5 minute read 7 Aug 2019
robust production

Why a robust production system is a prerequisite for the smart factory

By

Craig Lyjak

EY Global Smart Factory Leader

Operational Excellence thought leader. Digital innovator. Passionate developer of people. Foodie. Father.

5 minute read 7 Aug 2019
Related topics Alliances

A robust production system built on platforms like Microsoft Azure and Microsoft Dynamics 365 makes the foundation of the EY Smart Factory.

Over the years, most manufacturers have deployed some type of operational excellence or continuous improvement program to boost their performance. But while those programs may have delivered some immediate benefits, in our experience, those results almost always turned out to be unsustainable over the longer term.

Why is that? The biggest reason is that the programs failed to knit the new ways of working into the fabric of how the company operates. Organizations gradually lose focus and become complacent, and the old problems the programs were designed to solve end up seeping back into the daily routine.

What the manufacturers need

What manufacturers need instead is a robust production system that looks at how an organization works much more broadly. It incorporates not only well-known improvement tools and processes, such as Six Sigma and Lean, but also the organization structure, roles and responsibilities. By doing so, it makes sure that the changes and the results “stick.”

Such a production system is the foundation of the EY Smart Factory, which is a solution built on technologies from Microsoft, an EY alliance partner. The EY Smart Factory helps manufacturing executives develop, implement and drive global operational excellence programs in a connected and centrally controlled system. In addition to operating on Microsoft Azure, the EY Smart Factory uses Microsoft Dynamics 365 to help manufacturers unify relationships, processes and data across not only the shop floor but the entire organization.

Key elements that make the EY Smart Factory different from traditional performance-improvement programs 

A few fundamental elements are key to generating the kind of sustainable results that so many manufacturers struggle to achieve. The first is the concept of servant leadership. The EY Smart Factory production system helps enable manufacturers to develop their leaders as highly effective coaches.

It equips those leaders with what they need to stay engaged with what is happening across the organization on a daily basis. It also helps enable them to continually build new capabilities among the front-line individuals who work with equipment to transform raw materials into finished goods. Such leadership is vital to the organization’s becoming self-sufficient and achieving sustainable results.

Standards as a key element

Standards are another key element of this production system. But in this case, we’re not talking about the rigid and strict standards of old that can turn an employee’s job into a boring, repetitive routine. The standards in the EY Smart Factory production system are unique in two ways:

  1. They are positioned as not the definitive, unquestioned way of working, but rather, the best current approach. People are encouraged to always look for better ways to do things and improve on the standards in place.
  2. The standards are put in place where problems have been solved, to draw a direct line between the use of those standards and beneficial impacts to the company. Such a clear connection illustrates the importance of standards and builds a cultural desire for people to follow them.

If the standards solve problems, enable the company to be more successful and make people’s jobs easier, why would they want to do things any other way? 

Employee ownership as a key element

The third key element is the concept of employee ownership. For people to continually focus on how they and the company can do things better, they need to be proud of their work and their company. This requires the company to help people build their skills and capabilities and give them responsibility and accountability — the freedom to act as “owners” of the company.

An employee who sees his or her job as simply executing specific tasks until the shift is over likely won’t be too concerned about how to improve those tasks for the betterment of the company. A phased maturity progression is fundamental to how the production system helps teams. It first credits them for good work to date, then identifies their remaining “gap-to-good” and gives them a 90-day step-by-step improvement plan to close performance gaps.

Importantly, this production system isn’t just theory — it’s mature and battle-tested, and has been refined continually over time in the field. When deployed, it is aimed squarely at generating business value, which helps foster its acceptance and use across the organization.

For instance, the production system makes its biggest impact in reducing loss — on average, it increases Operational Equipment Effectiveness (OEE) and productivity by as much as 10% to 25%. If the people in a facility clearly see how using the production system will help the site, their line and themselves be more effective in eliminating loss, they’ll be eager to use it.

Culture change as a crucial element for sustainable results

The EY production system’s most enduring contribution is the culture change it engenders because of how it is deployed. Rather than looking to instill a “big bang” change — which rarely is successful — EY professionals help guide the transformation of a manufacturer’s culture incrementally. We work with an organization’s employees on a simple progression, starting with executing a specific task consistently and correctly to a point at which it becomes a habit.

Over time, as employees internalize the habit and why it is important, the habit becomes behavior. People know why they need to act in a certain way without being prompted. When enough people develop that behavior, they affect the larger organization’s culture. That’s when the results the company seeks become sustainable and a foundation for future improvement efforts.

A production system eliminates the traditional distinction between deploying an operational excellence program and running the business. Done right, it makes continually improving the business simply a part of how the business runs. It then sets the stage for the broader digital transformation that manufacturers today are looking to achieve.

Summary

Most manufacturers have deployed operational excellence or continuous improvement programs over the years to boost their performance. These programs may have delivered some immediate benefits; however, the results turned out to be unsustainable over the years.

What manufacturers need instead is a robust production system that looks at how an organization works much more broadly. Such a production system is the foundation of the EY Smart Factory, which is a solution built on technologies from Microsoft, an EY alliance partner. It helps manufacturing executives develop, implement and drive global operational excellence programs in a connected and centrally controlled system.

About this article

By

Craig Lyjak

EY Global Smart Factory Leader

Operational Excellence thought leader. Digital innovator. Passionate developer of people. Foodie. Father.

Related topics Alliances