Open Communication Boosts Profit
By Del Williams
Mishandling communication can cost a manufacturer—from missed orders, quality issues, and running out of material to increased scrap, absenteeism, and turnover, to misunderstanding customer need and selling the wrong product. Separate silos of information can arise between functional departments, to the point where it’s almost necessary to introduce Engineering to Production and Sales to Accounting.
Weak growth, profit, and morale can result, prompting the founder-owner or president of many small to mid-sized American manufacturing companies to question what can be done to narrow the gap between their original entrepreneurial vision and today’s frustrating reality.
While communication typically is considered a “soft skill” that’s often overlooked in machine-filled manufacturing plants focused on production, many of the ills in manufacturing are actually symptoms of poor communication. Once better communication is established, the manufacturer’s bottom line often can increase by 10 percent or more very quickly.
“Manufacturers have focused so much on cost reduction that they’ve taken their eye off their people,” says Bill Flint, president of Flint Strategic Partners, a Midwest-based full-service business consulting firm headquartered in Goshen, IN, specializing in helping small to mid-sized manufacturers improve their results.
“Too often the focus is on tasks, rather than on the people who do the tasks,” adds Flint, who rose through the ranks to become president of two manufacturing firms in almost 40 years of industry service. “But today communication is more important than ever because companies are operating with fewer people to reduce cost. People are busier and have less time to plan and tackle the big issues they’re facing. Yet if corporate leaders simply give orders without taking time to listen and communicate, they miss golden opportunities to make their operations more profitable.”
The Factory Floor
Poorcommunication can create unending production, quality, and personnel problems, particularly if training and feedback is shortchanged from the start. Some manufacturing firms are so eager to put people to work, for instance, that new hires can find themselves operating complex equipment within 30 minutes of being hired.
Flint conveys the dilemma of one such frightened new hire. “My supervisor worked with me for three minutes, showed me how to make a good part, then stuck a picture of a bad part in front of me,” the new hire said. “My supervisor said, ‘This machine costs $1 million. Don’t screw it up and try not to make any bad parts.’ I haven’t seen him since.”
“Imagine a football coach telling 80 new recruits, ‘We’re not going to practice this year,’” says Flint. ‘I think you are as good as you will ever be, so here’s the playbook, you figure it out, do what you need to, and we’ll all meet back here for Saturday games.’ That’s what some manufacturers do with inadequate on-the-job training, and it’s a recipe for disaster.”
One simple solution to improve communication and training for new hires is to pair them with an experienced “buddy,” who can answer any questions, have lunch with them, and introduce them to others until they’re comfortable in their new position. Such an approach has significantly reduced employee turnover and absenteeism among new hires at one manufacturer, while improving part quality, according to Flint.
The biggest career killer in manufacturing is continuing surprises and variability, according to Flint.
“Without good communication, production becomes a daily fire drill where the focus is on getting parts out the door,” says Flint. “Too often, a line manager will say, ‘We didn’t make the parts that were supposed to ship at 7 a.m.. The customer is on the line and wants to talk with you.’ One call can change the whole day’s production schedule, particularly at small to mid-sized manufacturers.”
Many line and mid-level manufacturing managers actually have the best hands-on technical production skills at their companies, but got promoted into management to increase their pay, according to Flint. “But being good with your hands does not necessarily mean you’re good as a manager,” he says. “Communication and leadership are different skills that need to be developed.”
Manufacturers would do better to first ask their technical production stars, “If you could make the same money, would you take this promotion into management or stay where you are?” says Flint. “Otherwise, many later will find themselves ineffective and miserable at managing others, rather than working with machines and equipment. Those who do make the jump to management still will need some help learning how to effectively communicate, delegate, and lead people.”
The founder-owner or president of many small to mid-sized manufacturers often started the company based on their technical ability, then recruited others to support them, according to Flint, who has met many founder-owners over the years both as a manufacturer and manufacturing consultant.
“The strength of those who start manufacturing firms is often in technical areas such as working with machines and parts, not communication,” says Flint. “Because of this, communication gaps can occur throughout a company, particularly between departments, if the founder-owner relies on others to convey his or her vision, or is ineffective in asking for and giving feedback.”
From Flint’s experience running manufacturing companies, including one he helped to grow from $21 million to $125 million with 10 facilities, he’s found that “people on the production floor know what the problems and issues are because they’re closest to the action.” Every day, for instance, the production floor crew knows which machines are producing excess bad parts or scrap, which machines need maintenance, which materials have run out, which suppliers are continually late, as well as who’s effective or not as a work teammate.
“One of the best ways to tap into the collective wisdom of the production floor is to hold regular town hall meetings, perhaps every quarter,” says Flint. “A good way to do this is to have a pizza lunch together and say, ‘Let’s talk about the issues. What’s getting in the way of us doing a good job? What’s your biggest challenge in this shift? What can I do to be a better leader? How can I help you?’”
Perhaps the most effective way to communicate and lead is to run the manufacturing company as a servant leader, suggests Flint, whose consulting company offers four modules on improving communication for small to mid-sized manufacturers, with sessions available for virtually any size group. Servant leaders hold themselves and those working for them accountable for results but ask for honest feedback on how to best help them do their jobs. It’s a classic win-win perspective. Servant leaders put people first.
“By opening the lines of communication, manufacturers bring problems to the forefront and work on them proactively,” concludes Flint. “Doing so can not only minimize surprises, scrap, late delivery, employee turnover, and absenteeism, but also improve the bottom line by 10 percent or more.”
Del Williams is a technical writer based in Torrance, CA.