Four Indian Companies have won the Deming Prize for 2019. With that 33 Companies from India won Deming Prize so far. One of the Companies that won Deming Prize in 2019 is ELGi Equipments Limited, an Industrial Air Compressor Manufacturer from Coimbatore. I worked for this company for about 7 years and that is a reason to be extra happy and proud of ELGi’s achievement! Congratulations to all ELGians world over!
ELGi is a good example of sustaining the Excellence over a period of time. I can see two big reasons for this sustenance of Excellence as an outsider with some inside knowledge (though outdated now).
The first Big reason is the commitment of the Leader. The Managing Director, Jay is fully committed to this process. This is a very big reason why they have won the Deming Prize now. I can’t imagine ELGi going anywhere near the Prize without this. His Commitment, I am sure would have trickled down to every ELGian.
The Second Big reason is the ‘Full Time Business Excellence Team’ called as ‘ELGi Business System Team’ or EBS Team in ELGi. I have seen many companies who do not care to spend money on this full-time Team, and I have seen that their practices collapsed over a period of time. A Full-time team is needed to sustain the practices and keep improving them continuously. This is a strong team in ELGi that motivates the employees to sustain the practices.
There may be more reasons that ELGians would know. These are my top two looking from outside.
So, how do Awards help companies? Should you go for an award?
There are many Excellence Awards available for Manufacturing Companies to challenge. Deming Prize, Deming Grand Prize, TPM Excellence award, TPM Sustenance award, Rajiv Gandhi National Quality award, Bajaj Award, CII Award and so on. You can Google and you will get many of them.
Running Business is a Sprint or a Marathon?
An Athlete who runs Sprints is generally Muscular and his approach to the run is to put his full effort and cover the distance at full speed. He aims at putting in his full energy for that limited time and get the best result.
An Athlete who runs Marathon is generally lean and strong. He aims at conserving his energies and run for the long distance. He aims at completing the Marathon in Best possible time.
So, should you run your Business like it is a Sprint or like it is a Marathon?
We are good at focused efforts!
My observation is that many Companies struggle to maintain the momentum of improvement within the Company. Teams keep losing their interest towards the Goals, Senior Management keep wondering why Kaizens do not happen on the Shop floor, why the Sales team is not pushing with full vigor towards improving their market share and so on.
We can observe the same behavior in our Society too. The Corporation cannot maintain the Sanitation in the City. The Police cannot maintain the traffic discipline. The Road works seem to be happening forever. The Flyover project seems to be going on without end!
But we are good at getting things done if there is an emergency! Remember the Commonwealth Games in 2010 in Delhi? Even before couple of weeks, the games looked doomed. Lot of work was left incomplete. The foot over bridge in front of the stadium collapsed with just 12 days to go to the Games! Yet, we managed everything, and Games were conducted without any major embarrassment to the Country!
I remember Tamil Manadu (A World Conference on Tamil Language) in Coimbatore in 2010. The whole city was in a mess with 10 days to go. But then the Government pulled its’ act together and got every work done in those last 10 days! Coimbatore got a face lift during that time!
Everyone who works for a Manufacturing Company would know the ‘Tremendous efforts’ that the teams would put in hours before the ISO Certification / Renewal audits or the ‘Fantastic effort’ that the New Product Team has put in after threats from the Customer that he will cancel the Order if another deadline is missed out!
There can be many more examples of focused and concentrated effort under duress! We are good when it comes to focused effort with clear goals. This effort has to be for a limited time. Otherwise, the problem of maintaining the momentum returns!
Run Business like a series of Sprints!
It would be nice to run Business like a series of Sprints! Focused efforts with Clear goals for everyone in the Company!
If you can manage to do this without going for outside Awards, it is better. The concentration is on Business and Business only! You can do it if you can create enthusiasm around the Annual / Three-year Goals of your Company!
I would say the following are very important to make this happen:
- CLEAR goals for the Company / Individual Employee. These Goals have to be Clear for the Year / Quarter / Month / Week / Day.
- Company and Individuals should be having good Continuous LEARNING opportunities. The environment in the Company should be encouraging and enabling Learning continuously.
- LEADERSHIP should be able to INSPIRE the teams to raise above their normal potential and deliver something superior!
If these three elements are there in your Company, you can definitely create Sprints that would keep motivating your team to keep delivering continuous superior performance.
I would prefer this as the whole Company would be focused only on Business.
Many companies use the Award route when the Internal Motivation is not happening or they may chose it to add to internal motivation! There is nothing wrong with it. This is like an Athlete taking a performance booster. You would agree with me that you can’t be on Performance Boosters forever. Many companies learn how to create this ‘Sprint like situation in the Company’ after a few awards. I also know companies who got stuck to the Award culture forever! I do not recommend this!
All said and done, Companies do get slightly distracted when they go for an award. The award criteria can be nicely aligned with the Company’s Business Goals. But if it is not done properly, you would be ‘doing a lot of work for the award in addition to your regular work’ ! This is where the Companies get distracted. The Leadership has to ensure this does not happen.
There are many companies who have failed to make their effort for an award align with their Business Goals. These companies will also loose the benefits of the Award very fast! The Excellence which seems to have got them the award fitters away very quickly.
How to get maximum benefit from an Award?
You won the award and you are on the top of the world! Savor the moment. The Business exigencies are always there to remind you of reality that you need to handle.
You need to ensure that you get maximum benefit from the Award you just won. You can do some of the following.
- Ensure the Goals of the Teams and every individual in the team are clear and continues to be challenging. Don’t let the team go for a ‘Long unwind’ after the award. If they are achieving something continuously, they can’t be getting tired of achievement. If ‘they’ feel their work is an achievement!
- Ensure the Continuous Learning environment is improving in the Company. Celebrate Learning in the Company. Put Learning Goals for the entire company and every individual. Use Technology like E-Learning to help employees Learn continuously. Micro Learning is a great concept that can help Companies to build that elusive momentum towards goals!
- Address the Employees and put them on to a medium-term Leadership Programs. Help them to sharpen their Functional and Leadership Capabilities. Give regular feedback to the Senior people. Help them become better Leaders who can INSPIRE the teams. Every Leader at every Level should be able to Inspire their teams. Focus on encouraging the Leaders to hit the road and work hands on.
- Develop your own ‘Sprint’ Practices without the Award. These practices should be put in place immediately. While you may challenge another award, you still need to build the ‘Sprint’ practices without the award.
Use the Award to get over the Award!
In the next article, we will look at the process of winning Prizes and Awards!
For a Leader to be successful, especially in these fast-changing times, he/she has to be Learning continuously. But Learning is one of the first casualties once a Graduate join a Job. Somehow the habit of Learning dies once someone joins a Job. As one gets promoted and goes to senior positions, the Learning habit gets buried in the ‘heap of experience’. One can Learn from own direct experiences and from what is happening around them. My observation is that most of the Executives are very resistant to Learning. The more senior a person is the more he/she believes that there is nothing more to Learn.
To Learn or not to Learn?
If you are the Senior Leader in the Company, you may be even thinking that it would be counterproductive to say that you are learning, or you want to learn! The proportion of Learning Leaders is very small.
How do I learn?
It is not that no one wants to Learn! I observe that many of us want to Learn. Learn something new and so on. But, most of the times we fail to Learn! I notice that many people may not know how to Learn!
When you were in College or in formal Education, there is a structure to your Learning. I remember when I went to a 3-year MBA while working. There was a strong structure of Monthly classes, Assignments, Residentials, Group discussions and so on. I was able to Learn a lot! I am always thankful to my employer then, Rane Group who sponsored me for that excellent Course! When you are dealing with many issues live, you can learn much more than when you just completed your Degree!
Now, how do I learn at Job where there may not be a structure for learning? How do I learn in my Business? This seems to be the issue many people are facing.
There is nothing to Learn!
Of course, other than this there is this callous attitude of saying ‘I don’t have time to learn’! For these ‘Busy bodies’ the time has not yet come! We can try to help them by trying to rise their ego to Learn. But responding or not is still their choice!
While working in a job and as an Executive and Business Coach, I have always tried my best to Learn as fast as possible. I remember one celebrated Teacher commenting about me as an ‘Osmotic Learner’ meaning someone who learns with every breath! This had been a god given strength for me.
I have been trying to teach the art of Learning to many people with whom I had the fortune to work with.
I would like to present you a few Best practices in Learning.
01. Learning is Highly Technical: While some of us can learn fast and naturally, many of us require a structure for Learning. If you agree with me that this Human Body is a sophisticated machine, then there is a way in which this Machine Learns. I think David Kolb captured this very well in his Learning Model.
Kolb says as we go thru many experiences in life, we need to Observe what we are going thru in a reflective manner. We then have to conceptualize the Learning to our context and then experiment it in our life.
We need to ensure we follow these steps. Many of the Training programs stop at Concrete experience stage.
We have to Learn the art of Reflection. This is very critical step in Learning. No reflection – No Learning! But once you cross this stage the other two are as important.
