The Foundations of a Sustainable Business

The ABCs of Structured Maintenance, a recent post to this blog, emphasized the importance of maintenance as a foundation for viable manufacturing operations. The following updated version of Cultivating Disciplined Operations, a post from October 2015, expands on the necessity for structure and discipline. — C.H.


Cultivating Disciplined Operations

In order for an organization to function effectively in a competitive world, a culture of disciplined operations is necessary. This does not mean the imposed discipline of a military boot camp. Rather, it means a voluntary coordination of efforts among all involved. As an ideal, consider a symphony orchestra, where a group of highly skilled musicians coordinate their personal talents to a mutually understood and desired end. Yes, a conductor does arrange the music and does direct the tempo. But it is the blended performances of the musicians that work the magic.

Cultivate Text Box“Cultivating” is the right word here. A voluntary coordination of efforts comes about through a culture of mutual respect, directed toward a mutually desired end. It is that culture that needs to be cultivated. Here, “mutual respect” means a sincere regard for the interests and aspirations of everyone involved, diverse though those interests and aspirations may be. “Mutually desired end” refers to a condition in which everyone involved can prosper indefinitely.

An initial assessment of how closely a given organization’s culture approaches one of mutual respect, directed toward a mutually desired end is pretty easy. Employee turnover rates, absentee rates, equipment downtime rates and OSHA recordable safety incidents can readily be compared with relevant norms. Apply Pareto’s rule: if your organization isn’t comfortably in the top 20% for each of these, your competitive posture is at risk. [1] Even if your numbers are all in the top 20% — or even the top 1% — remember that everything and everyone can always improve. Including your competitors, today and tomorrow.

Here are some areas that require constant cultivation:

>> Safety: In manufacturing, a top notch safety program is essential. The benefits of a pain free working environment are immediately clear to everyone. Cultivation of safe operating practices is fundamental to the cultivation of mutual respect. [2]

>> Maintenance: Equipment and facilities need be designed for operability as well as for throughput. Poor working conditions and dysfunctional equipment are antithetical to the cultivation of mutual respect.

>> Training: It is not reasonable to ask anyone to participate in manufacturing operations absent a clear understanding of what that individual is to do and how to do it safely and effectively. My personal preference is that written work instructions be used as a basis for training materials. Trainers should be trained in how to train others. Understanding should be confirmed by demonstration.

>> ISO 9001: The ISO 9001 Standard for Quality Management Systems provides a systematic framework for disciplined operations. It is worth studying, even in part. Implementing systems compliant with the ISO 9001 Standard is a substantial undertaking. However, the cultivation of disciplined operations that occurs while doing so is a substantial reward for everyone and a substantial step toward an organization that can prosper indefinitely. [3]


Chuck in FranceThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

 

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.


[1] For more on Pareto and operating performance, see Operational Excellence – The Performance Curve, this blog, http://jerasustainabledevelopment.com/2012/05/24/operational-excellence-the-performance-curve/

[2] For more on safety and its importance, see On Safety and Sustainability, this blog, http://jerasustainabledevelopment.com/2013/10/24/on-safety-and-sustainability/

[3] For more on the ISO 9001 Standard and its application, see What’s Wrong With ISO?, this blog,  http://jerasustainabledevelopment.com/2012/07/05/whats-wrong-with-iso/  and Keeping Up With ISO, this blog, http://jerasustainabledevelopment.com/2014/08/28/keeping-up-with-iso/

Cultivating Disciplined Operations

In order for an organization to function effectively in a competitive world, a culture of disciplined operations is necessary. This does not mean the imposed discipline of a military boot camp. Rather, it means a voluntary coordination of efforts among all involved. As an ideal, consider a symphony orchestra, where a group of highly skilled musicians coordinate their personal talents to a mutually understood and desired end. Yes, a conductor does arrange the music and does direct the tempo. But it is the blended performances of the musicians that work the magic. — C.H.

Cultivating Disciplined Operations

Cultivate Text Box“Cultivating” is the right word here. A voluntary coordination of efforts comes about through a culture of mutual respect, directed toward a mutually desired end. It is that culture that needs to be cultivated. Here, “mutual respect” means a sincere regard for the interests and aspirations of everyone involved, diverse though those interests and aspirations may be. “Mutually desired end” refers to a condition in which everyone involved can prosper indefinitely.

