Friday, August 24, 2018

Strong Leadership: The Key to Shaping Millennials into Manufacturers

By: Jamie Headley

Employers across America are dealing with the combined effect of baby boomers retiring, a strong economy and record low unemployment. Now faced with the large labor shortage this perfect storm has created, manufacturers are looking to the next generation of workers to fill this gap: millennials.

When I talk with executives about their feelings toward the emerging workforce, some common grievances I hear include: “They don’t want to work” or “They want to be promoted every 10 minutes” or “All they want to do is play on their phones.” The resounding message is that today’s hiring managers do not see this group of workers as the answer to their needs. The fact is, millennials are the present and future workforce of this country.  So how can we bridge this gap?

First, let’s stop playing the blame game.  The term “millennial,” which is meant to simply refer to someone born between the years of 1980 and 2000, now carries with it negative connotations of being lazy and entitled. However, we all know plenty of people in their forties and fifties who act entitled and demonstrate less than stellar work ethics. We also know plenty of people in their twenties who want to work hard to establish a career. Yes, this generation may have different priorities than prior ones, but isn’t that always the case?

Secondly, let’s keep in mind some typical characteristics shared by people of this young age:

Maturity – New hires entering the workforce after high school or college are immature. This is not an insult, it is just a biological fact.  The human brain does not fully develop until the mid to late twenties. Particularly the frontal lobe, which is responsible for attention, tasks, planning, motivation, understanding future consequences of current actions and modifying emotional responses into socially acceptable reactions. Employers need to be aware of this and work to communicate with young employees regarding expectations and consequences.

Job Experience – Our perception of life is deeply based on our experiences. Many people entering the workforce have little or no experience in a full-time job role, so they may struggle, feel lost or fear failure when first getting a “real job,” thus wanting to quit.

Financial Knowledge – It can be difficult to really understand the value of money until you have to support yourself. Fiscal understanding is a big part of what motivates people to come to work everyday. When you are in your twenties, having little or no money is common. Living at home , eating ramen noodles and driving a beater of a car are all typical experiences of being young. For many, as we mature our desire for a more financially stable life grows. The value we put on money then evolves and, in turn, our attitude toward work changes.

Life Wisdom – When I graduated college, I didn’t know what I didn’t know, so I thought I knew it all. Life had not humbled me yet. I suspect young adults today are not much different, so it is not surprising  they want to move up the corporate food chain faster than may be realistic.

These are traits that are not necessarily specific to millennials, but are typical of most people as they enter adulthood.  My guess is that if we took an honest look back at how we were during that period in our lives, we would discover we weren’t much different.

Enlightening as this may be, how does this help our labor issue?

It all comes down to leadership. Good leadership is timeless.  From Alexander the Great to Alan Mulally (CEO, Ford Motor Company), people who provide great leadership achieve great results even in difficult situations – regardless of generation or age.

All great leaders have a few things in common that contribute to their effectiveness. They set a vision, develop a strategy to achieve that vision, communicate the strategy to workers, empower and motivate their team and execute tactical measures only if they are in support of the overall vision. Companies with engaging cultures and low turnover also have the following in common:
  • Hiring/Onboarding/Training process – Hire the right people and help them acclimate, succeed and grow.
  • Succession plans – Identify career paths for moving up in the organization as workers develop.
  • Employee feedback process – Ask workers why they stay, why they leave, what they need, etc.
  • Leadership training – Establish continual learning from the top down.
  • Commitment to being the workplace of choice – Maintain a focus on being the best workplace you can be.
Implementing the above can be an undertaking. It is often an investment of time, energy and money, but it is an investment that will pay dividends as employees gain a new understanding of personal responsibility and loyalty, while supporting your company’s vision. Instead of focusing on the differences between your workplace generations, focus on how to bridge these gaps to successfully nurture and lead employees of all ages.


MEET OUR EXPERT
Jamie Headley
Senior Business Solutions Manager

As Senior Business Solutions Manager, Jamie works as an advisor to Michigan manufacturers in the Southwest region of the state, helping them to “manufacture smarter.”  Jamie is a seasoned operations professional with expertise in change management, strategic planning, leadership, process improvement, lean implementations, cost containment and operational excellence. With more than 25 years of manufacturing and consulting experience, Jamie has served as Director of Supply Chain for Catalent Pharma Solutions, Vice President of Operations for Art.com and President and CEO of Dementia Services Group.  




Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.

