Problems:
• Building Toasters in the same way for 4 years – Manufacturing techniques change and improve year on year! They are obviously missing out on these advantages.
• They have used the same raw materials for the last 4 years – Again raw materials change and improve. It does not sound like they have taken advantage in the possibly improved materials and that they may be cheaper.
• There is clearly a “people” problem between the staff and management:
o Staff leaving for feeling undervalued! – This should be addressed, as the cost of recruitment and training is expensive.
o Training is limited – Training can be done cheaply and effectively, a simple step would have been to ask the staff what training they thought they needed (part of PDR).
o Management’s perception that some teams are showing a poor attitude to their work – Do they have evidence of this? Can they speak with the union or work representatives to find out why?
o Refusal to work new shift patterns – See above, they need to speak with the workforce to ascertain why they have a problem with the shift pattern, maybe the staff can suggest a better way.
o New young staff have messy work stations – This comes down to training. Speak with them or add to induction programme.
o A secretary takes long lunch breaks – A simple fix is that her manager tells her what the policy on lunch breaks is.
• A further staff complication is the introduction to the shop floor of teams producing exhaust pipes. Have systems and processes been aligned? Teams introduced to each other?
• Finally, they are making too many toasters for the market to absorb. Waste of cost, storage, manpower, if the toasters get too old they won’t be able to sell them.
TIMWOOD:
Transport: Aspects here could be “Bad Layout”, they have introduced “exhaust pipes” into a toaster production factory. If using common materials for both lines, are they correctly sited.
Inventory: With the increase in toaster production, they clearly will be carrying a great deal of work in progress and large stocks of raw material. This inventory (along with the exhaust production) must be cluttering up the shop floor.
Motion: Nothing obviously identified, but ask the question why the work stations are messy and why are they losing staff? Is there frustration involved in being unproductive in some way?
Waiting: Similar to above: Is the shop floor layout causing problems? Are there teams working on both toasters and exhausts? This will cause frustration in delays in machine change over, conflicting cycle times.
Over Production: Clearly output of toasters is exceeding demand of the market. This is causing a cost increase in regard to storage and probably stock they will never sell.
Over Processing: If teams are working on both production lines then the time spent on set ups, change overs and down time will be frustrating. The workflows will be disrupted and hard to manage. Staff will have low morale.
Defects: No obvious product defects but this could be looked at in terms of a) Planned overproduction to meet lower targets, which we have in regard to toasters. b) Excess overtime, we have staff refusing to work required shift patterns, does this require “overtime” as a result?
Building Toasters in the same way for 4 years – Continuous improvement needs to be applied to both the manufacturing techniques and the sourcing of raw material.
Staff leaving for feeling undervalued – People should be involved in all parts of improvement process – At a minimum, ask the people why they chose to leave at their exit interviews and feed back into the business.
Training is limited – People should be involved, so speak to the staff, ask them what training they think they need and why? This can be done as part of performance appraisal, but does not need to wait until then.
Management’s perception that some teams are showing a poor attitude to their work, refusal to work new shift patterns, new young staff have messy work stations – The business seems to have a very hierarchical structure. A better approach to applying gradual change (like a shift pattern or clean machines etc.) is to involve the work force, and explain the reasons for the changes and see if they can suggest a better method of working. If staff are involved, you will get “buy in”.
A secretary takes long lunch breaks – Speak with the secretary (People), and ascertain why she does this. Maybe she has a valid reason, external commitment or she is bored at work. If you can involve her in the solution, then you may create a very motivated employee. (e.g. Flexitime or more interesting work.)
A further staff complication is the introduction to the shop floor of new teams producing exhaust pipes. – Three areas to look at are: a) Involve staff in the development of both production processes, there could be common approaches to both production runs and saving cost. b) Ensuring staff know that “Change” is a good thing and essential for survival of business. (a) & (b) are People techniques) c) Look at Waste and apply TIMWOOD, two production teams will produce much waste without an attempt to merge them.
Finally, they are making too many toasters for the market to absorb – Stop!!! Elimination of Waste, will led to reduction in cost, storage and manpower.
1) Review Industry Manufacturing Techniques with plan for improvement – 3 months for report to Board
2) Look at Raw Materials use for both Toaster and Exhaust manufacturing. Include cheaper and better alternatives now available. – 2 months for report to Board (and can be implemented in to report in (1)
3) Implement staff satisfaction questionnaire (anonymous) – Questionnaire on line in 1 month, results analysis in 2 months.
4) Set up detailed exit interviews immediately. Ascertain why staff are leaving. Feedback into business.
5) Add training requirements to PDR process before next round. Also conduct company audit on training immediately, speak to staff as to why they feel training is needed. – 1 month.
6) Set up Process Group, workers and management. All persons have equal say. Work on small and gradual improvements to the business (mainly production) – Working hours and shift patterns can be one of the first items as it will set the tone. Ensure this includes shop floor and admin (i.e. the secretary hour’s issue). – 1 month to set up. Other items to deal with will be business process improvement working the TIMWOOD steps.
If they apply continuous improvement techniques to their toaster production (manufacturing techniques and raw materials cost), the cost will come down because it will be cheaper to produce and they may become more reliable. Thus they may sell more of them! Asking their customers what they think is an important aspect of this step (What do you like about the toaster, what don’t you like? How much would you be prepared to pay for it?)
People: involving their employees in the decision making (Process Group) would mean that they get staff buy in to the initiatives. Big hurdles like working patterns can be overcome because staff may suggest something they had not thought of. Motivation of the staff will rise, thus retention will be improved saving on recruitment and training.
Change: This business needs to change, the steps can be small but still have a dramatic effect. Just reviewing the materials for the toasters could save a massive cost. Maybe the customers will tell them a feature on the toaster that is not required, this saving cost and complexity. Remember “little and often” is the best method.
Eliminate Waste: TIMWOOD steps will add value to the products. The materials cost goes down (raw materials and storage), staff morale goes up. We have seen that a better shop floor layout should be reviewed, stop the over production and looking at a more efficient merger of the production products (toaster and exhaust) to prevent constant tooling up.