In the area of Reflection, writing Diary / Writing Logs of incidents that we go thru can be very useful. This is the way we try to practice what we learnt!
02. Your own Leadership Model: I would encourage every Leader to formulate his/her own Leadership Model. This model should reflect how he/she is practicing the art of Leadership. This does not mean we will not improve this model. We are going to have the model so that we can improve what we have. If there is no Model you don’t know what you are practicing and you may not be able to improve.
I am reproducing my own model of Leadership below. This is one model. I am sure you can do even better than this one.
I continuously keep improving this model.
03. Career Goals / Learning Goals: You need to be clear about the direction in which you would like to learn! For this, you need to have your Career Goals and Learning Goals for at least next one year! Without this, you may work hard and still not find yourself with good direction!
04. Showing Gratitude: Showing gratitude for what you already have is very important to Learning. Acknowledging what you have is important to get more! Once you start showing gratitude, your attitude towards world changes radically. It opens you up for more Learning. Try it! You can write down all the good things that you already have in your Life and thank whoever has helped you to get them. It may be your Teacher, your Boss, your Wife, your children. It would be great if you can tell them personally. You can keep going thru this in your mind every day!
05. Partners in Progress: In your Learning journey, you need the help of your Friends / Colleagues. Without them, you would be simply Blind to your Strengths and Weaknesses. It would be good to have a group of Colleagues/ Friends to get a 360 Degree feedback and a feedforward as to what you can do to improve yourself in a specific area. Please be bold to pull in a few people who do not see eye to eye with you on a few issues. When someone is not agreeing with you, it is a chance to improve. If you ignore them, you are going to lose chance to improve!
06. Use Technology: We are going thru Fourth Industrial Revolution! These are exciting times. There is a lot of technology around us and we can use it for our Learning too. You can rewire your Learning using the Technology. Use E-Learning courses. A Good E-Learning Company can help you to use the Courses in a systematic way. Micro Learning is a concept that can help you to learn regularly and at a Micro Level. You can keep learning the Micro Skills continuously.
Kick off a Learning Journey!
My experience of observing myself and others says that the whole journey has to start with ‘Reflection’. Please look at the Video of Robin Sharma on Reflection. He puts the concept together very well.
A few years back I had a chance to visit Toyota in Nagoya, Japan. We were allowed to go on to a ramp that goes on top of the Manufacturing Line across the factory. You could stand there for about an hour and observe the Manufacturing process at various places on the shop floor. It was a Car assembly line running in the shop floor with all the support functions available right next to the line.
Typical to Toyota Culture, the line was stopped frequently to fix problems. The problems were so small, and the response was so swift that each of the stoppages was for not more than a few seconds! The relevant team would run to fix the problem. We understood that the line was running so well that they had only problems that can be fixed in a few seconds. But they were still encouraging their employees to stop the line and fix them. The line had the traditional Andon String running the length of the line.
It was obvious that the Assembly Line is the center of the whole Factory. Everyone was focused on the Assembly Line and supporting it. They were all clear that they are there to ensure the Line is being run continuously without stoppage. The Support to Manufacturing was overwhelming.
Status in many of our Manufacturing Companies
There are few Companies in India that run like this. I am sure all the Vehicle manufacturers run like this. Automotive Companies have evolved this way. One helpful factor is that huge moving line in the Shop floor.
The Status even in the Auto Parts Companies is not as good. The status in non-Automotive sector is worse. The focus on the manufacturing is simply missing. Everyone is worried about the Production and if it is not coming, everyone is preoccupied with that worry. No doubt about it.
But the Companies do not work with the Manufacturing at the Centre. The Manufacturing would be suffering for want of attention in the midst of the ‘Worry for Production’. It sounds like I am talking about opposites! It is true. In the midst of their Concern for Production, the Companies are not positioned to support Production.
In fact, I have seen a Company where the Top Management target the Plant teams regularly as they feel the Plant Team is not performing! All the Corporate Functions regularly target the Plants for their ‘inefficiency’. The heads of Plant Heads roll regularly due to their ‘non-performance’. This type of Top Management and a Corporate team is a nightmare to all Manufacturing Plants!!
While the above Problem of Top Management targeting the Manufacturing Plants is not very rare, there are several other happenings in these Companies where the Manufacturing does not get good support.
01. People: The Work of the Supervisor Engineers and the Manager in charge of the Shop starts with running for the Workmen. Almost on every day, they lose some of the NEEM Trainees or the Contract Workmen and they can’t run the lines right from the beginning of the Shift. They run to HR department to plead with them to give them more people. Then, there will be usual rush to get more people and HR pleads with the Contractors to get them more hands. It is not overstatement to say that most of Indian Manufacturing runs at the mercy of these Contractors!! The first 90-120 minutes in every shift is spent by the Supervisor running around to get people! Who is worried about the Shift Startup procedures!!
02. Material: In most of the Companies the Production Plan simply does not work as there will be Material shortages almost on a daily basis. The Production Plans have to be changed. If changing is not possible, then the Shop will idle till the material comes. The Supervisor Engineer is again running around to Stores / Materials Department to plead with them to get him the Material. Most of the times the Production team Produces the Product for which the material is there. Not what is planned and not what is needed by Customer today!
03. Quality: Next task to the Supervisor Engineer is to run after the Quality Inspectors / Quality Managers to take their help in resolving the Quality Problems. The Supervisor Engineers are conditioned in such a way that they have forgotten that they are Engineers and even for a small problem, they search for ‘Quality Engineers’. The Quality Engineers / Managers have to take a call about the Quality issues either about Incoming material or about the Process.
04. Maintenance: Suddenly there may be a Breakdown of a Machine and the Supervisor Engineer has to run for the Maintenance team. These guys may be available mostly on the Shop floor. But they may be busy in something else! This Supervisor Engineer has to go to them and impress upon them about his line/machine.
05. R&D: Most of the days there will be a few New Products that are running on the Shop floor. They don’t behave in a predictable manner. The Parts are not settled, and Process is not settled. So, the Supervisor Engineer can be seen running to the R&D to get the experts to handle the problems with the New Products. The Production Manager also will get involved in this as he has to handle some Big Shots!
This way the Production Supervisor and the Production Manager have to run around the whole day to various people to seek their help! Sometimes the Top Management will get angry with them that they are not coordinating well with all functions!!
In fact the HR would recruit the Supervisors who are good at coordinating. The demand for Problem solving skills, Product / Process Knowledge etc in Supervisor Engineers may not be even asked about. It is decided in most of the Manufacturing Companies that the role of Production Engineer is to go around pleading with the various Powers in the Company to help him run the Production!
As the whole Company’s focus is on the Production numbers (?!), the Supervisors / Managers in Production have to ‘Perform’ and they dance the whole day.. all around the Company!!
This has to change. In Manufacturing Companies, the Manufacturing has to be at the center of the Company along with the Customer. If we do not have a stable Manufacturing, then the whole company right from the Managing Director has to focus only on that. This is good enough reason to change this set Paradigm of Supervisor Engineers / Managers running around the whole organisation!!
How it should be?
Settle the Age old problems: A Manufacturing Company has to settle the traditional problems of Material Shortages and ensure the Manufacturing runs as per a Plan ! This is not impossible. Every Supplier wants to maximize his Business with you. So, if someone tells you that Suppliers are not supplying, read it as ‘the Supplier engagement’ is not okay in your Company.
Should be Available on the Shop: All the People who directly contribute to the Manufacturing should be available on the Shop floor. The Andon signaling is a simple system that can be used to alert the concerned persons when there is a stoppage of a machine or a line on the shop floor. All concerned persons should be able to see the Andon light physically.
- A HR Officer should go to every line in the morning and check about availability of manpower and take care of problems if any.
- A Maintenance Engineer should have a simple system of getting notified about a Breakdown and he should be measured on his response time.
- A Material Buyer should be going to every line and looking at the Kanban cards. He should be held accountable to any Shortages.
- An R&D Engineer should be held accountable to occupying the shop floor beyond the time agreed.
- A Production Engineer should be encouraged to own the Quality. He need not be running around to fetch Quality Engineer/Manager.
Restrict the Meetings: The team who are on the Shop floor cannot be called for meetings. If they are required for a Meeting, then someone has to step into that role while the person is away from Shop floor. This has to be implemented strictly. If you are not allowing the Engineers to do their job, then how do you expect them to deliver?
Review of Losses: The Losses on the shop floor should be given utmost seriousness at all times. The Plant Management has to treat the Production Losses as a very serious issue. They need to minimize the losses continuously. There can be no other priority to the Plant Management till the Losses are addressed squarely. The Top Management should support this approach. Many Companies try to do too much on the shop floor without these fundamentals. Top Management wants to implement every fancy concept before they settle this. That is the main reason why the new initiatives do not work on the shop floor. So, we have to be patient with Manufacturing Plants. Build the Foundation first.
