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World-Class Building Blocks

World-Class Building Blocks

“A self-organizing system has the freedom to grow and to evolve, guided only by one rule: it must remain consistent with itself. The presence of this guiding rule allows for both creativity and boundaries, for evolution and coherence, for determination and free will.”

— Meg Wheatley, Leadership and the New Science

The road to high performance requires constant change. Organizations have traditionally exhibited one of the following three attitudes towards change:

  • Type I Organizations: Static consistency
  • Type II Organizations: Dynamic inconsistency
  • Type III Organizations: Dynamic consistency

Type I organizations resist change and pride themselves on maintaining the status quo, seldom realizing there is an opportunity to improve. Type I managers believe that they have optimized their operations and there is no room for improvement, or that they have always been profitable, so why change anything. Type I organizations rarely, if ever, achieve high-performance.

Type II organizations are dynamic, inconsistent organizations. They realize that they are not successful and are actively installing new programs. They are busy organizations and everyone is on a task force or two. No one has a chance to work as the entire day is spent in meetings, and there is no shared direction of where they are headed.

Type III organizations truly understand the meaning of dynamic consistency. They are driven by a mentality to improve constantly, based upon consistent direction from senior leadership. High-performance manufacturing organizations are Type III, dynamic, consistent organizations. In these organizations, the consistent direction is governed by the following 20 requirements, which become the operationalizing elements of the World-Class Building Blocks for success:

  • Manufacturing Costs: must be significantly reduced in the range of 40-60%
  • Manufacturing and Marketing: must become integrated and function as a winning team
  • Product Development: must become an integrated, iterative process whereby all parties work together to develop a product that meets customers’ expectations and can be economically manufactured.
  • Global Marketplace: all manufacturing decisions are made within the context of an integrated, global strategy
  • Lead Times: significant reductions in manufacturing lead time, production lead time, and customer lead time must occur.
  • Production Lot Sizes: production lot sizes and set-up time must be reduced in order to reduce queue time, and ultimately the manufacturing lead time.
  • Minimization of Uncertainty: all uncertainty must be minimized and discipline must be increased to insure that everything happens according to plan.
  • Balance: balancing the series of manufacturing operations and determining the cycle time are more important than speed.
  • Production and Inventory Control: the production and inventory control function must be straightforward and transparent and should be MRP or MRP II-based.
  • Inventories: Drastic reduction in inventories and increasing inventory turns must occur in order to reduce carrying costs.
  • Adaptability: manufacturing facilities, operations and personnel must become more adaptable in order to improve forecasts and handle the increased pace of development and customization requirements.
  • Quality: product quality, vendor quality , and information quality must improve and become a crusade and a way of life.
  • Maintenance: manufacturing process failures must be minimized by paying more attention to the five levels of maintenance failure–breakdown, routine, corrective, preventative, and predictive.
  • Material Flow: must be made more efficient through continuous flow manufacturing and more efficient material flow processes.
  • Material Tracking and Control: systems must be upgraded and vendors and customers integrated through Electronic Data Interchange (EDI).
  • Human Resources: management must be dedicated to creating an environment where every employee is motivated, committed, and productive.
  • Team Players: everyone in the organization must work together in an environment that fosters teamwork, and all adversarial relationships must be abolished.
  • Simplification: all manufacturing operations must be streamlined and simplified, and levels within the organization reduced to three or four.
  • Integration: all organization and manufacturing operations must be integrated using Information Technology, CIM, Balanced Scorecard, or other techniques.
  • Understanding: management must have a thorough understanding of high-performance, winning manufacturing and what it takes to become a world-class organization.

Implementing the World-Class Building Blocks is usually done following a twelve-step process similar to the one used in the implementation of Macrologistics Management. Each cycle of achieving high-performance begins with step 1 and continues through step 12 as illustrated in the flowchart below:

  • Understanding all of the 20 Requirements for Success (step 1a), understanding the external issues (step 1b), and understanding the internal issues (step 1c).
  • Establish Requirements of Success priorities.
  • Obtain organizational commitment
  • Establish action teams
  • Assess present status
  • Identify specific goals
  • Identify alternate approaches
  • Evaluate alternative approaches
  • Define improvement plans
  • Obtain support for improvement plans
  • Implement plans
  • Audit results

For further details, see (1) Manufacturing Strategies for Results by James Tompkins and Frank Voehl, Strategy Publications Center, 1999, or (2) Winning Manufacturing, by James Tompkins, Institute of Industrial Engineers, 1989. A Requirements for Success Checklist can also be used to evaluate and prioritize the organizations current situation and needs in this area.