As customer demands change W at an unprecedented rate, many firms are stressing operational flexibility. In order to succeed, however, a company must change the way it works at all levels of the organization. Though many managers claim their operations have improved in recent years, flexibility often has eluded the shop floor, where it is most important.
The co-location of work teams, defined as the grouping of different functional roles into one team with responsibility for an operation, is one way to address this problem.
Co-location at Cast-Fab
Cast-Fab supplies a wide-customer base with precision patterns, gray and ductile iron castings, steel-welded fabrications and precision sheet metal components. Formerly, the company was organized under a functional hierarchy that allowed very little interaction between departments. Under this traditional system, a typical customer order for a cast part might have travelled through the firm’s departments according to this scenario:
An order comes in. The sales department (I st floor, north end of the building) sends it to engineering (3rd floor, south end). After working out t~e specifications, engineering sends it to the production planners (2nd floor, other end of the plant). After scheduling, it’s sent to the production manager down on the shop floor for review with the molder. Once he ·s working on it, the molder may notice a better way to produce the part. The molder alerts his supervisor, who sends the information on “up the ladder. ” Often, the information never reaches the product engineer because it’s stopped along the way for one reason or another.
That was then. Today, Cast-Fab’s processes have been reorganized around its products and product engineers, production managers and planners are all physically grouped in very close proximity just off the production flOor, forming a co-located work team. This reorganization improves communication and brings together the functions that support a product-all to the benefit of the customer.
A Better Wheel
Like other companies, Cast-Fab has come to realize its process is really its product. The company doesn’t “reinvent the wheel” when it taps into new markets, it just finds a way to make that wheel better than a competitor.
Labor costs are a big percentage of final product costs, so it is imperative that any needed information be delivered to the shop floor when it is requested. It’s impossible for a core setter to move a job in question to work on something else. In the past, if he had a question, production would halt while a manager located an engineer to answer it. Thus, the accessibility of engineers, as well as managers, is crucial to product flow and final costs.
“We improved by streamlining the process,” said John Brewer, process engineer. “We made the shop smaller by cellularizing and organizing equipment for a better flow.” Locating engineers, planners and managers on the shop floor, with full access to production employees, has been a major factor in the firm’s improvement (as reflected in its ISO 9002 certification). Standard operating procedures have more integrity and are more easily updated under co-location.
For example, an existing customer recently said it needed a 20% reduction in costs to remain competitive. the colocated team worked together with the customer and the shop floor employees to redesign the part, then sat down and analyzed every item on every drawing, noting areas where cost could be reduced or eliminated. As a result, the team was able to reduce total costs by 32%, of which 22% came from the creation of a new process.
According to Brewer, “The camaraderie and unit integrity that comes from tasting just a little bit of success was instrumental in decreasing the cost of that product.”
Team Maintenance
Team meetings between the co-located group and shop floor personnel are vital to continued success. Engineer Tim Buchanan said, “We must take time to decrease cycle time and job hours, so we can make time for a meeting to reduce it more. You must invest some of the benefits back into the team.”
While the firm has a hard time assessing any hard numbers to the bottom line, everyone agrees co-location has produced significant cost reduction. It also creates a synergy within an organization that is sometimes difficult to quantify, but the main criteria of team success should be increased orders and profit margins. For the future, Cast-Fab’s organizational goal is a complete alignment between the customer, engineering and the shop floor.
Modern management techniques such as empowerment and total quality management are important to any firm, but the company must be willing to alter its organization. Often, companies find themselves less flexible and responsive to customer demands than they should be because of top management’s lack of commitment to the philosophies they are trying to instill.
Today’s organizations must take steps to increase flexibility throughout the company in order to meet the changing demands of the customer and the challenges and opportunities of the times. Co-location is a tool with which to streamline your processes. and make certain all your personnel are in a position to be as flexible as customer requirements dictate.