Friday, August 17, 2018

Is Your Business Performing as Well as It Could Be?

By: George Singos

We recently posted a blog about the importance of cascading policy deployment in achieving
business visions. While this company-wide alignment is essential to realizing strategic goals, progress cannot be made without maintaining a strong sense of how well the business is performing. This is where Key Performance Indicators (KPIs) come into play. By establishing, monitoring and analyzing KPIs, such as on-time delivery, changeover time or schedule bumping, companies will be equipped with the data and guidance necessary to align their business toward success.

However, looking at internal KPIs without knowing where your company stands within the market can make it difficult to fully comprehend how well your business is operating. To help manufacturers compare their KPIs with those of like companies, The Center developed the Transformation Planner. This assessment tool gathers data about an organization’s operations through nine KPIs to assess a company’s effectiveness. By using this assessment, companies will determine:
  • Where does your company stand? All data is compared against The Center’s growing database of relevant, related companies. In doing so, businesses can discover how well their KPIs stack up against peers.
  • What areas need improving? In analyzing these KPIs, companies can identify which metrics fall short of reaching goals. Once these areas have been identified, a deployment plan for improvement can be created.
Most manufacturers probably think they are already performing as effectively as possible. However, making even small changes to improve a few KPIs can have a dramatic impact on your company’s bottom line. For example, let’s look at how Acme Corporation tackled four of their problem areas to realize massive improvements.

Acme’s journey began by completing the Transformation Planner with their company’s current business information. From there, The Center’s experts worked to identify which metrics were weaker than peers’ values, essentially identifying which areas to improve. As seen below, this data was put into a table to compare current values with targeted values for each of the nine performance metrics measured, including both Acme’s values as well as placement among similar companies.




By evaluating these numbers, four significant areas of improvement were identified – Inventory Turns, Run as a % of Available, Scrap and Rework and Schedule Bumping – to boost Acme’s profitability and get their operations on track for success.
  1. Inventory Turns. This serves as a fundamental measure of lean performance and ability to convert expense into billings. A high Inventory Turns value often signifies a nimble company – one able to respond quickly to changes in demand. Low turns may result from excessive raw, finished or in-process inventory stocks. By identifying this as a weak point in Acme’s operations and increasing their Inventory Turns value from 7 to 8.5, a seemingly small improvement, Acme was able to gain an additional $26,470.59 each year, with $176,470.59 of cash not in Inventory. 
  2. Run as a % of Available. The best measure of your equipment utilization is how many hours your processing lines or systems run in a year. Once the appropriate level of run time is determined, the actual number of hours running must be evaluated. The goal is to attack the drivers of downtime, including long or unnecessary changeovers, unreliable supplier delivery, poor housekeeping and materials management, inadequate preventive maintenance and poor breakdown prediction. For Acme, achieving a 10% increase in Run as a % of Available boosted their competitiveness by more than 30% as well as earned them an additional $274,126.46 annually.
  3. Scrap and Rework. Scrap is waste from errors in the manufacturing process, composed of both lost labor and loss of materials that cannot be salvaged. Scrap directly decreases profitability due to the loss of time and materials. The requirement to run more product to compensate for scrap has a rippling effect on on-time delivery, making current and subsequent jobs late. Rework is an expense of labor that can occur before or after a product ships, which involves modifying a product to get it to conform to customer specifications. By decreasing their Scrap and Rework value from 1.5% to 0.75%, Acme increased competitiveness by 20% and achieved an annual benefit of $52,500. 
  4. Schedule Bumping. Interrupting a scheduled job often results in lost equipment run time, additional labor cost and poor delivery performance. Not only can "bumping" the scheduled job result in at least one extra changeover, but it also leads to more idle time and overtime pay for operators as well as increased charges for premium freight. Through targeting a 5% decrease in  Schedule Bumping, Acme gained an additional $38,201.92 annually and boosted their competitiveness by nearly 30%.
As seen with Acme’s success, by identifying and tracking your company’s areas of weakness and making even small adjustments to operations, your business can realize significant benefits both immediately and down the line. No matter how well your business may be running now, there is always room for improvement.

To learn more about how the Transformation Planner can transform your business, click here or contact The Center at 888.414.6682.


