That factory again

 

              There has been considerable interest in my factory visit last Friday. I am still thinking about it. Like a great sporting achievement, the pleasant experience lives on in my memory.

                There were two moments  above all in the visit when I realised they were very good. The first was when I heard how low their error rate had been in recent weeks. At times they run at zero defects. The second was in some ways more revealing.

                 As we walked around this spotless factory, where the  fluids were well contained behind screens and there was no usual smell of metal and oil, I noticed three pieces of waste paper on the floor. In that clean room style environment they looked out of place. I bit my lip instead of mentioning them.

                  I need not have worried. The Manager picked them up when he saw them. He studied them. He told me where they had come from. He said he would send them with a short memo to the manager responsible for the incoming trays of components. They had fallen off the side of the component trays when they were inverted to show they were empty and needed replacing. He would ask that manager to fix the problem so they could not fall off the trays in future.

                I was impressed. That action will not make the factory more productive. It will make no difference to the figures. It just showed that if you want to be the best no level of detail is too small. Nothing need go wrong. There is a way to fix everything. No recriminations, no shouting, just a polite request to keep the factory tidy.

                When I in the past have helped turn factories round I have found that cleaning them up is always a good first start. Bad factories have too much stock and work in progress littering the floor. Clear it, and you reduce the working capital costs. You make it easier to operate without the clutter. You cut down accidents as there is less to trip over. You reduce the faults from using damaged components that have been moved and left out for too long.

                  Clean the windows and remove barriers to natural light flooding in. That will cut electricity bills and cheer people up. Contain all fluids. People should not have to work in a sea of oil. If there is oil on the floor it is a hazard, and it is wasteful. If the factory is full of old cardboard boxes, bits of wood and other packaging materials from incoming components, put in a proper recycling and reclamation system, and have a place to hold such materials. Clean and re-use fluids where ever possible.

                 The joy of these techniques is they create a virtuous circle. A cleaner environment raises staff morale. It gives people something to be proud of. It cuts waste, which is now expensive to dump. It can lead to designing some of the packaging out of the process, to reducing the number of times an item is moved and held, and to faster line speeds. If you get it right first time you make more money and can pay better wages.

                 These same techniques can also be deployed in clerical operations, using computers to help cut error rates in processing paperwork. Clean green and lean needs to transform more of  the public sector, just as surely as it has modern manufacturing.

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34 Comments

  1. Mike Stallard
    Posted January 20, 2011 at 7:26 am | Permalink

    Does this apply to schools too?

  2. lifelogic
    Posted January 20, 2011 at 7:36 am | Permalink

    Yes being tidy helps but by far the main thing is having a high level of investment in plant and equipment, cheap (non green) energy, having efficient suppliers, a good affordable dependable labour supply, cheap and available funding, simple planning laws, having a good volume of work to spread the overhead costs over, good but little regulation, low taxes, a competitive environment and some encouragement from the government.

    This government seems to be determined to encourage the opposite to nearly all the above and provides weekly kicks in the teeth too (see recent employment regulation for example). So for manufacturing industries (other than a few very specific niche ones) it is best to go somewhere where you can actually compete, that is where the good suppliers have probably already gone too. Otherwise you are just wasting your time and money. Even if you do well the government will take 50+% of your income and 40% IHT when you pass it on so you will be lucky to beat inflation with your investment.

    And the Government is more likely to give honours to people who sail round the world, are in the entertainment industry, civil servants, act in a popular TV soap or people who promote the quack green religion/exaggeration if that is your motivation.

    10.3% growth in China I hear today. This is possible in the UK too if the government just takes all the government imposed brakes off and gets the state sector down to 20%.

    • lifelogic
      Posted January 20, 2011 at 9:19 am | Permalink

      Reported in the telegraph today:
      Tory chief Baroness Warsi attacks ‘bigotry’ against Muslims:
      Prejudice against Muslims has become widespread and socially acceptable in Britain because Islamophobia has “passed the dinner-table test” and is seen as normal and uncontroversial, Baroness Warsi claims.

      I notice that Bigotry (doubtless now one of Gordon Browns favourite words) is defined as: “Obstinate and unreasonable adherence to a religious or other opinion; narrow-minded intolerance; an instance of this.”

