Increasing Productivity: Chemicals Industry
Productivity Improvement Through Resource Management Development
Chemical companies need to leverage every resource available to achieve and sustain productivity gains. One found that by improving the leadership skills of its managers and supervisors, it could unleash significant gains in throughput, lost worker productivity, scrap and rework. This company worked with MTG to improve managerial skills to identify, analyze and remediate on-the-job performance problems and consistently implement operating principles and objectives. A continual evaluation of leadership competency and performance provided an ongoing feedback and development opportunity to keep managers’ skills sharp, ensuring sustainability of financial and operational improvements.
MTG’s work began with two separate analysis diagnostics: a Leadership Effectiveness Assessment and an Organization Effectiveness Survey. The assessments identified several areas for improving management skills and also identified available operational improvements through enhanced management capabilities.
The project, in which MTG partnered with the client in both design and implementation, focused on five critical areas of opportunity:
- Delivering management training (through a Resource Management Laboratory)
- Implementing sustainable operational changes
- Implementing on-the-floor management coaching for managers
- Implementing a comprehensive Work Center Management System (WCMSSM)
- Implementing a client-driven Sustainability Audit process
These areas are described in further detail below.
Resource Management Laboratory Workshop
Management skills were addressed in a Resource Management Laboratory Workshop attended by operations managers. The goal of the workshop was to increase operating efficiency and profitability. This was achieved by improving the managers’ abilities to respond to both the demands of their job and the needs of the company. The result was the development and execution of the following 10-module, 40-hour Leadership Development Program:
- Building an effective working team
- The motivational model
- Communication on the job
- Management/leadership styles
- Reaching team consensus
- Systematic problem-solving (Root Cause Analysis)
- Conflict resolution
- Decision-making for results
- The closed-loop operating system
- Change management
These client-specific modules were designed through the identification of specific behavioral and leadership deficiencies in the following categories:
- Goal alignment
- Leadership
- Overall Organizational Effectiveness
- Day-In-the-Life-Of studies (DILOs)
- Work center management
- The operations process
- Roles and responsibilities of key management personnel
Implementing Sustainable Operational Changes
While leadership development was the initial focus, the client also recognized the need to improve the performance of other important aspects of its business, including:
- Redesign Operations’ unit processes and establish Key Performance Indicators (KPIs)
- Establish and implement Best Practices
- Establish clear roles and responsibilities
- Set quantifiable and measurable goals and objectives
- Develop management tools and systems to help implement and sustain the changes in management skills and behaviors
Several initiatives were undertaken to design, implement, and sustain process and system improvements in shop-floor operating performance, which were now possible due to the changes in management skill and behavior. Among these were On-The-Floor Coaching, WCMSSM, and Sustainability, as detailed below.
On-The-Floor Coaching and Counseling
Managers were encouraged to use their new skills to better organize their area work flows. Management roles and responsibilities were changed, which allowed managers to spend more time on the floor with their operators. As a result of this renewed emphasis, this chemical producer achieved:
- A significant increase in on-the-floor, one-on-one coaching and counseling time
- Weekly progress updates provided to top management
- Development of a leadership scorecard for workshop participants, which enabled top management to make effective personnel change decisions
Once these changes were implemented, front-line supervisory time on the floor increased from 34 percent to the recommended 60 percent. The end result was a reduction in hidden lost timeof approximately 75 percent, with a corresponding increase in productivity, and a subsequent reduction in scrap and rework.
Work Center Management System SM
MTG and the client designed and implemented a WCMSSM, which is a structured and disciplined approach for setting targets, driving actions to achieve those targets, measuring performance, and determining appropriate next steps. The WCMSSM included:
- Identifying, defining, and establishing ownership of uniform KPIs for all areas
- Developing specific reports aligned to behavioral change to highlight variances from targeted performance
- Establishing weekly Work Center Management Board Reviews of area performance by the operations managers who had hourly operators
- Establishing continuous process improvements
The client now had a vehicle that drove effective planning and execution, and reinforced the necessity of the management skills and behavior changes developed earlier in the project.
The Sustainability Audit
The Sustainability Audit included follow-up on seven key productivity initiatives critical to the company’s long-term growth and the retention of key customers. The audit resulted in:
- Establishment of a top-level monthly quality management review meeting to roll up weekly area performance
- Timely, structured, and formal completion of annual KPI goals and objectives
- Review and modification of the company’s performance review and appraisal process. This included individual responsibility in managing the WCMSSM and adhering to the roles and responsibilities that were redefined to facilitate operational changes.
- MTG’s services being retained to expand the Resource Management Development Process into the areas of Maintenance and Warehousing in the following year
Results
MTG exceeded the deliverables initially established with the client. Profitability improved, productivity increased, and management had better control over plant operations. The project confirmed that there were critical personnel decisions that needed to be made, enabling the client to act on them effectively and quickly.
MTG’s coaching and counseling in between monthly audits provided the client with a critically important resource and aided in the decision to retain MTG as a partner for long-term, future resource management development needs.
PROJECT HIGHLIGHTS
- Seventy-five percent reduction in annualized hidden lost time: $4.5 million
- Increased sales potential: $7 million
- Potential savings in Cost of Goods Sold: $2 million