Accountability: The various Functional Heads should be held accountable to the Production line stoppages. This should be the biggest focus of the Functional Heads. Someone who is not focused on this has to be corrected firmly. If they are held accountable to the losses, I am sure the Functional Heads will deliver.
Manufacturing should be the focus: The Manufacturing Team has to be given very high focus and support. They should be treated as very important people and they should have the ear of every Senior person in the Company. We are not talking about individuals. We are talking about giving priority to the function. When you do it, the focus on the Manufacturing will improve.
Change the Paradigm
Change this existing / outdated Paradigm of Manufacturing running around everyone else in the Company to take care of daily Production. It makes Business sense.
A Company where the Manufacturing is not settled, cannot do anything else. Right from Managing Director would be preoccupied only with that worry!
It makes a lot of Business sense to settle this problem here and now!!
In the past 6-9 months, most of the Industries across India have started complaining about their Businesses slowing down. May be this problem very much exists in other countries too. But, let me focus on Indian Companies. The Slow down panic is there in many industries and everyone has his/her own theory about how bad it is, why it is happening and how long it will last.
In this article, I would like to just focus on ‘What a Company can do during the Slow down’.
Every Company would have expanded their capacities with some expectation of Sales every month. When that Sales is not happening consistently for a few months, they would start panicking. Usually, you would see following happening in Companies where the Sales is not happening as per plan and it started dipping below the last year and last few months average.
- Sales Team looks help-less. They are not achieving the Targets consistently and Sales numbers are falling steadily. The Sales team keeps reporting bad numbers. After a few months, the Management may start accepting that there is nothing that can be done, and Sales team is trying their best!
- Employees get fired. The Contract employees are the first to be fired. As the Sales Dip continues, the firing will extend to other types of Trainees, Junior Staff, in Some companies’ Senior people will be fired as it gives better bang per firing. These same Employers talk about the need for Employees to work as owners in good times and when things go wrong, they fire the employees (Rajiv Bajaj put this wonderfully in his interview with CNBC).
- Inefficiencies increase in Factories. The Factories start idling and the Production efficiencies increase. Again, this keeps getting accepted as okay as the Volumes are down.
- New Product activity reduces. Most of the Companies will see their New Product activity reducing as they do not want to take more expense and more risk during the slow down.
- Mad rush to reduce Fixed Costs. The Semi Variable / Fixed Costs get cut ruthlessly. Maybe it is right to do that. But even the essential ones will get cut.
- Negativity all around. There will be a mourning environment and the energies are down. Senior Management pet topic is about how to cut Costs (Again nothing wrong with this approach. But that can’t be the only chant.)
- Company starts going into a shell. You can almost see the company getting into a shell withdrawing all signs of life! It is almost like closing your eyes hoping the storm will just pass and it won’t affect you if you close your eyes!
- Everyone starts asking for Government help. Last but not least, everyone starts looking to Government to rescue them. Government can help Companies to enter in to new markets across Globe by passing on some subsidies to them. This is done by many Governments across the world. China is a wonderful example of supporting their Industries selectively so that they can penetrate the Global market. But, you can’t expect Government to come to your aid whenever there is sluggish demand or more serious slow down.
What else we can do?
I would argue that most of the Indian Manufacturing Companies have huge possibilities for improving themselves. The inefficiencies that are there in the Companies are huge. The Slowdown that is happening can be used to rediscover themselves in many areas of Business. We can look to becoming a stronger Company that can withstand these Slow times! I am not talking about throwing lot of money at problems. I am talking about fundamentally restructuring your P&L in such a manner that you can withstand these Slowdowns.
Let me highlight a few ways below. We will deal with each of these areas in detail in articles that will come in subsequent weeks.
01. Skill up your People: A Company is built only by the People that it has. When the Top line dips, Companies should not look at firing its’ People. This is foolish and it is akin to shooting yourself in your foot. When you look at the Shop floor Employees, most of the Companies are living on Contract employees and Trainees whom they can fire immediately! This is no great Leadership! You can show great Leadership by:
a) Re-engineering the Learning: Defining the Skills required for each of your Employees, Skill them up by using Modern Technology like E-Learning. Use this Slow down to re-engineer the way you focus on Skills.
b) Make Learning Contextual: Define Micro Skills and Micro Learning agenda for employees depending on your Business agenda for this Year. Train them for the Context by using the E-Learning.
c) Bring Skills to the center of the Business: Link Skills to Performance and link Skills to Performance assessment. This will ensure your Employees create a pull for Skilling up.
The Business Goal for this activity should be to Triple the Sales Turnover created by each employee in the Organization over next 2 years. This is very much possible. Leaders need to take up this challenge.
Do not look at firing Employees. Rather, build a Team that is totally committed to your Organization and this will make you win in the Longer run. In the Short term too, only this can create good results. If you fire people and improve your Bottom line, the Investors would see it clearly. You would be harming the Company by doing this.
02. Re-engineer your Business Systems: Most of the Indian Companies do not have a clear way of working. The SOPs are there in ISO files and they get dusted before every re-certification audit. After that no one looks at them and no one follows them. Some of the following can be done:
a) Re-engineer the way you Manufacture. If you have not implemented the Lean Concepts on your Shop floor, this is the time that you should do. Everyone will understand the seriousness of the Situation in a Slowdown.
b) Re-engineer the way work happens in various Functions. The Productivity of every activity can be at least doubled if you have not applied Lean principles to it. I am talking about the activities that your Staff does. Time taken for releasing a P.O, Time taken for accounting a Bill and so on.
c) Define the way of working in every Function. You should define your ‘way of working’ in every function. New Product Development System should be defined, Cost reduction System for your company should be defined, Sales Process should be defined, Marketing Process should be defined and so on.
The Objective of this exercise should be to get every activity in the Company done in 50% of the time compared to what it is now.
03. Re-engineer your Costs: The Opportunities for reducing the Cost in a significant manner are there for many companies. In the past decade or so, the Companies are focusing more on Costs. But still there are opportunities to reduce Costs. Some of the activities that can be taken up are:
a) Taking up Big Targets for Cost reduction.
b) Conducting Brain Storming sessions.
c) Involving Subject Matter experts.
d) Bench marking with World Class Products.
The Objective of this exercise again should be to improve the Profitability by 35% or more. A Big target will make your team to think entirely in a different manner. Have trust in your team, they will deliver the results.
04. Re-define the Market Place and the way you approach it: In the current status of the Industry where there is a big change that is coming up in Auto sector in terms of surge in Electric Vehicles and reduction in IC Engine vehicles, many Companies have to have a relook at their focus areas. They may have to redefine their Industry focus. A Foundry / Machine shop that is focused on Auto sector has to realign itself to other Industries.
When a Slowdown happens, it is not that the whole Business has disappeared. You are not growing. But there may be several other Companies that are growing. Indian Economy is growing by 5% right now. You are not aiming to capture the whole Economy. It is just fine for you if you are able to capture a few more new Customers. Every Prospective Customer is looking for new ways to save money and reduce costs in this environment. How can your Team deliver this to these Prospective Customers? If you are skilling up your Team, you can ask them to deliver this result for you. If you are firing them, then there is no one to deliver this result for you!!
If you have been rejecting RFQs that are 20% below your Price expectations, then can you challenge your team to start reducing the Costs and accept more of these RFQs?
05. Re-engineer your Products: Use this time to align with your Customers much more. Every Customer wants the same product at much lesser price. You may be having ideas for reducing the Cost and come out with a new Family of Products. But you would have been postponing it due to the pressure on the Factories and R&D Team. Now, the Factories are not having the Pressure. Focus more on New Product Development, come out with the Family of Products that may be Priced 20% cheaper and most of the functionality.
This is the time to teach ‘Frugal Engineering’ concepts to your New Product Development team and become more attractive to your Customers.
Fill your Company with Positive energy
There may be many more Initiatives that can be taken up. What I am suggesting is that you should use this time of Slow Down to energize your Employees and ask them to take your company to the next level in terms of Competitiveness.
Use this time to create some World Class Benchmarks!
There are many Leaders in the Manufacturing Industry. I have had the Privilege to meet Hundreds of Leaders as part of my Career and Business/Executive Coaching. No two Leaders are the same. Each Leader is interesting in his/her own way. Each Leader has his/her own way of guiding the team and getting results. We can look at results and say who is effective and who is less effective. But, it is also important to look at the Process that each of these Leaders follow.
Let me discuss a few examples of Leadership that I have seen.
01. Patient Leader: I have met a Leader who does not follow up hard with his team. This Leader may / may not fix any targets. If a Sub-ordinate is proactive, he may bring a target for approval by the Leader which the Leader loyally does approve! Otherwise, he is not running after the Team members for Targets. This Leader also does not review his team closely. He does not put any pressure on his team. None whatsoever. In fact, he is trying to make them absolutely comfortable in their jobs.
