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Client's Problem: Low Productivity/Low Profits/High Frustration Acme Inc. (a fictitous name) makes tools for use in a specialized manufacturing process. Acme's owners were disappointed with the company's economic performance and the low productivity of its 25 employees. As one owner said, "We made this much money when the company was only a fraction of this size." Their goal was to improve productivity with the hope that profits would also increase as a result.
To determine the causes of the company's poor performance, we conducted a thorough anaylsis beginning with interviews of the two owners. In these interviews we examined the owners' perspectives regarding the company's problems and discussed the previous efforts to improve productivity. Our analysis continued with meetings with all of the employees divided into manageable groups. Using group facilitation techniques, we collected information regarding the employees' understanding of the business and its market, the company's competitive strategy, its operations, and a variety of other matters that might affect employee performance and the overall success of the company. These meetings revealed an inconsistent understanding between the owners and employees regarding the issues affecting employee and business performance. Among other things, the employee meetings identified significant communication breakdowns between functional departments within the company, and between management and staff. In addition, we learned that glitches in the manufacturing process were undermining product quality and placing enormous stress on employees to meet unrealistic delivery deadlines. The effect of these problems, combined with management's inadequate information sharing, was an overall lack of cohesiveness, which resulted in low productivity and disappointing profits. Furthermore, the various communication barriers prevented employees from taking action to improve the system when they saw opportunities to do so.
Our findings led to several recommendations aimed at improving communications and enhancing the cohesiveness of employees and departments. In addtion, the manufacturing process was modified at various points ranging from the collection of design requirements through the delivery of the finished product. These simple and inexpensive changes generated dramatic short-term increases in productivity and profitability, and also began a long-term cycle of improvements for the company. Acme is now much more profitable and is recognized as on the leaders in its industry.
A. Reducing Downtime in a Manufacturing Process A plant manager wanted to reduce the unexplained downtime in a manufacturing process. Our analysis revealed several factors contributing to the downtime, including problems with equipment, worker training, suitability of raw materials, and inefficiencies in the manufacturing process. Prior to identifying these causes, the company's repeated improvement efforts had been ineffective. With the findings from our analysis, the company was able to make effective changes to reduce downtime and improve productivity. B. Identifying a New Growth Strategy The owners of a recently formed service business wanted to jumpstart sales growth. We facilitated an exercise to review the firm's situtation, their strengths and abilities, and several proposed strategies. Through this exercise we developed a plan to add unique service features based on the owners' prior experience in a related industry. This strategy successfully distinguished the new firm from its competitors and accelerated growth. C. Developing a Fair Compensation Plan The owners of a new business were at odd over how to set their own compensation to properly reward their different roles in, and contributions to, the business. They sought a process to fairly examine and evaluate their various options. We facilitated a structured meeting and exercise that led to a mutually agreeable compensation plan that recognized the value of the services provided by each owner and also encouraged each owner to pursue self-improvement activities in selected areas. Click here for our free Getting Started materials for creating the business of your dreams. |
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