An initial assessment of how closely a given organization’s culture approaches one of mutual respect, directed toward a mutually desired end is pretty easy. Employee turnover rates, absentee rates, equipment downtime rates and OSHA recordable safety incidents can readily be compared with relevant norms. Apply Pareto’s rule: if your organization isn’t comfortably in the top 20% for each of these, your competitive posture is at risk. [1] Even if your numbers are all in the top 20% — or even the top 1% — remember that everything and everyone can always improve. Including your competitors, today and tomorrow.

Here are some areas that require constant cultivation:

>> Safety: In manufacturing, a top notch safety program is essential. The benefits of a pain free working environment are immediately clear to everyone. Cultivation of safe operating practices is fundamental to the cultivation of mutual respect. [2]

>> Maintenance: Equipment and facilities need be designed for operability as well as for throughput. Poor working conditions and dysfunctional equipment are antithetical to the cultivation of mutual respect.

>> Training: It is not reasonable to ask anyone to participate in manufacturing operations absent a clear understanding of what that individual is to do and how to do it safely and effectively. My personal preference is that written work instructions be used as a basis for training materials. Trainers should be trained in how to train others. Understanding should be confirmed by demonstration.

>> ISO 9001: The ISO 9001 Standard for Quality Management Systems provides a systematic framework for disciplined operations. It is worth studying, even in part. Implementing systems compliant with the ISO 9001 Standard is a substantial undertaking. However, the cultivation of disciplined operations that occurs while doing so is a substantial reward for everyone and a substantial step toward an organization that can prosper indefinitely. [3]


Chuck in FranceThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

 

P.S: Contact me when your organization is serious about prospering in the globalized 21st century … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[1] For more on Pareto and operating performance, see Operational Excellence – The Performance Curve, this blog, http://jerasustainabledevelopment.com/2012/05/24/operational-excellence-the-performance-curve/

[2] For more on safety and its importance, see On Safety and Sustainability, this blog, http://jerasustainabledevelopment.com/2013/10/24/on-safety-and-sustainability/

[3] For more on the ISO 9001 Standard and its application, see What’s Wrong With ISO?, this blog,  http://jerasustainabledevelopment.com/2012/07/05/whats-wrong-with-iso/  and Keeping Up With ISO, this blog, http://jerasustainabledevelopment.com/2014/08/28/keeping-up-with-iso/

The Pursuit of Sustainability

Getting Started in Sustainability

The pursuit of Sustainability is a big deal. Done well, it affects your entire business and its future on the most fundamental levels. The pursuit of Sustainability begins with recognition of the business pressures that led you to Sustainability. Next comes increasing your understanding of Sustainability and how Sustainability fits with your business and its culture. Almost always, the more one learns about Sustainability, the greater the range and magnitude of the potential becomes apparent. From there, it is appropriate to focus on the most relevant issues and to define a near – term scope. Next, develop a sound business case. Then, a systematic plan of action is developed and implemented. Progress is reviewed regularly, appropriate corrective actions are taken, and the plan going forward is revised. The pursuit of Sustainability continues.

Zooming In

This post begins with a general description of a process for becoming, and remaining, a Sustainable business. To make that description actionable, the critical segments of that description have been printed in red. Comments on the highlighted segments, along with links to further information, follow:

Business Pressures that Lead to Sustainability 

There are three primary motivations for choosing to pursue Sustainability:

>> Stakeholder Demands – customers, financial organizations, environmental advocates, insurers, stockholders and employees are among the individuals and groups that pressure (or encourage) firms. See Still Customer Driven, this blog, http://jerasustainabledevelopment.com/2012/04/26/still-customer-driven/

>> Compliance Issues – concerns for compliance with applicable laws and regulations (especially EPA, OSHA and their State counterparts) may motivate actions toward sustainability.

>> A Sense of Doing the Right Thing – almost invariably, management learns that Sustainability efforts lead to significant competitive advantages; that is, Sustainability offers economic, as well as ethical advantages.

Increasing One’s Understanding 

Sustainability, in its essence, represents a significant expansion in the scope of management attention. Sustainability involves the active management of externalities; factors once considered outside a manufacturer’s scope of concern. Examples include environmental emissions, health issues, ultimate product disposal and many others.

