The Fortune Cookie: Change or Deal with It
You never know where a great blog topic is going to come from. Believe it or not, this question was in a fortune cookie:
Is there something that you can do to change the situation, or is it truly a fixed equation?
As a business leader, you probably believe that any problem in your company can be fixed. We agree with that assessment if you have unlimited time and resources. And as consultants to manufacturing companies, we have seen the benefits of getting to the root cause of a problem and fixing the cause of the problem, not just the symptoms.
But the question above raises two additional questions that are very important to consider:
1. Do you invest time, money and effort, or do you continue to live with the problem?
Every business decision is a cost/benefit decision. Will the benefit gained from fixing the problem be greater than the cost in time, money and effort spent fixing the problem? So the first step is determining the cost of the problem. This could include machine downtime, repair costs, unscheduled maintenance, additional parts, overtime, process workarounds, etc. Until you have a firm grasp of what the problem is costing, it is difficult to assess if the cost of fixing the problem is greater or less than costs associated with the problem itself.
We often talk with potential clients about the investment they are making in problem-solving and problem-prevention skills and systems. While we usually demonstrate a significant return on the investment within a few weeks, we stress the long-term improvement of the client’s profitability. Once developed and supported, these skills are a continuous source of profitability for the company. Which leads us to the second question.
2. Do you change the conduct of operating or is it business as usual?
To be truly effective at problem solving and problem prevention, companies build the use of these skills into the conduct of operating in the plant. They not only fix the obvious problems, but they start asking questions at the core of continuous improvement. Here’s an example:
The line operators were trained in problem-solving skills at a plant that had been operating only about a year. After the training, a machine operator noticed that the parts from his cutting machine came out in various lengths. He never worried about this because the parts were ground to the exact length needed in the last steps of the manufacturing process. After performing a root cause analysis, he found that a stop had never been installed on his machine or the other machines used to cut the part. After installing the stops, the company documented $250,000 in reduced scrap by eliminating parts being cut too long.
Before the problem-solving skills training, the company had assumed the scrap was just a cost of doing business. But this one change in operating conduct returned multiples of the company’s investment in the skills training. Problem solving and problem prevention became a way of doing business at the plant.
To be truly effective, the skill development should be reinforced through performance and information systems so the skills are integrated into the day-to-day work of the plant (the conduct of operating). In our experience, this increases the use of the skills over time to assure the long-term return on the investment.