How to Fix a Factory: A practical approach to clarify and resolve underlying challenges in your factory, by Rob Tracy
"Every factory will eventually run into trouble," says author Rob Tracy. This could happen because of a lack of effort, or because there is a problem with how the plant is running: nothing seems to improve it, no matter what you try.
Fixing the factory, as understood by the author, focuses on establishing a healthy, balanced, and stable platform.
When you are having trouble at the plant it is exactly the wrong time to attempt a more aggressive improvement method in search of ‘excellence.’ The fundamentals must be in place long before attempting anything more demanding. The difference is analogous to a car with a cracked windscreen, and a car with no brakes hurtling down a steep road.
The book is aimed at the executive team who have both the power to make the necessary changes and without whom, going through Tracy’s fixes, is impossible.
Examples of situations that need "fixing" include: On-time delivery that isn’t meeting customer expectations; a workforce that is disengaged; cost position that isn’t enabling sales and profitability; difficulty capturing and sustaining the gains; holding high inventories while experiencing stock-outs; reactive scheduling; capital investments that just don’t seem to be paying off; erratic financial performance; and more.
If any of these ring true, read on.
Tracy has made his career fixing small and midsized factories. The value of this book is huge because there is no course here or in the US, on how to achieve this correction. His five-phase approach will both demystify and guide you in building a robust, rock-solid plant.
Phase 1: Set the stage
Phase one is to "Set the Stage". To recover from distress, the leaders must demonstrate confidence, compassion, and resolution, while revealing their vulnerability, and be challenging without being overbearing. Tracy uses a compelling image to make this point.
A racing shell is a long, narrow boat built for speed. This system works well on the Charles River in Boston’s calm waters, when you want to travel fast in a straight line. A rubber dinghy is the boat of choice for going through the rapids of the Colorado River. A rubber dinghy is slow and difficult to manoeuvre, but it is flexible. The guide of a dinghy barely has control of the boat.
Leading a factory that is struggling is ‘dinghy leadership’ and leaders must adjust their style to become a dinghy guide.
When factories are struggling, people feel like they’re playing a losing game every day. The workforce must be given substantive, tangible, visible hope that things are going to improve for them to rally behind the effort. Stirring speeches and posters won’t suffice. They need to inspire the people to do hard things as part of building something special, and then keep communicating.
Fixing factories is not a spectator sport. Everyone in senior leadership positions needs to be a guide on the dinghy, not sitting on the shore just observing. Tracy offers extensive advice on this phase, because it is absolutely critical that leaders and the rest of the factory are on board, enthusiastically, fully and vigorously. Or don’t expect success, just a large invoice from consultants for very little change.
Stage 2: Reveal the issues
Phase two is to "Reveal the Issues". The presenting problems are usually self-evident, but they might well require a deeper investigation to bring the causal factors to the surface.
"Reveal" is an accurate word choice for this purpose. It is rare for employees not to know what is going on. It is far more likely that their suspicions are confirmed, and ideas that they already hold, are validated.
The unfortunate reality is, (for example,) that you can’t fix poor on-time delivery. You will need to find the underlying factors that adversely affect on-time delivery, and fix those. Again, the ‘people’ issues will be prominent and will need to be addressed: denial that what we are doing well is not what is needed, facing the fear of personal loss, are just two examples.
The easier, but no less important part, is using real numbers at a granular level to reveal truths and to gather useful insights.
Phase 3: Reset expectations
Phase three is "Reset Expectations". The journey toward improvement in factories, as elsewhere, starts with stabilising the entity. This must extend through the company and even to customers.
The message is: ‘We are aware of the problems. We are hard at work fixing them. We will be back to being even better very soon. Please bear with us.’
Phase 4: Prioritise the core
Phase four is to "Prioritise the Core". This phase involves identifying the core processes to determine which ones have the biggest impact on the performance of the factory, and where we need to focus. You cannot focus on ‘everything and all at once’ in a factory, as you can in some business turnarounds.
A factory is comprised of systems and processes that must be working at a threshold level of performance. Tracy identifies 10 core processes that should be reviewed to identify those that have the biggest impact on your performance. These are: talent, cleanliness and safety, management, equipment reliability, quality, supply, inventory, sales and operations planning, data and measurement, and the operating system.
These and their subsets need to be prioritised so they can get maximum focus and attention.
Phase five is to "Execute with Discipline". Here the key is the discipline of focusing on the prioritised core issues and executing using the ‘Plan-Do-Check-Adjust’ cycle. This is the system popularised in the 1950s, by W. Edwards Deming, the man credited with the turnabout of Japan from a manufacturer of the ‘cheap and nasty’ to among the best in the world.
There is an old Chinese proverb: "When is the best time to plant a tree? Thirty years ago. When is the second-best time to plant a tree? Today."
The subtitle of this book is: "A practical approach to clarify and resolve underlying challenges in your factory." It is practical on both scores and I highly recommend it. If you need further encouragement, take the quick test below and see how you fare.
Score yourself on a scale of 1 (worst)– 5 (best)
1) The company produces consistent, predictable, positive financial results.
2) Managing the company feels stable, not chaotic.
3) Our customers feel that we serve them well.
4) Our employees are engaged, and they come to work for much more than a salary.
5) The entire organisation is focused on the critical few initiatives that will move the needle.
6) The company generates financial results that satisfy ownership and allow for adequate reinvestment in the business.
7) We can hire and retain the workforce that we need today and for the future.
8) The workplace is safe and clean, and we take pride in keeping it that way.
9) Our equipment is reliable and well-maintained.
10) The supply base is aligned with our needs, and they serve us well.
11) We have appropriate inventory levels that are well organised and controlled.
12) We do a good job of aligning the sales forecast with the operations and financial plan.
13) We have good data and metrics to run the business.
14) We are effective at implementing the company strategy.
15) Everyone in the company knows our values, and we live by them.
16) We have effective meetings.
17) All employees know the company strategy and their role in implementing it.
18) Continual change and improvement is normal, and we’re good at it.
19) Our employees feel that they have a voice and they feel respected.
20) The changes that we implement stick and generate positive results.
Readability Light --+--- Serious
Insights High -+--- Low
Practical High +---- Low
*Ian Mann of Gateways consults internationally on strategy and implementation, is the author of ‘Strategy that Works’ and a keynote speaker. Views expressed are his own.