>> The Triple Bottom Line constitutes the most frequently used approach to Sustainability. See Double Take on the Triple Bottom Line, one of the most often read posts to this blog: http://jerasustainabledevelopment.com/2012/10/04/double-take-on-the-triple-bottom-line/

>> Case Studies provide practical examples of how well known firms are approaching Sustainability. Comparing several cases provides guidance as to what Sustainability means operationally and insight as to how very broad Sustainability can be. Here are five case studies in Sustainability:

BMW – http://jerasustainabledevelopment.com/2014/10/04/bmw-a-case-study-in-sustainability/

Unilever – http://jerasustainabledevelopment.com/2014/07/17/unilever-a-case-study-in-sustainability/

Wal-Mart – http://jerasustainabledevelopment.com/2014/03/19/wal-mart-a-case-study-in-susstainability-2/

DuPont – http://jerasustainabledevelopment.com/2014/02/19/dupont-a-case-study-in-sustainability-2/

Waste Management Co. – http://jerasustainabledevelopment.com/2013/11/20/a-case-study-in-sustainability-2/

Defining a Near – Term Scope 

In most cases, a firm chooses to pursue Sustainability when Sustainability — as an issue or as an opportunity — becomes sufficiently urgent and important. While comprehensive Sustainability planning is intrinsically long term, urgency requires immediate, constructive actions. Here are some immediate actions that can provide quick benefits, while providing groundwork for later actions:

>> Remedial Actions – In cases where interest in Sustainability has been sparked by some situation requiring remediation, take action. Don’t wait for some comprehensive plan. At the same time, regard that situation as symptomatic of deeper problems. Keep clear records of actions taken and use those records as input to the preparation and prioritization of the comprehensive plan to follow.

>> Safety Program – A truly excellent safety program – which includes product safety and industrial hygiene issues — offers obvious benefits for everybody concerned. Implementation, over time, of a safety program that is consistent with the OSHAS 18001 standard is a great way to advance systematic operations in a manner that employees can readily embrace. For more on safety, see On Safety and Sustainability, this blog, http://jerasustainabledevelopment.com/2013/10/24/on-safety-and-sustainability/

>> Structured Maintenance – Obviously, equipment malfunction causes quality issues, safety concerns, material losses and downtime. Signs reading “If It Ain’t Broke, Don’t Fix It” have no place in systematic operations. For more on this, see Structured Maintenance, this blog, http://jerasustainabledevelopment.com/2012/01/12/structured-maintenance/

>> Lean Manufacturing – Lean techniques constitute, in essence, a war on waste. The most basic aspects of Lean — 5S, for instance – are easy to implement and produce readily noticed results. What’s more, implementation assistance is available almost anywhere. For more on Lean, see Thriving With Lean, this blog, http://jerasustainabledevelopment.com/2013/09/05/thriving-with-lean/

>> Energy Utilization – Energy consumption – be it fuels or electricity – is a fair proxy for greenhouse gases emissions. Reducing energy consumption helps protect the environment while reducing your power bill. And incentives are available to help you do just that. Start with an energy utilization audit and build from there. See Still a No Brainer and Negawatts – Waging War on Waste, this blog, http://jerasustainabledevelopment.com/2012/08/16/still-a-no-brainer/ and http://jerasustainabledevelopment.com/2012/06/14/negawatts-waging-war-on-waste/

Develop a Sound Business Case 

If the powers that be – the home office, the stockholders or the bank – aren’t already convinced of the necessity for pursuing Sustainability, it may be necessary to spell out the business case. For insights as to the business case for Sustainable manufacturing, see Beyond the Business Case, this blog, http://jerasustainabledevelopment.com/2012/05/31/sustainability-beyond-the-business-case/

A Systematic Plan of Action

There are any number of ways to approach development and implementation of a Sustainability program. The case studies mentioned above provide some rather diverse examples. The optimal structure, content and sequencing of Sustainability initiatives follow from context – that is, from the challenges the firm faces and the resources the firm has available. As with strategic considerations generally, there is no one-size-fits-all course of action. At its best, Sustainability isn’t a separate plan or program at all. Rather, it is a strategic characteristic of a firm’s overall mode of operating, embedded in the firm’s overall plan of operations.

Development and implementation of a Sustainability plan, or the integration of Sustainability into an overall operating plan or system, requires the participation of somebody with the requisite knowledge and scope of experience. Very few smaller firms have individuals with the requisite knowledge and experience, along with enough time available away from working in the business to drive this bus. Still, Sustainability is a strategic requirement for 21st century manufacturing. Ignore it at your risk. Better to find the right person(s), sooner rather than later!

Chuck - Blue Sweater 2Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization decides to pursue Sustainability … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.

On Safety and Sustainability

Systematic Actions, Sustained Over Time

For manufacturers, especially smaller manufacturers, it may be difficult to see the value in pursuing Sustainability. The long term value — thriving in perpetuity [1]  — may be clear enough, but, as Lord Keynes pointed out, “in the long run, we are all dead”. The necessary efforts are considerable, so near term thriving needs to materialize.


