Welcome to What the Duck?! a podcast with real experts talking about direct spin challenges and experiences. And now, here’s your host, SourceDay’s very own manufacturing Maven, Sarah Scudder.

Thanks for joining me for What the Duck?! Another Supply Chain Podcast brought to you by SourceDay. I’m your host, Sarah Scudder, and this is the podcast for people working in the direct materials part of the supply chain. I’m @SarahScudder on LinkedIn and @SScudder on Twitter. If you are new to the show, make sure to follow this podcast so you don’t miss any of our direct materials supply chain content. Today, I’m going to be joined by Mark Alarik, and we’re going to discuss how to empower workers to make improvements on the production floor. If you work for a manufacturer and are struggling with the thought of giving your team the authority to make process improvement decisions, then this episode is for you. Mark is a systems thinking expert. He has experience in researching and purchasing production machinery and creating standard operating procedures for workers that really understand that their job is quality, how to run the equipment, how to handle materials, maintenance, troubleshooting, and the job sequence. Welcome to the show, Mark.

Oh, thank you, Sarah. It’s my pleasure.

So you have an interesting background. You wanted to be an artist but became an expert in continuous improvement instead. What is the story behind this transformation?

Well, it’s interesting growing up, my favorite artist was Leonardo da Vinci, and I copied his work, and there are some artists in my family who are professional artists, and I thought it’d be a direction I’d go in. But I studied DaVinci, and I was wondering why he would be my favorite, and it wasn’t until later on I learned this fellow was a systems thinker. He studied the human body, he studied the ecology, studied the land, and started everything and drew the systems, not just an eyeball, but he was drawing a complete circulatory system and all that. So I learned later this is something that attracted me to him, and he was also such an inventor, innovator, and two elements that are extremely important as being a systems thinker.

So does this mean that you are an art collector?

No, not really. I mean, I have my favorites, but I still dabble from time to time, and I’m a great copyist, so I’ve copied some Winslow Homers and N. C. Wyeths and all that. I did one for my grandson and all that. Occasionally I just have to do something, but I didn’t want to stand in front of an easel for eight hours a day or more. So when my dad started his little company, he invited me to join him, and he bought a machine, a terrible piece of equipment that stuffed envelopes, a very antiquated one, and I was hooked. I was hooked on production. I was hooked on the magic of, “Boy, I can go get business for this, and someone might pay me $5 for every 1000 pieces that would come out of this machine,” and I was just hooked on production. We developed a direct mail production company from them.

I was gonna say envelope stuffing machines sound like in the realm of direct mail, which it sounds like it was, so you gave up your career of being an artist, and it sounds like you still dabble in it as a hobby, which is nice to hear. What did working for your dad’s direct mail production company teach you?

Well, aside from starting a business and how a business operates, a system of elements that work together, finance, some production, all that, I learned that from direct mail, direct marketing. That is truly a system-based media, unlike other advertising because you need data, printing equipment, and understanding of the product, customer, and offers. All these things have to come together to coordinate into the direct mail piece. We had the equipment that would collect all the materials and put them in, but our job was to help the customer in their mission, which was to get more customers. So we weren’t just production ink on paper, but we understood the system of continuous improvement. After the mailer or the response, we would analyze that data, and then we would understand how we could improve the mailer for the next time. As a media, it was extremely effective, and I learned all about this from doing that.

So, walk me through your career progression. You worked for your dad for a while, and then what next?

Yeah, well, after ten years of working together, he passed away, and I relocated to Chicago. At one point, I got introduced to systems thinking through a client, actually a direct mail client, who said they used the principles of Dr. Deming for their production company. As I was studying it, I realized that my brain works in systems like that. I have to understand holistically. You cannot understand a part; you can understand a system by analyzing a part. The more I studied, the more I realized that you cannot improve one part and expect an improvement of the whole. This is true of a business because most businesses really run in silos, not as a system. Production optimization is actually downstream from operational optimization. In a production line, all the elements are correlated, so to speak, in order to create success for the production line. A production line optimized is a system. Workers need to understand the entire production system, how it operates, and the ramifications of how it interacts with other parts, not only in the line but also other parts of the company and even outside vendors. It’s the frontline worker who sees where the improvements need to be made. But there are a number of bottlenecks to that.

