Small Manufacturers Are Not Little Versions of Major Manufacturers, Part 2

Consultants selling continuous improvement programs don’t seem to recognize or acknowledge the dilemma and resource problems of small manufacturers.

By MICHAEL COLLINS, Author, Saving American Manufacturing

Mike Collins ImageThis is part two of a two-part piece. Part one can be found here.

When I was a general manager, I needed to implement a better quality system and was approached by some consultants who wanted to sell me ISO 9000. None of my largest customers cared if the company was ISO 9000 certified. Their contracts simply stated that the production line machines had to reach 99 percent uptime in a given period. We built machines that were engineered for each customer plant with different specs, different purchase parts and a lot of new engineering.

A consultant suggested that we should implement the same version of ISO 9000 used by the auto companies. They had little understanding of the one-off nature of our parts, and the great variability of our machines and labor hours. I admit that some of the basic concepts in ISO 9000 were very useful, but the consultant could not explain how the process could be adapted to our type of manufacturing in which every order was very different.

I saw this as a paperwork nightmare that would drastically increase our indirect hours, and slow our production and delivery times. He would not offer pieces and parts of the system, and wanted me to accept the whole thing. I wanted something that could fit our resources and systems. I needed a simpler process that could be implemented slowly with incremental results.

The second point is that all small and midsize manufacturers are restricted by resource limitations. FACTS is an acronym that best characterizes the reality of the small manufacturing environment and is described as:

  1. F = Fear of making a wrong decision.
  2. A = limited Access to capital.
  3. C = Cash flow problems.
  4. T = Time constraints.
  5. S = Small or no staff.  

Consultants selling continuous improvement programs don’t seem to recognize or acknowledge the dilemma and resource problems of small manufacturers. The assumption seems to be what is good for Toyota must be good for ABC Fabrication. The complexity of using these processes is often too difficult for smaller manufacturers. They need the processes chopped down into bite-size steps that fit their resources.

If the solution does not consider FACTS and the type of company, it can harm rather than help SMMs. In a medical analogy, one must be careful that the dose of medicine does not kill the patient or make the symptoms worse. A Hippocratic Oath must be observed in helping save America’s SMMS — do no harm!

SMMs are often sold a system so complex that it ends up defeating its original purpose. A good example is the SEMCO Co., which is featured in the book Maverick by Ricardo Semler. Semler took great risks to remake his company into a new organization that was driven by the customers and employees. He began by eliminating all types of structures, rules and top-down policies.

After investing in an information technology (IT) department with a mainframe computer and all of the necessary programmers to run the equipment, Semler found out that it had become a priesthood of people who made systems more complex, harder to use and more expensive. When he found out that they could not get all of the invoices sent out each month because of the limitations of the equipment, he fired the entire IT department.

Semler says, “We no longer have all those programmers or keypunch operators; we have dismantled our information systems department and thrown out the systems master plan.”

Most SMMs have neither the staff, nor the resources to adapt Type 4 manufacturing continuous improvement programs. I think that continuous improvement programs tend to slow down once the 861 giant companies have tried them, and it tends to grind to a halt when they get into the Type 1, 2 and 3 companies. To be useful, these programs need to be scaled down to fit the manufacturing type, resources, existing systems and staff of the company.

This is part two of a two-part piece. Part one can be found here. What’s your take? Please feel free to comment below! For more information, please visit www.mpcmgt.com.

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