Lexington, Mass. — The people who run American companies spend too much time asking how much it costs to make something and too little time asking why it costs that much. If they would ask "why" more often, says Jack Niles, they might see a major reason for productivity being at an all-time low, and slipping. Mr. Niles, a management consultant here with Rath & Strong Inc., has spent more than 15 years going into plants and telling managers what they can do to make them run better.
"Management hasn't paid as much attention to production processes as it has to the marketing structure of another round of price increases," he said in an interview at the firm's headquarters here.
If managers would pay more attention to production, Mr. Niles said, they would see some of the things he spots when he tours their plants -- a tour he urges all managers to take frequently.
The problems he finds range from machines not running because the toolroom is locked, other machines working too slowly because they are feeding the finished product into a small space beside a wall, and forklift trucks not working because they've been poorly maintained.
In one instance involving a forklift truck, Mr. Niles recalled the time he toured a plant in Oklahoma. "There was a really nice truck chained to a supporting beam. That chain had the biggest padlock on it I ever saw." He asked what the truck was doing there.
"Oh, that's Harry's truck," a supervisor told him. It seems that Harry, one of the plant's burlier employees, was not eager to use the other forklifts in the plant because they were so poorly maintained, so he had appropriated this one for his own use. Mr. Niles was able to persuade the managers of the plant to maintain all their forklifts better.
Forklift trucks are not the only victims of poor maintenance, Mr. Niles finds. Many factories, he has discovered, are able to keep their machines running only 30 to 40 percent of the time. "Most people agree 30 to 40 percent is not good," he said. "They should be 'up' 70 to 80 percent of the time. You need good reasons why the machine isn't running more. It may even be the wrong kind of machine."
Seeking answers to such questions illustrates the need for what Mr. Niles calls a "back to basics" approach. "Back to basics means it's time to go back and look at some of the fundamental things we learned about how to manufacture a product."
The best way to do this, he contends, is -- while taking that all-important tour of the shop floor, he repeats -- to talk to the people who are working on the machines.But many managers are reluctant to take this step.
"They haven't been trained to talk to the production people," he noted. "Many of the people coming out of business schools are only familiar with marketing and finance."
To remedy this, Mr. Niles encourages managers to set up "forums" where they get together with supervisors and the people on the production lines "to work out the best way for all involved."
At these forums, Mr. Niles finds that workers often have figured out their own -- and very differing -- ways to do things. At a New England plant that makes tape recorder cassettes, for instance, three women were doing the same work, but each was putting the cassettes together differently, and each took a different amount of time to do it.
"Each woman had figured her own way of putting them together," he said. "So we took the one who was fastest and got the other two to do it her way."
This sort of incident points up what Mr. Niles sees as "a feeling that once you design a product and put it into the shop, the shop is supposed to figure out how to make it any way they can."
Dealing with problems like this -- or any others that involve trying to increase productivity -- requires managers to do all they can to cultivate trust among the employees, Mr. Niles points out. Managers have to show employees that just because they are expected to turn out more work, their jobs are not being threatened and they are not being asked to work at an unreasonable pace. This attitude is especially necessary when dealing with a union.
"If you deal with every issue the union raises in a businesslike manner, the end result is usually what you want," he noted. "The biggest problem is to get management to understand the process."
"The boss can treat many problems by getting a lot of people involved," he concludes.
But sometimes the causes of production problems are even easier to correct. Mr. Niles occasionally finds people working on machines, making a product or a part of one, "and they don't even have a drawing of the thing they're supposed to be making."
And some problems are very easy to spot -- but a lot harder to correct. "I've found plants that were laid out completely backward," he said. In one, the finished product came off a machine that was not near a loading platform or storage area, but at the front of the plant, by the offices.
"A forklift had to squeeze into the small space between the machine and the wall, take the finished product out, and carry it to the back of the plant," Mr. Niles recalled.
Lately he has been getting a lot more calls. "In the 1970s, a lot of effort went into managing materials and inventories," he said. Now, computers are doing much of this work, and there is more interest in production problems.