It’s almost impossible to work in the chemical industry for any length of time without being involved in some improvement or cost-reduction initiative. These efforts range from the random local and piecemeal to comprehensive multiyear corporate-wide programs. Many succeed, initially. However, their impact usually deteriorates over time because of the lack of discipline and personnel changes that rob the site of key knowledge underpinning success. The task, therefore, isn’t just to come up with a better mouse trap but to come up with one that still will be working well in 20 years. So, you need to design not just effective but “durable” process improvement programs.
Consider a simple analogy: It might take five or more years of very hard work to cultivate a garden from raw land. However, that land, if then left unattended by trained gardeners, will return to virtual wilderness in three years or less. This illustrates that how we engineer durability into the new systems is every bit as important as the systems themselves.
The knowledge gained during the transition from an inefficient reactive operating status to “world class” performance doesn’t just relate to technical improvements but also has a very large “cultural” component. A site must nail down both the technical and human interaction elements at the start.
Most manufacturing plants, particularly older ones, aren’t designed, constructed or operated with the expectation they would perform at what today is considered a world-class level of performance, i.e., an overall equipment effectiveness or OEE of ≥90%. While we to some extent can build in reliability by specifying high quality equipment such as API-610 process pumps instead of ASME standard chemical pumps, it’s much more difficult to anchor the systems and permanently change the cultural/operating mindset.
Transitional Cultural Change
The primary challenge, therefore, is getting employees to work in teams to resolve issues and solve problems around achieving “world class manufacturing efficiency.”
A company faced with poorly performing assets typically commissions a “benchmarking” exercise to find just how good or bad the situation is. Not enjoying the news it usually receives, the firm then searches for a solution that hopefully will simultaneously reduce costs and improve efficiency while being both quick and painless.
Typically, the company clings to the concepts of “lean” and “cost reduction” and hopes that by sending a few employees to short training courses and conferences, the knowledge will spread by osmosis throughout the organization. This simply doesn’t work. Instead, the firm should be looking for an integrated system of “enduring efficiency improvement” and “better documented methods” rather than simple cost reduction.
It’s not just misfocused corporate emphasis, though. Being engineers by training themselves, plant managers often undermine success by believing that simply getting more/better engineers will solve any problem. This is a common refrain I’ve heard from plant managers in the U.S., Japan and Europe. Sadly, having “x” more engineers isn’t the answer.
Typical Improvement Process Mechanics
In basic terms, you can divide activities within a plant into four principle areas that are focused around 1) safety, 2) reliability, 3) operating accuracy and 4) quality.
Excluding the safety element for simplicity in this article, as management consultants we typically set up cross-functional element teams under the headings:
1. Work planning and scheduling;
2. Operator asset care (total productive maintenance — TPM);
3. Reliability centered maintenance (RCM);
4. Equipment condition monitoring; and
5. Multilevel problem-solving, e.g., six sigma, root cause analysis (RCA), Kaizan, etc.
Operational accuracy (excellence) improvement, i.e., error proofing, success in all these can be defined as having a fully engaged group operating in a team environment implementing industry best practices and performing each sub-activity at “world class standard.”
Just as fundamental is having a team-based culture with a methodology centered on plant-wide forms of problem-solving. The particular problem-solving techniques used must function routinely at all levels.
These multi-level problem-solving and defect-elimination processes share a stepwise approach: identification of the initial problem/issue/defect; classification by size; prioritization; and, finally, allocation of resources to eliminate it as a loss.
Often constrained by budgets, a company will recognize the need for improvement in one particular area and mount an initiative aimed at just that narrow area. Initially, that achieves impressive results but the impact quickly dwindles because the rest of the organization (having no ownership) doesn’t support the efforts. A broader multiple-improvement initiation is harder to implement but is more durable if accompanied by a plant-wide culture change.