What does good production, what does a good production optimization system look like? Like, how can we build a kind of a best practice for people that maybe are interested in doing this at their manufacturing plant?

Well, it goes to the importance of the optimized operating procedures. You know, everybody must be optimized and optimized way trained in their job, and as I explained before that when you’re fully trained on the job, more than just your little siloed function, you’re no more you. They need to know more than just the specific area they’re working on. They need to know what’s going on before and what’s going on after, because every section, whether it’s a company or whether it’s a production line with all these machines, it is the interaction of the parts that make it successful, the interaction that makes it successful. So if I’m on this one company, they were passing defects from station number one to station number two and down the line, realizing that station number five would fix it. That kind of interaction with the part means they’re sending defective parts from station to station to station, and that is hugely wrong, and that’s why the individual worker needs to understand not just the function but how their station interacts with the station preceding and afterwards as well. It’s hugely important. Slack was one company. We’re receiving Canon plastic canisters from the vendor and some of them are defective and they’re going all the way down the line, like 100 feet or more, passing off this defective canister. Now, what does that cause it? What’s the real cost of that defective canister, not just the 33 cents they paid for it when we throw that away? Get it a refund, but all these workers are working on it, so you have to understand your job holistically, and optimized operating procedures just don’t tell you what to do. They tell you why. They help you understand the interactions that are going on the line. It’s quite a training. It’s quite a training, and it’s improving their skillset knowledge.

Yeah, it seems like it would almost be something where you set your team and shifts, and every two weeks or however much time you’re doing different parts of the production line, so everyone on the team eventually is going to know how to do every step of the process, so somebody’s out sick, you have an emergency, something comes up, it’s almost like you can plug employees anywhere in the production line without having an impact on the actual production schedule.

That’s exactly right, and that’s something I tell them. You got to switch them around. I mean, for boredom’s sake, at least has some of the tests can be pretty mundane for eight hours, you know?

So this seems like what I would call a no-brainer. Why wouldn’t everybody want to do this? Seems like their employees will be happier. They’ll have increased their skill sets, they’ll have a voice. Why do so few manufacturers actually optimize their production? I’m kind of baffled by this.

I can’t speak for all manufacturers, but I was really surprised with it because I have a continuous improvement consulting firm, and it’s not just about standard operating procedures, obviously, it’s about many areas. But I was just surprised at some of these large companies would reach out to me and say we need, we need them redone. They had them but they need them completely revamped because they were missing so many things. They were having such trouble with defects and rework, and I’m not sure they really understood the full costs of it either. They’re having such trouble and at one, one of the engineers, said something very insulting to me, not at me, but he said, “are these people, these workers, do you think they’re like have low intelligence?” 

I said, “I’ve worked with these people. Absolutely not.” So not too many of them are afraid. You know, there’s fear based management which still rapid. I’m looking at the one client that are going on the back, we’re supposed to have a meeting on procedures and all that stuff. Can’t do it now. Can’t do it now. I gotta run the back because there’s an emergency. This happens like every day. There’s always an emergency. There’s always a fire to put out and all that all these managers are doing are like they’re managing outcomes. They’re not managing the real root causes. I’m not saying all companies are like this. You got the Toyota Production System. I mean, all these all the information is there. But it still goes back down to I believe that the employee, worker by and large, is devalued is not valued as a shouldn’t be by the company, and they tell me things they tell me, think ways to make improvements, and so I mean, they’re a great resource for that. It is. I’m not sure what it really is Sarah, it’s just it’s just, it’s just free. This doesn’t cost them anything really, except, maybe redoing the, the SOPs, which by and large, they don’t have the internal expertise. I mean, they’re using the operating procedures from the equipment manufacturer, and if you’ve ever read those, I’m sure you have. I mean, they’re, they’re really written by somebody who is, uh, I’m not sure any kind of a writer, let alone a tech writer for the maintenance department, and if it’s especially put together by a foreign company, you see some of the darkest phrases in there, which are useless for the, for the operator to learn about how to do their job is to maximize quality.

So, what have you seen as the trigger point where leadership teams come to the realization that we need to do something different, right? Status quo is very comfortable. It’s very easy for all of us, right? We get set in our ways. So, I’m assuming some sort of impact on revenue or some significant impact on the business being shut down or not being able to fulfill large customer orders?