Capture - OSHA Incidence RatesNot so long ago, Safety was regarded in much the same way. Some big companies — DuPont and Alcoa come to mind — demonstrated that Safety programs have significant benefits for employer and employee alike. Examples like DuPont and Alcoa, along with push from OSHA and workman’s comp providers, got just about everybody aboard the Safety bus. The results have been stunning, as this knocked-my-socks-off chart indicates.


Success with Safety programs demonstrates that systematic actions, sustained over time produce a significant and continuing stream of benefits. Safety programs provide zoomed in models for Sustainability initiatives. Build your Sustainability initiatives on your experience with Safety!


Here is an essay from a year ago that zooms out on that idea:


====================


What’s Green about Safety?

From: 1 November 2012


Safety and Sustainability


Of the seven billion people alive today, your firm probably affects the lives of your employees most. Demonstrating concern for the well being of your employees is a logical place to emphasize in working on the concern for humanity aspect of Sustainability. A truly excellent Safety program does that. And it does a good deal more:


Capture - Simpson Safety PosterA real Safety program is built on employee engagement. It goes far beyond regulatory compliance. The advantages to the employee (relief from painful accidents, possible disabilities and other work-related health issues) and to the manufacturing firm (relief from medical costs, lost time, workflow interruption, workforce morale issues, regulatory intervention and more) are clear to everybody, so the mutual motivation exists to support a high level of cooperation. Credibility gained from a good Safety program makes it easier to attain high levels of employee engagement in other initiatives, where the advantages to the employee (the advantages of working for a competitive, hence thriving company) may be less obvious.


With today’s high unemployment numbers, it is easy to forget that finding and retaining talent will be a defining issue — if not the defining issue — for prospering in the coming decades. Labor can be automated. Talent can’t. This means many sorts of talents and skills, manual as well as cerebral. Talented people are already in short supply, and that will get worse. The demographic trends are quite clear. Talented people have options: They need not and will not work in unsafe or unhealthy environments.


About Safety Programs


Safety needs to become a key component of an organization’s culture. If you are moving from a culture defined by compliance, Safety is a great place to start. Developing and implementing a meaningful Safety program is the logical way to proceed. Believe it or not, your friends at OSHA offer lots of useful resource information tailored for smaller firms. The OSHA small business web pages are worth becoming familiar with [2]. The OSHA Small Business Handbook  [3] is a “must have” free download. There are safety consultants available almost everywhere. Contact the Manufacturing Extension Partnership (MEP) office in your State [4]the MEP folks will either assist directly you or refer you to somebody local who can help.


My concern about Safety programs, like Quality programs or Maintenance programs, is that an organization is an interactive system. When aspects of a system are treated as independent entities, the system (that is, the organization) is not optimized. Zoomed in [5] views, as Safety programs are, need be balanced by integration into a zoomed out comprehensive management system.


One way to do this is to structure your Safety program such that aligns with the structure of an ISO 9001 Quality program, especially if you already have an ISO 9001 program. Globally, over a million facilities have ISO 9001 Quality programs. So, the ISO 9001 structure is rapidly becoming a de facto global standard. ISO 9004 provides guidance on how to extend ISO 9001 beyond its explicit requirements. Since the ISO 14001 Environmental Management standard already aligns closely with the ISO 9001 structure, the ISO 9001 structure offers a convenient platform for a comprehensive, integrated, zoomed out management system [6].


The OSHAS 18001 Occupational Safety and Health standard intentionally aligns with the structure of ISO 9001. OSHAS 18001 is formally a British standard. However, at least 50,000 facilities around the world use it. While it is possible to be certified to the OSHAS 18001 standard, smaller manufacturers may find it more useful as a reference model for the content of Safety program. A detailed summary of OSHAS 18001 requirements (hence the contents of a sophisticated Safety program) is available on-line, for free [7].


In summary, a safe and healthful workplace is an essential aspect of pursuing Sustainability — that is, of seriously striving to thrive in perpetuity [8].


Chuck - Blue Sweater 2Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)


P.S
— When it is time for your firm to seriously pursue Sustainability, contact me — C.H.

 

Note: This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.