      Yet the chairman of the Tory party seems to think it is people (atheists and others) at dinner tables, perhaps expressing disapproval (of extreme conduct by others -ed).

      Is she really the best the Tories can find to be co-chairman of the party?

      • Alte Fritz
        Posted January 21, 2011 at 1:20 pm | Permalink

        Generally I do not like to be critical of people I know only through the media, but whenever this lady is on, say Question Time, she seems dangerously out of her depth.

        • rose
          Posted January 21, 2011 at 5:29 pm | Permalink

          I disagree AF. Lady Warsi seems to me to bring the common sense and honesty of expression which are so often absent in today’s public life. Here she is being honest again, and saying what she really feels. Do you really want just weaselly non-committal opinions from all of them?

          • rose
            Posted January 23, 2011 at 12:46 pm | Permalink

            I think the difficulty has arisen because as usual words have been taken out of context. Lady Warsi is asking for devout and practising believers of all religions to be tolerated in the UK just as much as lapsed or semi-lapsed ones are. In objecting to the phrase “moderate muslims” she is just saying be careful not to give out the message that strict piety, observance, and devotion are in themselves suspect.

        • lifelogic
          Posted January 21, 2011 at 9:59 pm | Permalink

          She seem pleasant enough but she is completely out of her depth as chairman and leaves the clear impression that all they sort for the job was a northern tory muslim woman and she was the only one available.

          Is this type of selection not against the nonsense employment laws they keep inflicting on all uk business at a great cost?

          Reply: I am assured she was chosen on merit.

  3. Johnny Norfolk
    Posted January 20, 2011 at 8:05 am | Permalink

    Its called good housekeeping, and its sets the standards for the whole business, My distribution centres were cleaner than most hospitals.

  4. Nick
    Posted January 20, 2011 at 8:35 am | Permalink

    Has the commons cleaned out the fraudsters and the overclaimers?

    Nope.

  5. alan jutson
    Posted January 20, 2011 at 9:23 am | Permalink

    Yes all good stuff John

    Commonsense in every respect. a clear working environment, leads to a clear mind, order, and concentration on the work in hand. It is also cost effective because you do not end up searching for hours through piles of old components, scrap, parts awaiting rectification, and rubbish, to find the components you want to use, or dispatch.

    Now can I suggest you visit a solicitors office.

    Typically you will find yourself side stepping bundles of files standing on the floor, the desk is piled high with paperwork, until it is moved (to the floor), filing cabinets abound everywhere. Hours spent leafing through pages and pages of paperwork after you have untied the pink ribbon.

    Why do I mention this, because many MP’s, and particullarly cabinet Ministers of all Party’s seem to have a legal background where it would seem the mindset is, the more you surround yourself with paperwork, the more impressive it looks. All of this energy of course keeps the fees rolling in, as a client pays for the file sifting.

    Then look at how expensive our legal system is, how confusing it is, how easy it is for two qualified people to argue two different points of view to every paragraph, and perhaps you get the connection with the rules and regulations made by Parliament over the years.

    Second example: The Tax system, now we are informed something like 12,000 pages of explanation are required, Self assessment forms almost impossible to complete without any mistakes by the average person.

    Third example: The Benefits System a whole range of differing and confusing benefits, where you need to go to seperate departments, to claim for different things, which have very different qualifying criteria, different, confusing and often very lengthy forms to fill in.

    So to take The example of your factory:

    Cut out the crap.

    Simplify the Tax System, so that we can all fill out our returns easily without having to use an accountant to cover your back, in case of honest mistakes made.

    Simplify the Benefits System, then have one office where you can go to get advice, from competent staff, to claim all benefits due, with completion of one comprehensive but simple form.

    Think you should invite many of your fellow MP’s to this factory, alternative put the man in charge of the factory in the Cabinet.

    Any news on reduction of the massive wasted costs highlighted by our man from British Home Stores, or was this a PR excercise ?

  6. Richard
    Posted January 20, 2011 at 9:26 am | Permalink

    The techniques of TQM (total quality management) and the Quality Standard ISO 9001:2008 that this excellent company are demonstrating, are widespread in manufacturing as a natural way of working, but in the public sector this culture does not appear to be implemented nor understood.
    However, I don’t think they would work properly in the public sector until their basic structures are altered.
    My first action, would be to alter the way all public sector budgets are arranged. The current system fatally rewards overspending, whereas in industry the opposite happens.