While this is the style of the Leader, the Subordinates who are quite conscientious are building their own methods and achieving the results that they can. Those who are not firmly in control of their problems may not be delivering very good results. This Leader is not putting any extra ordinary pressure on this person. Sometimes he may get involved in this area a bit more.
The results in this company are reasonably good. They keep growing very well. It is not a very small company. It is above Rs 1000 Crore turnover and they are growing.
When you look at the Business Systems in this Company, they may not be very strong. Whether the Company can withstand strong competition and survive in a tougher environment also? It remains to be seen.
But, fundamentals related to People seem strong.
This type of Leader is a big exception and I have not seen this type of Leader coupled with good results in short and long term. There are leaders where the Business Results are there. But not Process results.
02. Lost Leader:There are many Leaders of Companies who are expecting a lot from themselves and their teams. But, they have no idea of how to achieve it. They keep taking up BIG targets and keep failing regularly.
They keep pushing their teams hard. The teams do not have a way of going after the Targets. The guidance from the Leader is not Clear.
Results are always well short of expectations. Very often I found these companies more or less stagnated at the same level for years on!
This type of Leaders are many. I am not referring to Entrepreneurs only here. There are many Professional Business Leaders who fall in this category.
03. Aggressive Leader: Then there are Leaders who are out to achieve everything and, in some way, or the other. They want results ‘somehow’.
The Targets are usually set to be quite aggressive. But, these Leaders are okay even if their team achieve 75% of these Targets. They have fixed ‘high’ targets in a ‘smart’ manner!!
These Leaders usually tell the team what to do, how to do and of course when to do. They just seem to know everything and have answers for everything.
These leaders ‘deliver’. Their Bosses are very careful with them.
These are the Organisations that are stuck in the wrong place. They seem to be getting ‘Good’ results and they don’t want to even blink while this is happening for the fear of losing everything.
But, they would be damaging the organisation quite badly. When this extraordinary Leader leaves, the Company will come back to Zero.
This is perhaps the most dangerous of all the situations.
How to build your way of Leadership in a conscious manner?
I would say that the type of Leadership that you adapt should develop the People in the System continuously. It should be a very strongly Process oriented approach.
I have heard from some accomplished Leaders that Process is not required when a Company is Small, and it is required only when your Company is beyond a certain size. I would invite these Leaders should look at their definition of ‘Process’. Are we straight jacketing our definition of ‘Process’ meaning something that will deliver results only in the medium / long term? A small company / unit requires to deliver results quickly. A Baby who is trying to walk for the first time needs to develop the muscles in the legs. He can’t be worried about preparing for University examination. But, the Process that he adapts should aim at delivering the Short term results only. A Baby that has to learn walking will be helped by her Parents to practice this walking in a controlled environment where the Parents remove all obstacles in the Baby’s path and one Parent releases the Baby while the other goads the Baby to move and come to him. There is a process happening here!
I would say Process focus is a must whatever the size of the Organization. If you don’t have a method of doing your work, then the results happen only by chance.
I would lay down Three Components of ‘Your way’ of Leadership:
01. Your Expectations: A Team develops to meet the expectations of its’ Leader. If your Expectations are set in miserly manner, you are short circuiting the development of your Team. At the Same time if you have too high and unreal expectations from your team, it won’t work.
Please note that it is your Team who will decide whether a Target is unreasonable or not. If they feel it is ‘unreasonable’ and you feel It is ‘reasonable’, the onus is on you to prove it can be attained. Not on them !
If you don’t agree on a Target, please note there is no communication happening !! You need to STOP here and fix this.
You need to have a good Vision of what you can expect from your Team. You need to stretch the Team so that the BEST comes out of them. I would say that this ability of Leader to set the Right expectations is an art. He/She has to look at their team and know how to set expectations and rise the expectations slowly. The speed of raising should be slow enough not to leave too many people behind and fast enough not to disappoint the team members with good capabilities.
The Leader should be very clear about the Targets for this year broken up in to Monthly / Weekly / Daily Targets. Leader has to guide the Team to break up the Targets and ensure they know what to do today to achieve their Weekly / Monthly / Quarterly/ Annual Targets.
01. Your Follow-up: A Leader has to work out his own way of Follow-up with his team. The Follow-up tools will include the following:
a) Business Reviews: Regular Business Reviews and Fixed agenda for these Reviews is very important. If you ask ‘x’ number of Questions every week and you are asking the same questions, the whole organisation designs itself to answer your Questions. Definite paths develop in the organisation along the questions that you are asking. A good Daily Work Management (DWM) (You can get certified as a DWM Specialist with the help of an E-Learning Course from IMA) with good KPIs helps this situation. What is important is to ensure Business Reviews are happening at ALL levels. Not just your Reviews at the Top.
b) Motivation system: The Motivational methods in the Organisation should be continuously tweaked to push the Objectives of this year. Many companies who have some motivational systems have FIXED systems. This does not help. Your Award and Recognition systems should be evolving continuously.
c) Organizational Initiatives: When you are pursuing a set of targets in the Company, you may see a need for taking a bigger action in one area. Example : If too many accidents are happening in your Shop floor, you may feel the need for a major improvement in the area of Safety. You may appoint a Subject Matter Expert either as a Consultant or a full time employee to push for a revamp of Safety systems. These Initiatives are important to help your Company to make some bigger improvements.
d) Deep Dives: In some situations, just reviews are not enough. You may want to get down to the Shop floor / Market to lead some Activities. Eg. In a tough Market environment, You may want to go out and meet the Dealers across the Country to find their views about Market status. Look at what is working and what is not working so that you can motivate the team to get results where they can. These Deep Dives are very much needed to know the Status on the ground and to understand the Problems on the ground.
e) Bench mark visits: It is very important to take the Team to look at other Companies that are doing well. Nothing teaches your team better than a working model. Many companies are quite open to receive teams and share their experiences provided you know the Questions to ask. Companies are available across the world in different economies. Bench Mark Visits have to be timed well. You need to take the team to these companies when they are ready for that. A wrongly timed visit will have no impact.
Many a times the Leader adapts only the Business Reviews for Follow up. Even these Business Reviews will end up in lot of questions rather than answers. This will demotivate the team rather than motivate them! Be careful about this aspect !
Try and put yourself in the environment that you are giving your team and see whether that environment motivates you. You can ask for feedback from your team too!
3. Your Guidance: We spoke about Your Expectations and Your Follow-up. I am talking about another aspect of Leadership. How do you guide your team to put the pieces of the puzzle together and find their way around?
A Sales & Marketing Manager has to build the Process of Selling and Marketing. If he has a wonderful process, he should be delivering consistent results in line with your targets. If he is delivering, it is time to raise the bar. But, the continuous development in the process is a must. Being static is being dead! How do you guide your Colleague to improve his methods?
A HR Manager has to keep measuring their effectiveness in developing people. There is so much modern technology today for People Development is that he should evolve a better process every day. How do you guide him to develop better and better methods fo improve Human efficiency and Human Learning methods?
A Finance Manager has to look at better and better methods to monitor all the costs and understand the activities that are causing the cost. He should make the activities so transparent that anyone can monitor them and control the Costs. How do you guide him in this?
A Leader has to guide her team members to develop these processes in every interaction that she is having with them. This is the higher purpose of Business Reviews! We are not reviewing them to just push them hard!!
To give this guidance, the Leader need not be expert in everything. All that he needs is a systematic thinking and patience to guide. I would say each Leader has to spend at least 2 hours per month with each of their team members to look at the processes and guide them to improve the processes. In some cases they may spend more time and in some cases they may spend less time.
Using the above aspects of Leadership and other aspects that you may feel necessary, it is required for you to build YOUR WAY of Leadership that continuously evolves and that delivers Consistently!
If your team is getting consistently better results, this is one indication that you found your way!
When you look at a typical Manufacturing Company in India, the usage of IT is very limited. A small percentage of Big companies use IT in an effective manner. While a great majority do not use the Quality, Manufacturing and other Modules in ERPs like SAP even though they would have paid for it and they lie unutilized in their servers.
Resultantly, most of the Important work in Manufacturing happens off line. We don’t try to control the Manufacturing process as it is happening. Most of the controls are off line. We seem to be letting defects / problems happen and then we are reacting.
Can we go more online?
I think we should go much more online than what we are right now. I would recommend using some Apps for specific purposes. I would recommend using IT in two areas to begin with:
a) How Employees Learn
b) How Employees pursue Routine
Let us examine how we can use I.T effectively in these two areas.
How Employees Learn
Objective of this exercise can be to reduce losses on the shop floor and improve efficiency by bringing a focus on to the Skills and Knowledge of every employee in the Shop floor.
Today in most of the Companies there is some focus on the Skills of the Workmen. In most of the Companies this focus is very weak. There is no effort to continuously improve their skills. Focus on the Skills and Knowledge of Staff is much lesser. Only a very small percentage of the Companies the Staff are getting trained in a systematic manner.
