Interviews
Best practices boost productivity & profits at textile firms - Stanford
15 Dec '10
5 min read
The consultant attended these meetings for the first few weeks to help the managers run them and provide feedback. “The treatment intervention led to significant improvements in quality, inventory, and production efficiency,” the researchers wrote in a summary. “The result was an increase in productivity of about 10%, a 60% reduction in defects, and a substantial increase in profitability of about $200,000 on estimated average-plant sales of $7.5 million.” In contrast, the control group factories registered less than a 1% gain in productivity.
For the most part, the changes were made with the same management, which demonstrated that “achieving better practices is a learning process,” said William Barnett, who is Thomas M. Siebel Professor of Business Leadership, Strategy, and Organizations; he also codirects the business school's Center for Global Business & the Economy with Roberts and former U.S. Secretary of State Condoleezza Rice, a Stanford professor. The processes that were successfully introduced included recording machine downtimes and the reasons for them, clearly marking the floor where each machine should be, daily updated visual aids on procedures and efficiencies per machine, and spare parts systematically purchased, recorded, and stored.
In quality control, the practices included monitoring, recording, and meeting to discuss defects on a daily basis, developing a clear grading system for the product and an action plan based on defect data. Previously at some plants, defects were logged in handwriting but only referred to if a customer complained. Now defects are analyzed so they can be corrected the next day and not repeated.
In the “treated” factories, Bloom says, display boards now make productivity statistics visible on the shop floor, and incentive pay is based on the data.
Factories often lost track of yarn supplies. Now they have them organized and counted so designers can fashion uses for them.
The Accenture consultants asked standardized questions to learn why a given practice had not been adopted previously. Cultural practices and legal institutions played a role, but, Roberts says, the primary impediment to change is limited knowledge.
“We saw a significant uptake in preventive maintenance in our treatment firms but not in the control firms, who heard about it in the initial consulting. Even in the treated firms, consultants had to persuade the owners to try preventive maintenance on a sample of machines first. They needed to see proof it paid off over time.”
When asked why they had not done preventive maintenance before, factory workers indicated “either it was because they never heard of it, or they didn't believe it worked, or they thought they were pretty good at what they did already.”
Click here to read more details:
For the most part, the changes were made with the same management, which demonstrated that “achieving better practices is a learning process,” said William Barnett, who is Thomas M. Siebel Professor of Business Leadership, Strategy, and Organizations; he also codirects the business school's Center for Global Business & the Economy with Roberts and former U.S. Secretary of State Condoleezza Rice, a Stanford professor. The processes that were successfully introduced included recording machine downtimes and the reasons for them, clearly marking the floor where each machine should be, daily updated visual aids on procedures and efficiencies per machine, and spare parts systematically purchased, recorded, and stored.
In quality control, the practices included monitoring, recording, and meeting to discuss defects on a daily basis, developing a clear grading system for the product and an action plan based on defect data. Previously at some plants, defects were logged in handwriting but only referred to if a customer complained. Now defects are analyzed so they can be corrected the next day and not repeated.
In the “treated” factories, Bloom says, display boards now make productivity statistics visible on the shop floor, and incentive pay is based on the data.
Factories often lost track of yarn supplies. Now they have them organized and counted so designers can fashion uses for them.
The Accenture consultants asked standardized questions to learn why a given practice had not been adopted previously. Cultural practices and legal institutions played a role, but, Roberts says, the primary impediment to change is limited knowledge.
“We saw a significant uptake in preventive maintenance in our treatment firms but not in the control firms, who heard about it in the initial consulting. Even in the treated firms, consultants had to persuade the owners to try preventive maintenance on a sample of machines first. They needed to see proof it paid off over time.”
When asked why they had not done preventive maintenance before, factory workers indicated “either it was because they never heard of it, or they didn't believe it worked, or they thought they were pretty good at what they did already.”
Click here to read more details:
Stanford Graduate School of Business
Popular News
Leave your Comments
Editor’s Pick
Esteemed Clients
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
