February 20, 2019
A Standard Work System Prevents Invisible Losses
Written by Andy Reith, Owner, Scioto Productivity Solutions. Published with permission.
Your company’s ability to gather, utilize, and maintain information is critical to long term success. Few leaders would argue this point and yet every day valuable information is still walking out their doors. Not through theft, as you might imagine, but through employee turnover.
According to a study by the Society of Manufacturing Engineers (SME), 72.5% of manufacturing companies have an annual employee turnover rate that exceeds 10%. That number represents an astronomical amount of information that is going out their doors every year. How much tribal knowledge left with those individuals? Did they transfer that knowledge to their replacements? The answer is almost universally “no.” In addition, more than one-third of companies acknowledge that over 20% of their workforce will be eligible for retirement within the next three years. Simply put, that means the turnover problem will not go away any time soon.
One way to combat this problem is with a tool that few companies properly utilize – a comprehensive Standard Work system.
Why Standard Work?
“Without standards there can be no improvement.”
Taiichi Ohno’s quote relays the primary reason to create and maintain standard work, because improvements cannot be made and refined without a standard baseline. If operator A and operator B do not complete work the same way, it will be nearly impossible to improve their processes. Standard work will also lead to better quality and happier customers. It’s for this reason that many Lean articles address standard work.
In addition to the major benefit of enabling improvement, there are other less obvious benefits to maintaining Standard Work documentation. Let’s take a look at those.
Capturing Tribal Knowledge
It’s common knowledge that no manufacturing process works as intended on the first try. As a matter of necessity, operators, engineers and technicians devise tools and methods to improve a process. If a problem is big enough, these tools and methods will be shared with others. Many times, this knowledge only exists in the heads of those involved in creating the improvement.
There will always be an element of skill, knack, and familiarity involved with manufacturing. A good standard work document will capture the knowledge that creates the baseline to build upon.
According to 84% of companies, onboarding is a primary challenge for their business. Standard work is a great starting point for training new employees and quickly bringing them up to speed. New employees will always require facetime with an experienced trainer, but having proper standard work documents provides an excellent guideline for providing that training and ensuring that key points, not just those at the front of the trainer’s mind, are all covered. Only 41% of respondents in the SME survey agree that their company trains their people to learn the right skills, with the blame for not doing so falling squarely on management’s shoulders. A comprehensive training program needs to go beyond standard work documents, but a solid standard work system demonstrates management’s commitment to training.
Clear standards lead to better quality and drive decision-making to the lowest possible levels. Gray areas are reduced and individuals become confident that they are producing quality products at the rate that is expected of them, which means a supervisor only gets involved if problems arise and the employee needs help. With operators making decisions currently made by supervisors, the supervisor’s workload would then naturally shift away from monitoring production and firefighting, resulting in more time that can be spent on systematic improvements in their area of responsibility. They can focus on developing the people and processes for further improvement in their area.
Where Should Standard Work Be Implemented?
Standard work procedures can and should be applied far beyond front-line operators. Maintenance groups should have standard work for response to downtime incidents. Changeover/setup operators should follow a standard process for part changes (part of a broader Single Minute Exchange of Die program). Standard work should also be applied to various office functions such as purchasing, sales and human resources.
Every position in a company should have work that revolves around standards. Without standards there is no control, leading to an environment that is frequently dominated by uncertainty and disorganization.
The Path Forward:
Despite the obvious benefits associated with a structured standard work system, very few companies implement one beyond requirements for ISO certification. In my experience, less than 20% of companies make a real effort to create standard work, but those who have done so are higher performers with more engaged employees and lower turnover.
Standard work is vital to any process, no matter your industry. Make it a priority for your company and your future self as well as your company’s future profits will thank you.
Would you like more information or assistance on designing and implementing a Standard Work System for your company? Please contact us. Our network of experts, such as Andy Reith from Scioto Productivity Solutions, are ready to help you.