The following Q&A relate to an article by Ian Herbert on Modern manufacturing (empowerment) which appeared in June 2008 issue of CIMA Study Notes.
Question
Sherwin Ltd has recently installed modern, largely automated, equipment and this has proven successful in reducing the size of the direct workforce. However, customers have continued to complain of product quality and delivery issues. As a result two further initiatives, TQM and JIT have since been introduced, although progress to date has been slow. Whilst the remaining workforce accepts the need to modernise further and has generally embraced the spirit of both TQM and JIT, few concrete results have been achieved.
Fred South, the founder and Chief Executive, is frustrated and has asked a friend, Linna Ye, a management consultant, to have exploratory discussions with some of the managers and workers. Linna has selected the following extracts of conversations to reflect the sentiments expressed to her.
Dave Bizet – Production Director
The new machines are very fast, but setting them up needs great care. One slip and thousands of pounds (£s) of materials might be wasted. We’ve had to tighten up the control system a lot. Put a stop to a lot of sloppy thinking. ‘Right first time, all the time’, that’s what I say and my people know that I mean it. Otherwise they’d just run the business to suit themselves!
Michelle Auberg – Dog Grooming Products Supervisor
Things have changed a lot in the last year. The new machines are much better than the old labour intensive methods, but it’s not quite as simple as just pressing a button. To make best use of the machines they have to be maintained and programmed properly. We’ve had to alter the physical layout and workflow around the machines to ensure that there are no hold-ups. Also, we’re now running two shifts, which means that the operators are left on their own for 4 hours before I start at 10 am and 4 hours after I finish at 6 pm. If they have a problem they have to stop until they can get hold of me or another senior manager.
Kieran Patel – Machine Operator
The quality is much better from the new machines but we’re getting a lot of pressure from management to change the way we do thing, partly through the JIT and TQM systems but also through the need to swap between product lines very quickly. The extra business with the supermarkets is good[1] but they keep changing their minds as to which colour is best and even which products should be sold. There’s a lot of frustration in the plant at the moment.
Dave Smith – Machine Operator
I was recruited recently as part of the second shift. It’s alright working here but there are a lot of problems. No-one seems quite sure what they should be doing. It is a bit like at my last employer. Management say we should use our initiative but when we do they say we should have asked them first. They don’t seem to know what they want. And, it’s just as bad for those in the middle, the supervisors.
Take the other day, for example. We had a big, rush job coming through. We wanted the maintenance team to check the machines over as they had been playing up a bit, and for stores to do their quality checking on the materials ahead of the normal schedule. Neither happened because, by the time the three departmental supervisors (ours and theirs) had held a meeting and then cleared things with the Production Director, the job had started. In the end we had just enough materials, ready but only because the machines did in fact break down! The problem is that one part of the company can’t talk to another part without going up and down through the supervisors and sticking to lots of petty bureaucratic procedures.
In response to these comments, Fred South said:-
It’s all nonsense of course. I’m always telling everybody that as long as they stick to the rules they have total authority to sort things out. Everyone is well informed, we now publish a company newsletter on-line twice a month, and twice a year summary accounts. I want them to see how low our profits are and how much we need to get our act together. People are empowered here, they can’t say the directors don’t trust them. If anybody tells you otherwise I want their name!
Required:
a) Identify the likely causes of the friction in the working relationships at Sherwin Ltd.
(15 marks)
b) Advise the directors how a better culture of empowered working might be adopted.
(10 marks)
(Total 25 marks)
Answer
General Approach
There is a lot in this scenario but, nevertheless, it is very typical of many real-life situations. You will need to be quite organised in identifying the relevant issues and linking them to management theory. Which way around you do this, theory or practice first, probably doesn’t matter. My preference is to work from the case as you have this in front of you and then relate the theory as you can remember it. A good answer plan is essential. Note that in the scenario there is a mix of both specific incidents and more open clues as to the possible background issues. You have to use your imagination/powers of reasoning to fill in the gaps. This can only be done through practice. The key to writing an answer is in the use of the words ‘likely’ and ‘perhaps’.
Another guide to the scope of your answer structure in part (a) is given in part (b) where the examiner is asking about ‘adopting a better culture of empowered working’, thereby suggesting that there are problems at present with this aspect even though the scenario has not specifically stated that the company has formally adopted an empowerment initiative. This may be one of the problems – senior management think there is such a scheme but no-one has told the workers or at least there is a gap between thoughts and action.
a) Causes of friction
Scale of Change
A first reaction is that the company may already be trying to do too much, too quickly. The machinery installation has gone well apparently but TQM and JIT are significant initiatives in themselves. Moving to an empowered working culture is also challenging. However, both TQM and JIT are essentially bottom-up schemes which involve middle management and workers identifying and solving problems together. There is likely to be some synergy between the approaches but also problems if there is not a suitable atmosphere of trust and understanding between people at different levels and in different departments.
