Engineering and process changes are a fact of life in our precision machining shops. In high-mix/low-volume production, process changes are actually a core competency. But there are four common mistakes that are often made by shops trying to implement such changes. When making engineering or process changes in your shop, try to avoid making these mistakes:
1. Claiming savings that don’t really exist. This is probably the most common one I have seen. Top-down changes are almost always driven by somebody’s perception that there are going to be some significant savings—savings that never materialize.
In many companies, the quality department has converted to “lean dojos” or martial arts thinking (them against the process). I call this wishful thinking error “Green Belt Fantasy #1.”
I used to call it “Boss Delusion #1.” In my experience, the savings or “improved performance” aren’t sustained, if they show up at all. Want to know more? Do a Web search on “Hawthorne Effect.”
2. Ignoring labor fringe benefits (and overhead). This can easily
be 20 percent or more per labor dollar. Just because the accountants
claim they have it figured in doesn’t mean they really do. Failing to account for unanticipated maintenance costs is another aspect of this kind
of mistaken thinking. I call this the “Iceberg Mistake” because we
only see and plan on a tiny part of the real problem.
3. Using production time estimates that reflect substantially different rates of work. The best example of this was in a movie where the producer had a time study of how a chair was being painted by brush so he could low-ball the quote. (He needed a bunch of chairs for his production.) After the producer got his low-ball price accepted, the painting contractor picked up his signed copy of the contract and hollered to his crew, “Spray ’em!”
In our industry, we wouldn’t dream of using setup time estimates for a CAM machine on a CNC machine. But when was the last time you audited the rates that your estimating and quoting department is using? When were those rates last updated? Do they reflect your current shop reality? My name for this mistake is “Apples to Oranges” because we are comparing dissimilar rates.
4. Not accounting for the hidden costs of change itself. On what line item does this cost get entered? This error is the most trying of all. While we all like to think we make rational decisions based on cold, hard facts, most of us rely on a pretty large dose of “gut.” Our mental processes have a lot more adrenalin and other chemical inputs than we will admit.
If we really want to make a project happen, we somehow manage to ignore, underweigh or fail to consider unquantifiable criteria, especially relating to the human performance issues of those affected (e.g., employee fatigue, effort required, distractions’ effect on performance and job dissatisfaction).
This is an invisible mistake to us in the organization, as the costs of change are not and often cannot be seen, nor are they measured. Disruption, resistance to change, adjustment time, learning curve issues—these and others are invisible at the time when we most need to see them.
Worker acceptance of change is difficult to predict. It is even more difficult to manage. But, in my experience, the key to avoiding all of these mistakes when managing change is to give the employees that have to do the work a contributing role on the team to implement the change.
“Become the change you wish to see” and “the easiest way to deal with change is to help create it” are two truisms that can help your people get involved. They can also help your shop avoid the mistakes (and their consequences) that I have listed above.