MEET OUR EXPERT
George Singos
Business Leader Advisor

George Singos is the Business Leader Advisor for the Michigan Manufacturing Technology Center. He has accumulated more than 30 years of manufacturing experience in Business Development, Sales & Marketing Management, Project Planning, Quality Management, Costing and Scheduling. Prior to joining The Center, George worked in International Business Development, where his primary focus was growing International Sales in Europe and East Asia while supporting North American, South American and ASEAN operations.





Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.

Friday, August 10, 2018

Not All Food Failures Are Hazardous, but All Are Costly

By: John Spillson

The idea of Failure Mode and Effects Analysis (FMEA) was formally introduced to the world by the military shortly after WWII. Due to failures in munitions during the campaign, this methodology was developed to identify and eliminate critical defects in production. In the 1950s, FMEAs began to be applied in aerospace and rocket development to achieve high levels of quality and safety. Another significant push for failure prevention came in the 1960s with the increase in space exploration as countries around the world raced to put a man on the moon. Ford Motor Company first introduced the FMEA process to the automotive world in the late 1970s for safety and regulatory consideration, likely in response to the rupturing fuel tanks in the Ford Pinto. Now, in modern-day manufacturing, FMEAs are quite commonly used.

Everything we do as manufacturers, and food processors, can be described as a process.  FMEAs help identify what can go wrong within a process as you create, make or assemble your product. Although this is often associated with a manufacturing process, it can be applied to any process (which involves inputs being turned into outputs). FMEAs are used to analyze possible failures or risks, along with the potential severity, chance of occurrence and detection rate of each risk.

FSMA ≠ FMEA
However, food processors already follow food safety laws under the Food Safety Modernization Act (FSMA).  Wouldn’t an FMEA cover what’s already mandated through these regulations, making it redundant and unnecessary? Not really. While the FSMA functions to prevent hazards with serious health consequences associated with them, an FMEA works to prevent potential failures or defects that don’t just involve health hazards, but failures in quality as well.  This means it is beneficial to use both the FSMA and an FMEA together to prevent the most risks possible and produce quality products.

Quality is much more than producing safe food. There are many instances where this is evident in the food industry, including:
  • a salad served with too much dressing
  • pizza prepared with too little sauce or toppings
  • a muffin that’s slightly overcooked or dry
  • potato chips that aren’t evenly seasoned
  • a resealable bag that doesn’t seem to reseal
All are examples of products that can be viewed as failures, defects or essentially non-quality.  The cost of quality is often considered, but the cost of non-quality should never be overlooked. This is especially true in an era when instant gratification and social media are so prevalent, making it possible for a disappointing product to be quickly broadcast to the world, damaging both your company’s reputation and sales.

Where does an FMEA fit into all this? The focus of an FMEA is to consider, identify and prevent any potential defects or failures. Scrap, rework and dissatisfied customers all come with a cost. Having to discard inferior goods, remake products or make employees work overtime to redo orders only amplifies the impact. Identifying defects or risks in the planning process – before they become an issue – could yield enormous benefits down the line.

To get the most out of performing an FMEA, follow these three steps:
  1.  Do the FMEA.
    • Identify each step in your process and for each ask the question, "What can go wrong?" This would be your Failure Mode.
    • For each identified Failure Mode, determine the type and severity of potential consequences. This would be the Effects. Be sure to look at the potential cause of the Failure Mode to determine how to prevent it from occurring.
    • Look at how the Failure Mode could be detected so it won't reach the consumer, or even the next step in the process. Although you may not be able to control how bad the effect would be, you will likely be able to lessen the likelihood of it happening or make it easier to detect.
  2. Determine what you need to do differently to keep a failure from occurring. Realize that all things affect all things by understanding the correlations between operations.
  3. Implement corrective actions. This involves incorporating continuous improvement steps, increasing training and error-proofing your processes.

Romaine Recall: Prevent Disaster with an FMEA
Recently, contaminated romaine lettuce left experts baffled and hundreds sick around the United States. In June 2018, officials reported the outbreak strain of E. coli bacteria had been found in an irrigation canal in the Yuma, Ariz., area, where it was originally grown, recalling all affected lettuce. While preventive controls measures (those outlined in the FSMA) should involve water testing measures or finished product cleaning measures, an FMEA would have identified the irrigation canal as an ‘area of concern’ when looking at the process of growing romaine lettuce. Performing this FMEA could have prevented this health and safety catastrophe from ever occurring, proving just how beneficial an FMEA can be.


