People: refers to the personnel manufacturing the product; Machine: refers to the equipment used to manufacture the product; Material: refers to the raw materials used to manufacture the product; Method: refers to the methods used to manufacture the product; Environment: refers to the environment in which the product is manufactured.
In this theory of five elements, people occupy the central and driving position, just like a car. The four wheels of a car represent the four elements of "machine," "material," "method," and "environment," while the driver, "people," is the most important element. Without a driver, the car can only stand still and become useless.
Even if a factory has good machines, materials, and processing methods, and the surrounding environment is suitable for production, it still cannot produce if it lacks employees.
Analysis of People: Skills issues? Does the system affect people's work? Is it a problem with personnel selection? Is the training insufficient? Are the skills mismatched? Are the employees disloyal to the company? Is there a responsible person? Can people operate the machines? Are people adaptable to the environment? Do people understand the methods? Do people recognize the materials?
Machine analysis refers to the equipment, tools, and other auxiliary production tools used in production. In production, the proper functioning of equipment and the condition of tools are factors affecting production progress and product quality.
Is the selection correct? Are there maintenance issues? Is the machine properly matched? Is the operator qualified? Is the machine operated correctly? Is the machine placed in a suitable environment?
Machinery management consists of three aspects: use, inspection, and maintenance. Use involves training operators based on the machine's performance and operational requirements, enabling them to correctly operate and use the equipment for production; this is the most basic aspect of equipment management.
Inspection refers to confirming the equipment's status and performance before and after use according to certain standards, identifying abnormalities early, and preventing unintended use; this is crucial for equipment management.
Maintenance refers to performing maintenance, cleaning, and lubrication on the equipment at regular intervals according to its characteristics, preventing equipment deterioration and extending its lifespan; this is an important part of equipment management.
Material analysis: Is it genuine?
Is the model correct? Does it have a shelf life? Has it undergone incoming inspection? Is the material used in accordance with regulations? Is the material suitable for the environment? Does the material work well with the machine? Will the material interfere with other materials?
Analysis of the Method: Is it done according to the law? Is it clear? Is it written clearly? Is the method suitable? Does a law exist? Is the method provided to the appropriate person? Is the method feasible in this environment?
Analysis of the Environment: Has the environment changed over time? Have factors such as light, temperature, humidity, altitude, and pollution levels been considered? Is the environment safe? Is the environment man-made? Can the micro-environment and the macro-environment coexist?
Workplace Environment: Refers to the placement of various products and raw materials, the arrangement of tools and equipment, and personal 5S practices. Hazardous materials control: First, the storage of chemicals, such as alcohol and thinner. Second, the control of six chemical substances (lead, mercury, cadmium, hexavalent chloride, polybrominated biphenyls, and polybrominated diphenyl ethers) during the production process. Production Environment: Refers to the control of temperature, humidity, dust-free conditions, etc., during the specific production process.
Problem Levels: After the initial qualitative assessment of the "Man, Machine, Material, Method, Environment" (HMI) framework, a secondary cause investigation is needed. This secondary cause investigation can still utilize the HMI analysis. Even after the secondary cause investigation and qualitative assessment, a tertiary qualitative assessment is still required, i.e., investigating the root causes of the secondary qualitative results. This still aligns with the HMI analysis method, essentially asking "why" multiple times.
Example: Finding engine oil on the ground is qualitatively classified as a "machine" problem within the HMI framework. Is the machine malfunction caused by improper operation by "people"? Lack of established operating standards for "methods"? An impact from the "environment"? After eliminating these possibilities, the problem lies with the "machine" itself-a counterfeit product. The reason for the counterfeit "machine" is a problem with the "people" who bought it. Why is the "people" problematic? Because of the lack of supervision by the "methods."
QC methods for corrective actions: System diagram method for action formulation
Comprehensive cause-effect analysis (Man, Machine, Material, Method, Environment) + System diagram method: Each method must include the responsible person, the method, and when and what effect to achieve.
Man, Machine, Material, Method, Environment: Reflections on Management of SMEs in Chinese Manufacturing
I. Insufficient Corporate Culture – Problems in Management Philosophy
In my country's SMEs, few have their own culture. Even if they do, it's often just a facade created during system development, not truly implemented. Therefore, I will compare the corporate cultures of private enterprises and Japanese-owned enterprises: Let's first look at how domestic SMEs approach corporate culture, including the behavioral planning that extends from corporate culture. In China, basically no enterprise values corporate culture. There is no clear definition of corporate behavior. Below is an analysis of the enterprise's management system:
A. Strongest Philosophy:
A Company Example
President's Policy: Build a trustworthy xxx
Our goal is to become a company that achieves the highest customer praise and trust through superior technology and quality. We will continue to improve the quality of all aspects of our operations. To achieve this, we will continuously improve. We are committed to complying with laws and regulations and aim to contribute to society. We have a challenging spirit and strive for sustainable development.
