Your ECM partner works with many customers, each of whom has their own technical standards and style of working. Don’t allow yourself to think that your electronics manufacturer's abundant technical expertise somehow includes clairvoyance!
Your company is facing one or more of these situations and has made the decision to outsource the manufacture of electronic circuit board assemblies, control panels and/or box-build assemblies.
Prototypes – From a Customer’s Perspective
Our team has a great idea for a unique and powerful new product. If we don’t act quickly, someone else will launch a competing device soon. The first company out there usually captures the greatest market share; we’re in a hurry to get some prototype circuit boards built so we can tweak them and get ready for full production.
Recently, I came across the article "Social Media- Finally Ready for Electronics Manufacturing?" The post was written by Beth Dickinson, a Marketing Consultant for the company TFI, which provides strategic advice and market insights to clients worldwide. The blog post posed the question: What does social media have to offer component distributors, solder-paste makers, and contract manufacturers?
Let’s say that your customer makes the purchasing decisions at an original equipment manufacturer (OEM). They are responsible for an assortment of custom electronics – with ever-changing needs. You are their reputable contract manufacturer (CM) and accommodate their style well, yet you suspect that your customer has made at least one of these comments:
The supply chain relationships have become such an important part of any manufacturing business and especially that of a job shop that values keeping inventory at a minimum and On-Time-Deliveries at a maximum. I am sharing some habits that are a must for success.
Every organization has its own language. At RBB we use the term swarm to describe how we behave whenever some task or activity needs extra help. But don’t think of kids swarming on
the beach on a summer afternoon. Think instead of piranhas attacking a fresh kill.
Our own special notion of swarming grew out of RBB’s implementation of LEAN manufacturing methods. Simply put, LEAN is all about eliminating anything a customer is unwilling to pay for. Like most small companies who bought into the idea of continuous improvement decades ago, RBB embraced LEAN.
Unfortunately, early results were limited: we implemented many projects (known as kaizen events) before we discovered that LEAN in a job shop environment is simply not the same as LEAN anywhere else. We found that we needed to swarm.
The basic idea is this: we perpetually reassign our people and other resources to where the work is temporarily heaviest. Since job shops like RBB operate in a world with unpredictable/unforecasted demand, we cannot afford to design a rigid, hyper-efficient system for satisfying customer orders. As with card games like gin rummy, the best hand is the one with the most tactical options as new cards turn up. If you’ve ever waited in vain for that one right card to appear, you know what I mean.
As our daily shop floor situation changes, we reconfigure and reallocate resources once again. That’s the other dynamic of any swarm in nature – it changes direction quickly and seemingly effortlessly.
Swarming behavior is easy to recognize – you know it when you see it – but it’s almost impossible to describe. So we don’t spend time precisely defining it; instead whenever we see things that prevent us from doing a fast, smooth job of swarming, we take action to knock down these barriers.
Examples of things that can’t coexist with good swarming techniques include:
All of these cause the swarm to stop everything and ask for directions.
Like real swarms, once the energy is flowing nicely it can be amazing where it will spread. Not satisfied with just swarming on the shop floor, RBB-ers decided to keep going and swarm the new product quoting process as well. And the product documentation system. And the purchasing of materials. And month-end closing. A highly motivated and skilled workforce – with few energy barriers – can combine the best LEAN principles with a hungry attitude.
I can share from personal experience that watching a swarm at work in your company is a joy to behold. But be prepared for the morning when you realize that your job as a leader has completely changed. You now work for the swarm. Your new role: point the swarm, clear away their obstructions, and lead the cheers.
Bruce Hendrick has been a leader of major change in corporations and small business alike for the past 25 years; currently he's the owner of RBB Systems and Organizational Development Services, LLC; noted speaker, author, active church member and community volunteer.
We wrap up this series on job shop leadership by considering a topic that pervades many shops – something that could be driving employee behavior more than we realize.
Look at the picture; what do we see? It’s the beautiful bride, of course. We note in passing that she’s wearing a veil but take little notice of it. It’s not something that would distract most of us. That’s how it should be, but what does this have to do with leadership in job shops? Well, let’s look at two images found in job shops the world over – the ubiquitous organization chart and the process flow diagram of the business.