We can’t afford this anymore. We need to become very efficient if we want to grow our top and bottom lines. Let us act on this !
I would suggest defining the Competencies that all the employees need. These competencies may cover:
a) Product Knowledge:The employees need to have good knowledge of the Products that they produce.
b) Process Knowledge: The Manufacturing Process and the process in every function can be another focus area.
c) Systems Knowledge: The Systems that the company may be following can be another focus area as this will ensure employees know the way of working in the company. Eg. Manufacturing system, Daily Work Management System , Policy Deployment system etc.
d) Functional Knowledge: This covers the knowledge that each Staff member needs to have respective to her function. Eg. APQP / MSA / Problem solving knowledge for Quality Engineer.
Bring the Training online
You can bring the Training on these topics online by doing the following:
- Define the Training agenda for each employee covering topics from the above 4 fields.
- The topics defined should have close link with the requirement of Knowledge and Skills to achieve the goals for that year / Quarter.
- Divide each of the Competencies in to several Micro Competencies / Skills as applicable. We should go really micro so that the topics become small enough for easy consumption.
- Have Learning hours every week. I would recommend at least 2 hours every week.
- Make the Learning content available on line on the cloud.
- Define Certification Standards for every Micro Competency / Skill in terms of Knowledge, Implementation and Results.
- Certify the employees continuously for the Micro Competencies.
This will ensure that the Employees will have continuous focus on Skills, Knowledge. This will ensure the efficiency on the shop floor improves.
The Training and Development has to be owned by the Functional Leaders. They will be the Sponsors of the Training as they will have to show the ROI.
By bringing focus on Skills and Knowledge, the Functional Leaders can make huge progress on the efficiencies in the shop floor and that will more than pay back their investment on the Training.
How Employees pursue Routine
Routine is something that is not very exciting in a Manufacturing facility. But, without a strong and consistent routine, the heart beat of the facility can not be consistent. Most of the problems that Manufacturing Companies face is usually related to a violation of Routine.
Defects happen as the SOP is not followed, High Break downs of machines happen as the Preventive Maintenance does not happen, New Products do not perform better as the New Product Development process is not followed well. The list can be very long.
Strengthening the Routine in a Manufacturing Company can give very high returns.
If you look at how the routine is being followed now, it is mostly offline.
- Quality System is verified off line.
- Machines Preventive maintenance happens offline.
- The Production Routine of a Supervisor happens offline.
- Safety checks happen online if they happen.
How do we bring the Routine of the Shop floor online? I have some suggestions.
01. Online Quality Checks: Develop a Software that will work on hand held devices (may be smart phones) that can do the following:
a. Trigger Quality checks on the basis of the Product that is running on the line.
b. The triggers may go for People across the hierarchy to take care of the ‘Layered audit’ principles making Quality the Collective responsibility of Employees at all levels and not just the responsibility of that Junior Inspector of Quality on the Shop floor.
c. The Data will be accepted in various ways by the Software:
i. Physical data entry by the person to whom the check is triggered.
ii. A Photographic input for Visual Checks.
iii. An electric pulse from an Instrument having capability to give output.
iv. There can be more ways in which we can collect actual data on Quality.
This will ensure that the Quality System becomes online and the checks that are happening and not happening will be clear. Quality can be controlled online.
02. Online Safety system: Similar to the above Software, one can use the concept for Safety checks too. The input can be similarly taken. In addition to the inputs mentioned above, the CC TVs that are available in Shop floors can be used to identify unsafe acts and alert the concerned employees.
03. Online Maintenance Checks: Again, the approach is same as explained in s.no 1. The Supervisor / Operator will check the Maintenance points on line. The machines that have Breakdowns and Machines that already have Zero Break downs can be treated differently in terms of the checks that you do.
04. Online Assembly line: The Assembly Lines can connected to Internet and following actions can be brought online:
a. Start up procedure. Many of the Start up procedures can be automated where the Software will sense the presence / absence of certain parts / resources. The Pressure in the airline can be sensed by a Transducer and recorded.
b. Running Status recording. The Line may stop for various reasons. The losses may be entered by the operators to ensure we capture the losses. The Software can ensure this.
c. Who is working at the Station. This is quite easily captured by the Software for traceability purposes.
d. No Fault forward. The Defects that can happen at each station can be defined, Quality checks to capture these defects can be available at every station and using a RFID / Barcode system we can prevent a defect going to the next stage.
e. Line Work Management. The Line can display the data on Production / Losses and escalate the information in case of Line stoppages and other inefficiencies.
There can be several more ways in which the work on a Shop floor can be brought online. When we do it, we have tons of data coming up from the shop floor.
Analytics: We need to have our Engineers trained to analyze this Data and take learnings from the data. The learnings may include:
- The Quality checks that are getting missed out and address some practical issues that may be there in carrying out these Quality checks.
- The Engineers who may be missing Quality checks at a certain time of the day and this data can help us to understand the way of working of the Production Engineers and help them to arrange their work much better.
- The Safety points that are getting violated frequently and what needs to be done to avoid these violations.
- The Breakdowns that have relation to running a specific product and specific operation.
- Relating the defects to the people / conditions / time will become easier.
There should be a small team who does these Analytics, takes the learning and does something about it.
When you go online, the Team has to become more Disciplined and more knowledgeable about everything around. The training discussed earlier will ensure this. The Online working will also highlight the absence of Knowledge and Skill of People much more.
Indian Companies have to shift to working Online earlier than what we think.
Are you getting ready?
I meet this team from a big Indian Tyre Manufacturing Company every month. I am helping this team to improve their Leadership Qualities. They are making very good progress. One of the members of this team is a Body Builder!! He is devoting a lot of time to exercising, lifting weights, running and so on. He is an absolutely fit guy!! He is real motivation to everyone around him.
But, I should say that this is an exception than rule among Employees of Indian Manufacturing. Even among youngsters, the percentage of people who are actively taking care of their health is very small. In any group of employees, I have not seen more than 20% who exercise regularly. Most of these people who exercise are just walking. May be 1% or 2% probably go to the Gym.
In any company it is the Mid to Senior Level Employees who take important decisions that affect more people in the Company, and these are the Leaders who give a Direction to the whole Company. I have seen that in most of the Companies this Leadership Team is not very healthy physically!! Again, there are always exceptions. There are some Leaders who are avid Marathon runners! Some Leaders who play sports and go to Gym regularly. But, as I said before this category is Very Very small!
Leaders need to be healthy Physically, Mentally, Emotionally and Spiritually. These are the Four types of Energies that are available to all of us. Many of us may not be aware of the four types of Energies.
What are the ill effects of ‘Unhealthy / Not very healthy Leadership / Employee Team’??
Handling Pressures: Today the Business environment is becoming more volatile than ever. The teams need to be contributing actively. The pressures are increasing continuously. The suicide of VG Siddhartha of Coffee Day is a case in point. I do not know about his Physical health at the time of Suicide. But, from what I read in the News Papers it is very clear that he was under tremendous stress mentally. Continuously working on Mental health could have helped him?
Growth Orientation: A Team that is healthy physically and mentally will be much more Growth oriented than a team that is not very healthy. Many Companies have the problem of their Employees not pushing for improvements. The Employees are quite busy in the routine and do not look at improvements at all. Taking care of Physical and Mental Health will help in enhancing the Capacity of the individual to handle more and look for improvement possibilities.
Execution capability: A Team of unhealthy Employees cannot be very good at Execution. They will keep missing the targets frequently and there will be generally frustration around. As the Targets are being missed, the Company will keep revising the targets downwards. This adds to the generally despondent environment around.
Productivity will suffer:The People Productivity will be an obvious victim. The team will not have much of inclination for working on improving Productivity as they will be feeling that they are already stretched a lot.
There can be many more ill effects of ‘Not very healthy’ Employees.
How to promote Wellness in a Company?
There are many ways in promoting the Wellness of Employees. I am capturing some of them below. I have been fortunate to be part of many such initiatives. Hence these are Initiatives that are working in Companies. Not theory.
You can start various initiatives to promote wellness in your Company:
a. Conduct a Yoga course. Repeat it every year. Encourage more and more employees to participate and learn.
b. Yoga weekly practice. Have a Wellness Centre in your company and encourage your employees to get together to practice Yoga and Meditation periodically.
c. Zumba Practiceweekly
d. Promote Sportsthroughout the year. Encourage employees to take leadership for individual Sports like Cricket, Basketball and so on.
e. Encourage your Employees to participate in Marathons. Encourage a Core group.
f. Encourage your employees to Walk at work every dayas part of their work. Let the office / Factory be designed accordingly. Eg. Let there be a walk involved for getting coffee / food etc.
g. Have an App for Health monitoringand motivate employees to Volunteer to get on to it.
h. Organize for ‘Health Talks’ on various Health related topics by Physicians.
i. Organize for ‘Healthy food habits’Consultation.
j. Promote Employees learning Meditationand practice it regularly.
k. Conduct a Course on ‘Mental health’and encourage employees to join it. Many Yoga institutes conduct this type of Courses.
l. Encourage employees to participate in Social Initiatives. This gives them Spiritual Energy.
m. Give help to Employees who need Counsellingfor problems at work or for problems at Home.
