Can you define the buzzword “Best Practices” or demonstrate how you implement Best Practices within your firm? Don’t feel bad if you can’t. Often, Best Practices, if considered at all, are elusive goals of senior management. They are confused with the implementation of a new process or benchmark comparisons to industry statistics. It’s not enough to say, “We’re above industry averages.” Best Practices involve all aspects of a business, and the application of best methodologies, systems, tools and procedures used to obtain superior results and competitive advantage. A best practice may be as simple as how a phone is answered or as complex as developing a lean manufacturing plant layout.
Some common problems arise when trying to pinpoint Best Practices. First, Best Practices and business can change rapidly. Manufacturing doesn’t change rapidly enough to keep pace with trends. Second, not all Best Practices will fit each firm; they vary from firm to firm and from industry to industry. One example is Six Sigma, a highly touted Motorola process that sets a structure for management to meet objectives. Six Sigma has been a boon for some Fortune 500 firms, while others had to abandon the process all together. That’s why it’s so hard to define Best Practices in most industries; it’s hit and miss. Regardless of where you stand in terms of Best Practices, this article will help set the record straight about what the spring manufacturing industry is doing to compete in the 21st century.
The Research
With the above in mind, we turned to spring manufacturers to collect industry-specific Best Practices. What successes had members obtained? We interviewed a variety of people – large and small companies, multi-location organizations, job shops and mass manufacturers. You can ask yourself the sample questions we posed to your peers:
1. Does top management know what Best Practices are?
2. How does your firm research and implement Best Practices?
3. What Best Practices have you already implemented?
4. What are the results achieved by using Best Practices?
Our Findings
1. Best Practices have not been formally established for the spring industry. Not one executive or manager could clearly define what Best Practices were, how they used them and what results they achieved. One well-intentioned and knowledgeable interview candidate attempted to explain how numbers were accumulated within the industry, but even his firm did not have any systems to work Best Practices into company processes. When asked specifically what Best Practices he had implemented, the phone line was quiet. In spite of each springmaker’s diligence and desire to win in the market, no one was able to provide hard evidence to suggest that Best Practices have been established or are utilized in any formal fashion within industry. Unfortunately, published statistics of industry numbers were often confused with striving for Best Practices. The terminology “benchmarking” would be more apropos for comparisons and goal setting.
2. The good news – all the companies strive for Continuous Improvement. Each participant was able to offer tools and successes indicating they are constantly looking to improve their operations. These “Continuous Improvements” are used to modify and transform operations, develop new products and services, and create new business. In fact, your peers were happy to offer some helpful tips that are being passed on to you in this article.
3. Unfortunately, current numbers used for Best Practices can’t be trusted for comparison. There are two reasons: The first is that the numbers aren’t collected in a consistent fashion, so we are working with findings that come at the whim of the people supplying them. For example, if Spring Company A calculates its averages based on shop-floor manual counts and other firms have digital counters collected at a central terminal, numbers could be skewed just due to human error. If a company calculates wages based only on hourly machine operators and another firm includes some hourly wages of shipping personnel and supervisors, the numbers will tell different stories. The second reason is that the numbers don’t show the processes behind them. Without the transfer of the culture of a firm, the plant layout, urban or rural location, or an understanding of the product mix and customer type, some practices or numbers may never be able to be transferred, implemented or even understood. The numbers do not tell enough. We have all read an article or traveled to a trade show, learned how a competitor does a process and then found that it was impossible and problematic to attempt to apply what we learned to our own firms. What yields high numbers for one company could yield low numbers for another, based on missing ingredients in the “recipe.”
Ideas You Can Implement
Until formal Best Practices are established for the industry, there are a number of Continuous Improvements you can apply to your company:
1. Apply Continuous Improvements to each department, such as accounting, sales, operations, shipping, engineering and maintenance. Often operations and customer service related activities are addressed at the exclusion of other, less obvious departments. The goal is to raise the whole firm’s level of quality.
2. Make change a group effort, enlisting input from top management to front line. You’ll find that, by including employees from all areas of the company, you’ll gain valuable information and greater acceptance of change. The smaller the company, the less staff power you may have to take from day-to-day operations. In these situations, it is more important that management take an active role in bringing new ideas to the firm. Senior management is more likely to understand the entire enterprise than committees are.
3. Broaden your scope for idea gathering. Spring manufacturers find ideas everywhere. This includes trade shows, articles, books, vendors and tours of other facilities in different industries. One spring company travels with a group of managers to local businesses that are non-competitive and walks the floors to see and hear how the facilities are managed. They bring back and develop ways to implement what works. Although this is a great way to solve problems and be proactive, it doesn’t ensure that you’ll find a best practice.
4. Keep records of changes to gain buy in, to provide sales and marketing with new tools, and to consistently build morale. Michigan Spring and Stamping (Muskegon, MI, and El Paso, TX) takes “before” and “after” pictures of projects to provide a point-in-time reference. When a project is completed, the pictures are posted for everyone to see. Later, they are placed in an album to record company history.