The org chart conveys general responsibilities, job titles, who reports to whom, what the official “chain of command” is supposed to be, and related information. It is helpful for quickly communicating relative levels of influence, especially with people that are outside of the organization.
Process flow diagrams show the sequence of activities. The one shown here is the most basic, for illustration purposes. These are less common than org charts but every enterprise can make one readily. It’s what the people are actually doing each day to serve customers.
Here is RBB’s org chart. I’ll bet that yours looks similar.
Okay, so now think about this: of the two drawings above, which one is the bride and which one is the veil?
This is not an obvious answer. Many people don’t see it, but a moment’s reflection reveals the answer: the business process is the bride! It’s what really matters! The health of the business depends on how things flow, whereas the org chart is simply the way we have divvied up our talents to accomplish these processes.
In your own shop, how often has your process changed compared to your org chart? Think of it this way. The chain of command matters, yes, but only in the successful accomplishment of the mission. As often as necessary we reorganize ourselves to accomplish our mission; we never change our mission to accommodate our structure.
A reasonable question. This is what I tell the folks at RBB – “Take care of the bride! Keep her healthy. Never let the veil – the org chart – get in the way of a happy bride. Make things a little bit better for the bride every day.”
Unfortunately this is a lot easier said than done, mostly because we’ve picked up some bad habits at less functional places along the way. When folks get distracted by the veil they do things like:
· Avoid owning a problem completely (it’s not my place…)
· Pass the buck (it’s her job…)
· Sit on important but unasked questions
· Craft “ticking” emails to others, copying bosses (hey, I’m a team player…)
· Confuse influence with authority
· Assume their value to the organization is defined by what org chart box they’re in
Employees at vibrant, growing job shops look through the veil and concentrate on the work at hand. They don’t worry much about who “should” do what, according to Hoyle. Get the job done right and quickly is their mantra. They sense the health of the bride (the daily business) and act, even if it means apologizing for overstepping their authority on occasion.
Just as important – managers and supervisors foster this environment. They have small egos and toes (it’s hard to step on them). Risks taken for the bride’s benefit are rewarded, not punished. They don’t take themselves too seriously.
In these healthy shops the org chart is seen as a communication tool, nothing more. They refuse to let it dictate their behavior.
At RBB we move heaven and earth to get our small batch customers what they need, when they need it. Our customers don’t care much about how we’re organized, do they?
I leave you with a final challenge. What are you or your people doing this week that serves the veil instead of the bride? And are you okay with that?
Bruce Hendrick has been a leader of major change in corporations and small business alike for the past 25 years; currently he's the owner of RBB Systems and Organizational Development Services, LLC; noted speaker, author, active church member and community volunteer.
None of us are as smart as all of us – so says the well-known Japanese proverb. And while this holds true in every organization, job shops in particular must take special heed.
RBB focuses on low volume electronics: what we like to call “small batches.” We assemble and test our customers’ high tech products on a made-to-order basis. It is common for our 40-person workforce (not counting support staff) to run 200+ highly intricate, mission-critical jobs through the shop at any one time. That’s a lot of opportunity for our employees to use their smarts!
As we’ve discussed earlier in this series, a mission, a vision, and a daily dashboard can do wonders to get everyone on the same page. These tools help crystallize what it takes for the business to win – and gives us a scoreboard for how we’re doing. Which is good. But, alas, once again, it ain’t enough.
Three frogs sat on a log. One decides to jump in the pond. How many are left? Well, three, of
course. Deciding to jump… is not jumping. Knowing does not always translate into doing, as we realize only too well. The leadership tools described above prepare folks to make the right call at crunch time. But actually leaving the log is what matters.
More than at many other places, the scarcest resource in job shop environments is usually time. With so many jobs running at once, and so many variables in play, the performance of any one job – and the satisfaction of that customer – often comes down to whether one single employee feels free to make the difference at “crunch” time. And most every job has it. That pivotal moment when someone must step up and do the often-invisible-next-right-thing or the job will suffer a quality, cost, or responsiveness problem.
The crunch time, crucial moment will likely come for somebody else on the next job. So it’s not enough for most of our people to “get” it. We all need to; we sink or swim together!
Do your folks pull the trigger? Do they feel comfortable making decisions and immediately executing on them? Must they check with the hierarchy first or inform them later, if at all?