Note: For bonus points you might mention that a doubling of productive time might also be placing a strain on the infrastructure and other departments.
Management Culture
Particularly with the two shift system, operators will need to have the authority to sort things out in the absence of supervisors. Just as important as having authority to act will be having
management support in respect of decisions taken. This needs to be supported by appropriate training and on-the-job mentoring. There is a hint in Fred South’s comments that the management style is still somewhat autocratic, and, there may be a ‘blame’ culture which creates negative feelings resulting in frustration and a lack of confidence throughout the plant. There is a reference to bureaucratic procedures hampering decision making both vertically and horizontally in the hierarchy. Perhaps more direct liaison between the sales and production people may be helpful.
Empowerment
There appears to be mixed messages in what Fred South and Dave Bizet are saying. Fred’s reference to making information available to the workforce seems to represent only the first stage of Wilkinson’s typology of empowerment, simply sharing information. Fred also seems to be using the information for political end and this is likely to further undermine the relationship with workers. He also states that people are empowered and trusted but qualifies this by saying ‘as long as they stick to the rules!’
What we cannot tell is what form those ‘rules’ take. They could be a supportive framework in the way that Simons (1995) suggests that boundary controls can help to establish limits within which to work. Alternatively, the rules could reflect the autocratic, ‘management know best’ style which seems to pervade the senior managers’ comments. Perhaps the present framework of rules, policies and procedures was formed in the past, before automation, when a large number of direct workers needed to be directed and controlled very closely, along the lines of the scientific school of management (command and control).
The company now faces a different set of problems based around optimising workflow and support activities around the new machines. For example, the need to co-ordinate the maintenance and material stores depots around specific production orders.
The lack of supervision for the 4 hours at each end of the day is a problem that results in stoppages when workers cannot get authorisation to solve routine problems. Empowerment here looks more like abandonment. (Adler, 1993)
b) Adopting a better culture of empowerment
Note that most of the work and the marks are in part (a). Your answer to part (b) can be shorter, building on a) whilst not reiterating all the detail.
Further investigation
Firstly, further investigation of the problems being experienced by the customers is required together with an appraisal strategic aims and the operational constraints of the business. If there is a need to improve the effectiveness of the factory in terms of reacting to erratic customer requirements then the machine operators, being closest to the production issues, should be best placed to make decisions about how best to organise things. It may be that a view needs to be taken on the advisability of pursuing the TQM and JIT initiatives until customers are placated. Perhaps additional management resources are required.
Secondly, management need to understand the nature of empowered working and it is likely that an education/training programme will be helpful. This would need to be established as a deliberate attempt over the longer term to achieve the following;
· Changing the attitudes of both management and workers.
· Improving coordination and communication between departments
· Reviewing company rules and procedures. Some issues may still require very detailed prescriptive rules, for example, where safety is concerned. But other rules/procedures might be relaxed within a set of wider discretionary guidelines, e.g. the request that maintenance inspect machines before a particular production run.
· New monitoring/performance measures that reflect the wider business imperatives, e.g. machine utilisation, customer deliveries on time rather than standard cost targets within individual cost/activity centres which may be very remote from the outside world, but still feel the pressure to react to external issues.
Summary
In addition the company will probably need outside help to take stock of where they are and where they want to go. There seems to be something of a faddish nature to problem solving and whilst Sherwin’s marketplace may be changing rapidly too much change can be counter productive.
Perhaps a greater sense of team working, based around product lines for example, might help to assure management that individual workers are not taking ‘off-the-wall’ decisions whilst still centering decision making as close to the activity as possible.
Note: This is quite an open-ended scenario and in real-life a number of different approaches/techniques would be valid. In examinations the trick is to stay focussed on the topic in the requirement whilst demonstrating that you appreciate that other aspects of management will be linked.
References
Adler, P., 1993, “Time and motion regained”, Harvard Business Review, January-
February, 97-108.
Simons, R. L., 1995, Control in an Age of Empowerment, Harvard Business Review,
March-April, 80-88.
Wilkinson, A. (1998) “Empowerment Theory and Practice”, Personnel Review, 27
(1), 40-56.
1
[1] The new machines had changed the cost structure and allowed the company to increase contribution through its larger customers by reducing selling prices but vastly increasing sales volume.