How To Manage In Manufacturing

There is an unspoken expectation that management of manufacturing is somehow different from other industries. You can feel this when speaking to manufacturers who complain about how others are not aware of the complexity of being tethered to factory production. You can hear it when keynote speakers outside of manufacturing make pronouncements about the future of work or hyped up commentators write about digital transformation as if the future is some virtual paradise where workers are free from physical constraints. Both parties speak as if these areas were worlds apart.

Are they? And, for how long? To what extent is this difference real and does it affect management practices? Having just completed a two-year study of digital transformation in manufacturing, I find the reality surprising but encouraging.

Manufacturing is indeed slightly different from any asset light industry because you are dealing with production constraints stemming from physical infrastructure. Three particular constraints come to mind. First, materials need to be procured and assembled into products which tend to depend on physical infrastructure such as shopfloors or factories. Second, materials and finished products must be shipped in a timely manner, which entails building logistics flows along supply chains that often are international in nature and where delays in one end produce even longer delays in the other end. Third, the sale is only the beginning of a circular chain that ends with the responsible disposal or redistribution of recyclable or reusable materials to new products. Some of these constraints have always been there and some are newer in origin.

Those technicalities, one might say, make manufacturing complex because they are examples of the enduring constraints of the physical world. There is infrastructure that needs to be built, maintained, and it also needs to evolve as needs change. It would be tempting to wish these constraints went away but that’s not so productive. For better or worse, we are living in a still predominantly physical world and many of us like that.

What about managing the workforce? Is that also a distinct aspect of manufacturing? This is where I quibble with where we are at. It seems that one has readily assumed that workforce training and development is another constraint. This is visible both in policy circles, when you hear trade associations and worker unions argue their case, and it is certainly a discussion topic for senior management. The problem with that assumption is that it takes an, in theory, flexible resource, and puts it into the same mold as physical infrastructure constraints. That’s not right.

In reality, the workforce should be thought of as the most flexible resource we have in any industry. The strength of numbers, in this case, means diversity and not just overhead. Manufacturing is no different. When we, erroneously, speak of training as a chore, as a constraint, we are not treating it with the proper attention it deserves. Training, for one, should be nearly non-existent. Why? Because, supposedly, our technologies are becoming more complex. With that in mind, one should expect that training needs decrease, because technologies become more and more automated, autonomous even. Let’s look at that aspect for a second.

Training is only needed when the task at hand is novel, is not intuitive, and is painful to execute. There should be very few such tasks available in manufacturing today. Yet, the worry is always, how can we train and retrain workers fast enough to keep up.

What if that got turned around? What if training was the least of our worries, because machine interfaces were fluid and intuitive, much like the consumer devices of today, such as smartphones and tablets are. Wouldn’t that be the case, you ask? Surely, one would expect, that when even consumer devices are now easier to use (and not like the infamous video players of yesteryears that took a nerd to ensure would record a TV show at the right time), industrial machinery would have received even more attention? After all, this is what our society depends on?

But no. If you have spent any time in factories or shop floors, the opposite seems to be the case. The control panels may be slowly morphing into web-based interfaces, although not all of them have. But the basic logic still seems flawed. They don’t invite the worker to explore, they invite the user manual. They call for weeks of training and working alongside an experienced operator who knows the ins and outs of a particular machine.

Easy then, to realize that management in manufacturing has been quite slanted towards control, emphasizing supervision, excessive training, and hierarchical oversight. Those are activities that other industries, certainly office jobs, left behind decades ago. You cannot get an office worker to show up in the office anymore, let alone will you make them work better by controlling their every move. The contemporary workplace is moving towards empathy and empowerment. How would that work in manufacturing? Or is it perhaps already?

Strikingly, the best manufacturers, companies such as Stanley Black & DeckerSWK
, J&J, and DMG MORI, have already for the most part transitioned to a view of the workforce as their main enabler. As such, workers are gaining independence, can feel rightfully empowered, and operators are encouraged to come up with suggestions, even substantially alter their work process if it makes sense, and are told to bring their own tools. This is what Natan Linder and I in our upcoming book, Augmented Lean, describe as combining a top-down and bottom-up leadership style.

