Do you feel the need for external support to improve your China operations? Good news, many companies are competing for your RMBs. The first question you should ask yourself is, ‘what type of manufacturing consultant/trainer do we need?’
In this article, I divided them into 6 categories. The most common categories are listed first, and those more seldom found come last.
1. The training company
Trainers are placed first on this list because there are so many of them. It is the most common type of external support Chinese-owned manufacturers resort to.
You need your quality staff to be able to implement ISO 9001? You need your management team to understand how to increase profits? You need your supply chain staff to understand how to use Kanban signals? Do you need to understand how to use that new ERP? You can get a trainer.
I wish training programs were administered much more often. One key issue we face in our work is that key managers and supervisors have a very narrow-minded view of the way to do their job. Improvement projects go 2-3 times faster in those companies that have been training their key employees for years. They grasp and apply new concepts much faster.
Having said that, what are the limits of a training, in the context of operational improvement?
- A training usually comes in a package that may not address the organization’s needs. The trainer seldom spends time talking to people at different levels before starting his work.
- In China, what is said in a conference room stays in that conference room. Knowing is one thing, doing is another thing. Without immediate application (1 hours talking, and then 1-4 hours doing), training is pretty much useless.
- A manager has to take the concepts and see them through by himself. This can be quite a challenge if managers keep getting distracted by fire-fighting all day long.
- If technical assistance is needed, the organization needs to find it elsewhere. Improvement projects often require extensive engineering work.
2. The equipment salespeople
You will probably find these if you look for ways to automate your processes or if you want to make a totally new type of product.
They can help a lot. They will create a link between your company and the equipment manufacturer.
How to recognize an equipment salesperson?
- They send a technical salesperson, who might brand himself as a consultant, to describe his offer and handle objections. They might introduce themselves are general consultants, but that’s not how they really make a living.
- They will typically only work on plastic injection, or PCBA, or metal CNC machining. Don’t confuse them for category No. 6 (see below), though.
The problem is, they are incentivized to make the sale even if what they offer does not correspond to your needs. For example, you might work on small parts, but they will sell ABB robots rather than Epson robots, simply because that’s how they get a nice pay... and you will be stuck with a sub optimal solution.
A more general group of manufacturing consultants will first listen to the company’s goals, then evaluate several approaches (which would include lower-tech, simpler automation, as well as other ways of gaining productivity), and finally suggest the most suitable option.
3. The hands-off advisor
We hear of this often, but we seldom see any real improvements come out of it.
For example, if a large customer tells their supplier ‘you need to hire consultants and get to the next level in the next 6 months’, the response is often ‘one of my friends has managed an excellent company that sells to large Japanese companies and he will come and help us in the coming few months’. This is simply a way of diverting the blow and buying time.
In some cases, a factory owner really wants to improve his organization, and he will look for a mentor among their own circles. The problem is, they can very seldom find such a competency among their old-boy networks. But sometimes they do.
Can this be effective if the right advisor is found? Yes, definitely. The hard part is for the manager inside the organization to work on making those changes without any hands-on assistance.
That’s how improvements get done in the novel “The Goal”. The plant manager follows the advice from his old professor, he has to rack his brain and find a path that makes sense in his context, and in the end, the results are above his expectations.
In the end, what this really means is NO CONSULTANTS INVOLVED. Pointing to a direction is good, but that’s only 5% of the work. Good planning, good handling of objections from other key team members (and getting their buy-in), and good execution, are all critical.
4. The hands-on stabilizers
We have run into a few of these consulting firms. They are typically Chinese-owned. Their expertise lies in stabilizing operations.
They tend to apply the same tools from one organization to the next: 5S programs (with an emphasis on organizing, not on breaking and re-doing), simplification of the material flow, strengthening of the quality system (but generally not of process controls), writing work instructions and defining standard hours, and so on.
The result is a much better-looking facility, and better grades in customers’ quality audits. This is a large selling point to Chinese factory owners: it helps them acquire more customers – that’s generally their No. 1 priority. And, to be fair, this approach, if well done, generally cuts costs and improves quality.
When a customer has special requirements, though, these manufacturing consultants fall short. They have a hammer, and everything looks like a nail.
If a client wants to start manufacturing much smaller batches in an economical fashion or drive changes in office & admin functions, they might be unable to even suggest the first step.
Another limit is their inability to drive deep improvements. Much of what they do is incremental, and at the surface. They won’t attempt to cut 40% of the variable costs, for example.
5. The hands-on improvement consultants
This is how CMC positions itself, and we haven’t run into significant competition in China.
From the beginning, a typical project shakes up the organization – which often brings up resistance from some members – and then, toward the end, more stabilizing efforts are applied. Both are necessary:
- Without deep changes, no deep improvement in performance and culture.
- Without stabilizing force toward the end, no sustained improvement.
We do what it takes to drive deep and lasting improvements. Here are a few examples:
- Totally re-organizing certain processes (changing the layout, re-engineering the way tasks are organized among distinct workstations, etc.)
- Setting up a management system that cascades down the organization
- Evaluating what extra controls and user views the current ERP needs to have
The challenge, as noted above, is the resistance from certain people. Top managers need to be prepared for it. Employees need to be aware of the “why” and the “how”. Consultants need to listen and adjust (sometimes people get thinking and suggest another way that is equally good or better). And there will virtually always be friction.
That friction needs to be kept manageable. Some topics (e.g. changing the way purchasing is done, switching from a piece rate system to an hourly rate) are explosive in nature. They change the way people get paid, and especially the way they have been exploiting the current system to earn more money.
These people will fight back with whatever it takes – sometimes even hitting a consultant in the back of the head. It can only be attempted after some other ‘wins’ have been demonstrated and more ‘allies’ are on board.
In other words, change management is key. It’s not only about technical expertise but also about working well with the different constituents within the company.
6. The purely technical service providers
These are typically toolmakers that can help improve the performance of your operation (be it die casting, rubber molding, etc.). Another example would be developing an inexpensive way of linking your engineering documents and your production plans into a paperless system.
We wish there were more of these! They are quite hard to find in China.
One reason is, they often morph into a more profitable business model:
- Automation experts start to make their own equipment and sell it to a certain niche.
- Electronic engineers work on a new product development and then start to handle the manufacturing too.
That makes sense. Selling something tangible is easier than selling pure service.
Are you looking for help with your Chinese factory?
A good start is to examine the process improvement that our manufacturing consultants use themselves. You can use this proven approach to start making in-house improvements, or to have a far more effective cooperation with trainers or consultants should you wish to bring some in. Hit the button below to watch the video walkthrough & get your free copy.