Is shop floor (or kitchen, or wherever else) risk-taking and initiative feared? Welcomed? Encouraged? Rewarded? Even taught? The answer to this question will determine how far employees will stretch their necks at crunch time. It may be saving and building your company right now, one job at a time, without you even knowing it.
Or it may be the culprit behind some chronic problems that you’ve been attempting to solve with technology, or high sales growth, or org chart calisthenics.
Whether it’s small volume electronics or some other type of job shop, in future blog entries I will tackle a number of proven strategies to help induce our frogs to leave their logs. For now though, I invite you to get out there and get some honest answers about whether your folks truly feel free to do whatever is needed at your “crunch” time. Then just go do the next-right-thing.
Bruce Hendrick has been a leader of major change in corporations and small business alike for the past 25 years; currently he's the owner of RBB Systems and Organizational Development Services, LLC; noted speaker, author, active church member and community volunteer.
Even the best run job shops should not underestimate their level of employment paranoia. Sometimes it’s our best people who can get very antsy, very quickly. It doesn’t take much.
In my experience, the more finely-tuned an operation we have, the closer to the edge we are likely to live. Most job shops must:
Sprinkle in a few years of chronic economic pressure and we test even the most resilient co-worker.
So if we acknowledge that there is well hidden fear and uneasiness even with good people, good processes, and good business prospects, then we have a choice to make. Do we openly face and discuss the unsettling aspects of our situation or do we shield our employees from the stress and distraction of our business realities so they can focus on their immediate tasks?
I pose this as a viable choice but in truth it is not. Workers have lost their innocence; few are willing to fully commit to organizations unwilling to level with them. Plus, in the absence of actual information, folks assume the worst anyhow. So most progressive job shops tell the truth, the whole truth, and nothing but the truth, whether they are assembling printed circuit boards (pcba’s), building custom airplanes or making deli sandwiches.
The practical question becomes how to quickly convey the shop’s complex status and direction in ways that everyone understands. If I were on a tightrope (not gonna happen), I would have just three urgent demands that would really decide my stress level! Smart job shops figure out how to communicate this information simply and constantly:
RBB has created a dashboard, published daily by 9:00 a.m., which allows every employee to tell how we are doing and what the near future looks like – while there is still time to change it! Its core content is these four charts. (Real dollar figures are used but have been removed for this publication.) Let me explain.
This was the RBB dashboard on May 31st, 2012. In Chart A, the shaded area shows our planned shipments (USD). Green dots are added daily showing actual results. At a glance we know whether we are ahead or behind schedule. The blue “ideal pace” line reminds us to try to ship the same amount of dollars every day (impossible in a job shop but still a cool goal). Chart A says that in May we stayed very close to schedule and even shipped a few added circuit boards.
Chart B shows the Gross Margin (= price – [material + labor]) of what we are shipping. The MTD (month-to-date) bar is our current status. Simple: Green is best and the higher the better.
Chart C weaves Charts A and B together. Folks understand that gross margin dollars are what we use to pay for the built-in costs of the business. Every morning we see whether our shipment profitability is high enough to cover the fixed costs of the day. If the green dots are above the shaded area on Chart C, we are safely expecting to make money this month. The green line at the top is the projection of monthly profit if we ship everything in the schedule and if the MTD gross margin holds all month. You can see that May was a joy.
Looking ahead then, Chart D shows the actual backlog of booked orders, by month. The pattern here is typical of most job shops: where it looks like demand disappears after the short term. Serious faith that new orders will come in is required (more on this in a future post)! Chart C says that at least June looks busy.
Now fast-forward to mid-June and let’s take another look.
In 5 seconds, we note many things:
Bottom line: to finish out June well, we need to make sure everything in the schedule ships and yet do it without raising costs (through overtime, etc.).
And this is the whole point. A simple, powerful dashboard turns every staffer into a business person. Each employee knows what needs to happen to maneuver this month’s tightrope safely. And once we get across, as the new orders dictate, we get to do it all over again.
This ongoing tension is the fun, the thrill, and the stress of the average job shop. Dealing with it as a true team of unified business people – now that’s the real victory. And yeah, it was a squeaker, but we saved June.
Bruce Hendrick has been a leader of major change in corporations and small business alike for the past 25 years; currently he's the owner of RBB Systems and Organizational Development Services, LLC; noted speaker, author, active church member and community volunteer.
