If your improvement process could release an hour of shop floor labour what would you do with it? How would that be converted into bottom line benefits?

 Without this information it can be a struggle to prioritise improvement activities and achieve lasting improvement to bottom line benefits. Our research into the difference between average and best in class organisations identifies this as one of four barriers which best in class organisations overcome to release their full potential operational potential/Hidden Factory.

Below is the profile of gains achieved by one award winning organisation over a 3 years period.

• 8% productivity gains worth £3.4m per annum due to improved reliability, lower absenteeism and less staff turnover.
• 5% less material usage worth £4.0m due to improved process capability, reduced scrap and defect/rework reduction.
• 20% less power usage
• Increased capacity of 15% worth an additional £2m net profit.

 The bottom line benefits almost doubled net profit levels.

 In this organisation, although there were technical improvements, most of the gains were due to changes in working practices and the clarification of operational standards. For example the reduction in set up time was delivered by changing the sequencing of tasks, standardising practices, training and improving work place organisation.

To extract the learning from this improvement journey we need to dig deeper and ask why such low cost or no cost improvements were not applied sooner.

Our work with well known and award winning organisations identifies the need to remove four barriers to improvement to deliver industry leading performance . These are

 - Direction setting

 - Performance management

- Capability development

- Employee Engagement

In addition to delivering bottom line benefits, removing these barriers also transforms front line employee, management and leadership ways of working to secure year on year improvement in performance.

The table below sets out the barriers and countermeasures which form part of the process to release the Hidden Factory.  Click on each heading to find out more about each barrier and countermeasure. Then call us to see how we can help you to release the full potential of your operations. 

 

	Why the hidden factory exists	Countermeasures
1	The potential for improvement is not recognised or there is insufficient pressure to find ways to deliver that potential.	Direction Setting: Quantify the value of the hidden factory, Improve knowledge of what is possible and the tactics to systematically reduce it. Generate a sense of urgency through leadership and collaboration towards a common goal.
2	Short term day to day issues mask the real priorities. Accountabilities for improvement are poorly defined so time was not invested in addressing root causes or on focused improvement.	Performance Management: Apply visual management to reduce operational complexity, Prioritise focused improvement goals and release resources to deliver them. Clarify cross functional accountabilities for problem prevention
3	The technical process knowledge to support improvement is not available, there is low awareness of Focused Improvement tactics or a lack of confidence in applying them. .	Capability Development Provide foundation CI knowledge Formalise and refine best practices through practical projects
4	Emotional investment in historic ways of working are a barrier to improvement (If it ain't broke don't fix it). Front line personnel with the knowledge of what to improve are unclear of the process to implement new ideas. Manages don't invest time in coaching and developing their teams	Engage Employees Establish a measurable route map to remove the root causes of productivity losses, operational complexity and barriers to continuous improvement. Use practical projects to deliver business priorities defined by 1 above. Start with gaps in information flows and performance management to reinforce and refine new working practices. Audit progress against capability milestones and coach managers to put their time into areas where only they can add value.