Operations Management – The Hidden Machine in Communication and Cooperation

There is a secret code to get the full attention of everyone in the areas of Production, LEAN, OPEX and even the Finance Department: “The Hidden Machine”. With the term Hidden Machine, we describe improvements in efficiency and effectiveness by which we can produce more with the same equipment and manpower. More output as if we had installed additional machines, hence the name Hidden Machine. Our efforts focus at first mainly on technical and logistical improvements, further along the path we modify for example production lines into flexible work-centers or optimize tact and capacity between processes. The many success stories from all the production facilities I visited all over the globe over the years are truly impressive and motivate to keep looking for the next Hidden Machine.

There is however a Hidden Machine which we are not paying enough attention to: the Hidden Machine in improving Communication & Cooperation (C&C). C&C between departments, between Managers, shifts, even operators, the entire organization. In short, inefficiency in Communication & Cooperation can, and in most cases does, cost us more than just a Hidden Machine. During my coaching and training sessions, I use the following practical example from my own experience to show the full impact and potential.

Discovering the Hidden Machine in Communication and Cooperation

I had an assignment in a production facility which was producing aluminum automotive parts in 5 to 7 production steps. Roughly 250 active parts from the full pallet from A to D demand. With 60 active parts in the A-segment (high volume with daily demand) and 40 primary production machines, a high frequency of changeovers was required. The Production Planner didn’t have any planning system available so he used an Excel sheet which he optimized over many years. And that Excel sheet, intended to help him develop the planning to supply the dynamic demand of the customers, revealed the true depth of issues caused by lack of Communication and Cooperation.

With ever changing quality issues, the planner had increased the Gross-Net losses with 100% compared to the reported Gross-Net losses. To compensate for the high amount of stoppages in production with a dynamic mix of technical and organizational causes, the planner used 6 hours shifts instead of the actual 8 hours. Due to the enormous inventory inaccuracy, the planner decreased all reported inventory of WIP and Finished good. All this was apparently still not enough because the planner had the calculated required amounts of production for each department automatically increased by 10%. And despite all these attempts to be able to deliver the required parts to the customers by increasing the production volumes, the OTIF Ratio (On Time, In Full delivery according to customer demand) was below 85%. On the other hand, the inventory levels of unfinished parts between the departments was fully out of control.

Shocked by the situation and the enormous inventory levels, I wanted to understand the way the planner was working, how he was integrated in the team, which communication was established, which escalation plan existed, etc. We didn’t get beyond the way of working because there basically was no integration, communication or escalation. Various interviews later, I summarized the situation as follows: according to the planner, the production didn’t keep the planning no matter how much he tried to compensate for bad results and according to production the planning wasn’t realistic because the planner didn’t reflect the reality production.

The newly appointed Plant Manager agreed on an experiment for the duration of 2 weeks:

  • Planning based on the agreed target for OEE +5% and reported inventory -5%.
  • Every shift reports the deviations between planning and realization with causes and proposals.
  • Daily review between the Planner, Logistics, Production Manager, Plant Manager and myself.

By this experiment, we made them communicate again, nothing else.

When Production reported to have produced 500 parts to supply to the customer and logistics reported to have only 450 parts available, we send them away with the message “don’t come back until you agree on a number” but when that agreement wasn’t reached within the next 15 minutes, we of course joined them again to help find solutions, identify causes and ways to improve and avoid issues. And from this, we learned at least as much as the others.

6 months of regular coaching with focus on Communication and Cooperation later, the Planner and Production Manager have formed a coalition, partners with full responsibility and accountability. The daily and weekly Planning were analyzed together in 15 minute sessions, the next 15 minutes was spend to look at variations and improvements, both zipping on their second glass of Cay. The same cultural change was noticeable on the shop-floor. Operators now understanding the planning and production goals after receiving their information for each machine in each shift, proactively communicated when they expected that the planned volume couldn’t be achieved. Shift-leaders understood at which point they needed to inform their supervisors. But most important, the entire team had started to “pull the boat together”. Problems would still occur occasionally but they were addressed as team. And that gradually enabled several Hidden Machines!

This is an example from my own experience where communication and cooperation had completely collapsed and I could almost visualize the trenches between the departments and managers during the operations meetings. By focusing on Communication and Cooperation, we were able to bring the team on the field and not just individual players. When communication and cooperation in your facility is good, it can become great with the right approach and coaching. Let us find that Hidden Machine together, the Hidden Machine of Communication and Cooperation.