    Having made this change I was thinking what I would then do if I had the power……
    In health I think we are currently moving towards a better system with the money being more with the patients, via their GP’s.
    I would make private health insurance the norm, with tax breaks for companies and individuals who take out cover.
    In education there are signs of improvements with schools being able to struggle free from LEA control but the real change would be to give parents vouchers to choose their school.
    Popular schools would be encouraged to expand and money made available for them to do so. I would pay extra money to teachers who have succeeded and who have popular expanding schools.
    In welfare we need massive simplification and a radical alteration of the tax system to make working more worthwhile.
    The key drivers that need to be introduced into the public sector are competition, profit related pay and employee share schemes.
    If you give people incentives they will respond.

    • alan jutson
      Posted January 20, 2011 at 11:03 am | Permalink

      Richard

      Agree with many of your comments, but ISO 9000/9001 is not a quality system. It is simply a paperwork system which tracks all components on their way through the manufacturing and supply system.

      You can get ISO approval for your Company as long as you can prove all aspects of its manufacture and supply with recorded paperwork. Thus if you claim to have the worst product in the world, and can prove it with your paperwork system, you will gain ISO 9001 recognition.

      This simple fact has meant that many Companies do not bother with the additional costs of ISO 9000 if they already have a good (but simple) low cost paperwork tracking system.

      • John Bowman
        Posted January 20, 2011 at 12:56 pm | Permalink

        I once asked an advisor how ISO could improve product quality. “Not at all,” he replied, “You get the same old sh*t, but beautifully documented.”

        • Simon
          Posted January 20, 2011 at 11:33 pm | Permalink

          What a shame that so many people who obviously do have a background where they have had to walk it rather than talk it have taken the easy but lucrative option of becoming advisors .

      • Mike Paterson
        Posted January 21, 2011 at 3:04 pm | Permalink

        ISO9xxx is just a big scam, same as Investors in People and other such ludicrous certifying schemes. I have heard, more than once, of ISO companies who lack wherewithal, winning contracts simply by virtue of the badge and then sub-contracting the work to non-ISO companies to get the work done, thereby inflating the bill of the customer. But more fool the customer (often public sector) who has an ISO stipulation in their procurement terms.

    • Simon
      Posted January 20, 2011 at 11:08 am | Permalink

      I agree that Documented drocedures and working frameworks are needed but very few companies manage to implement them without promoting the tick-box mentality and enshrining mediocrity over excellence .

      It has to be a help and at all costs must not be allowed to become a hindrance to creativity .

      When you see from the inside the sort of companies which gain ISO9001 accreditation the whole thing becomes about as credible as ever better GCSE results .

      The two businesses I was working for which achieved ISO9001 employed under 200 people and the nature of the business changed so rapidly that the extensive quality system could not keep up .

      Fortunately the owner ditched the quality system . Other companies , particularly those run by hired in management , must have mistakenly tried to hold on to the quality system a bit longer with the result being insolvency .

  7. A.Sedgwick
    Posted January 20, 2011 at 9:36 am | Permalink

    How about zero tolerance for policing and jail sentences – it works too. One of your colleagues illicited, no doubt through gritted teeth, the facts about the effect of length of sentences this week – longer jail terms lessen the reoffending dramatically – more waffle Ken?
    And then there is the nonsense going on in the Lords, that is a an example of bad pratice and luddite behaviour – perhaps they are auditioning for “Life on Mars 2”.

  8. Geoff not Hoon
    Posted January 20, 2011 at 10:14 am | Permalink

    Mr. Redwood, early on in my career I was taught to follow the phrase RICE in everything I did.
    R=Respect: I=Integrity: C=Continuous Improvement: E=Excellence in everything you do. In the business I started I employed 800 folk across three Continents and my wife and I were regularly the one’s to clean offices if we felt the manager’s were letting the side down. They quickly got the message. Memo’s were what other companies produced, we believed in speaking to people first and foremost. With our present Government we have a chance to get some of these values back into business, the company you mention is a good example but at the moment too many of those like it in the UK are but assembly points for foreign made products.

