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Wall Street may be celebrating the financial system’s signs of recovery. But Main Street is singing a very different tune.
For one thing, unemployment remains high. This has led to an austerity mindset in consumers typified by increased saving, deferred consumption and trading down to value product lines. Consumers are now more willing to delay gratification. Not buying new stuff has become an entirely acceptable form of behavior and trading down is now not just acceptable but even cool and hip.
This is Main Street’s “new normal.” It’s an attitude that will prevail for years to come. And according to a growing number of analysts and economists, it will reshape the manufacturing landscape significantly.
For manufacturers across all industries, surviving and even thriving in this new environment also requires establishing a new normal that reflects Main Street’s new attitudes and reduced demand. It’s a model where success hinges on being a lowest-cost producer—and doing so without compromising quality or utility.
To attain this status, a growing number of manufacturers are letting go of old assumptions and taking a different approach to their performance improvement technology. Rather than implementing yet more data capture and analytics products and pilot engineering-led trials, these businesses are focusing instead on getting to the point: They are installing technology that helps them take action and actually do work differently to impact real costs each and every day, and also to find out what they can stop doing right away.
This means thinking differently about what improvement technology is going to do for you, and avoiding the pitfalls that many companies fall into when applying technology to factory improvement.
1: Don’t Lose Sight of the End Goal
The goal is to become the lowest-cost producer in the sector. It is not to capture all data from the plant. There are very specific areas to focus the use of data for cost reduction in operations, yet all too quickly the collection and analysis phase becomes obsessive goals in themselves, overwhelming the original objective.
In fact, studies have shown that in as many as eight out of ten initiatives associated with the use of new tools, techniques or technologies, supply chain managers find themselves focusing too much energy on the new tool or technology instead of on the goal.
2: Don’t Waste a Crisis
The new normal on Main Street presents a tremendous opportunity. It enables companies to use the current climate of fear and uncertainty to drive change. Organizational resistance is low, and the workforce is more willing to change daily work practices.
To be effective, however, leaders must craft a decisive action plan for specific cost improvements and how they will be achieved with the new action-based technology. When this is positioned correctly, both management and rank-and-file workers will unite to support the company’s leadership.
3: Don’t Assume All Answers Come from the Executive Suite
It’s time to face the fact that the real daily performance dials in today’s plants are moved by the workers, not by upper management. Manufacturers that focus attention and technology on factory-floor workers to improve their individual performance—so that the next two hours of work are more effective than the previous two—will see transformational results.
Ironically, this is not that difficult to accomplish. Workers are far more resourceful and capable than given credit for when they have the right targets and information in real time; then they can clearly see what actions they can take to improve their shift. Without the right information framework they cannot do this. This is not analytics; this is action.
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