Yeah, well, there’s a number of bottlenecks on this. I think when I say fear-based management, one CEO came up to me and he said, “Mark, you’ve got to help us cut costs,” and I said, “you got that completely backward.” A strategy for cutting costs is like a strategy for saying, “I want to go out of business.” The problem with that is the reversal of that is improved quality, and costs will reduce automatically. You won’t have the defects, you won’t have customers that are sending products back. Some of the unknowns, the intangibles are like, what’s the cost, the real cost of a customer that leaves you and goes to a competitor? What is that real cost? Kind of an intangible, but maybe not, but it’s really sitting there on the table. What is it worth to you to keep your customers instead of giving them to your competition because of poor quality?

So, impact on revenue? Sounds like that. That’s one thing. What else? Have you seen work in convincing leadership to empower their employees to make improvements? We may have people listening who aren’t necessarily the decision-maker but would love to see this happen at their organization.

I mean, that’s why I have a coffee table conversation with these companies and say, “let’s take a look at what you have, and why do you think it’s not working? Or what really is not working? What is preventing your profitability? Or are you making your numbers? What are those areas?” And so we have to look at those bottlenecks and prioritize them. But one big area to me, I think, is defects. One company said, “Well, we’ve got like $300,000 a month in defects and rework and all these costs,” and so I’m saying, “well, that’s hitting not just hitting your bottom line, but it’s preventing you from offering a product at a lower price that can be produced faster because defects, of course, slow down the production line. As well, you’re not going to make your numbers. They want 85,000 a day. They’re producing 55,000 a day, and I’m looking at pallets and pallets, thousands of defects, rework, send-backs, and all that. But I don’t think they’re looking at it systemically, how this is affecting everything? Who is the one that’s touching the product the most? That’s going to be the frontline worker, by and large. Who’s the one who’s going to know what the problems are? I mean, I have had them give me ideas that were the darkest solutions. Some work, some not. But if they’ve got ideas on how to do it, so we need an environment in a production facility of testing. This is something I’ve almost never seen with the business world. It’s always been ready, fire, aim. Here’s an idea, we’re going to go out with it and see what happens if it doesn’t work. It doesn’t work. But in the manufacturing environment, we need a like a testing laboratory going at all times. Can we try something? No, we can’t stop the machine for a minute. What you have to, you have to because you’re going to stop it anyway with all defects and rework and everything, so let’s do some heavy testing. That’s something that I really… well, it’s more than I bring to the table, but I really emphasize the clients and who are those people that should be sitting at that table, the test table, frontline workers, for sure, middle managers for sure, whoever we can find vendors. Vendors are treated like you know what, buy them by procurement, get the lowest price so that lowest prices end up costing us how much in production? Does anybody know that? If we paid more for the raw materials to get a better product, we had a vendor that was truly a partner at the table with us, or the machine manufacturers sitting at the table with us, and so who’s on that team who’s on that bus? And that’s something I think can make a make a tremendous difference. I mean, where’s the downside?

Mark, what does… you talked a lot about testing, which I’m in alignment, I think that’s so important in a manufacturing plant to not only be testing for new products, but testing for ways to produce what you have more efficiently and more effectively. What does a good testing process look like to you?

Well, you start with the bottleneck. What is the bottleneck that you think might be the game changer? What is… what is that? And we’re saying that if, like in the theory of constraints, you have five machines in a row, and one’s doing 10, one’s doing 10, one’s doing 3, that one’s doing 10 and 10? Well, your average is going to be three at all times, and so what are we doing to exploit that bottleneck? The one is doing three, and we’re saying, I’m saying that what will make a difference, you can test almost anything that’s this little, not totally true, but could test almost anything manually or without much expense. So if this is producing three, what will it take to have either we get another machine and get that up to six? Or what are those problems? Are we creating scenarios? We create a scenario on what would happen if we could do this, and so I had one client where I felt they were a silkscreen shirt printer, and they would print the front, they’d print the back, they print the collar, and print both sleeves. And I was convinced that both sleeves should be printed at the same time, not on two different machines separately. That’d be like a 25% increase in production. Can we test this? Can we? No, and I gave them three different proposals on how to do this, where the can be done. We did some testing, it could be done, and it just takes kind of a relentless commitment. I’ve seen top managers discard something that could make a double-digit difference because of some emergency or fire, or “we don’t have the money for that,” and all that there’s a corporate mindset that has an adverse reaction to trying something new, and that comes back down to fear, and the fear based on “we’ve got to cut costs, we got to make these numbers.” That’s what’s the biggest bottleneck to the testing, I think.

