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Do rules help business performance?

I've had a few conversations over the past weeks about rules. Not policies that cover a business, but rules around operations and scheduling.

The core of the debates has been around 'will we hamstring ourselves if we implement rules to help guide the teams?'.

My view is that rules will help iron out many problems and make your life easier in the long run.

Pros and cons

Some benefits that jump to mind:
  • People know where they stand (including customers).
  • Decision making becomes clearer.
  • You stop having to re-invent the wheel!
  • Performance improves.
Some drawbacks that come to mind:
  • You need to think through the scenarios where the rules don't help you and decide (in advance) if you want to cater for the 10% of situations (hopefully less!) that don't work perfectly with your rules.
  • You need to be firm and enforce the rules.

In real life

A long time ago I worked with a manufacturing business that was having a nightmare with their on time delivery performance. A handful of their key customers were threatening to leave...

From reviewing what they were doing, there was too much volatility in their schedules. The customers were chopping and changing their priorities. The internal team kept on 'refining' the schedule. Any emergency orders were crammed into the schedules with complete disregard for overall effectiveness and efficiency.

The result?

Daily disaster and undue stress. Oh yes, and unhappy customers.

Five simple rules

From memory, we implemented five main rules:

1. No scheduled work in the last four weeks of production could be altered (dropped from the schedule only).
2. Any work in the five to ten week range was a like for like replacement (80 hours of milling for 80 hours of milling, for example).
3. The automated scheduler must run every day at 4pm. (Don't like the schedule? Fix the scheduler!)
4. Any emergency operations would be executed after the current machine's operation was complete (no breaking down the machine mid operation).
5. Any priorities to look out for (maximum of three) needed to be declared at the morning production meeting.

The outcome?

After communicating a version of this with their customers, noise in the order book reduced significantly. On time delivery started to increase over the following months, to the point where they became the top performing supplier in several of the leagues their customers had them in.


What will your rules be?

Rules can work brilliantly. They can also tie you up in knots. Hopefully the above example has given you some food for thought.

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If you like some more ideas, which we also deployed at the company referred to above, then check out my book Business Process Re-engineering. There are numerous ideas and practical methods to improve on time delivery performance.

For now, enjoy writing your (short) rule book!

Giles

About the author:

Giles Johnston is a Chartered Engineer who specialises in helping businesses to grow and improve through better business processes and embracing Kaizen.

Giles is also the author of Effective Root Cause Analysis and 'What Does Good Look Like?'.

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