Manufacturology

Grains of sand

I’m intrigued by the so-called “sand cone model” which was pro­posed by Fer­dows and de Meyer (1990). The idea was that com­pa­nies should develop their capa­bil­i­ties in a cer­tain order in order to become com­pet­i­tive. Fer­dows and de Meyer sug­gested that all com­pa­nies must start with quality.

Sand cone model (Fer­dows and de Meyer, 1990)

The pic­ture illus­trates that when you develop your pro­duc­tion sys­tem, anal­o­gous to build­ing a sand pile, you must first pour some sand in the mid­dle that form the base. You add qual­ity, but the sand spreads to the sides too. Soon you’ll be adding some dependability.

Con­sider a hot strip mill. The first thing plant man­age­ment has to do is to make sure that the plant has the capa­bil­ity to pro­duce prod­ucts that meet the spec­i­fi­ca­tions. Qual­ity require­ments must be met before there is there a point in focus­ing on other improvements.

But accept­able qual­ity is related to depend­abil­ity. Depend­abil­ity means e.g. sta­bil­ity, on-time deliv­ery and vari­abil­ity reduc­tion. Pretty soon you’ll want to reduce process vari­a­tions because qual­ity tar­gets must be met every time.

Only when pro­duc­tion meets accept­able stan­dards regard­ing depend­abil­ity is it time to develop the speed of man­u­fac­tur­ing. Speed is an unfor­tu­nate term, and is often replaced with flex­i­bil­ity. The mean­ing is the speed of response to changes, which can be change of vol­ume, new prod­ucts, mul­ti­ple prod­ucts in one plant etc.

Accord­ing to the model, it is only after pro­duc­tion per­forms rea­son­ably well with respect to all these mea­sures, is it time to start work­ing on cost reductions.

A prob­lem is that capa­bil­i­ties are really hard to define. Some peo­ple refer to the above used four strate­gic pri­or­i­ties and call the per­for­mance with respect to each the company’s capa­bil­ity with respect to qual­ity, depend­abil­ity, flexibility/speed or cost. I’m not con­vinced that that makes sense.

Com­pet­i­tive pri­or­i­ties are per­for­mance met­rics for, not causes of, com­pet­i­tive­ness. How well a com­pany per­forms depends on things like degree of fit between oper­a­tions and busi­ness strat­egy, as well as the qual­ity and time­li­ness of the busi­ness strat­egy itself.

I think the sand-cone model has an intu­itive appeal to it although the fussi­ness of the capa­bil­ity con­cept com­pli­cates things. But it also seems that this idea has been rest­ing for a while. Per­haps it is time to dig it up?

• K. Fer­dows, A de Meyer, “Last­ing improve­ments in man­u­fac­tur­ing per­for­mance: in search of a new the­ory”, Jour­nal of Oper­a­tions Man­age­ment, vol. 9, no. 2, 1990.

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