Manufacturers must be nimble; it is essential they have a methodology to protect and sustain manufacturing performance during turbulent times. Companies hungry to achieve operational excellence are continually assessing their performance versus their plan, questioning why they are not hitting KPIs.
“The only constant is change” is a phrase we've all heard, typically when dealing with something that's causing difficulty and pain. Painful change causes disruption, sometimes to the level of chaos, resulting in inefficient operations. Confusion reigns while stress and frustration mount as the old plan — which the team or company developed, communicated, and implemented during more stable times — quickly becomes ineffective and distracting. In addition to frustrated employees, customers and business stakeholders are aggravated — the plant misses orders, expedites shipments, and puts lots of extra effort into simply getting through the day. The operation is in survival mode. During turbulent times, business and operations leaders must step back and evaluate if the organization is focusing on the right things.
Is it Time to Re-Evaluate Your Plan?
Since the team already invested a lot of time and effort creating the strategy and implementation plan, there can be resistance to revisiting any part of it. Rethinking the plan can feel tedious, particularly since operational professionals tend to prefer execution to planning. However, using a plan that is no longer valid will never yield the desired results.
A few considerations that might signal the need for a revised or new plan:
- Are customer service levels and on-time delivery metrics faltering?
- Is the manufacturing plant achieving key performance indicator (KPI) targets?
- How well are you able to adhere to the plan versus haphazard scrambling?
- Are overtime and expedite costs rising?
- What's the mood across the organization? ... Are employees optimistic and positive, or skeptical and stressed?
Do You Have Skills On-Hand to Keep Things Running?
It’s natural for employees to feel anxiety during a chaotic situation; they might also have added stress in their personal lives. Some may even need extended time off the job. Leaders must ensure there is available bench strength to backfill.
A few questions to consider while planning during turbulent times:
- What are the most critical skills to keep the operation running?
- Are the procedures for those roles well-documented?
- Are others trained to take over if the incumbent departs?
- What insights can you glean from previously conducted succession planning?
Where Do You Stand on Customer Service and Finished Goods Inventory?
Now is the time to assess customer service levels and finished goods inventory. Demand for products that were going gangbusters last year may be in the tank this year. Likewise, demand for a SKU that was low volume last year may be skyrocketing. Tight cash flow might dictate how much finished goods inventory you can afford to keep.
Relevant questions to pose when things are changing rapidly:
- What changes in customer demand is the business experiencing?
- Do you have insight regarding how long those changes may continue?
- Are customers willing to adjust payment terms to support your operation?
- Should you adjust safety stock or lot sizes?
Can You Count on Supplies and Raw Materials?
Assess your supply reliability. Turbulent times require even tighter connections with key suppliers because your success is directly tied to their health. Ultimately, you’re responsible because customers want product when they need it; they don't care if you're the issue or your supplier is.
Questions you should be asking related to supplies and raw materials:
- What is the current financial situation at key suppliers?
- Should you adjust payment terms to assist key suppliers that are struggling financially?
- What is the inventory level of critical materials?
- Do you need to establish secondary suppliers?
- What is the anticipated stability of supply that comes from overseas?
What Can You Do to Boost Communication?
During turbulent times, standardize and increase communication. Rumors run rampant during chaotic times. And, when anxiety and uncertainty are high, rumors can quickly turn negative or harmful. It’s critical to fill the communication vacuum with honest, relevant, up-to-date information and increase touchpoints.
Consider the following aspects of communication:
- Have you taken the pulse of the operation? … Gathered information from a cross-section of employees? How often and what method should you use to assess morale?
- Who’s responsible for developing communication protocols? Is there agreement on who and how to develop communications? (For example, is it provided by a corporate group, or does the team develop/supplement locally?)
- Is there agreement on the method(s) of communication? Will it be face-face, video, something else?
- Does the plan include consistent methods and timing for interacting with employees? Consider developing standard work for the management team.
- Have you leveraged HR and communications teams where appropriate to ensure messages are in-line with corporate guidelines?
Have you Built in Flexibility?
Modify the plan as necessary. During turbulent times, speed is of the essence. Your process needs to be nimble and you don’t have time to excessively labor over the exercise. The leadership necessary to run a successful operation means quickly acknowledging a need for change, developing a revised plan, and communicating those changes.
Ask questions around flexibility:
- Who needs updates about changes to the plan?
- What is the best method of communicating the changes?
- What should be the timing for evaluating changes?
With a plan in place to protect manufacturing performance gains during turbulent times, your organization can focus on the business at hand: churning out product, hitting KPI targets, and aspiring to new levels of manufacturing performance.