Monthly Archives: February 2012

Increase factory output: Part 5 – Working Overtime

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OK – let me say up-front where I stand on this: I’m not a big fan of overtime working, as it’s often practised. In my experience it’s often the wrong solution to the wrong problem. I’ve seen too much regular institutionalised overtime and it’s something that I’ve always tried to eliminate in every factory I’ve ever managed. When it comes to individuals’ pay I’d far rather that production operators  were far more productive and far better paid. In my view, low pay and low productivity go hand in hand and are not consistent with Value-Driven Manufacturing.

It’s a very complex issue, touching as it does on so many areas:

  • work-life balance
  • the written and unwritten contract of employment
  • power and politics
  • industrial relations

For these reasons, overtime working relates closely to the third principle of Value-Driven Manufacturing: Effective Leadership, based on strong values and beliefs. How and why overtime working is used (or not used) says a great deal about the culture of the organisation, its values and its leadership.

Don’t get me wrong – overtime working has its place. So when and how might overtime working make sense? Here are some thoughts –

1. When it’s a short term fix to provide valuable additional labour capacity. In other words, where it satisfies the basic principles of Value-Driven Manufacturing – it increases the value of the business and / or it delivers additional value to the customer.

2. When it makes more sense than the many alternatives, for example:

  • applying Lean principles to create additional capacity by reducing labour hours required
  • rescheduling / prioritising delivery dates
  • re-deploying staff from other areas (including Management and Admin)
  • employing additional staff (perhaps temporary, agency or subcontract labour)
  • flexible demand-based hours (eg annualised hours – but not “zero hours” please!)
  • automation

3. When it’s seen as part of a concerted effort to achieve an usually diificult / important / one-off challenge.

As always, this is my personal view – I’d be interested to hear of  other people’s experiences and opinons on this, so please feel free to log on and comment…

Poor Activity

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Hello all.

I’ve just registered on this site and am really disappointed to see that there really isn’t much activity on here. The posts which I’ve read are great but they’re very old and that is so disappointing. i am passionate about manufacturing, I know many of us are. We are hearing so much about the need for the Manufacturing Industry to lift this country out of the hard times and it’s fair to say that we are one of very few indusrties which are showing positive signs. Let’s get this blog more active. To be quite frank the decline in manufacturing which has happened over the past 30 years is something I could never understand, because as a young engineer I could only see that it would have an unhappy ending and I was right. So let’s get some cross sector chat going on this blog and let’s see if we can all do our little bit to use the industry, that we have worked in all our life,  to make this country great again.

Value-Driven Manufacturing

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I had the pleasure earlier this week of meeting with a highly impressive Operations Director, as we toured his plant in preparation for hosting a best practice visit next week. As always, we got to talking about what makes an excellent manufacturing business, and it turns  out that we share many common beliefs about this. Not surprisingly, they all revolve around concepts of value. I firmly believe that value is the key to business success, even more so in the current economic downturn. For manufacturers this translates into Value-Driven Manufacturing, which is based on three simple beliefs:

  1. The Goal is to maximise the value of the business
  2. This can only be achieved by delivering maximum value to the customer
  3. Success requires effective leadership, based on strong values and beliefs

Those are pretty strong statements so if you’re still reading at this point, I’ll assume that you don’t entirely disagree! Let’s look at what this all means in practice:

1. The Goal is to maximise the value of the business

Anything else is either subsidiary, irrelevant or “nice but useless”. Maximising value requires an excellent operating / management system. We’ve all heard of Lean and the Toyota Production System but many manufacturers don’t realise that this is only one part of the Toyota Management System. Here’s a challenge for you – put yourself in the position of a potential purchaser of your business, and walk the plant, trying to see everything through their eyes. Of everything that they see, what would genuinely cause them to pay more for the business?

2. This can only be achieved by delivering maximum value to the customer

Let’s be controversial – too many manufacturers are still internally focused and cost-driven, led by accountants who “understand the cost of everything and the value of nothing”. They use Lean and Six Sigma primarily as cost-reduction techniques. Do you understand your customer’s business / market / industry as well as they do? Do you understand how they add value for their own customers? Do you fully understand their needs and wants and are all employees engaged in delivering value? Do you regularly undertake “value-add” visits to your customers, and do you take your engineers and operators with you?

3. Success requires effective leadership, based on strong values and beliefs

Great leaders are believers – they passionately believe in what they’re doing and they inspire others with their values and beliefs. They’re humble, keen to learn and they expect excellence where it matters. Great leaders are rare but they exist in all walks of life and in all areas of business, at all levels. They need to be encouraged, developed and trusted to excel.

You can find other blog posts about Value-Driven Manufacturing here on the Manufacturing Times blog (helpfully categorised under “Value-Driven Manufacturing”!), and you can find out more about Value-Driven Business at www.ValueDrivenBusiness. co.uk.