The story below is a classic example of a situation where the company’s goal-setting and day-to-day management remained at too high a level.
In the client case described below, middle management and employees may not have fully understood what their concrete objectives and priorities were, or everyone had slightly different perceptions of them. Production was managed at an overall level without detailed knowledge of the individual production lines. The old objectives and their monitoring no longer served their purpose, so they were completely reconsidered.
Problem: Productivity underperforms week after week, month after month, year after year
This case involves a manufacturing company with 18 different production lines. The CEO describes the initial situation as follows:
“For years, we have been approximately 10 units below the productivity target of 80 set for us by the Group. A productivity figure of 80 is generally the target for good performance in similar companies within the industry. As CEO, I have been unable to gain clarity as to why we are not reaching this productivity target. We also lack clear and easy-to-read monitoring tools. This situation must change.”
Action 1: Bottom up goal setting from production to factory level
The company engaged a business consultant to conduct a thorough business analysis in light of operational metrics. All 18 production lines at the factory, along with their production volumes and machine run times, were analyzed with the consultant’s assistance over the previous twelve months.
Each production line was given its own individual target. Historical data, including production shifts run, was utilized in defining these targets. The consultant interviewed production planners and production line operators to determine whether the new targets, based on historical data, were realistic and acceptable. Using this method, the targets were built from the bottom up—from production to factory level.
Action 2: Implementing proper monitoring tools
Following the target setting, an A4-sized monitoring tool was created that contained the previous day’s outcome for all 18 production lines and compared them to the established targets. This automated report was delivered to production line personnel every morning at 7:30 AM. Color codes—red, yellow, and green—provided supervisors and all personnel with a quick overview of the daily situation.
Supervisors were trained to walk their production lines every morning and discuss the previous day’s results. Gradually, new insights began to emerge. Connections were discovered regarding production operations, production stoppages, error situations, the role of maintenance during shifts, and production planning—topics that had not previously been discussed with the same intensity and precision. The elements of continuous improvement had been identified in production.
No ready-made solutions
At Reflector, implementing change projects is part of daily operations. Regardless of industry, situations can be remarkably similar. A skilled partner approaches the situation systematically, from multiple perspectives. To manage the whole, one must also understand the details. Most importantly, it is essential to comprehend the specific company’s situation and business objectives. Based on these, the right metrics are defined and clear reporting is established, ensuring that daily monitoring of objectives is straightforward, purposeful and it can be trusted.
