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Identify and Mitigate the Risks with Your Production System | Part 1

By Roger Price - March 4, 2015

production-systemsThis blog post is part one in a two-part series.

In my blog post titled Production Systems 101, I defined a production system as follows:  A production system is a common approach to managing and improving operations across a distributed manufacturing footprint by strategically implementing industry standard best practices.

There are three critical and related elements to this definition.  First, the idea is to drive commonality in how operations is managed and improved.  Second, this commonality needs to extend across all production locations in order to eliminate that natural performance variability that results from different approaches to operations management.  And finally, the definition specifies that this common approach must derive from the application of proven industry best practices pulled from the right combination of CI methodologies and tools (the selection of the right mix of methodologies and tools is driven by factors such as industry and process type).

And, as most of you know, the whole idea of a production system stems from the Toyota Production System, which Toyota used to develop a significant operational competitive advantage over many older, more established car companies and turn it into the world’s largest automobile manufacturer.  The story of Toyota’s rise has been the subject of numerous books, articles, and academic studies and has led numerous organizations to undertake the production system journey, many with mixed results.

Perhaps your organization is one that has experienced mixed results and you’re trying to understand the root causes. Or you’ve started the production system journey and feel that you have yet to successfully cross the threshold such that the production system approach is entrenched into the DNA of the organization.  Or maybe you’re about to make the commitment to a full-blown production system journey and you want to make it successful.  Regardless of your situation, it’s important to have a clear sense as to the risk factors that may be present.  This article focuses on three common risk factors:

Risk 1: Underestimating the Challenge of Change

In our experience the ideal situation in which to implement a production system is at a “green field” site (i.e., a new location that is being commissioned from scratch) where the conditions are ideal for success.  The organization has the opportunity to select the team based on the proper combination of skills, experience, and behavioral attributes, set clear expectations about job performance and behaviors, and train each employee based on those expectations.  The new hires likely have no preconceived notion about what it’s like to work for this organization and are excited for the opportunity, so they tend to be quite willing to take everything at face value.

I mention the above scenario to contrast it with a production system implementation in a “brown field” site (i.e., an established location that has operated for some time), which is typically a much more challenging situation for the following reasons:

  • History of failed continuous improvement/production system implementations, leading many to conclude that this one will fail as well

  • Multiple changes in leadership across time, which have proven disruptive and erodes confidence in the organization among the broader workforce

  • History of poor hiring/staffing decisions; employees are placed in roles for which they are not well-suited, which creates friction in the organization and further erodes confidence

  • Degradation of the asset, which leaves employees believing that the organization has not invested the needed capital to make the operation successful

For these reasons, and others as well, the workforce at many brown field sites will be naturally resistant to a production system implementation.  And while none of this may be news to many of you, I will contend that most organizations still do not do enough to overcome this resistance.  In a book titled Beyond Performance – How Great Companies Build Ultimate Competitive Advantage (Reference: Colin and Price, John Wiley & Sons, 2011), the authors write about the Influence Model, which involves four key levers needed to drive lasting change.  These levers are:

  1. Role Modeling – “I see others behaving differently…”

  2. Understanding and Commitment – “I know what I need to change and I want to do it…”

  3. Aligned Systems and Structures – “Our systems reinforce the change…”

  4. Skills and Confidence – “I have the ability and confidence to behave in the new way…”

I could offer specific examples as to how a lack of focus on each of these levers undermines your production system implementation, but to avoid a major digression, I will simply note that, if your organization is serious about driving a production system approach, your change management model should consider all four of these levers, particularly if you need to change deeply entrenched, counterproductive mindsets and behaviors.

Phase 5 Group

At Phase 5 Group, we’ve partnered with leading companies to drive a structured and disciplined approach to their production system journey to ensure business impact and sustainability.  The experience gained over a period of years is what led us to develop EON.  EON helps companies that are committed to a systemic approach to continuous improvement to set and manage strategy, execute improvement projects, implement best practices, and calculate their operational gap to perfect.  Our leading indicators scorecard provides unparalleled business intelligence in the form of activity- and outcome-based metrics to help our clients to better manage their production system implementation.  

Please contact us to learn more about EON, the world’s first comprehensive continuous improvement management platform.

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