General Motors CEO Mary Barra appeared before a Senate panel once again Thursday to discuss the company’s flawed ignition switches and vowed that GM will “do all it can to make certain that this does not happen again.”
In terms of damage control, much of what Barra and GM appear to be doing right now is positive: fessing up about product failures, bringing in outside investigators and firing employees that failed to take appropriate measures.
And while these are important steps, they amount only to a good, if somewhat belated, crisis management strategy. In fact, these efforts pale against the very real organizational challenges that lay ahead for GM and Barra. In order make good on her promise to Congress, Barra must prevent the kinds of engineering failures that caused the ignition problems in the first place and the organizational failures that propelled the problem to its current tragic magnitude. And that will mean changing the culture at GM.
Engineers like to be right. They like to prove that they have the correct answer.
Highly trained and highly motivated to solve problems, at the point of releasing a design or demonstrating a model or a prototype, everything in them is wired to prove that they’ve arrived at the right answer. The premium is so high on being “right” that even when data starts proving them wrong, they work to show that they are right somehow. They seek to explain what is happening is an exceptional outlier or an aberration; not that it is a sign of a problem. Read More »
It’s an old business rubric: What gets measured, gets managed.
In the age of big data, the very basic set of measurements that managers used to rely on is expanding to a robust set of 24/7 sensor inputs from factory floors to off-shore petroleum platforms – all of it accessible across a wide variety of mobile devices to employees at many levels.
Management is now able to access data from varied locations, crunch it at headquarters and then return the enhanced data to managers out in the field, on the factory floor or on the oil fields. These new, more robust data sets will allow managers to make better decisions in a shorter amount of time than ever before. For companies in complex industries, such as Shell where I work, the potential for increased performance, efficiency and safety is enormous. Read More »
In the last 20 years, we’ve seen a massive wave of manufacturing jobs move to low-labour-cost countries. Now, many companies are beginning to question whether the cost differential offered by distant suppliers compensates for the cost of working with an extended supply chain. These companies find themselves with massive inventories, yet in spite of those inventories they frequently are not able to meet all demand.
It has been difficult for managers to analyse the cost differential mismatch trade-off because mismatch costs are difficult to quantify. The intuition is that the mismatch costs are high, but the managers I discuss with have difficulty believing that overstocks and stockout costs are high enough to wipe out the cost advantage enjoyed by their offshore supplier. Without solid numbers, it’s difficult for managers to incorporate these costs into decision-making.
As a manufacturing expert, I help factories become more productive by refining the way they operate. Small improvements over time can lead to big changes in the long term.
But it wasn’t until I arrived home late and exhausted from a trip that I realized I needed to use these same principles at home. Opening the closet to hang up my coat, I found the closet crowded with kids’ sporting equipment and old school projects. Similarly, evenings at home seemed shorter as our after-dinner hours became crammed with homework and activities.
Where had all our time gone? And how did the space in our cabinets and closets disappear? Why had the job of doing the dishes slipped from right after dinner to right before bed? And why was I finding myself more frequently being drawn into a game of “Dish Tetris,” struggling to fit all the dishes into the dishwasher when they used to fit in just fine?
The health of the US manufacturing sector has been at the top of the news agenda for some time. Factory closures are highly publicized; businesses that move their production overseas are publicly shamed; and politicians often find themselves on the defensive.
True, the United States has seen a dramatic reduction in manufacturing jobs over the past decade, and many of those jobs are not coming back. (Garment-making and smartphone assembly will likely stay in places such as China.)
Despite all the negativity, though, US manufacturing is in good shape. Industrial production remains near its all-time peak, as measured by the Federal Reserve Board, and the sector will likely continue to thrive. More companies will set up — or indeed keep — their production here as the manufacturing sector becomes more efficient, innovative, and technologically sophisticated to allow for greater product variety.