MEET OUR EXPERT
John Spillson
Food Business Development Manager

John works to develop and expand the food program at The Center. His experience operating his own business has given him knowledge in production, sales, food safety, marketing, warehousing and logistics. John comes from a long line of entrepreneurs, following both parents and grandparents in operating their own family food businesses. Prior to joining The Center, John owned and operated his own food processing company for more than 20 years.





Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.

Friday, August 3, 2018

Internal Audits Made Easy – And Practical

By: Dale Wicker

If your company is registered to one of the ISO Quality Management Systems (ISO 9001, AS9100, ISO 13485, IATF 16949), then you are required to perform internal audits at planned intervals to verify the conformance of your system. Since these ISO standards are process-based, these audits should be developed and scheduled around the company’s current processes to assure the organization can meet the intended results and satisfy its customers.

What does this look like in practice? For example, prior to committing to a customer’s order, you must review their contract (or quote) for requirements to confirm your organization can meet their demands. These “demands” typically include things like quality, cost and timing.  The established process for contract review in your organization should be clear and, in many cases, documented, identifying the inputs needed, the activity to be performed and the expected output. Records of the review then need to be retained.

When auditing this process, the inputs, activity and outputs are reviewed and verified based on the requirements of the standard, your customer and your own organization, along with your implementation and practice.

A Practical Approach to Auditing
Internal ISO audits typically have three principles to consider regardless of the scope:  intent, implementation and practice. Each of these principles form a portion of each audit and the auditor must understand how they are satisfied within the scope of their audit.

One might wonder, “What do I need to check for each of these principles?” To answer this question, let’s look at samples for each in the context of completing a Contract Review (Figure 1 below).  Note that in some organizations, ‘Contract Review’ may fall under other names such as Quoting or Sales and Quoting, etc.

FIGURE 1 - Contract Review Process


For the first principle – intent – the internal auditor needs to verify that the company’s process for Contract Review meets the requirements of the applicable ISO standard and other referenced documents. This typically is done as part of the audit preparation, where the auditor compares the ISO Standard (external standard) to the organization’s current procedures and processes to guarantee that all pertinent requirements have been addressed. This also may include any applicable customer-specific requirements mentioned in the contract. 

Looking at Figure 1, the procedures for ‘Feasibility Reviews’ and ‘Contract Reviews,’ or P1.2 and P1.3, would be reviewed and compared to the input documents to assure all relevant requirements are being addressed. This process is typically called a desk audit, and it provides the auditor with an understanding of the requirements that must be addressed, and ensures the organization has addressed them.

The next principle, implementation effectiveness, has two parts: awareness and availability.  For procedures P1.2 and P1.3 mentioned above, the auditor would want to verify that the personnel who need to use these documents are familiar with them (reviewed, trained, etc.), and the procedures are readily available to them in their day-to-day activities when and where they are needed. The documents may be available via electronic media or hardcopy, whichever the organization prefers.

The third part is practice effectiveness. Several things can come into play when determining the effectiveness of an organization’s practices. The customer’s requirements may specify certain metrics that need to be verified. The company may have timing, cost or quality metrics in place for the process being audited. There may be departmental goals or metrics established. This is where a process flow or map is helpful, which lists the inputs, process activity, expected outputs and any measures associated with the process.  

In Figure 1 above, Performance Indicators are listed for Contract Review. Timing and Quotes In Process reports are monitored by management. While these are the main metrics of the process, others may be identified in the procedures or other documents as well.

For Contract Review, there may be a checklist of items to consider related to product requirements, process capability, capacity, timing, changes, cost, materials, etc. Key personnel may be identified as to who must review and approve the contract. The resulting output should be clear and record retention identified. The auditor could look at Contracts in various stages of review – newly initiated, work in process and completed reviews – then compare production jobs on the floor to the contract requirements to ensure they are being met. In Figure 1 above, procedures P1.2 and P1.3 would identify most, if not all, of these items.

Any internal audit of a quality management system element should consider intent, implementation and practice to determine conformance.  If an auditor keeps these three principles in mind, they will find the auditing process to be more comprehensive and more practical than ever before.


MEET OUR EXPERT
Dale Wicker
Quality Program Manager

Dale Wicker is a member of The Center's Quality Team. He manages and delivers training and assistance to organizations in the areas of quality improvements and environmental management systems. Some of his projects involve support with the implementation of a Quality Management System including: ISO 9001, ISO/TS 16949, AS 9100 and ISO 14001. Dale also conducts training and provides consulting on the supporting tools of Quality Systems.





Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.