This guest posting is written by James Jelinek and Fletcher
Question: As a plant manager, why should I have my people work on reducing set-up and changeover time now? The market is so slow, we don’t have enough orders to keep the machines running.
Answer: You are not alone. As recession deepens, you will have plenty of company.
Every indication calls for a severe recession of 12-18 months, but it will pass.
If your plant truly is so slow that you don’t have enough orders to keep the machines running, perhaps workforce reductions are needed. However, this short term “fix” can have very long term negative impact as a solid experienced workforce is a treasure to be protected. I recommend you consider the following before you act.
While recessions are hard, at times they can be a great opportunity to take actions to improve your operation.
Eliminate any “D” players – many other employees may be wondering “what’s taking so long?” Sometimes we (myself included) keep people too long when we have high growth periods simply to keep up with the work load. Now may be a time to trim dead weight. Better yet, other “A” players may come on the market. This may be a good time to trade up.
An acquaintance of mine – Red Scott of Vistage – once said “a little success can lead to a lot of overhead.” I bring this up to remind all of us that improvements can be found in the office as well as the shop floor.
This may be a terrific time to really talk to your people about what it will take to not only survive this recession, but to emerge stronger. They will understand this message. They read the paper and understand the threat. My experience tells me they will appreciate the challenge and the leadership. They will rise to the occasion. The book Good to Great states the “Stockdale paradox” (Admiral James Stockdale): “you must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties to confront the most brutal facts of your current reality. Whatever they might be.”
Specifically, with respect to set up reduction and changeover time I offer the following thoughts.
Reducing set up and changeover time is a necessity in good times and even more necessary in bad times. The firm having the most efficient cost structure has the advantage. If your industry is truly distressed, this factor could determine who is the “last man standing.” I would also advise that now may be a good time to focus on your per piece run times as well. Recently, we have done this on certain key parts we run. We were able to work with our tooling vendors to find ways to reduce run times 30-50 percent. While set up was not affected, as we only changed the perishables, I ask you to focus on both set up and run.
Remember that reducing set up and changeover not only reduces cost, but enhances flow-through. This factor can allow you to offer shorter deliveries. This offer should be well-received by customers who want to keep inventories low. I see a potential competitive edge. This may be a good time to “take market share.”
Finally, I would highly recommend that you do something now. Do not hesitate. This recession is an opportunity to take actions that will enable your firm to emerge “leaner, meaner, and stronger on the other side.” Even if things are so dire that the excess capacity cannot be used to serve other customers, action can be taken to cut expenses and conserve cash.