Are real-time KPIs helping or hurting manufacturing performance?

Over the last 20 years there has been a massive increase in the real-time accessibility of key performance indicators (KPIs). Production rates, unplanned downtime, and quality performance can instantaneously appear on everyone’s smart phone dashboard. Further, the metric is highlighted red or green, depending on missing or meeting the standard. This is accessible to everyone, I mean the production worker, the mechanic, the plant manager, vice president and CEO.

The same is true for reliability and maintenance metrics. With just a few clicks, everyone can know downtime percentages, preventative maintenance compliance, and percent planned work, to name just a few. Sounds great, right? It can be, but most of the time I believe a plant’s performance suffers greatly from this free flowing of information. I know you’re thinking, "What? You need to get into the 21st century, Joe." Before you decide, let’s see how this plays out on the shop floor.

The problem

Everyone having access to real-time information means everyone now has the nudge, expectation, and right to step in to give advice, share experiences, coach, and ask for an update every four hours. Additionally, no manager wants to say, “I don’t know,” to their boss when asked about a metric. As a result, the crew leader is being “helped” by three or four management layers in the organization. For a mental image, think of one man with a shovel digging a hole while five others tell him what he is doing wrong. The crew leader that knows the problem intimately, must respond and inform up the organization taking him off value-add actions and problem solving. Often the crew leader will hesitate to attempt to fix a problem on his own without top management buy-in to prevent being second guessed and dealing with harsh judgement when a solution did not work. It is better the top manager to own the solution than take personal risk. Consequently, time, ownership, people development, and money are lost. 

Another major influence is the fact that many managers greatly enjoyed and excelled at problem solving and the “hands on” work of past job assignments. Presently, they are trapped in meetings and under piles of paperwork. The chance to get their hands dirty and “make things happen” on the shop floor is very enticing and rewarding. It is also a chance to share “war stories” from the past. 

The result is worse that just handicapping the organization’s ability to solve imminent problems itself; perhaps more damaging is the fact that higher levels of management are distracted from their accountabilities. Question: If everyone is focused on the emergency of today, who is working on improvements in the next 30 days, six months, or two years? Unplanned work draws in managers, engineers, technicians, planners, and technicians like moths to a flame. Consequently, business results and KPIs continue to get worse, the organization is discouraged, and top management increases its already stifling oversight. 

The solution: Time span of control discipline

This is a new topic for most of you. Think of time span as the hours, days, weeks, months, and years in which employees are accountable to drive results. Examples:

• Crew leader: Accountable for this shift, this week, and this month’s performance.
• Production manager: Accountable for this month, this quarter, and this year’s results.
• Plant manager: Accountable for this quarter, this year, and the next five year’s results.
• Vice-president: Accountable for this year and the next five years and beyond results.

Note the overlap in accountability of each group. I recommend each layer in the organization employ the 80/20 rule for their time. 80% in your time span of control and 20% auditing the other time zones lower in the organization. I said, “auditing” not, “doing the work of others.” Auditing will often lead to training and development opportunities. Leaders must trust their team members to make the best decisions in their time span of control.

Another linked change I employed with great results is to make it acceptable to say, “I don’t know,” when a request comes in for information outside one’s time span of control. Personal case study: My boss Ed called me one afternoon asking why the hot mill has been down for two hours. I replied, “I don’t know.” He was stunned. The phone was silent for an awkward 10 seconds. Ed then asked, “Well, don’t you think you should?” I replied, “No, I trust my production crew leader, maintenance crew leader, production manager, maintenance manager, and process engineer to do their jobs. If they need me, they will call. I would just get in their way.” Ed went silent again obviously thinking about my comments. He then stated, “You are right Joe. Thank you. I need you to help me with this way of thinking. It is not natural for me.” This event is exactly how cultures change – one experience at a time. 

By letting everyone do their job, great wastes and inefficiencies are eliminated – at zero cost! At the same time, the future becomes more secure and profitable. It is tempting to say that a top manager can solve a problem faster than a junior crew leader; perhaps. But at what opportunity costs? Did the crew leader get a chance to own the problem and learn from failure? What long-term improvements have been delayed or lost due to the entire management structure overseeing today’s emergency?  

What can you do on Monday?

1. Introduce to your management team the concept of time span of control. This could be as simple as forwarding this article.
2. Ask for a 30-day experiment using the concept of time span of control. This must be agreed upon from all levels of the organization.
3. Challenge the plant manager to conduct a 30-day experiment where it is okay in your organization to say, “I don’t know,” when questioned about performance outside their time span of control.