingredients, the cake will not likely turn out to be a cake. The same goes for your business. Without each of the 10 commandments in place, your manufacturing cake will likely not turn out the way you had hoped.

With that, let's get on with the next five commandments.

6 Thou shalt live by the rule, 'The schedule is the schedule is the schedule.'

Businesses can only execute one schedule effectively and at the maximum profit. That schedule must originate from the company master scheduler (or whoever performs that overall scheduling function; some companies call it the production planner). This person coordinates the company's response to the marketplace by ensuring that all the planning and execution functions in the business are synchronized and working from the exact same plan. The shop schedule, receiving schedule, picking schedule, shipping schedule, and engineering development schedule must all be tied directly to the company master schedule.

If you walk out on the shop floor and ask a department supervisor what order the team is working on, the supervisor should be able to point to a line item on the formal schedule to answer your question. If the supervisor points to the back of a handwritten envelope that she has just pulled out of her pocket, or worse yet, if she tells you they work on the orders for whoever yells the loudest, you know you are in trouble.

The only schedule that everyone in the business has access to and can synchronize their own activities to is the one formal plan created by the master scheduler. Any changes to the schedule must be agreed upon and then officially made in the formal master schedule, so everyone knows about it.

There is also a sub-commandment on this one: In any given week, your formal schedule cannot have any "past dues" that are more than four days old. On Monday of each week, there should be zero days of past due. You should have rescheduled any misses from last week into a valid future period before entering the new week on Monday. Lingering past dues erode the credibility of the schedule and cause other functions in the business to work to an unachievable schedule.

7 Thou shalt have a 'no-exceptions' mind-set for meeting the daily schedule.

This mind-set must include on-time, on-quality and on-quantity. The execution function, and everyone who can affect the supply side of the business (manufacturing, engineering, materials, purchasing, inventory, etc.) must have a 'no-exceptions' (zero-defects) mind-set for meeting the plan. Managers, supervisors, every person who participates in the execution of the plan, must be prepared to leap tall buildings, crush huge boulders, and move any mountains that are standing in the way of meeting the daily delivery promises they have made. This includes promises to both external and internal customers.

Meeting the schedule to support down-line operations is just as important as meeting the ship date promise to an outside customer. Good planning is essential to achieve your goals. After all, a manufacturing company only makes money when value is being added on the shop floor. All other functions and people must be in 100% support of the value-adding function. Those support people's only job is to keep the material moving on the shop floor, through the value-adding process, without any interruptions.

8 Thou shalt hold the demand side of the business to the same standard of accountability as the supply side of the business.

A manufacturing manager who does not meet the manufacturing promise date, or does not make the full quantity of good parts as promised, is not long for that job. Everyone expects the supply side of the company to be on schedule and at high quality. But what about the "demand" side? Is there the same level of expectation and accountability? Positively not. And everyone freely admits to this inequity.

In fact, many management teams accept wide discrepancies between the demand that was planned and what actually came true. Who makes up for the deviation? The supply-side people. The lesser standard of excellence for the demand side is given rationalizations like, "Customers just don't know what they want," or, "Our type of business is hard to forecast/predict." Or, "We were too busy selling to have time to plan." This double standard is totally unacceptable. Meeting and exceeding customer expectations requires that supply and demand both be managed to the same standard and held to the same level of accountability.

There is a sub-commandment to this rule, too. Customer delivery-date promises must be based not on any form of "standard delivery" lead time, but on a valid determination of the capability and capacity manufacturing has available at that specific point in time. Customer service must not commit to a delivery promise that manufacturing (supply) has no ability to meet. History has proven that in excess of 90% of missed delivery dates are missed at the time the order was accepted - because the person making the promise had no systematic and reliable way to determine a valid delivery that manufacturing (supply) had the ability to meet.

9 Thou shalt systematize everything.

Vince Lombardi, Hall of Fame coach for the Green Bay Packers, said, "Striving for excellence. That's not a 'sometime' thing; it's an 'all-time' thing. We don't do things right once in a while; we do it right all the time. Success is a habit. Winning is a habit." Mr. Lombardi went on to explain that losing is also a habit. He believed in systematizing the process of pregame practice to carry it over to the game. Do you do that in your business?

Successful and profitable businesses have agreed-upon systems for everything from booking a customer order to ordering more pencils and staples, and the businesses follow these processes without deviation. Any function not documented as the best practice in your business has little chance of being systematically and regularly followed.

Without agreed-upon, documented processes and procedures, a new person or even a temporary substitute will have to rely on gut feeling, intuition, and best judgment. You cannot guarantee that he will act in the official company way, and more important, in a way that is consistent with the expectations of all the other functions. To operate smoothly, your company must document its agreed-upon procedures and follow them without fail.

10 Thou shalt have a full-time person in charge of continuous improvement.

To thrive in today's business climate, you require the ability to internally generate increased profits without relying on your customers or suppliers. You can best (and maybe only) do so by incorporating a systematized process for continuous improvement in the business. Without such a process, you face too high a risk of failure or of achieving less than acceptable results.

A leader of the continuous improvement process is a key starting point for systematizing the process. This person provides a focal point where project activities, the team structure, the team process, defined measurables, and desired results all come together. This is the only way to ensure that the company achieves its goals and its vision of the future.

Think back: How many times has someone gone to an outside course or workshop and never had the chance to implement the new ideas gained there? Sometimes, the person has even left the company before doing anything with the information he learned at the course. A designated lead person, however, is responsible for helping to turn individual knowledge into company results, preventing such occurrences.

Change is difficult. Many companies do not know how to change on a regular and predictable basis. Companies trying to create a lean environment, even just on the shop floor, have struggled because they did not approach the process with the appropriate formality and the necessary structure. In many other cases, senior management did not understand that becoming lean was not a project, but a way of life and a brand-new way of thinking. Thus, they failed to create a robust vision and provide the necessary leadership from the top. Once they changed, the results changed, too.

A final note

So, there you have it, the 10 Commandments of Manufacturing - easy to understand but not as simple to achieve. Good leadership is about maintaining the highest rate of change that an organization and the people can accept. Targets must be difficult and challenging, yet achievable.

I have one last recommendation. As you progress on your journey, there is probably one underlying principle of change that is more important than all others: It must be OK to fail. Tom Peters, author of In Search of Excellence, has often said that he would like to see a company award for the biggest mistake or biggest faux pas of the year, because it would signify that someone must have stuck his neck out far, reaching for an important goal.

You must encourage people to take risks, to stick their necks out. A successful culture of change (and of progress) must encourage people to challenge the status quo. It must be more dangerous to give in than to dissent. It must be OK to dream and speak the unthinkable. Staying put must be considered the highest-risk strategy of all.

Part I appeared in the Spring 2003 issue of Krannert Magazine. Contact Ribar for a copy of the full article (see contact information below).

THOMAS F. RIBAR, CFPIM, MSIA '75, is president of Management Solutions International, located in Cedarburg, Wisconsin. He is a nationally recognized expert on process-improvement strategies and has worked with hundreds of companies to help them raise the integrity of their inventory records.

A frequent presenter for professional organizations like APICS (American Production and Inventory Control Society) and INC Magazine on various management and business-improvement topics, Ribar is also a member of several manufacturing and quality associations, including ASQ, AME, and APICS, where he has earned the Fellow (CFPIM) designation. In addition to his MSIA, Ribar has a BS in electrical engineering from Purdue.

For a copy of the full article or for more information, you may contact Ribar at (262) 375-7400, fax: (262) 375-8640, or e-mail: tom@vision4success.com.