April 5, 2022

Source: Jon M. Quigley | Value Transformation LLC

There is no silver bullet.

Cost of Manufacturing

Businesses are constantly under cost pressures, this includes manufacturing.  Material and labor cost can be a significant cost in the product.  We use value engineering techniques to ensure that material costs are as low as we can while still meeting the performance and quality objectives of the customer and the organization.  Besides the labor costs, automation can improve quality.  I shake when I hear people use the words always and never.  People are not that repeatable; automation can lead to a very repeatable outcome if done appropriately.

Automation is usually not an all or nothing proposition.  It is possible to automate some of our manufacturing line and still require people in support of the manufacturing line.  The level of investment to automate balanced against the level of human talent available to keep the manufacturing line working.  Up front investment of capital, juxtaposed against hourly rate to work the line, and both often exist. That is where things can become difficult.  We may believe that automation is the savior for reducing the associated labor costs, but unless the line is fully automated, we will still have people working the line.  This can present some challenges.

Modern lines are not only automated, but can also perform the measurements, not just on some of the parts, but all the parts and automatically.  This reduces the cognitive and physical load upon the team members. This is perhaps a good thing, but does not help when it comes to engaging the team.  I have heard managers say just this, and is one of the reasons for writing.

Team Engagement

Have you ever been part of a team? I do not mean what most refer to as team, but those rare occurrences when we are thoroughly engaged and more importantly, so too our team mates.  If you have had these rare moments, you understand the power of team engagement.  A business makes progress not through technology, but through the creativity and talent of the team members.  It takes these things to determine the best approach to automation.  No problem here.  However, what happens to the level of engagement for those remaining on the manufacturing line?  I have been interested in employee engagement for years now, a good place to view employee engagement over the years, is the Gallup Workplace Engagement.  I have been following this poll for many years, and some of this is quite scary.  Their poll breaks down into the three categories below[1]. 

Engaged – work with passion and emotionally attached to organization. Generating new ideas and consistent performance to move the organization forward.
Not engaged – put their time in, but no passion or energy into their work.
Actively disengaged – unhappy and resentful, they spread negativity within the organization.

Lack of engagement limits the available creativity and talent; this is not the way to continuous improvement or competitive advantage. 

Team members do not have the same demand for their attention on the manufacturing line as those lines that are largely manual.  This reduction of focus on the manufacturing line should be a good thing in that it provides time for our team to explore other improvements and creative ideas.  Yet in discussions with managers of manufacturing lines we find that keeping the team engaged to be difficult.  Reduced stress due to a high degree of focus on the line, should make it possible to improve the organization at large.  It is in everybody’s best interest to find ways to engage our team members beyond the focus of the automated manufacturing line.

What can we do?

It is not in our organizations best interest and longevity to have unmotivated talent.  The level of automation of the manufacturing line may place limits the amount of team engagement maintaining a manufacturing line.  If the line is not extensively automated, we may be able to improve it through the creativity and talent of our team, engagement.  If we can improve the line, we can use a host of techniques and develop a culture of continuous improvement constant learning.  If the line automation is significant but not entirely, we can focus the talent supporting the line on other areas of the organization.

Operations improvement (logistics)
Process improvement
Quality improvement
Value Stream Mapping
Value Engineering (or other product / process cost improvement)

The approach need not be any of these, or any other formal regiment. The point is to find a motivating objective, and develop an environment that will not only allow, but value team exploration and learning.  In fact, there are good arguments for moderating the formalism, making easier for the team to explore alternatives.  If increased engagement can be obtained through some home-grown approach that will be the best solution.

Conclusion

Competition does not end because we have automated our manufacturing line.  True competitors are constantly striving to improving.  Developing a line that balances the capital investment along with the labor burden at time t=0 (start of manufacturing) does not necessarily mean the end improvements.  This is a fact to which suppliers to the automotive Original Equipment Manufacturing (OEMs) are all too aware.  From experience, OEMs go to their tier 1 suppliers and “request” cost reductions annually.  Also from experience, these decreases in sale price are often contractual obligations.  Even when the production runs are 10 or more years long with little or no additional investments post launch.  Continuous improvement does not end when we have automated the line.  Creativity does not come from automation, but from our team and continuous exploration.  The on-going concern is best served not through an over reliance on automation, but the talent, creativity, constant learning, and engagement of the team members.  Not apathy.

Jon M. Quigley PMP (204278) CTFL is a principal and founding member of Value Transformation, a product development (from idea to product retirement) and cost improvement organization established in 2009. Jon has an Engineering Degree from the University of North Carolina at Charlotte, and two master’s Degrees from the City University of Seattle as well as two globally recognized certifications. Jon has more than thirty years of product development and manufacturing experience, ranging from embedded hardware and software through verification and process and project management. Jon has won awards such as the Volvo-3P Technical Award in 2005 going on to win the 2006 Volvo Technology Award.

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