A new plant management structure for a new 'world economy’ – in 1985

“We are in a world economy that puts new competition in front of companies who never dreamed they could have competition. Companies are being driven to a least-cost-producer mentality with a focus on new ways of using capital and a just-in-time inventory approach.” If Michael Hora had offered that view of the world last month, he would be right in line with most of the conventional ...

07/15/2007


“We are in a world economy that puts new competition in front of companies who never dreamed they could have competition. Companies are being driven to a least-cost-producer mentality with a focus on new ways of using capital and a just-in-time inventory approach.”

If Michael Hora had offered that view of the world last month, he would be right in line with most of the conventional thinking about manufacturing. Had he offered those views in 1997, he would have been considered far ahead of his time.

When Plant Engineering readers found that quote from Hora, then a vice president and partner for management consulting firm A.T. Kearney, it was May 23, 1985. In the middle of the Reagan Era, the world was in the midst of a changing political and economic landscape. By the end of the decade, communism in Russia was in ruins and the Berlin Wall was torn down.

Manufacturing was undergoing its own revolution. Computers were commonplace, and the strategic role of the plant engineer was evolving. In 1985, A. T. Kearney executives were asked by Plant Engineering editors to evaluate the role of the plant engineer and to look at how that role would change in the future.

Several structures were discussed as to how to organize the modern plant engineering and management function in 1985. All the Kearney experts agreed, though, that it was the mission of the organization, not its structure, which was the area most in need of definition and change. “A comprehensive mission definition,” the editors wrote, “is the foundation of a successful organization. Once the mission is agreed to, appropriate responsibilities can be assigned.”

“When you understand your mission, you know what you’re there for,” said Hora. “The classic case is the plant engineer who says 'my job is to provide the best plant engineering and maintenance operation at the least cost.’ That’s not a mission. He must understand the business that he’s in. He must take his part of the responsibility for that business.”

One area of plant management that was evolving, and that Kearney experts pointed to in particular, was the way maintenance costs were viewed. “Management is beginning to recognize that all the money they spend for maintenance, which they thought was free and which they used like a free service, should be controlled like other operations,” said Delbert Wible, then a manager with Kearney. “Production has been squeezed in terms of incentives and measurements as tight as it can get. The focus is now shifting to other areas of uncontrolled costs like maintenance.”

In light of these changing manufacturing dynamics, Kearney consultants drew up several organizational charts for plant management %%MDASSML%% everything from a plant manager overseeing parallel maintenance and engineering managers and departments to an operational team approach, with each team having individuals skilled in maintenance, engineering and operations.

Hora said that what really mattered was how plant engineers chose to approach their role in the organization. “The plant engineer can take two positions: He can take the defensive, or he can say, 'Maybe I can lead the way to a different way of having this function contribute to the company.’”

The editors summarized the A.T. Kearney insights the same way: “Plant engineers must change their thinking from a department level to a company level. They are going to have to take their part of the responsibility for the business instead of limiting their responsibility to projects, increased capacity, maintenance, equipment uptime, which is not the business.”





No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
2016 Top Plant; 2016 Best Practices on manufacturing progress, efficiency, safety
2016 Product of the Year; Diagnose bearing failures; Asset performance management; Testing dust collector performance measures
Safety for 18 years, warehouse maintenance tips, Ethernet and the IIoT, GAMS 2016 recap
Big Data and bigger solutions; Tablet technologies; SCADA developments
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Safety at every angle, Big Data's impact on operations, bridging the skills gap
Ensuring SCADA/HMI cybersecurity; Optimize manufacturing value in real-time; Simplifying drive-based and controller-based automation
Tying a microgrid to the smart grid; Paralleling generator systems; Previewing NEC 2017 changes
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role of plant safety and offers advice on best practices.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me