How can we measure and improve employee productivity? It’s a common question now, one that I am often asked within the Component and LBM industry, but that wasn’t always the case. We’ve come a long way and learned a lot!
Back in 1911, mechanical engineer Frederick W. Taylor, a machinist and foreman turned management consultant, recognized the national preoccupation with workplace productivity and published The Principles of Scientific Management. In it, he put forth the (at the time) revolutionary idea that production rested on variables related to men and machines. Therefore, managers could—in a scientific and systematic way—optimize these variables to produce more outputs with the same amount of inputs.
In other words, businesses could make more money without any extra costs. You can just hear the wheels of the factory owners’ minds turning. They simply needed to figure out the right ways to train and standardize employee actions. By fixing blundering, ill-directed, or inefficient human efforts through systematic management, individual efficiency would rise, giving way to maximum prosperity for both employer and employee.
Now accelerate several years and the world is introduced to the Toyota Production System and Lean Manufacturing (with the key concepts we’ve been covering in our TIMWOODS series). Lean Manufacturing is a shift away from the traditional model of batch processing. Lean Manufacturing focuses on the process as a whole of manufacturing a single or several parts. In this way, steps flow continuously, allowing for the manufacture of a single part or thousands in rapid procession. Lean processes are designed to achieve a highly-efficient, waste-free operation, managing materials, manpower, and energy precisely. By cutting costs and freeing resources, lead times are reduced, and both productivity and quality are improved. By adopting techniques that create incremental improvements in the organization, a significant improvement in efficiency is seen overall and profitability is returned to the bottom line.
The Houlihan Labor Method
You no doubt have heard the Houlihan labor method bantered about in the industry, but you may not realize how it was started. In the early 1960s, my dad, Don Hershey, asked a labor expert named John Houlihan to come and work with him to develop a new labor tracking method for the component and millwork operations at Imperial Components. Don and John worked for a number of years before they perfected this method, now referred to as the Houlihan method in our industry. So for my brother Keith and I, you can say the Houlihan method was instilled in our labor thinking at an early age.
In the 1960s, Don Hershey and John Houlihan developed the Houlihan Method for the Industry
For those of you actually trained by John or my dad in the Houlihan method, one of the components of the training was the importance of the 4M’s, and then eventually 5M’s, in an operation so that they work together to increase productivity. At the time, I did not realize I was learning the early Lean/Six Sigma philosophy. To put it simply, Lean is an all-encompassing philosophy that takes the 5M’s (Man, Material, Machines, Methods, and Management/Measurement) and harmonizes or helps orchestrate them together for the best possible outcome in your manufacturing operations. Profitable and Lean Manufacturing is rooted in these 5M’s of Efficiency. Sometimes represented as a fish diagram, the 5M’s can be used to evaluate each process or problem in manufacturing to determine the root cause of inefficiency.
The Basics of the 5M’s
In a nutshell, the 5M’s is one of the most common frameworks for root-cause analysis:
- Man – Highly Skilled People Make Great Products
- Material – Choose your Materials Wisely
- Machine – Maximize your Machining Performance
- Methods – Implement a Lean, Efficient Production Environment
- Management/Measurement – Measure, Manage, Optimize, Increase Profitability
Some Examples of the 5M’s in Action
- Man: You have labor that is required to perform certain tasks to produce your products. If your labor force is not happy, you may find your operations struggling. When a direct employee (the ones actually making your company money) interfaces with a piece of equipment, they must be comfortable working at a specific station for extended periods of time. Thus, making sure material is flowing/pulling to the factory automation equipment efficiently will help ensure a productive environment for your direct labor force.
- Materials: Every process has materials coming into the work area to be processed or assembled. Making equipment that facilitates easy material flow can pay huge dividends to those who understand that minimizing material movements is vital to being a successful implementer of lean.
- Machine: Each machine used in a process must be able to perform its intended function or task with precision and reliability. Making machines that are robust, flexible, and scaleable are key to following the Toyota Production System mentality. Machines can also include in-process inspections, self diagnostics, and mistake-proofing features that only allow perfect parts to be passed downstream to subsequent process.
- Methods: Every product has a process or multiple processes that it must go through before it is ready to be delivered as a final product to a customer. The methods used to perform value-added work to the product must be consistent and controlled.
- Management/Measurement: When you invest in a piece of automation/equipment, you must be certain, before purchasing, that it will pay for itself. If the machine solves issues and helps you realize the results you are hoping for in your business, you should see a great payback and realize immediate positive impacts on your bottom line.
Certainly Time & Motion are a large component of the original Houlihan labor system, but poor time management is as ineffectual as a broken-down machine, an indisposed employee, or lack of adequate materials for production. And various schemes have been used by successful companies to ensure proper and efficient use of time by man and machine, including timely delivery of materials, to ensure manufacturing sustainability. But several companies have simply copied information, compromised data or such, which is tantamount to a business venture shooting itself in the foot, especially if you forget about the 5M’s that go along with the Time & Motion data.
Just like I learned as a teenager and honed while operating and owning my own component and LBM operations, successful lean management means making optimal and responsible use of man, materials, machines, methods, and measurement/management for productivity and profitability.
Bottom line for you and your team, spend the rest of this year reinforcing the leadership skills that will help every employee contribute to the 5M’s objectives. Your managers and supervisors should work hard to achieve the bottom-line objectives of the business through the way they interface with their team, not just with the way they manage metrics, materials, machines, or methods. And remember, if we can be of assistance to you, if would be our pleasure to help you, give us a call!
Ben Hershey is CEO of 4Ward Consulting Group, LLC, the leading provider of Management and Manufacturing Consulting to the Structural Component and Lumber Industry. A Past President of SBCA, he has owned and managed several manufacturing and distribution companies and is Six Sigma Black Belt Certified. Ben has provided consulting to hundreds of Component Manufacturers, Lumber Dealers, and Millwork Operations in the past seven years. He is highly recommended by customers and leaders throughout the industry. You can reach Ben at ben@4WardConsult.com or 623-512-6770.
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