By Debra Evans, Kepner-Tregoe
As global competition squeezes company profit margins, ensuring manufacturing processes are well tuned for cost and quality performance is essential. Equipment must be fully utilized to maximize return on capital investments and production quality issues must be resolved quickly to ensure full realization of potential revenue from customers. In the past when companies performed most of the steps themselves to transform raw materials into finished goods, resolving problems and optimizing performance could be handled by the company’s internal problem management process.
Improvements in transportation efficiency and nearly frictionless information flow among companies in the manufacturing value chain over the past 2 decades have not only made it possible, but in many cases essential, for companies to take on more focused and specialized roles and increase their leverage of 3rd party suppliers and partners for other activities. The manufacturing eco-system approach enables greater leverage of economies of scale, deeper specialization and in many cases greater cost performance than vertically integrated business models. Partner eco-systems are great when things work well, but what happens when there is a problem?
Companies are finding that as their business models become more complex, a purely internal approach to manufacturing problem solving is rapidly losing effectiveness. What these companies are learning is that the future of manufacturing problem solving is becoming a collaborative team sport.
The future of problem solving in manufacturing will involve 4 key elements:
- Subject Matter Experts who understand the various components of the manufacturing process and how they interact with each other to generate overall results. As processes cross companies, this will often be a group of SMEs coming together to provide coverage of the big picture.
- Visibility to holistic and accurate data about how the overall process is performing in order to diagnose issues. Treating the activities of each company as a black-box and only having visibility to the interfaces may be fine for normal day to day operations, but problem solving requires an additional level of data transparency in order to effectively identify the root-cause of issues.
- A consistent and coordinated process across eco-system partners to diagnose problems, identify alternatives and implement change. A team is only as strong as its weakest player and only effective as their ability to work together. Problem solving skills and processes must span the partner eco-system in order for the problem management process to be effective.
- Clear decision-making authority – often alternatives will have costs, benefits and impacts that are un-even across companies and trade-off decisions are inevitable. The individual or group with decision making authority needs to be clearly defined.
Implementing these elements into your company’s manufacturing eco-system environment will require some changes to skills, processes, operational data management and cross-company decision making roles. A common question from many companies seeing the need for change is identifying where to start.
A good first step for most companies is focusing on people and skill training. By developing a consistent understanding about the problem-solving process, SMEs from across the eco-system will have a common foundation to collaborate with each other and understand the role that each individual plays as a part of the problem solving process. Even if visibility to end-to-end data is not available across companies, problem solving SMEs will understand what information others need and be better prepared to provide it.
The focus on people must also extend beyond the SMEs to the decision makers as well. Each company has a primary responsibility to create value for their individual stakeholders. Developing a clear common understanding of how cross-company decision making will take place and where authority resides is essential to translating recommendations from problem-solving SMEs into business results. Depending on the structure and formality of the eco-system environment (things like regulatory requirements, contractual obligations, and industry dynamics), developing a shared decision-making process may be as simple as a facilitated training/workshop or it may require written contractual agreements amongst all companies involved in the manufacturing value chain.
As the manufacturing environment evolves and involves a more complex web of specialized companies contributing to the transformation of raw materials into finished goods, problem solving is becoming a more collaborative team activity. The future of problem-solving in manufacturing has some key elements that will need to be developed and matured over time, however the first place to start is with providing people the skills and training they need to be effective in this new environment. Kepner-Tregoe has been helping companies develop and mature problem-solving skills for over 50 years through training, process implementation and facilitation services.