Image: Safety poster courtesy of Work Place Planning Centre (U.K.), via Google Images


[1] Werbach, Adam, Strategy for Sustainability, Harvard Business Press (2009), page 9 

[4] Locate the MEP office nearest you at: http://www.nist.gov/mep/index.cfm

 

[5] “Zooming in” and “zooming out” is explained in Green and the Zoom Lens Mind, this blog:http://blog.jerasustainabledevelopment.com/2012/02/22/green-and-the-zoom-lens-mind.aspx

 

[6] For more on using ISO Standards as a basis for a comprehensive management system, see What’s Wrong with ISO?, this blog, http://blog.jerasustainabledevelopment.com/2012/07/03/whats-wrong-with-iso.aspx

 

[7] Download the OSHAS 18001 requirements at: http://www.18000store.com/ohsas-18000-requirements.aspx

 

[8] For more on thriving in perpetuity, see Thriving in Perpetuity, this blog: http://blog.jerasustainabledevelopment.com/2012/08/22/thriving-in-perpetuity.aspx

 

Structured Maintenance

Sustainability goes far beyond concern for the environment. Adam Werbach* says that “being a sustainable business means thriving in perpetuity”. To thrive in perpetuity requires constant attention to the present and the future on the factory floor, within the business as an organization, within the industry in which the business operates, within global economic and social realities, and within the natural world we all rely on.

For manufacturers, that begins with efficient production and timely delivery of high quality products — all the time. And that requires production equipment that reliably performs as intended. It is the function of the maintenance program to assure that the equipment performs reliably. As extreme examples, think about what “reliably performs” means to passengers in jet aircraft or to sailors in nuclear submarines. The sign on the shop wall that said “If It Ain’t Broke, Don’t Fix It” was retired some time ago.

To be clear on terms, that which is to be maintained, I refer to as a “maintained item”, or, more simply, “item”. An item may be a machine (such as a lathe), a system (e.g. electrical power distribution) or anything else that you may want to declare as a unit for the purpose of maintenance records keeping.

Items can be divided into three classes, so appropriate maintenance plans can be developed for each:

ABC BlocksClass A Items – The failure of a Class A item can shut down or significantly impair production, or create a serious safety condition, in the entire facility. Most Class A items are utilities or similar services, such as a main power transformer, a boiler, materials conveying system or critical ventilation unit.

Each of these critical items needs both a plan to keep it performing reliably and a plan for its rapid repair or replacement, in case it does fail. The “keep it performing” plan might include a scheduled inspect / clean / service routine, pre-emptive parts replacement based on service hours or proactive parts replacement based on throughput or on monitored machine condition (for example, vibrations analysis).

The corresponding rapid repair / replacement plan might involve in-line spare capacity, critical spare parts inventory, rental equipment (for example, an air compressor) and/or fast response third party service (examples: digital control systems or boilers). Since parts for critical items are often quite expensive, spare parts inventory costs must be weighed appropriately during the planning process.

For critical items, Failure Mode and Effects Analysis (FMEA) may be of significant use in formulating both plans. FMEA is a technique for evaluating the probable occurrence of various failure modes and the likely effects of such failures. FMEA is widely used in the automotive, aerospace and other industries for product and process design and improvement. It works well for critical item maintenance planning too. If you aren’t familiar with FMEA, start with www.asq.org/learn-about-quality/process-analysis-tools/overview/FMEA.html. There is a lot more on FMEA on the web. Don’t confuse FMEA with FEMA, the federal agency that is supposed to respond to natural disasters.

Class B Items – Class B includes most primary production equipment, failure of which can shut down or significantly impair operation of a single production line, or create a localized safety concern.

The “keep it performing” plan for each of these less critical items might, as with Class A items, include a scheduled inspect / clean / service routine, pre-emptive parts replacement based on service hours or proactive parts replacement based on throughput or on monitored machine condition.

Appropriate repair / replacement plans might include common spare parts, reconditioned parts (e.g. gear boxes or rewound motors), prearranged “order as needed” parts from reliable suppliers or specialized third – party service calls (preferably with pre-arranged vendors).

Class C Items – Repairs or replacement of Class C items, taken individually or in small groups, are less urgent. Scheduled inspect / clean /service routines are often appropriate. For some high wear parts or for items that require other items to be down while maintenance to be performed, scheduled preventative maintenance may be the best route. Run to failure is an acceptable strategy for some Class C items.

The real point to this post is that effective and cost efficient equipment maintenance requires item–by–item planning, to keep the equipment performing reliably and to correct failures when they do occur. Grouping items by criticality helps make maintenance planning easier.

There is a lot more to maintenance planning than any one post can even hope to cover – look for more on maintenance in future posts.

Thoughtful comments are always appreciated.

…  Chuck Harrington


*
Werbach, Adam, Strategy for Sustainability, Harvard Business Press, Boston (2009), page 9.