John Schneider, quality manager at O’Hare Spring Co. in Des Plaines, IL, stressed the need for internal auditing. Creating their own statistical benchmarks, they gain a quick view of how they fit within the industry stats. This management tool provides focus and direction for the company. Schneider’s advice is to take a measurement of where you are today and establish where you want to be. Come up with a prioritized action list, and address each issue.
5. Systemize what works. Dean Prange from Michigan Spring and Stamping outlined how his firm traditionally starts with a cross-functional group to address changes within the organization. For a single manufacturing concern, the members walk the process and follow raw materials through the system. The group asks questions and removes non-value-added activities. Plotting the changes, the group might be able to eliminate several steps or days in a process. Gerald Baker, the GM, in a separate interview mentioned the same process, signifying that the approach is systematic and consistent among the plants they operate.
6. Make the shift from being reactive to customer needs to being proactive to Continuous Improvements. You’ll gain better control over the results. It may appear that when a company like General Electric needs a part, the staff reacts to customers’ needs. In fact, the ability to quickly meet the demands of the market comes from systems that may reduce a process from three parts to one part, making the firm more productive, streamlined and better positioned to win future business. Continuous Improvements can originate from within or outside your firm. For example, Gene Huber Sr. of Winamac Coil Spring Inc. in Kewanna, IN, keeps an eye on trends and passes down what he learns from larger companies. He employs the Best Practices of another firm and adapts them to fit his needs. The bigger picture is that management exists in the future, and the present is the result of yesterday’s smart actions.
7. One “size” does not fit all. Find the approach that works for you, and make sure that it aligns with what you offer to customers, not the other way around. A job shop is different than a batch shop or a continuous-flow facility. If one tried to apply the same manufacturing ideas in a job shop to a batch shop, the long-term results would develop conflicting systems and a confused sales staff. If a manufacturing concern concentrates on short-run job-shop work, it should not and cannot compete with a facility that sells stock items. Machinery and processes are different, and the capacity of tooling is different, as well. Pricing, quality, delivery and a host of other issues are adversely affected when we try the impossible: to be all things to all people.
8. Practice hands-on management to generate new ideas for improvement. When members of management are directly involved in watching day-to-day activities, ideas are born. Another benefit is that management has the authority to cut checks, providing quick funding when the need arises. A manager, owner, president, CEO or CFO who is walking the shop floor and listening to customers feels the heartbeat of the organization and tends to make better decisions.
9. Set up meeting groups consisting of executives from multiple firms that are non-competitive in customers served and product types offered. They should meet a few times a year to share in-depth knowledge and experience. Financials and plant tours (on videotape) should be included. Others are likely to see what you are too close to your own company to see yourself. Employ a capable consultant or mentor to facilitate the meetings. We facilitate such meetings with one such group in the mat services industry. The members save and earn a great deal of money by assessing and making recommendations to other companies in a completely open environment. They also share information on Best Practices from the industry, which has improved the services to their customers and boosted their bottom lines.
10. Set up industry wide definitions for financial numbers supplied to the Spring Manufacturers Institute and other organizations that compile industry data. Once definitions are established, stick to them. This means that if a company could not comply with supplying numbers according to the definitions, then its data would not be used in the survey. This is another way to move closer to establishing Best Practices for the spring industry.
Becoming More Structured
One “Best Practice” everyone can use is the development of a structure for finding and developing Continuous Improvements.
- Develop a process to research problems and find solutions. In some cases, you might use a cross-functional group; in others, just the decision maker. The first matter is to collect ideas and data internally and externally: a real thinking-and-analyzing first step. Be generous when filling your idea bank. Thirty ideas are better than three. Areas in which to look are:
· Internal financial and statistical numbers.
· “Industry” perceived Best Practices. (“Industry” means manufacturing overall if dealing with an operational concern. In accounting, the same would apply.)
· Interview vendors and suppliers.
· Read, read, read books, magazines and journals.
· Partner with your customers.
2. Set up systems for creating change. The process we recommend is a combination of the Funnel Theory created by Wheelwright and Clark, and The Stage Gate Theory by Robert Cooper. The process involves capturing ideas and then having a structure for determining what project fits the company’s needs and is the best solution to pursue. Do not leave the mental strategy to a game of chance. Create a process culture.
3. Utilize project-management tools to outline implementation and increase the probability of success. There are management tools that can aid you in your endeavors, including: Critical Path Method Charts, Microsoft Project, Ghant Charts, logistics tools, Queuing Theory, and so on. The Standish Group reported in 1994 that success rates for projects in Fortune 500 companies were 16.7%. The likelihood of the same projects coming in on time and on-budget was 9%. By 1998 the numbers increased, partially due to project management, to 26% successful and 24% on-time and on-budget.
4. Lastly, implement the ideas with a well-thought-out plan including contingencies that are adaptable to change. It’s the delay in equipment delivery or the failure of a loan to go through that generates massive confusion and lost time if not addressed early on in the process.
Perhaps “Best Practices” will always be a vague buzzword, and maybe it really doesn’t matter. What’s important to know today is that the most successful firms are those that are committed to Continuous Improvement to find the best business solutions. A Best Practice today might be out-of-date next week. It’s what works for your firm and your customers that matters. Where the spring industry is concerned, there is a strong desire for excellence and great potential for future success.
