Infrastructure for Productivity

By R. Keith Mobley, Principal SME, Life Cycle Engineering

One thing that has always bothered me about most continuous improvement programs is that they ignore the impact of the plant’s infrastructure on productivity. If you stop to think about real factors that limit performance, infrastructure must be a primary consideration. Perhaps one reason that most continuous improvement programs ignore or covertly address infrastructure is that few of us like to be told that we are the reason our plants are ineffective. Think about it—if you were the CEO of your company, would you hire a consultant or adopt a continuous improvement program that pointed the finger of blame directly at corporate management?

To me there are two distinctly different infrastructures that influence, if not control, plant performance. The first is the way that you do business and run your plant. The second is the methods and tools that are used to manage the entire operation.

Corporate or plant culture is established in the boardroom and is carried out by the entire management team. It should establish and enforce an operating environment that is conducive to effective operation of the entire corporation. Corporate culture starts with the mission or vision of the corporation. Why is the company in business and what are its goals and objectives? In addition, the philosophy and policies established in the boardroom govern the day-to-day operation of every function within the corporation. These policies establish the benchmarks that will be used to measure success, individual performance, rewards, and all of the other criteria that will determine how each employee within the corporation will perform.

Unfortunately, the corporate cultures established by many of our corporations are counter-productive. In most cases, the primary mission statement, policies, and benchmarks preclude effective resource utilization and severely limit performance. In too many cases, these criteria are driven solely by short-term return-on-investment or stockholder dividends, not optimum plant performance.

How many of you have worked in a plant that closed the receiving department near the end of the month to limit expenditures? Or that kept the books open for an extra week or two to improve monthly revenues? These are classic symptoms of corporate cultures that severely limit our ability to achieve optimum performance levels.

The second form of infrastructure that has a major impact on performance is the actual methods and tools that are used to manage day-to-day operation. Until recently, most corporations have ignored this critical limiting factor. They continue to use out-dated information management systems and standard procedures that can no longer provide effective management tools. Two major areas should be considered: information management and standard procedures.

I am absolutely convinced that the information management systems in most corporations are designed for one purpose—to make the corporation look good. In our consulting practice, we rarely find an information management system that provides accurate, timely data that can be used to effectively manage the day-to-day and long-term operation. In most cases, reports are generated much too late to provide any meaningful management data. 

In the past two years, many corporations have recognized the limitations imposed by their outdated information management systems. As a result, there is a growing trend to replace these systems with a new generation of enterprise systems that will provide a common, integrated database for all of the data needed to manage the corporation. While this enterprise approach has many benefits, it is not a panacea. My concern about this new trend is that corporate management has not recognized the need to completely upgrade the methods, like standard procedures and practices, which are integral to these systems. It will do little good to invest $100 million in a new enterprise system and continue to do business as usual. These systems are simple software shells that provide the ability to acquire, store, manage, and report all of the data needed to evaluate and manage a corporation. Unless these software shells are properly implemented, loaded with viable data, and universally used, they offer little value.

Please do not misunderstand. I firmly believe that an enterprise-type system is an essential management tool. Consolidating all of the data needed to effectively evaluate and manage a plant is a positive, necessary step toward optimum performance. However, to gain the real benefits of this approach, it must be used properly. This means that it must be consistently, universally used by all functions within the corporation. Without a corresponding change in corporate culture, it will not happen. 

What should we do to create an infrastructure that is conducive to optimum performance? The first and most critical step is to change the way we do business. Instead of short-term benefits, we must focus our efforts on the real measures of effectiveness. This will mean a radical change in the way we evaluate and measure performance within the corporation. As part of this effort, we must establish a new benchmark that defines the physical limits of performance and establish specific, universal indices that will measure both day-to-day and long-term effectiveness.

Management philosophy must also support effective utilization of all resources. This philosophy must be universally applied throughout the corporation. Until effective procedures and practices become the only acceptable means of performance, we cannot hope to achieve optimum performance levels. 

An effective, information management system must be fully implemented and universally used throughout the corporation. The format of this system must be conducive to effective performance of each function within the corporation. The new enterprise-type system eliminates many of the technical problems of hardware and software integration between data required by each plant function, but represents only one part of the solution.

The bottom line is that developing an infrastructure that is conducive to productivity will require a total, absolute culture change in many of our plants.

MOBLEY'S 30th LAW:
“Change must be holistic and absolute."

Thank you for taking the time to read this month’s letter. Hopefully, it has raised a few thoughts that will help you take the next step in your journey to excellence. I welcome your feedback and am happy to respond to specific questions. You can reach me at kmobley@LCE.com.

Best regards,
R. Keith Mobley
Principal, Life Cycle Engineering, Inc.

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Keith Mobley has earned an international reputation as one of the premier consultants in the fields of plant performance optimization, reliability engineering, predictive maintenance, and effective management. He has more than 35 years of direct experience in corporate management, process design and troubleshooting. For the past 16 years, he has helped hundreds of clients worldwide achieve and sustain world-class performance. Keith can be reached at kmobley@LCE.com.

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