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Improving Safety, Quality and Productivity Together

2010/10/07

Many manufacturing companies tackle safety, quality and productivity improvements separately.  It is common to separate safety and quality functions from production.  A manufacturing operation, however, is an integrated system of people and processes.  Whatever level of quality, safety or productivity the system produces is all the result of the same processes.

This post continues this month’s theme of addressing “safety” across high consequence industries.  Tom started this theme last week in Improving Safety by Taking More Risks.  Here I will broaden the focus a bit by looking both at another high-consequence industry, chemical manufacturing, and looking at how safety, quality and productivity may be addressed together.  Specifically, the fastest and possibly most effective way to address improvements in these areas is to address them all together by engaging everyone in needed improvements.  Too often companies make quality or safety the responsibility of a specific function as if it was that function’s responsibility for safety or quality — a responsibility often seemingly at odds with overall productivity. (Are you listening BP?)

There is another way to improve quality, safety and productivity, and to do so without months of studies, expensive retraining, or Six Sigma courses (although these may help).  Instead it relies on using the expertise of the people already working with the processes, bringing out that expertise in new ways that enable action.

In most organizations, the people working within it already know 80% or more of everything necessary to improve safety, quality and productivity.  However, there are various (usually unrecognized) factors preventing them from recognizing, sharing and acting on what they know in order to achieve improvements quickly.  The key is to find ways to unlock this capacity and test the resulting improvement ideas.  This is possible through the use of carefully designed large group meetings and follow-up activities that enable the system to reflect and learn from its experience.

I have helped three different manufacturers improve quality, safety and productivity quickly by engaging the whole system from engineering to operators, from corporate offices to remote manufacturing operations in a sustained conversation supported by observations of current practices and new actions.  One of the manufacturers made medical devices (and was producing injuries among its workers almost as fast as it was producing FDA citations for quality concerns).  The other two manufacturers were in the chemical industry.  Here I will tell the story of one of those chemical companies.  (This story was told in greater detail in The Handbook of Large Group Methods by Barbara Bunker and Billie Alban, Jossey-Bass, 2006)

 

Business Challenge

Over its 50 year history, this company had been acquired, merged and divested enough times to have lost sense of its original product lines and culture.  With its latest acquisition, two manufacturing sites were merged into one.  Though this resulted in immediate operational cost savings, it also caused significant confusion and disorganization – enough to reduce productivity and morale, and increased safety, quality and delivery problems.  Over time, these issues became significant enough to erode quality, cost savings and customer confidence, endangering the business’ long-term profitability.

Approach

When we arrived at the plant, we[1] found a disorganized, dirty facility filled with skilled but frustrated employees.  The recent merger had moved all of the material and equipment into the new building but hadn’t organized it into an integrated production system.  We felt it was important to be successful quickly and to “earn the right” to make longer-term changes, so improvement activities had to begin with whatever was causing the most frustration among employees. Improvement activities would be identified, prioritized and accomplished by the employees.  Though much of the management team was skeptical at first, the facility’s general manager was an active supporter and participant throughout the process. The consultants worked with plant management, operators and support department to develop and implement a four-phase improvement plan that gradually built a sustained, fact and action-based dialogue across the whole system.

Phase 1: Understand and commit to change.  The consultants met with groups of managers, professional staff, administrators and operators over the course of a week to discuss their situation and develop the focus for the Phase 2 meeting.

Phase 2: Assess current capabilities and agree on the initial steps.  The consultants facilitated a two-day, cross-functional meeting to engage about a third of the relevant whole system in a sustained dialog.  (This high engagement meeting was based on the Future Search design; for more on this design see Future Search method ).  Twelve initial projects were identified and agreed to by all as key areas to begin acting to improve the plant’s safety, quality and productivity.

Phase 3: Confirm initial learning and deploy additional work teams. Various teams formed to begin working on the improvements the very next week.  Many of these teams were themselves cross-functional which helped to further the dialog.  The initial focus of many of these teams was on completing initial actions to begin the changes needed, taking various observations and collecting data as they went.

A second cross-functional meeting with representatives of all teams and other members of the manufacturing system was held only 30 days after the initial meeting (in Phase 2 above).  This half-day meeting provided an opportunity to report results and identify the second round of projects, this time with many more people from the plant in attendance.  The level of engagement and dialog begun in Phase 2 was now broadened and deepened as managers and employees began to hear new insights, see progress and recognize each other’s commitment to change.

Phase 4: Reflect on progress and expand on the foundation. Led by the plant manager and managed by the steering committee (with very little involvement from the consultants), the improvement efforts continued throughout the next year.

  • The discipline known as “5S” was implemented throughout the facility.  This helped to create safer, more environmentally-sound work practices.  It also led to better use of existing plant space to serve the needs of production. The product line was trimmed from over 3,000 products to 1,800 with no loss in customer satisfaction.
  • Initial experiences were used to plan and implement a new Lean production area and self-managed work team.  This area became the prototype for all future production.
  • Lean requirements for suppliers were negotiated into agreements so that small, frequent shipments and consignment inventories became the norm.
  • The facility had a yearly improvement plan that specifies projects to be conducted and their expected results.  The ability to work in cross-functional teams and continuously review results against plans had become standard practice.

Results

Looking back at the improvement effort, we found that in less than two years the plant achieved the following results:

Measurables: at project start and three years later …

Safety, Health & Environmental

– OSHA recordables: from  11/year  to 0/year

– Hazardous waste produced: from 7,675 lbs/year to 2,900 lbs/year

Quality

– Batches right first time: from 89% to 93.4%

– Customer issues per million: from 1,900 to 1,100

Productivity

– Batches per operator/year: from 154            232

– Number of operators: from 48 to 45

Delivery

– On time in full shipments: from 92% to 96.8%

– Order to delivery lead time: from 15 days to 5 days

Financial

– Working capital as % of sales: from 21.3% to  9.9%

– Inventory turns: from 4.5 to 16.9

 

Making Change Easy by Engaging the Whole System

In this plant as well as in the other two manufacturing settings I mentioned earlier, the success of the effort came through the real engagement of the whole system in a continuing dialogue about what they knew and how they thought about improvement.  Change was not always easy and some managers and departments would resist new ways of working.  In time, however, even the “late adopters” saw the impact of actions by their colleagues and began to change their own actions.

Throughout the process, our role as consultants was to facilitate learning from the system’s own actions.  This is very different from the consultant as “expert” who diagnoses the problems and prescribes solutions for others to adopt. This later approach increases resistance and, at best, creates compliance but not true commitment to improvement.  When the system as a whole can learn from its actions and build a shared responsibility for improvement, the changes become broader, deeper and more lasting.

 

 

 


[1] I was working with Jim Van Patten who led this effort

 

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