Day: June 18, 2024

Frontline Leaders: The Key to Successful Cultural Transformation

Posted on by Richard Winsor

A group of diverse frontline leaders in a manufacturing setting, engaged in a discussion with senior management. They are reviewing a strategic plan together, with machinery and production lines visible in the background. A photo in support of operations article written by Richard Winsor, Greenland, NH

Never underestimate the importance of front line leaders

Who Owns Cultural Transformation? When organizations embark on cultural change, the spotlight often falls on executive management or senior plant management. However, the real drivers of this transformation are often overlooked—middle and lower-level managers. These frontline leaders oversee the largest number of employees and are pivotal in implementing change initiatives.

Understanding Resistance to Change Middle and lower management can sometimes resist change due to several factors:

  1. Lack of Outside Experience and Perspective: Many frontline leaders have grown within the company, leading to a belief that their established methods are the best. This can stifle innovation.
  2. Limited Leadership Development Opportunities: Without continuous training, these leaders may develop a fixed mindset, making them resistant to new approaches.
  3. Pressure to Meet Deadlines: The constant push to meet production targets can make cultural change initiatives seem like an additional burden.
  4. Previous Failures: Past unsuccessful attempts at cultural change can foster skepticism about new initiatives.
  5. Rewarding Chaos: In some organizations, chaos is inadvertently rewarded, creating a barrier to standard, efficient practices.
  6. Laissez-faire Culture: Some leaders prefer to maintain the status quo to keep their teams comfortable, resisting any new changes.

Engaging Frontline Leaders To drive cultural change, it’s essential to actively engage middle and lower-level managers. Here’s how:

  • Empowerment: Provide them with the responsibility to lead continuous improvement projects.
  • Training: Offer regular leadership development programs and exposure to new practices.
  • Support: Ensure they have access to mentoring and coaching from Lean and Six Sigma experts.
  • Involvement: Include them in tactical discussions and require regular progress reports on change initiatives.
  • Broaden Perspectives: Encourage participation in conferences, expos, and benchmark visits to other plants.

Top Leadership’s Role Top leaders must also be actively involved in the change process:

  • Daily Engagement: Participate in gemba walks and production meetings to understand daily operations and reduce end-of-month pressures.
  • Accountability: Implement structured daily management processes to hold all levels accountable and foster continuous improvement.
  • Commitment: Demonstrate dedication to change through consistent actions, not just words.

Conclusion Cultural change is complex but achievable with a structured approach and unwavering dedication. By involving and empowering frontline leaders, organizations can drive successful cultural transformations that lead to sustained growth and innovation.

Richard Winsor

Vice President, Supply Chain

 

The Manufacturing Renaissance: Opportunities and Challenges in U.S. Reshoring

Posted on by Richard Winsor
The U.S. manufacturing sector is experiencing a historic resurgence, reshoring production at an unprecedented rate. However, this renaissance comes with its own set of significant challenges that need strategic solutions.
Reshoring trend in U.S. manufacturing sector
The US Onshoring Trend

The U.S. is currently experiencing a manufacturing renaissance, with new facilities being built at a record pace. In 2022, spending on new manufacturing construction soared to an annual rate of $114.7 billion, marking a 40% increase from the previous year and a 62% rise over the past five years, according to the U.S. Census Bureau.

Several factors are driving this reshoring trend, including the CHIPS and Science Act, rising labor and transportation costs, U.S. tariffs on China, geopolitical tensions, and a desire to reduce single-source dependency and enhance supply chain resilience.

A recent report on global chip supply chains projects that the U.S. will triple its domestic semiconductor manufacturing capacity between 2022 and 2032. However, reshoring manufacturing to the U.S. comes with its own set of challenges.

Key industries such as automotive, semiconductor, high-tech, and aerospace and defense are leading this reshoring wave. For instance, the U.S. semiconductor market in aerospace and defense is expected to reach $7.93 billion in 2024. Major players like Intel, NVIDIA, Samsung, and Micron Technology are expanding their footprint in the U.S.

While reshoring offers numerous benefits, including shorter supply chains, increased national security, improved quality control, and economic and job growth, significant hurdles remain. Here are five major challenges facing U.S. manufacturing:

1. Powering U.S. Manufacturing: Building a manufacturing facility is often the easiest part; the surrounding infrastructure and utilities pose greater challenges. The U.S. electricity grid is becoming less reliable as fossil fuel and nuclear power plants are decommissioned, while renewable sources like solar and wind are not yet backed by enough storage and transmission capacity to meet future demand.

For example, the TSMC chip plant being built in Arizona will initially create 200 megawatts of demand, enough to power approximately 40,000 homes. With up to five additional fabs planned for the area, the electricity demand could surge to an astonishing 1,200 megawatts. An unreliable power supply can disrupt manufacturing operations, and the vast amount of electricity needed for new onshore manufacturing comes at a time when America’s power grid is increasingly unstable. Meeting the increased demand, particularly from energy-intensive industries like high-tech, will require a delicate balance between electricity supply and demand, preventing energy curtailment or worse, blackouts.

2. Labor Issues: Despite 570,000 U.S. manufacturing job openings in March of this year, it’s projected that by 2033, an estimated 1.9 million manufacturing jobs could be vacant. Finding enough skilled workers is a major obstacle for companies in the U.S. Assessing the labor supply and cost in proximity to potential manufacturing sites is crucial. Labor shortages can impact supply chains in many ways, including the inability to meet production demand, reduced output, longer lead times, delays in opening new factories, lost revenue, and an inability to invest in new technologies.

Labor disruptions are another notable risk for manufacturing. Labor disruptions, due to strikes, layoffs, and protests, increased 74% in 2023 from the previous year, according to EventWatchAI, Resilinc’s supply chain risk-monitoring application. In Q1 of 2024, labor disruptions already ranked as the number-two disruption impacting the manufacturing industry. With a tight labor market and inflation, labor unrest is likely to continue.

3. Climate Change Risk: This year, Resilinc has tracked over 300 extreme weather events that can wreak havoc on supply chains. Historical data shows that the frequency and intensity of extreme weather events like heatwaves, flooding, droughts, and hurricanes are increasing every year.

According to NOAA, April 2024 was the hottest month on record, continuing an 11-month global record-breaking streak. Rising temperatures contribute to more powerful hurricanes, stronger winter storms, floods, extreme heatwaves, and droughts. Hurricanes can seriously disrupt supply chains by damaging critical infrastructure such as roads, railways, and ports; severe winter storms can strain energy grids, causing power outages and halting manufacturing; and extreme heatwaves or drought can cause shortages of critical