CDC Factory

Profit is the Goal: The Power to Achieve It

January 12, 2009

As this blog is titled "The Power of the Plant Floor," I want to address the nature of this "power. "A plant floor is truly powerful when two things are occurring:

  1. The actions of the people on the plant floor — specifically line operators and their immediate supervisors — make a difference in achieving the goals of the plant.
  2. Those people on the plant floor can see exactly how their actions have power, so that they will take as much powerful action as possible.

The second point is critical. Power comes when people know which actions are effective, so they can repeat them and refine them.

What is also critical to the power of the plant floor is a well-aligned goal. Without this, the plant floor can easily misunderstand what it is they strive to be powerful for. As obvious as goal alignment is for anyone who has had their first business school course, this appears to me to be among the most difficult concepts for companies to put into practice.

In the case of the food and beverage companies I work with, I often see the wrong goal being pushed to the people on the plant floor. Usually, it has to do with the implementation of a software product or other technology. Naturally, these projects are led by middle managers in the organization — managers who are not typically held accountable for the profitability of the plant, but instead only for the success of their projects. But when this happens, the success of the project, instead of the success of the plant (i.e., profitability), becomes the goal. As a result, there is no way to measure ROI for the project, because it isn't tied to any value. The workforce may do an excellent job of supporting the project, but the project does not support the plant; therefore, there is no real power.