There can be many more initiatives.
It is important to encourage employees to take lead in the above Initiatives voluntarily. Wellness cannot be promoted by the Company unilaterally. It gains energy if you can find a group of Volunteers who will run many of these initiatives.
Company can be supportive to these Groups.
Use of Technology
Technology can be used for promoting the Health concept in a very active manner. One way is to have your own App for your Company. You may collaborate with any of the Health Apps that are already there and customize the app for your Company needs.
You can link the Medical tests of employees that you may be doing annually to the Health Apps and encourage the employees to address the Health issues proactively.
Wide variety of Initiatives
Companies should introduce many initiatives in this area. Employees may have their own priorities in the area of Health. Everyone may not be interested in the same initiative. Some may be interested in Yoga. While some others may be interested in Zumba. Similarly their interests in Sports also may vary. A Company should have a Target of engaging 100% of employees thru one Health initiative or the other.
What can be the Metrics for the Health of Employees?
It is very important to measure your efforts towards the Health of employees. There can be two types Metrics.
a) Process Metrics
b) Result Metrics
You need to measure the Process by which you are trying to promote the Health of Employees.
- Number of Participants in each of the Initiative.
- Regularity of Participation.
- Number of Initiatives introduced vs Initiatives Successful
- Number of activities planned vs executed in each of the Initiatives.
- Number of Volunteers in this area.
Results can be measured in a few different ways.
- Number of Employees in Good health.
- Number of Employees who improved their Health.
- Number of KPIs of employees in which there is improvement
Each company can devise their own way of measurement. But, measurement is important to ensure you know where you are going with the initiative.
Many companies do not have this type of focus on Health. Their reasons would be that they do not have time for this. But, if you are able to encourage a group of employees to take lead, then the Collective effort of the employees can push this focus forward.
Do you have focus on your Employees’ health?
All of us who worked in a few companies in our respective careers and those like me who had the wonderful opportunity to work with many Companies as a Business Coach would have observed that some Companies had a very good Working Culture whereas many Companies did not have such a great working Culture.
We generally say the Culture of the Company is good and may be recollect that this company had the practice of ‘Town hall meeting’ or ‘Annual Sports meet’ and so on.
Let us look at what a Good Work Culture is and how do we develop it in a conscious manner in a company.
I remember a definition of ‘Culture’. ‘Culture is the way we do things around here’.
So, a Work Culture personifies the way you run your Company. To understand this better, let us look at the case of any of the Religions that we practice. Each Religion has its Rituals / Festivals that are celebrated by the Practitioners of the Religion. These Rituals / Festivals survived for Centuries. In the Geographical locations where these Rituals / Festivals are followed rigorously, the Religion flourished. According to the Rituals / Festivals the Culture of that Religion developed. In the Same Religion, there may be different Rituals / Festivals in different Geographical Locations. So, the Culture in the same Religion in different areas may be slightly / vastly different. While the Governing Doctrine is same, the Culture may be different based on the Practices / Rituals / Festivals in that region.
But, the Practices / Rituals / Festivals play a very big role in sustaining a Religion. All the Religions have been sustaining for Centuries!
Now, if you want to develop and maintain a Good working Culture in your Company, you should be able to define your ‘Good Work Culture’. This may depend on the Values that your Company Practices and the way you want to contribute to the Society through your Company’s work.
It is good to start right at the top and be clear about the type of Work Culture that you want to build. But if you are not very clear about this overall objective, then you can look at some universal ‘Good to have’ Objectives.
Some examples are as follows:
01. Performance Focus: Competent Employees / Vendor Partners would definitely be very happy to work in an environment where good Performance is recognized and encouraged.
02. Professional Improvement: Again, the Employees / Vendor Partners would like to have a culture of Company encouraging / giving opportunities to the employees / Good Vendors to Learn continuously.
03. Wellness: Employees would love to work in a Company where their Wellness is given a good importance.
04. Customer Orientation: A Company where good Customer Orientation is there (Both internal and external Customer) would progress well.
05. Contribution to the Society: All Stake holders would be happy if the Company is seen as contributing to the goodness of the Society at large.
06. Process focus: Company may give importance to ‘How’ the Goals are being pursued in the Company and not just the Goals themselves.
This way a Company may have some overall Objectives that are not just monetary objectives but means to achieve the Business Goals of a Company in a consistent manner.
Why should companies pay attention to Culture?
People are the foundation for any Company. All the Stake holders are important. But it is ultimately the Stake holders who are making / breaking the company.
Even if a Company is not building a Working Culture deliberately, a Work Culture gets developed on the basis of how things get done in the company.
A Good / Bad Culture would develop without your active participation. If you want to develop a good culture based on your Company’s values, then it is better for you to participate in that process and try your best to influence it. If you do not control it, it will be left to the Dominant personalities in your Company who would anyway influence the way the work gets done in your Company.
If you are not controlling the Culture in the Company, then the Work Culture can keep changing as the Leaders in the Company change. This is the reason we keep hearing ‘It was an exciting place till 2 years back when ‘xyz’ was in charge’.
How do we build the Working Culture in a Company?
As we discussed earlier, the Company’s Work Culture is sum of its ‘ways of getting things done’.
One needs to introduce some specific Practices in the company that work towards the Objectives that have been set.
Let us discuss with reference to the Six Objectives of Work Culture that we earlier discussed.
a) Performance Culture: Some of the Practices that may be adapted to establish this culture are:
a. Having Measurable KPIs for every employee.
b. Having Transparent link between KPI score and Ratings. This should be visible to all employees.
c. Having clear rules for Promoting Employees.
d. Having practice of giving Objective Feedback by all Supervisors to their teams.
e. Celebrating Performance at the Micro Level. Leaders in the Company can have practice of giving small mementos to encourage Small but significant progress towards Goals.
f. Celebrating Good Ideas towards Work Objectives.
There can be many more innovative ideas.
b) Professional Improvement: You can promote many practices towards this Objective. Some of them are as follows:
a. Having periodic Technical Paper presentations and inviting IIT / International University Professors who are experts on your Company’s Technology area.
b. Sponsoring the higher studies of Employees.
c. Promoting study of your Technology area.
d. Promoting the learning of Formal Technical Problem-Solving methodologies.
e. Promoting Discussion forums on HR, Finance, Supply Chain related topics along with local companies.
f. Improving the Skills of Employees with focused training.
This is definitely not an exhaustive list.
c) Wellness: Promoting Wellness can be done thru a variety of means. Some of them are as follows:
a. Conducting lectures by Doctors / Yoga Experts to address Physical / Mental / Emotional and Spiritual Health.
b. Conducting Health Camps
c. Weekly Wellness camps where Yoga / Zumba etc are practiced.
d. Health monitoring of Employees
e. Recognizing Role models in the area of Physical fitness
What is critical is to do these activities continuously and not as one time activity. Employees adapt these practices at their own speed.
d) Customer orientation: There are several practices that can help you move towards this objective:
a. Taking periodic feedback / Score from Internal Customers.
b. Internal Customers to have a say in the Performance evaluation of Internal Suppliers.
c. Recognizing Best Internal Suppliers by Internal Customers.
d. Publishing Great Customer service stories in the Company.
e. Inviting Senior Executives from other companies to tell Stories about Customer orientation.
Truly this area has enormous potential for innovation in promoting Customer orientation.
e) Contribution to Society: This is an area that you can use to activate the fourth Energy – Spiritual Energy of every Human (After Physical, Mental and Emotional Energies). Very powerful one. Some of the Practices that you can think of are:
a. Encouraging employees to form a group that contributes money, physical effort for Societal Causes of their choice.
b. Channeling the Company’s CSR efforts thru Employee groups.
c. Encouraging Stake holder Groups to participate in Public relief activities.
d. Helping the people in immediate surroundings of the Company.
Stake holders participating in these activities will have enormous satisfaction and they will be able to realize their higher energy.
f) Process Focus: It is very important to let a Process Culture prevail in your Company. Don’t focus on the Results always. Encourage your Stake holders to follow the process and have faith that the results will come. Some practices that can help you are:
a. Have a defined way of pursuing Goals in your Company that prescribes a good Process.
b. Measure the performance of a Stake Holder with Process Measures along with Results Measures. Having only Result Measures will push the Stake holders to somehow achieve results.
c. Promoting a ‘way of working’ in every sphere of the Company like New Product Development, Quality Process, Problem solving etc.
d. Reward People / Functions excelling in Process.
You can do the above and you can do more. Each company should find its’ own mix of Activities / Practices / Rituals / Celebrations that promote the Culture that you want in your Company.
But you SHOULD participate in the building of the Work Culture in your Company. Leaving the Culture building to a few strong personalities in your company that too accidentally is very Dangerous.
