Managing Automation - January 2009 - (Page 23) weeks in order to sell off inventory.” Jabil executives decided they needed a way to quickly validate the accuracy of customer forecasts and understand the impact on manufacturing capacity and costs before committing to materials purchases and production schedules. The $13 billion company, after attempting to develop software tools to streamline and integrate the planning and scheduling processes, eventually decided to use RapidResponse, an on-demand tool from Kinaxis Inc. that integrates demand and supply planning as well as supply chain collaboration. RapidResponse lets Jabil planners quickly analyze customer demand estimates by comparing them with data such as historical averages and trended forecasts. Planners can change forecasts and communicate the changes to customers. And, from the same on-demand tool, planners can evaluate different scenarios for scheduling and executing demand plans, including impacts on capacity and material supply. “Now we’re able to really understand demand and plan production a lot better,” Joyner says. “The more accurate we can make those processes, the more it helps to make us more agile downstream on the production end.” CULTURE OF CHANGE implementation ma poll PEOPLE ISSUES TRUMP TECHNOLOGY Q: What role will IT and automation technologies play in your company’s efforts to become more agile? 10.6% Don’t know Q: Do you expect your company’s focus on agility to increase or decrease over the next 12 months? 6.4% Don’t know 27.7% 34.0% Technology will play a pivotal role 2.1% Remain the same Decrease 4.3% Technology will play an insignificant role 51.1% 63.5% Technology will play an important role, but will be subordinate to people issues 63.8% Increase 63.5% Percentages may have been rounded and may not equal 100%. While technology can help enable agility, it’s not enough, manufacturers say. Perhaps more important is a culture that embraces and responds to change. At first glance, Lincoln Electric Co. might not seem like such a company. A quiet, privately owned maker of arc welding and cutting tools and systems, the Cleveland-based company has been around for 113 years. Since 1934, the company has subscribed to a philosophy, developed by former CEO James F. Lincoln, known as Incentive Management, which, officials say, encourages employees to break with tradition and take calculated risks. Under Incentive Management, employees are compensated based on their ability to reach goals and targets and to develop competencies and behaviors they have agreed on with their managers. Behaviors on which employees are judged can include things like creativity, leadership, and ownership. Employees receive monthly reports on how well they have met their individual metrics. At the end of the year, employees who have met their metrics receive significant bonuses. Last year Incentive Management bonuses totaled 57% of salary. Lincoln also practices a guaranteed continuous employment policy. The combination of incentive pay for behaviors such as creativity and an employment guarantee have created a culture in which employees are quick to try new things, and that has helped Lincoln remain agile, says Chris Bailey, general manager of Lincoln’s Automation division. A couple of years ago, for example, Lincoln recognized that many of its industrial customers were reducing the size of their manufacturing engineering groups and increasingly looking to vendors for engineering expertise. So Lincoln decided to expand Bailey’s Automation division, which provides services and equipment to help customers design and implement robotic welding systems. The launch represented a big change for Lincoln, which had never been in the services business in a big way. Still, highly skilled engineers and other employees soon began to flock to Bailey’s group, supporting substantial growth over the past 18 months. “We’re seen as the new frontier within Lincoln, but we’ve been attracting more Lincolntrained employees,” Bailey says. “That’s the beauty of having incentive-based management. Individuals are willing to take risks and do new things. That’s our secret weapon.” ■ 23 January 2009
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