Proactive Technologies Report – July, 2022

For many organizations, the only way to know the road was bumpy is through negative events; product scrap or rework, lost customers, operator injury or an outcome requiring legal intervention. Perhaps the oversight has been lacking due to a lean or “green” supervisory staff, or a lack of budget for the extra hours or equipment needed to monitor the process, or processes are unsettled and changing rapidly without those individuals performing them being immediately notified.

For any reason, relying on a negative event to prompt scrutiny can be very costly – much more than the investment needed to prevent this. Worse yet, an investigation too narrowly focused resulting in remedies that overlook the obvious reasons for the discrepancy may inject new uncontrolled variables. Many remedies become more disciplinary (e.g. reprimanding or firing the person(s) thought responsible, a complete audit involving all departments and staff, reassigning the process to another department, or delegating the process to one person who knows how to get around the systemic errors and barriers to produce the output expected…until that one person moves to another job or company and that “wisdom” is lost).

To determine to what degree this is an issue with your operation, you need only: Read More

If the worker is reassigned to another department, and no task-based training infrastructure is in place, that reassignment may lower the efficiency there which, again, reduces the gains made by the Lean effort. So part of the Lean effort must be the deliberate cross-training of workers in temporary assignments or longer-term reassignments to other departments that seem to have the need for increased staffing, perhaps as a result of the increased throughput achieved from the Lean effort in the upstream department in the chain.

Another outcome of a lean effort may not include moving personnel, but either equipment or processes out of the Leaned department into another department up or downstream, often without structured training to absorb the new activities and maintain efficiency. Here the loss of gains made are similar if no training on how to perform the processes or run the equipment is provided. Read More

When the resident expert masters a task and it becomes routine, there is a tendency for them to marginalize the task as so easy that the next trainee should learn it by osmosis. If not, maybe the new-hire “just doesn’t seem to want to learn.” Somehow, the organization may get by. In this case, like so many, it may sound like an insignificant example of training, but not to the person who needs the copy and who may be judged if a meeting is waiting for it.

Same, too, are the more critical and complex tasks of the job, requiring compliance with so many factors such as engineering specifications, quality control requirements, safety requirements and company policies. Without a deliberate task-based training infrastructure in place, training might be ad hoc, informal, unstructured and rarely documented. Add to this the periodic worker cross-training that allows workers to train in, and master, tasks in multiple job areas and the amount of critical, but undocumented, training can be tremendous.

In the event of an audit by an internal department, a certifying agency, a client or a prospective client, explaining how a worker is trained to master a task critical to a repeated high level of quality might be difficult to impossible. And answering how a worker, who is thought to have mastered a task, is updated when the process is improved, redesigned, affected by changes in technology, changeover of product line or part of an orchestrated improvement program might be even more difficult. Read More

Publicly traded companies, and even some privately held companies getting ready to go public, seem preoccupied with increasing quarterly earnings per share above all else. A consistently high level of earnings per share over the long-run no longer seems adequate for some. If the market is slack, an organization might carve costs out of the company from even a lean operation rather than disappoint investors. When labor is viewed as a “cost” rather than an asset, the temptation might be to cut benefits and wages. This may prop-up numbers for the short-term, but a demoralized workforce might not produce the same levels of output and quality yield as before. Sadly, a decision might be made in following quarters to cut benefits and wages even more, followed by workers if needed to make the magic number. All the while, worker and operational capacity, along with enthusiasm and loyalty, are eroding.

How does this erosion happen? When workers are cut, the work they used to perform gets transferred to the remaining workers. If there isn’t a mechanism to quickly “transfer expertise” to the worker expected to take on the new responsibilities, capacity drops until the trainee comes up to speed. For as long as the transfer takes, one well-paid subject matter expert trainer is being paid to train the paid trainee, yet productivity improvement may be negligible. And further complicating the process, perhaps no one thought about capturing the exiting workers expertise before they left the building, so some “reinventing the wheel has to occur.” Multiply this across all affected workers and the labor and opportunity costs may wipe out any anticipated gains by cutting worker payroll.

Proactive Technologies Report has presented many articles about the value of workers, how structured on-the-job training increases the worker’s capacity to perform more tasks to a level of mastery, the high cost of worker turnover, and more. It is a concept we feel strongly about. Yet we are continually surprised how this topic is avoided by company’s accounting departments and upper management when they feel inclined to trim costs here and there, avoiding cultivating the enormous wealth before them – waiting to be harvested. What would be the value of just a 10% increase in worker capacity, operational capacity, quality and quantity of work, and worker compliance (safety, ISO/IATF/AS, etc.) to any operation?

Not to diminish the important role of investors, but there has been a lot written about whether maximizing shareholder value is a destructive rule that needs to be changed. Critic Steve Denning wrote in an article in Forbes published in 2011 entitled “The Dumbest Idea In The World: Maximizing Shareholder Value,” “Imagine an NFL coach,” writes Roger Martin, Dean of the Rotman School of Management at the University of Toronto, in his important new book, Fixing the Game-What Capitalism Can Learn from the NFL, “holding a press conference on Wednesday to announce that he predicts a win by 9 points on Sunday, and that bettors should recognize that the current spread of 6 points is too low. Read More