Catalyst: Volunteerism can be a Catalyst for Culture Building in a Company. Encouraging Employees to promote the activities that they can personally relate to can be very productive in furthering the Culture. Human beings can generate a lot of Positive energy when they connect to an activity where their heart lies. A Company should encourage this. The Positive energy they generate can be quite contagious!! Eg. Someone who is passionate about Social work should promote the Societal angle in your Company. You would be surprised to see how many of your Employees are interested in Social causes. I know many Youngsters earning just Rs 10,000 per month. But contributing to a Social cause every month!
Build the Work Culture in your Company Actively !!
Every Manufacturing Company always has Cost Reduction Agenda. While they try to improve their Product Design using Frugal Design principles, they always have Cost reduction agenda in the Product too.
The Business situation is becoming tougher and tougher for companies. The Topline and Bottom line Growth cannot be taken for granted! It has to be earned in the hard manner.
Automotive industry is going thru some tough phase. The Industry may get fragmented due to Electric Vehicles coming in. It is no longer left to a few Big companies. Few more Bigger companies like Apple, Google are entering this space. Some smaller / new Players are also entering the fray.
Manufacturing Companies across the world are trying to become more efficient using Industry 4.0 elements. The struggle to become more efficient is continuous for Manufacturing Companies.
Much like Individuals developing capabilities to do more things, Companies also need to develop Capabilities in their Companies. These Capabilities may be built around a few Practices in the Company.
Every Company needs to develop the Capability of ‘Continuous Cost Reduction’ on active basis.
I have seen many companies who get substantial Cost Reduction when they start it off for the first time. But after one /two years, the effort tapers off. They say it is no longer possible! I don’t think the Cost Reduction possibilities will dry up. The ideas to access new Possibilities may dry up.
I would like to highlight some Best Practices that can ensure Continuous Cost Reduction in a Company. Companies need to pick up a few or all of these elements and formulate their own Process. Following are some important elements in this process.
01. Cost Reduction Target: Every Company needs to have a Challenging Target for Cost reduction every Year. This Target may be there at the Company level in terms of Profitability improvement. This would be naturally broken down in to Targets for reduction of various expenses and will flow down to Various Functions in the Company. Some of the Cost Reduction Projects may be led by Cross Functional Teams. It is important to involve ALL functions in Cost Reduction effort. It should not be left to few Functions only.
02. Price Recovery: Companies need to have great focus on recovering the escalation of Expenses from Market. If there is a Raw Material price increase, if there is Power tariff increase, if you have given increments to your team, it is ideal if you can recover from the Market. The Market may comprise of individual Big Customers as well as After Market where you are addressing a bigger Market. Every Company would have its’ own constraints to recover full amount of Cost Escalation from the Market. The Competition and Customer Power will not simply allow this to happen. But still every Company needs to have a good mechanism to capture the Cost escalation and throw up information to Sales & Marketing to recover the higher Cost from the Market. Many a times a Good Software support is needed for highlighting the escalation of Costs and how much of it is being recovered from Market. This information has to be available. After this the Company will take a call as to how much it can recover from Customers and how much it cannot. I have seen many companies who simply do not know how much the Costs have gone up and how much is recovered. Resultantly they do not have control on their Profitability.
03. Cost Reduction as a KPI: Every Senior person in the Company needs to have Cost Reduction as a KPI and he has to deploy the Measures to achieve the Cost reduction to his teams. This KPI should have a reasonable weightage so that everyone takes it seriously.
04. Cost Reduction Projects: Every HOD should identify Projects to an extent of 150% of the Target that he is given. Companies may have a Guide line that at any point of time each HOD should have Projects for next 6-8 months. The Projects should have detailed Plans. This is essential to ensure the Projects are practical. Companies create some simple formats to have these details and have a sign off from all Stake holders that it is doable.
05. Brainstorming sessions: Every Company needs to have a structure for Brain Storming sessions to identify Cost Reduction Projects. Many of the Subjects may require a Cross Functional Participation. So, each HOD should work out a schedule for Brainstorming Sessions. Each Brain Storming session should have:
a. A Target for Value of Cost Reduction Projects that need to be identified in the session.
b. Advance information to Participants to come prepared.
c. Analysis of data to be sent to the Participants that will help them to understand the Cost Structure of the Product / Part.
d. Involve Supplier Partners as appropriate.
06. Involving SMEs: Every Company needs to have a hierarchy of Cost Reduction methods. While the Buyers would be pushing for Volume discounts, there should be some effort in challenging bigger things in the Company. May be Design of the Product may be redone to cut the costs by 1/3rdor the Dealer Model may be challenged in some areas to sell directly to the Customers. Every Company should have their own share of these Big Bang ideas and they may decide to involve some Subject Matter Experts (SMEs) from outside. These Brain storming sessions may be conducted with some notice and may carry on for a few sessions. Involving outside agencies like IITs / Technical Universities across the world in this effort is a good idea. These efforts will ensure that the Cost reduction effort will continuously happen in a company and it will not dry up after couple of years.
07. Involving Supplier Partners: The Cost Reduction has to be driven along with the Supplier Partners. Companies that want to take the ‘full benefit of a Supplier’s effort’ will not get much cooperation from the Suppliers. The Company needs to behave in a mature manner and look at the Medium-term benefit. Supplier Partners should be supported by the Company by training them, exposing them to new practices in technology and process. Companies who invest in to this will reap the Benefits from this type of philosophy.
08. Training of the Teams: If a company wants to do some serious Cost reduction, then it should identify the Competencies that its’ staff need to have and Train them to develop these competencies. Some examples of Competencies that are required are:
a. Ability to understand the Cost Sheets.
b. Product knowledge
c. Manufacturing Process Knowledge
d. Lean Principles
e. VA / VE
f. Frugal Engineering
It would be good to develop E-Learning material on these topics and keep training the Team members continuously. Training and Re-Training is needed in this area.
09. Involvement of All Employees: There should be processes in the Company to involve all employees in the effort of identifying ideas for Cost reduction. It would be good to develop a Mobil app for this and encourage all employees to keep contributing on a continuous basis. This type of Ideas Database can help a Company to maintain a Continuous flow of ideas and Cost Reduction.
10. Motivational means: Companies need to be liberal in rewarding the Employees for implementing great Projects. The practice that Facebook / WhatsApp etc. follow in this regard is a good example. Facebook rewards anyone who finds a bug in a handsome manner. Due to this incentive, there are always lots of committed hackers who are searching for a bug in Facebook. This is a win /win situation.
11. Spend time every day: All important Functions that are involved in Cost reduction should set up a War room for Cost reduction and ask the Teams to meet EVERY DAY for 45 minutes to push the Cost reduction Projects. Teams have to meet every day to ensure focus on the Cost reduction. This is a very important practice, if you want Cost Reduction to gain focus in your Company. The War room should have all the Parts, facilities to strip down the parts / products.
12. Bench marking: It would be good to encourage a practice of Bench marking the Products / Parts / Processes across the world. Every company can learn from others if the companies are open to let others in. It can’t happen with competitors. But, you can learn from Customers and Suppliers. Many companies get the Parts / Products and conduct a Strip Down Analysis to gain more insights.
13. Continuous activity: Cost reduction has to be looked at as a perennial activity in a Company. It has to go beyond the Annual Target. There should be Quarterly Target and the activity has to go beyond a Financial year as the Company may want to have Projects ready and identified for next 6 months.
14. Metrics: The Cost Reduction should have Lag and Lead indicators. While Department wise and Companywide target may be the Lag indicators, Practices like Brain Storming sessions, Daily War room meetings, Benchmarking, Strip down analysis etc. can be the Lead Indicators. It is very important to monitor the health of the Process of the Cost reduction.
15. Cost Council: It is good to formulate a Cost Council in the Company with senior people in it. This Council should set Bench marks with the Competition and Market for Price, Costs. This Council should formulate ideas for achieving Cost Competitiveness on a continuous basis. This Cost Council should be there at all levels in the Organization with its members conducting reviews at all levels. The CEO or Finance Head can become the leader for this Council.
There can be more ideas.
Individually the above ideas may be in practice in many companies. But what is needed is to put them together and formulate them in to a Competency for the Company. It will become a Competency for the Company if the individual elements are practiced regularly and a good result is coming regularly. Cost Competitiveness is very important for every Company. By putting together your own way of managing the Cost Reduction in your Company and practicing it continuously, you develop it in to a Competency for the Company.
Is Cost Reduction a strong Competency of your Organization?
The Naughty Baby Bear!
I remember a story told by one of my ex-colleagues.
An R&D Engineer was walking in a Forest. The R&D Engineer was carrying a young Bear which was very naughty, and the R&D Engineer was struggling to keep it in his hands as it was scratching him all over the body! The R&D Engineer could not keep it down as it may escape, and his Boss would take him to task. He came across a Colleague who happens to be a Production Engineer in the same company. R&D Engineer called him out and asked him to hold the Bear while he would go to attend to a nature call. The poor Production Engineer could see that the young Bear was very naughty. But he believed his colleague that he would come back and took the naughty Bear in to his hands. The R&D Engineer dashed off never to come back! The Production Engineer was left to struggle with the Naughty Bear!!