And who typically do you recommend should be overseeing the whole testing program, like who’s that decision-maker that should be owning and managing that process?

I would say the top person at that particular division, at that organism, at that location, or maybe somebody hired this. These things I’m talking about require a commitment from the top. Recruiting these operating procedures I’m talking about, there has to be a commitment from the top that we’re going to do this, and we’re going to empower the team to do it. Or, I say that or don’t, because if you leave it to mid-managers, and they’re putting out fires, and I can tell you from, I mean, we’re talking a big fortune 500 company, and I had the hardest time getting information out of the managers because they were running around with their lab coats, back and forth, and because there’s putting out a fire all the time. So without that top commitment, it’s not going to work. It isn’t, because one of the places, I’m not sure that humans use the procedures are created, and I’m not sure they had to be done, and they moved on to something else, and it did not get to the floor. I’m not 100% sure, but I’m really suspicious, and the procedures you enable… the other thing that comes to mind about this whole cost of, you know, not empowering frontline employees to make decisions and be proactive. Have you been able to quantify what are the costs for a manufacturer for not doing this?

Tell him, “look at your defects. The defects are caused by, I want to be careful. It’s not like caused by somebody, it’s caused at some point on the production line. You got machinery, maintenance, parts, vendors, and the personnel involved. It’s totally quantifiable, just look at your defects, and we get them down to the defects. You know, nobody can do anything about this half of 1%, but that’s not that’s not one, but he’s got about $300,000 because you’re passing defects from station to station to station and not fixing it at the point of defect. I think that’s very quantifiable, and I told him, I said, your problem is you’re so dependent upon inspection after the fact, after it’s too late. You’re not using your inspectors at the point of where the defects are happening. So put a quality inspector, you shouldn’t need one, but put a quality inspector at that point of defect and don’t allow anything to leave that station. That’s quantifiable. I mean, I saw a whole rack of them, and you can figure out how much money that cost for or defects from the vendor. That’s very quantifiable, that’s being passed through the system. It’s not just the cost of the canister, it’s a cost to everybody handling that. That’s quantifiable, if they want to know, so I’ve got a background in data, compiling data and reading data and reporting from data, but this stuff is very, it’s there. It’s very transparent.

So it sounds like defects are a really important part of the identification process, and once you can see how many defects you have, you can pretty quickly come up with a calculation, right? And then that, when you actually see a number, I think it can sometimes be more impactful than just talking about something without hard metrics behind it. Want to pivot just a little bit, we’ve been talking a lot about how to actually convince management to be open to this new process that you’re talking about. What happens when management says yes, great, we want to do this, we want to empower our employees? What steps should be taken, because this is a big mindset shift for the workers. They’re not used to giving feedback and a process like this can

I would say the top person at that particular division, at that organism, at that location, or maybe somebody hired this. These things I’m talking about require a commitment from the top. Recruiting these operating procedures I’m talking about, there has to be a commitment from the top that we’re going to do this, and we’re going to empower the team to do it. Or, I say that or don’t, because if you leave it to mid-managers, and they’re putting out fires, and I can tell you from, I mean, we’re talking a big fortune 500 company, and I had the hardest time getting information out of the managers because they were running around with their lab coats, back and forth, and because there’s putting out a fire all the time. So without that top commitment, it’s not going to work. It isn’t, because one of the places, I’m not sure that humans use the procedures are created, and I’m not sure they had to be done, and they moved on to something else, and it did not get to the floor. I’m not 100% sure, but I’m really suspicious, and the procedures you enable… the other thing that comes to mind about this whole cost of, you know, not empowering frontline employees to make decisions and be proactive. Have you been able to quantify what are the costs for a manufacturer for not doing this?