    • Simon
      Posted January 20, 2011 at 2:06 pm | Permalink

      One thing I cannot understand is the respect accorded to retail magnates who’s entire business model is based on flogging cheap imported goods .

      Why on earth do governments insist upon honouring them with Knighthoods ?

      I have found two British makes of socks , one of them Wolsey and they are superb . Can’t wait to find a source of good British made underpants so I never again have to set foot in that well known store that was synonymous with y-fronts .

      Presumably that store justifies it’s decision to drop British suppliers in favour of foreign ones as being “what their customers want” .

  9. StrongholdBarricades
    Posted January 20, 2011 at 10:24 am | Permalink

    You again point at the culture of the organisation

    One where everyone can make a difference, but also know that they can make a difference, but also one where systems are explained to workers and managers and they “own” that system.

  10. oldtimer
    Posted January 20, 2011 at 10:43 am | Permalink

    It requires the right attitude of mind and it must come from those in charge, as you point out. I would add, besides walking about inside the factory, that you should also walk about outside, including the boundary fence. If the factory makes easily thievable and sellable products or components it should be an early place for inspection. As often as not it will produce obvious signs of insecurity such as holes cut in the fence, trailers parked along side the fence to make it easier to lob sacks of parts over the fence and so on.

  11. Acorn
    Posted January 20, 2011 at 11:28 am | Permalink

    Has this company got an “output gap” JR? According to our glorious central bank it should have. That is, a significant gap between its current output and what it could output if the factory was flat out. According to the BoE, this is what will keep inflation down as your company strives to crank up the machines to 100% volume.

    As Mattich says in The Source today[WSJ]; “Worse still for the U.K. is that the country’s potential growth rate is now probably a lot lower than the Bank [BoE] thinks. The recession will undoubtedly have destroyed some of this potential. But the pre-crunch potential was probably also overstated by borrowing-fuelled growth and global deflationary pressures.

    The upshot is the Bank of England will continue to point to a barely existent output gap and inflation will continue to overshoot. Eventually, probably when the coalition government’s fiscal targets are egregiously missed, the gilt market will wake up to the fact that high and rising inflation has become endemic in the U.K. economy. And then we’ll see capital flight of Icelandic proportions.”

  12. Derek Duncan
    Posted January 20, 2011 at 11:33 am | Permalink

    Hmm. Very interesting factory and clearly well run. I used to run a busy office and have no experience of factories, but there’s one thing that surprised me about the manager (who is obviously so very able). He said he’d send the sub-manager a short memo about the bits of paper that had been dropped. I would have spoken to him instead of sending a memo – face to face or on the phone if he was far away. It’s much better to do such things in person.

    A friend of mine had a similar office running a multi-million pound business he had started up. His relations with the staff were excellent. There was nothing impersonal. He once told me he considered he was running the business for his staff because they were what made it so successful. They knew he felt that way and were totally loyal to him.

  13. Bernard Otway
    Posted January 20, 2011 at 11:53 am | Permalink

    I agree totally with those who say the public service is the polar opposite to this little story,in my case I applied as you have to ,in the year before you receive your pension for a forecast this was in 2009,it took 6 weeks to get a reply,which consisted of [over a period of 7 days] 5 yes FIVE different forecasts,in 5 different envelopes all with an the same explanatory leaflet about pension and entitlements,necessitating a very long phone call at Govt. expense to sort out eventually,followed by a properly worked out forecast,believe it or not I had better records of my lifetime national insurance contributions and graduated pension contributions than they did,but how many people keep them like me especially the graduated pensions,that anyone under about 40 knows nothing about,these miniscule contributions as they were give me over £800 pa,over a 20 year retired life that adds up.
    Finally 6 weeks before the pension started on Jul 1st 3 yes THREE identical confirmation letters over 4 days with the same leaflets as the ones received with the forecast,so including
    the corrected forecast a total of 9 letters and nine identical leaflets,WHAT MORE CAN I SAY. One of the main commentators on political life in this country in the last few weeks ,
    Richard Littlejohn,used the phrase in an article about this public service with the word service being QUALIFIED as NON,that this entity is INFESTED with a certain type of person which has been indoctrinated and inculcated to behave in exactly this way,and who see nothing wrong in these type of [WORKING practices and I use the word working advisadely] saying that it will take a gargantuan effort of retraining to get it right.I calculate that our public sector could achieve efficiency gains of at least 25%,this alone could reduce the borrowing deficit.Our country could be a powerhouse again,BUT I wont
    hold my breath,and I blame the political class entirely for not doing it,as every government gets in and kowtows to the mandarins,because it is more intent on keeping power than
    rocking the boat,I for one would privatise the whole lot then lets see what happens when the profit motive comes into play.

