The primary problem for brownfield plants is that executing a manufacturing vision is a lot easier said than done. Toyota Production System emulators often give the ingredients but no recipe — the sails but not the rudder. As one experienced manufacturing executive told us: “Lean manufacturing may not be rocket science, but implementing it is like advanced rocket science.”
In particular, four fundamental sets of questions often remain unanswered in attempts to transform plants:
Mission. In which operations can enhanced production systems truly make a competitive difference — and hence, where should a manufacturing excellence effort be focused? To succeed, a brownfield transformation must have a fighting chance in the first place. The hard fact is that some manufacturing environments will just not be able to fend off competition by instituting manufacturing excellence. Failure may be due to the culture of the plant, the profile of its employees, or gridlocked industrial relations.
But most often, failure occurs because some manufacturing technologies in the West, no matter how innovative or how service- and response-focused they are, cannot compete against factories in low-cost countries — and that would be true even if productivity were improved by double-digit numbers. This is frequently the case in manufacturing operations involving a significant labor component.
In those cases in high-cost regions, very little can be done to counter the labor rates available in the East. Some Western manufacturers believe that the extra expense of shipping from the East to markets in Western Europe and North America will protect their manufacturing assets; others feel the higher quality of their Western goods favors them over any manufacturer based in the East. However, neither of these factors is likely to provide a sustainable competitive weapon. Eastern European manufacturers are increasingly competitive, even in such quality-oriented, regulation-driven environments as aerospace components manufacturing.
Before engaging in a brownfield transformation program, it makes sense to select those technologies that are most likely to deliver competitive advantage for at least the next five years. This analysis has led some of our Western European clients, for example, to split their plants into two categories: those that are labor-intensive and use standard technologies, and are therefore best divested to the East, and those in which manufacturing excellence is required and can be implemented. Some U.S. clients have even separated their production technologies into three groups: parts manufacturing that is, for example, best located in China; component subassembly that is best located in Mexico; and final assembly that, for the time being, remains in the U.S.
Methods. What is the plant’s underlying performance problem? Will the new production system truly resolve the issues? What tools will give the most bang for the buck? Once the mission has been clarified, a targeted methodology can be employed. This methodology recognizes that it is not cost-effective — or feasible — to transform all aspects of a brownfield operation simultaneously. The belief that a production system will bring the desired benefits only if all elements run in concert from the start is a misconception. In fact, the term system is something of a misnomer. In brownfield plants, it is important to choose only those tools that most directly affect the plant’s critical weaknesses. In this way, the plant community is spared unnecessary implementation pain — and management gets the largest and quickest return on project investment.
Creating focus in this way makes sense from an economic perspective — it reduces the initial investment required. It also significantly enhances the chances of success. The single biggest complaint shop-floor workers have about large manufacturing improvement programs is that management tries to tackle too many imperatives at once. Executives might try to enhance asset utilization while simultaneously reducing the payroll and improving product quality, for instance. This approach demotivates people and is often unnecessary.
