Don’t simply reduce overheads, material and labour to drive productivity; instead identify and deal with the variation, or waste, in existing processes explains Professor Roger Schmenner.
All kinds of processes whether in manufacturing, service industries or those used to operate companies, can be made more productive and society’s continued well-being requires it says Professor Roger Schmenner, author of Getting and Staying Productive, which introduces the concept of “swift, even flow” and how it can be applied to improve the running of companies.
“‘Swift, even flow’ is about processes, manufacturing and service sector processes and processes used by companies internally to make themselves work and the productivity around those processes.
“When somebody wants to increase productivity they concentrate immediately on the factors of production – how can I make the labour on the line work better? How can this machine work better? They think about things like automation, let’s take labour out and put a machine in or they think in terms of improving that labour through time and motion studies.”
Professor Schmenner, Visiting Professor at Cambridge Judge Business School, says these actions are not supported by ‘swift, even flow’ that encourages thinking around the factors of production with a view to reducing variation in the process.
“You are trying to do two things – reduce sector variation and reduce the throughput time. In doing so you will uncover all of the problems that occur in a process. You’ll see what to fix and that’s how the waste will come out and improvements will be made.”
Professor Schmenner feels that the ‘swift, even flow’ concept is not appreciated by managers, who pay more attention to financial accounts which keep track of factors of production like direct labour, overheads and the cost of materials.
The natural inclination in cutting costs is to view different options like reducing bills for direct labour and materials. Overheads could be attacked with greater automation, laying off workers and renegotiating with suppliers.
Quoting Henry Ford’s production of the Model T Ford as a prime example of ‘swift, even flow’, Professor Schmenner encourages managers to look at the waste in their existing processes and the improvements that can be made by dealing with that waste.