  14. rose
    Posted January 20, 2011 at 2:38 pm | Permalink

    This applies too to hospitals and other public buildings, especially the bit about natural sunlight and clean windows. Noise is a detail which needs to be attended to as well, and ventilation.

  15. Éoin Clarke
    Posted January 20, 2011 at 3:56 pm | Permalink

    Having worked in distribution [Coca Cola] we found it a very good idea to extend the bonus scheme down to the very lowest level of worker. Incestive minimisation of bust cases, damaged product. Include the auditing scores for cleanlieness in their budget. Set them clearly acheiveable targets, not th edemoralising uinachievable targets that conventional wisdom used to dictate was best. Lastly, provide a clear route of promotion so that the floor sweeper understnads what he/she needs to do to become CEO.. All too often the top spots are reserved for extenral recruitment.

    • StevenL
      Posted January 20, 2011 at 10:08 pm | Permalink

      I was always under the impression that they are reserved for accountants.

    • Simon
      Posted January 20, 2011 at 11:50 pm | Permalink

      Completely agree about the career path thing .

      In my opinion teachers are paid a good package with the benefits typically being worth between 35-70% on top of salary . When job security , long holidays and the satisfaction of doing a really worthwhile job are factored in this should be a very attractive proposition to the right sort of people .

      Some people on this site and others claim that the public sector cannot generate wealth . I’d argue that teachers do more than most to , equipping people to make money , export and pay taxes .

      The injustice of final salary pensions schemes means that for a teacher to raise their benefits to the 70% mark (averaged accross career earnings) they have to depart the teaching career path and get onto the management one towards header teachership .
      Fortunately these benefits can no longer be obtained by abusive promotions on the very last day of service .

      Because of lack of a career path , too often in the process of getting a mediocre head teacher , the education system loses a very capable classroom teacher .

  16. Iain Gill
    Posted January 20, 2011 at 5:49 pm | Permalink

    I’ve spent a lot of time in factories

    One big place is essentially 3 large production machines which started off idential, over time they have developed different faults and been repaired in different ways, so there is a definite best, middle and worst machine

    Of the many shifts of people who work there they are all split into teams, and the same team always works together, mostly one team always works the same machine, but sometimes different teams get swapped between machines

    Several things become obvious, a team works best with “its own” machine, and more importantly the best team with the worst machine can do much better than the best machine with the worst team!

    All these little lessons are interesting

  17. Electro-Kevin
    Posted January 20, 2011 at 6:01 pm | Permalink

    “The joy of these techniques is they create a virtuous circle. A cleaner environment raises staff morale. It gives people something to be proud of.”

    Ditto litter on the streets. Why don’t we see offenders on Community Service picking it up ? This would visibly transform our country at very little cost.

  18. Richard Calhoun
    Posted January 20, 2011 at 7:43 pm | Permalink

    Hate to be the cynic here John, but do you think the factory received a special clean prior to your visit and the bits of paper were more par for the course??

    Reply No, I do not. The efficiency figures were good, part of regular displays and were not faked.

  19. Chuckles
    Posted January 20, 2011 at 8:17 pm | Permalink

    I’d caution against the mistake of thinking that it is all about process. The business is well managed. That is the crucial thing, that they actually have management that do what managers are supposed to do, which makes all the rest possible.

  20. StevenL
    Posted January 20, 2011 at 10:10 pm | Permalink

    A public sector manager once introduced a ‘paperless’ office policy. So I diligently scanned all my paperwork and meticulously attached the pdf’s to the database.

    I then approached him, showed him what I had done and asked if I could throw all my paperwork in the confidential waste bin.

    “No, we have to keep that for 6 years.” Came the reply.

    • Simon
      Posted January 21, 2011 at 9:42 am | Permalink

      Are you certain there was not a legal requirement to keep hard copies of that type of document and supporting paperwork for 6 years ?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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