Tell him, “look at your defects. The defects are caused by, I want to be careful. It’s not like caused by somebody, it’s caused at some point on the production line. You got machinery, maintenance, parts, vendors, and the personnel involved. It’s totally quantifiable, just look at your defects, and we get them down to the defects. You know, nobody can do anything about this half of 1%, but that’s not that’s not one, but he’s got about $300,000 because you’re passing defects from station to station to station and not fixing it at the point of defect. I think that’s very quantifiable, and I told him, I said, your problem is you’re so dependent upon inspection after the fact, after it’s too late. You’re not using your inspectors at the point of where the defects are happening. So put a quality inspector, you shouldn’t need one, but put a quality inspector at that point of defect and don’t allow anything to leave that station. That’s quantifiable. I mean, I saw a whole rack of them, and you can figure out how much money that cost for or defects from the vendor. That’s very quantifiable, that’s being passed through the system. It’s not just the cost of the canister, it’s a cost to everybody handling that. That’s quantifiable, if they want to know, so I’ve got a background in data, compiling data and reading data and reporting from data, but this stuff is very, it’s there. It’s very transparent.

So it sounds like defects are a really important part of the identification process, and once you can see how many defects you have, you can pretty quickly come up with a calculation, right? And then that, when you actually see a number, I think it can sometimes be more impactful than just talking about something without hard metrics behind it. Want to pivot just a little bit, we’ve been talking a lot about how to actually convince management to be open to this new process that you’re talking about. What happens when management says yes, great, we want to do this, we want to empower our employees? What steps should be taken, because this is a big mindset shift for the workers. 

They’re not used to giving feedback, and a process like this can probably be very overwhelming and actually scary in some cases for them.

It can be, but I really love these people that way. I work with them, and they know there’s somebody who’s working with them, and I encourage them. I am kind of SOP with them relationally as we’re working, and I ask, “What do you think? What’s your opinion?” And that’s great. “What would you do to improve?” And so, what’s really needed here is a solid production supervisor who has worked in that area for a long time as a resource. But the people on the floor, the operators, and the other supervisors are very good. However, they don’t always do things the same way, particularly between shifts one and two. That’s actually quite a difference. So when I present the first draft of the operating procedure, the supervisor looks at it and says, “Make some changes.” And they say, “This is how they’re doing it.” Right, so that’s exactly how they’re doing it. “Well, this is wrong.” “Okay, well, let’s modify it, then let’s change it. How do you want to do it? What is the idealized design? We’re working out from the ideal. What is the ideal for this? And that is obviously no defects, and the job is running.” Well, the production is doing 85,000 a day. We work from the ideal and work backwards. How are we going to get there? So I tell them, “You’re going to need to put some resources into this, and that’s going to be mostly people. And I’ve got to have access to somebody who is going to be available.” And then I bring our people in. We’re taking pictures and videos and all that, and I’m trying to encourage them to do videos more too. Because that kind of visual demonstration, you know, people remember 10% of what they read and 90% of what they see. So we try to make this a little system. But I’ve got to have the top managers committing the resources and personnel. Otherwise, it goes really slow.

Thanks for discussing how to empower workers to make improvements on the production floor today, Mark. If you have anything to promote or a project that you want our audience to know about, now’s the time. Tell us a little bit about what keeps you busy nowadays and maybe where people can find you.

Okay, well, gmahlerich.com is my website, and the same thing to access LinkedIn. Please call me, of course, just for a conversation, just fine. I’d like to know what you think about that. It’s just interesting. I’m involved in innovation, work with the ASQ innovation committee, also conduct improvement of all kinds, how to eradicate whatever those things are. But I’m just seeing that the real opportunity, I think what’s really important, is that made in America affects our economy, our jobs, our growth, or stability, and I really want to see American manufacturers excel in this, to develop those world-class products, and the revenue goes with competitiveness, and I believe that this is the secret sauce or secret weapon. This is one thing, not the only thing, but what’s keeping me busy right now are the standard operating procedures, optimized operating procedures, and I just finished doing 12 of them for a Fortune 500 company, and that’s what’s been keeping me very busy. So I’m interested in talking to others about this and see what your opinions are.

If you missed anything, you can check out the show notes. You can find us by typing in “What the Duck?! Another Supply Chain Podcast” in Google. To have the optimal search results, make sure to add “Another Supply Chain Podcast.” To ensure you don’t miss a single episode, make sure to follow this podcast and subscribe to us on YouTube. If you are new to the show, make sure to follow this podcast so you don’t miss any of our direct materials supply chain content. I’m @SarahScudder on LinkedIn and @SScudder on Twitter. This brings us to the end of another episode of What the Duck?! Another Supply Chain Podcast. I’m your host Sarah Scudder, and we’ll be back next week.