The result is management without ordering people around, freeing up the biggest numerical proportion of your workforce to start thinking of themselves as inventors, leaders, and decision makers. When this is commonplace, the effect will be profound and lasting. What we then can produce, will surprise all of us.

This is why I feel that the next generation of manufacturing workforce will eventually even bypass the label we so easily, after management scholar Peter Drucker wrote about it back in the 1960s, applied to most office workers–without checking if they were really that knowledgeable. Some of them were, others weren’t. What’s for certain is that it’s not the office that makes people full of knowledge. Knowledge is a practical thing, for the most part, and the ideation part has to do with colliding your ideas with others. Factories can be great for that.

In fact, knowledge worker does not even begin to describe the contemporary production worker, operator, and quality manager who has to work with a whole host of machines, technologies, interfaces, physical constraints, factories, customer requests, and emerging production data both forward and backward the supply chain. Do you realize that when a Stanley Black & Decker operator goes about carrying out their daily business, they do so with the awareness of exactly how much inventory is being sold or returned at retail outlets?

The old distinction between production and service worker is not so relevant any more. And, it’s not that services are taking over. In fact, production is not going away, the way pundits wanted to have it, it just encompasses much more than before. The production part of the supply chain suddenly is the key to the whole supply chain. Workers now increasingly have the tools to produce products more efficiently and more importantly, effectively.

The tragedy of the way we might, from the outside, view manufacturing jobs, is not that we diminish and underestimate the effort going into it. That’s of course sad. But the fact that we tend to misunderstand what is actually happening is more disconcerting on an intellectual level. I find it somewhat incomprehensible, because the evidence is out in the open.

The irony is that online retail, which is a big misnomer, already demonstrates this principle. Online retail is mostly production. The retail component is all electronic, and is mostly about pricing strategy. The production part, however, is still relevant, even for digital products. They all have to be ideated, tailored to end users, and produced. It is far too often pointed out that the cost of starting a digital business is so low these days. This hides the fact that it is coming up with a product that’s hard, producing it is just another challenge that follows. Except, because the market now gives feedback, whether you produce a digital or physical product, production never ends. We are starting to manufacture things for an end user of one, who constantly changes their mind.

Managing manufacturing workers is no different than managing office workers. The constraints placed upon the sector does not change the fact that in order to motivate employees, you need to set them free. Now, office productivity has increased over the last thirty years in great measure because of the billions invested in digital productivity tools. Imagine what is about to happen when you realize that a small share of that type of investment is now going into productivity tools for manufacturing workers.

The first few generations of digital technology, however, did little to empower manufacturing workers. It might have empowered manufacturing managers who got one more control lever. But it did not deliver the same levers to workers. That is now changing. Contemporary frontline operations platforms, fueled by no-code or low code software tools, are slowly but surely penetrating manufacturing organizations. What happens then is that the power that was concentrated in senior management and third party integrators of technology systems gets redistributed across factory floors and into the wider workforce. The result, over time, is faster innovation cycles, and a more adaptive industry.

It has always been a mistake to judge manufacturing based on whatever image of an industrial production facility you have in your head, often an antiquated one. I’ve been guilty of it myself. What we now need to do is to enter factories with new eyes. However, be warned. Older factories, so-called brownfields, may not look so innovative at first sight. In reality, however, the management practices that can turn a facility into a world class innovation space, are available without the bells and whistles of shiny, greenfields that are built anew. Manufacturing isn’t as constrained by old equipment as by outdated expectations to the sector from those not working with it on a daily basis.

Newer digital tools are, shockingly perhaps, somewhat invisible. It might look like this: small, inexpensive sensors and cameras that you can buy at a general electronics store, a basic server which could even be a repurposed mainstream computer, and a good frontline operations platform subscription with access to building so-called “apps”, that means tiny computer programs with purpose-built logical workflows that can be operated through tablets and easily displayed on monitors. Those off-the-shelf items can be combined with tracking human workflows or machine workflows, or both.

The end result is often nothing more than transformational, but more than that. It is satisfying because it doesn’t depend on breakthroughs or massive sunk costs that you have to amortize over a decade. The management principle that makes it work is even simpler. It’s called trust your workers.