I’ve personally been involved for over 50 years in changing organizations from the reactive to the world class state. At first, I often became so focused on the improvement process itself that I largely overlooked the threat posed by the loss of knowledge and skills over time. I naively thought: “What people in their right mind would ever discard all the knowledge and efficiency gained during the implementation program that was producing major profit for the owner, bonuses for employees, reduced stress and job security?” Unfortunately, I discovered that all of them would to some extent.
I’ve used four separate basic approaches, either singly or in combination, for different plant situations. So, let’s discuss some of the pitfalls and failures I encountered.
• As an improvement project implementation reaches a conclusion, it’s normal to extend the time between the periodic presentations of progress by the team leaders from monthly to quarterly and then semiannually. As a minimum, I recommend a high-level annual review with senior managers and team leaders with a written report back to a senior manager.
• Knowing that the plant’s systems need constant reinforcement, a second approach is to have the owner select a talented department manager to be trained by the consultant to be part of the implementation team as the manager of the change process. Then ultimately, that person becomes the “main man” in sustaining the systems. This approach is designed not just to achieve enduring success at one plant but also ultimately to give the company an internal consultant for efforts at other sites. I’ve found this approach moderately successful but it hinges on whether and how long the chosen individual remains at the company. With the knowledge gained in the improvement implementation, such people often get “poached” by competitors.
• Another strategy is to divide the responsibility for “system durability” among multiple leaders. This way, the loss of one person isn’t necessarily catastrophic.
Here, a company selects six to ten of the most-respected implementation team leaders and makes them responsible for maintaining the supporting management system.
Even here, best-laid plans sometimes can go astray. For instance, following a very successful implementation at one plant in the Chicago area, the owner purchased two additional plants and then transferred 90% of the key individuals (improvement team leaders) from the first plant to the other plants, leaving the original plant to sink backward.
• In every case, however, a pillar of durability is a documented “operating management system” that includes industry best practices and detailed “performance standards” around the key technologies. This requires periodic auditing. Such auditing can pose many long-term issues — not only about getting the audits done but also about getting money and resources to train newcomers in the skills to keep the culture and system operating.
Consider what happened at a plant in Louisiana: The company gave an individual many months of training and spent hundreds of thousands of dollars for equipment to enable that person to set up an advanced equipment-condition-monitoring program. The program achieved four years of outstanding success. Then, a new plant manager (not understanding the criticality of condition monitoring to mechanical integrity) allowed the person to take a new job in the same plant at a half pay grade higher to do a clerical job in the safely department but didn’t provide a qualified replacement. This demoralized the remaining condition monitoring team and led to collapse of the system.
Other Key Issues
Strive to make the organization believe the success belongs to them, i.e., the organization itself is responsible for the achievement. This hopefully will foster “ownership” of the system along with the new culture it embodies. As a consultant, I find ultimate satisfaction when someone at a site says: “I can’t understand why we paid all that money to someone from outside to teach us something we already knew.”
If possible, let the lowest-level capable employee head up some element of the program. It’s a learning/growing experience for the individual — and that person is less likely to leave the company.
From day one, emphasize the concept that the improvements must endure — that they should last forever and be embedded in all implementation team communication. Keep using the word “durable.”
Also, concentrate heavily on the senior management team. (Maybe this should be strategy No. 1!) Give them the “big picture view” of the organization and the sustaining culture you’re trying to create so they can fully support it. Senior executives operating in large organizations often expect an “individual” to drive change and success; they tend to see the world in terms of a good quarterback equals a good team.
A final but vital factor in the life of any program is realizing the most important person in the organization is the plant manager. Here, the issue is that over a 5-year implementation, that person probably has a 70% chance of being replaced by an individual who has no understanding of the program and little or no ownership. So, do all you can to talk up the value of the improvement process and get the new plant manager invested in its success.
If that doesn’t work, the only person who can help in this situation is the plant manager’s boss. If you can get that executive to show a distinct interest in the progress of the program from day one rather than just in the bottom-line financial results once a quarter, you’re halfway there.
BERNIE PRICE is CEO of Polaris Veritas Inc., Houston. Email him at [email protected].