My Ex-Colleague was telling me that this is the way New Product hand over happens in Companies!! You can easily understand that this guy was from Manufacturing side!!
Looking at my experience in dealing with about 40 Companies, I think this is fairly accurate description. No one to be blamed. Neither the R&D Engineer who has to deal with many a Naughty Bear nor the Production Engineer who is not equipped to handle untrained young Naughty Bears.
Simply the system is not there to handle these problems.
Handing over of New Products: A Process that is simply non-existent in many Companies!!
Indian Manufacturing Companies are handling several New Products compared to a decade back. There are more Car Models / Two-wheeler Models / Truck models / Capital Machinery models / Hand phone models / New Foods in the market than ever. Customers are having more choice than ever. All this choice made possible by Millions of Engineers across the Country who are working in Factories producing these New Products.
There are some companies that manage the New Products in a very systematic manner. In most of the cases, these belong to the Automotive industry where the New Product development process has matured more than other Industries. But, even in the Automotive industry I have seen companies that have no or minimal process in the area of ‘Handing over the New Products’ to Production.
We notice several scenarios in Companies regarding New Product Handovers.
01. Customer wants it yesterday: There are situations when the Customer would be sitting in the Company to get the New Product developed. The Company has to respond as the Customer has this urgency. Typically following would happen in such a situation:
a. Product may be developed with Adhoc processes everywhere. May be temporary tooling is used. No manufacturing process is defined. Trials are done right in front of the Customer.
b. Customer closes his eyes to several process violations.
c. The Customer team and the Supplier company team together cooks up a lot of documentation.
d. The Customer tests the Product in a great hurry. Only if very big issues are there, the reworks are done.
e. The Production team has to handle high volumes very quickly in this situation.
f. The Supplier Company would take several short cuts, spends much more money than warranted to meet up with Customer demand.
g. No one even talks about the high Rework / Losses in the Value stream.
h. Everyone is simply focused on the Quantity going out.
i. The whole process is highly inefficient. But, the high Volumes may cover up the losses in most of the Cases.
j. No one would seriously address the situation as the Customer is happy he got what he wanted and Supplier is happy a high Volume Product had been introduced.
k. Production team gets used to ‘handling the mess’.
l. Very often the Process is left in this ‘High Loss’ situation till one day when Customer wakes up and starts tightening up the whole process. Usually this happens when the QA Head changes at the Customer end!!
m. The Supplier would start having high losses due to sudden tightening up of Quality standards. He has no defenses as the ‘unwritten acceptance’ of deviations to Quality standards cannot be quoted.
02. Customer wants it but is not sure when: When there is no urgency for the New Product, the Supplier would push the New Product to the Customer. He would have got it developed in the Company at normal pace. But, the handing over to Production does not happen properly as there is no Schedule from Customer. Usually following types of issues are faced in companies:
a. Production refuses to take charge of the Product as the agreed number of Pilot batches are not done.
b. If even this process of doing Pilot Batches is not there in the Company, then the New Product becomes OLD just by passing of time.
c. When the Customer finally gives schedule for the New Product, no one knows the issues with the Product. Sometimes the New Product Development team would have left the company!
d. The Product would hit the Shop floor and all hell breaks loose.
e. The Product would have Quality problems at every stage.
f. The Manufacturing process is not defined properly as enough number of Products were not produced.
g. The intricate details of Process control / CTQ parameters were never identified.
h. Now, the Company starts learning about the New Product afresh!!
i. The Customer would have several Bad Batches before he can get acceptable Quality and acceptable Quantity.
03. The Normal Course(?!): In all normal Product Development Cases, most of the Companies deal with issues regarding the Quality and Quantity. The Root causes may be lying in following areas:
i. Voice of Customer would not have been collected meticulously. This results in multiple iterations of the Development.
ii. Manufacturing Process is not defined clearly. No one from Manufacturing participates in the Product Development.
iii. The Product Development is handled only by a bunch of R&D Engineers.
iv. The Development team would not have got the Manufacturing facilities to produce the number of Products required to establish the process.
v. Suppliers do not show interest in the new products as the volume is low and it would affect their Bulk supplies!
vi. When the volumes pick up, the Suppliers would start giving bad quality products or the Quantity simply does not take off!
This way, the New Product handing over to Production gets in to serious trouble in most of the Companies.
Most of the Indian Companies are developing more New Products than ever. I would suggest a Solution that I saw working in many companies that I have been involved in. There can be several other solutions. But I believe this can be a solution for situations where you are looking at New Product Development in a big way for sustained periods of time.
Organization for New Product Development
Technology / Product Development / Product Productionising: Companies need to have separate organization for continuously developing the Product Technology to the next level, they also need to have a team for Developing the Products with existing technology and then they need to have a team for Productionising the Products.
Having these three teams would help in giving importance to all three major activities. Otherwise one of these would be a victim to the limited resources that a company would have. A company that is having sustained New Product Development pressure should invest in to this Organization structure.
Full time Organization for Productionising: Now looking at the subject that we are currently dealing with, I would recommend a full-time team for Productionising the New Products.
Normally Productionising the New Products is handled by Part time Production / Quality / Procurement team that never have time for the New Products. They are always busy, and they never give as much time as is needed for the New Product development.
It would be good to get people from following functions and put them in to one ‘Productionisation function’:
- Manufacturing Engineering
- After Sales Service
The members from these Functions should be rotated every 2-3 years. This would ensure that these members retain their Functional Point of view and will not become R&D Engineers in disguise!
There should be a Leader for this Function who should be from one of the above Functions and not from R&D.
This team should physically sit along with R&D Team.
The Leader of this team should report to the R&D Head. Hence the Productionising is taken up broadly by the R&D. But with the support of a FULL TIME team.
Administrative control and Functional Control: When you put together a Productionisation organization with all the functions mentioned above, one needs to recognize the importance of Functional Knowledge / Processes in each of the functions mentioned above. The Functional Leaders should keep giving the Functional Leadership to the People in the Productionisation organisation. If the Quality Engineers in the Productionisation organisation are disowned by the Quality Head, then the same problems will be carried forward as they are in the current situation.
The Quality Head has to define the Systems and procedures for a Quality function while receiving new Products. This has to be followed by the team in the Productionisation team and the Mother function should keep conducting audits to check this situation.
Same is the case for all other functional people in the Productionisation team.
The R&D Head should let this Matrix structure work. If he becomes too possessive of the team, then we would not be having a proper solution to our problems!
Manufacturing facilities: Next problem that many companies deal with is, the availability of Manufacturing facilities for Initial Production.
The Production of New Products can never be at the full speed straight away. There will be some amount of Capacity loss. This is reality and we need to face it. Companies have to decide whether exclusive facilities can be given for Initial Production of New Products or it can be done in the regular Production facilities. Both strategies can be made to work with proper Systems. A Company can chose its’ solution depending on its own situation.
But it has to take a decision. Indecisive behavior of Management in this area can put it back by a few years in New Product Development.
Functions of the Productionisation team: This team would handle following types of activities to ensure smooth handing over of the New Products.
- Voice of Customer collection: As full-time team is there from several functions; the VOC collection would be much more effective with everyone’s point of view coming in.
- Participating actively in the Product Development: As the Productionisation team is full time, they would be participating in the Development actively. This would ensure better attention to DFM / DFA (Designed for manufacturing / Assembly).
- Receiving the Product from Proto Team: The Productionisation team should be very careful and use Check lists to see that Product they are receiving from Proto Team is acceptable to them. Each team has to own up what they need to own up. Right questions have to be asked at the right time.
- Material Planning: The Material planning and availability would improve as the Materials person is sitting within this team.
- Production activity: The Initial Production would be much more effective as the Production people are handling it and issues that are coming out are quickly being attended to by the R&D Engineers. As both Teams have same Boss, the interactions become easy.
- Quality Planning: The Quality Plan preparation can be handled by the Manufacturing Engineering team and Quality team in a seamless manner as they are sitting together.
- Hand over: When the required numbers are produced, the Productionisation team will hand over to the Regular Production with whom they can communicate better as they are one team.
Program Manager: In addition to the structure above, a Program Manager role would help in putting focus right from VOC to Delivery to the Customer. Each Program Manager may handle ‘x’ number of Projects.
This type of Organizational Structure level Solution can work very well for Indian Manufacturing Companies. This can ensure that the New Product Development and handing over to the Manufacturing is given its’ due importance. Especially when more New Products are coming in to Production, if this type of Organizational Structure level solution is not put in place, the Company would be inviting a lot of trouble in terms of unstable Production and unprofitable New Products!
How well are you addressing New Product Productionisation in your Organisation?