B. Comprehensive Rules and Regulations – All rules and regulations govern how employees should perform their duties.
1. System – Bottleneck
This is something you'll notice as soon as you join the company. From the general manager to ordinary employees, everyone wears the same uniform. It's not that you can skip wearing a uniform just because you're a leader. The system applies equally to everyone. This demonstrates that foreign companies typically have a complete set of procedures.
Japanese companies generally have a management model. What needs to be done at a given stage is very clear. The company's work process is basically step-by-step. Every new employee receives specialized training. They will tell you what methods are best for doing things, and even simple tasks like filling out forms will be taught to you.
However, these companies also have a relatively strict management system. This very rigid management system and hierarchical structure can make people unfamiliar with Japanese culture feel uncomfortable. Taiwanese-invested enterprises also have a strict system of checks and balances. Although the systems of European and American companies are relatively loose, employees in these companies still need to be constantly wary of being fired.
In my country's manufacturing enterprises, as the number of employees and departments increases, the CEOs become increasingly busy. This necessitates work standards, systems, and processes. If a company lacks a complete system, even if you hire managers, they will leave due to the inadequate system.
2. Systems-Execution
Why write this? Because some small and medium-sized enterprises in my country have a set of systems. Last year, I audited a private company in Changzhou. While reviewing their documents, I found their systems to be very comprehensive and detailed.
However, a closer look at the actual situation revealed that the systems were not being implemented. Their general manager complained to me that it was difficult to enforce the systems because there were too many relatives in the factory and the employees had poor work ethic. I think our companies should learn from the Japanese companies' strong enforcement-unconditional execution.
In fact, everyone has systems in place. Here's an example: A small state-owned enterprise in Suzhou was on the verge of bankruptcy due to poor management. Later, it formed a joint venture with a Japanese company. The Japanese side managed the factory, made appropriate modifications to the systems, and improved employee benefits. Then, they demanded unconditional adherence to the existing systems. As a result, within six months, the company's performance gradually improved, and within a year, it turned a profit.
Actually, execution is related to interpersonal relationships, that is, people's herd mentality. Remember when the government issued stocks? The public didn't accept them. Gradually, through various methods, the public accepted stocks. This is essentially herd mentality at work.
Therefore, a company's execution can be cultivated. If all employees have good execution, even if some are dissatisfied, their execution will still be good. This is like the government issuing stocks or treasury bonds, which are guaranteed by the government's credit and development expectations.
Therefore, companies need to provide employees with a good credit guarantee, rather than changing policies frequently and being inconsistent in word and deed. Coupled with a positive outlook on the company's development, through cultivation, the company's execution will eventually be very high, and even temporary difficulties will be easily overcome.
II. Misconceptions in Production Control – Problems in Management Concepts
1. Production Units: People, Machines, Materials, Methods, and Environment
For Chinese enterprises, production is naturally carried out according to customer requirements. However, you can observe significant problems in the control of standards by both direct and indirect production units: standards are not subdivided, and standards are not strictly enforced. In short, the direct units of production are people, machines, materials, methods, and environment.
People
Speaking of people, we cannot ignore welfare benefits.
Regarding compensation: Western companies are more generous, Japanese companies are more equitable, and Chinese companies' benefits mainly consist of four parts: salary, training, leave system, and others. In these four aspects:
A. Salary: Generally speaking, Western companies offer higher salaries because they seek the best talent and have strict requirements for education and experience. Japanese companies offer moderate salaries because they require stable and experienced employees. Chinese SMEs offer the lowest salaries, and employees often have to rely on the whims of the owner or their relatives.
B. Training: Western companies are clearly more generous in their employee training programs. Surveys show that European and American companies primarily rely on external training for management, professional staff, and general employees. Japanese companies, on the other hand, combine external and internal training, with internal training generally outweighing external training.
For Chinese companies, this aspect is primarily internal.
C. Leave System: Japanese companies, in their corporate culture, value seniority in their leave systems. The longer an employee has served, regardless of position, they receive sufficient leave. Generally, both European/American and Japanese companies provide holidays according to national regulations.
However, some Chinese companies still maintain a six-day work week, sometimes claiming it's overtime with a pay of 2-4 yuan per hour. It seems many Chinese companies don't treat their employees like human beings. Foreign companies from Europe and America tend to have more humane leave systems.
D. Other Aspects: Housing benefits are a major concern. Japanese and European/American companies are similar, but Japanese companies excel in certain areas. Generally, foreign companies from Europe and America contribute to employees' housing provident funds, and some even provide an additional housing allowance. This is a significant gap for small businesses in my country; some companies don't even contribute to their employees' pension insurance.
Therefore, employees are the primary responsible party for a company's products. Stable and skilled personnel play a crucial role in product stability. This inevitably leads to the discussion of employee turnover.
Regarding employee turnover: Japanese companies offer the most stable jobs, followed by European and American companies. While Japanese companies may not offer the same income as their European and American counterparts, the advantage of Japanese companies lies in job security and lower expectations for employees.
As long as employees don't make major mistakes, Japanese companies are unlikely to fire them easily. In contrast, employees in European and American companies need to constantly be wary of being fired. Therefore, for small and medium-sized enterprises in my country, it is essential to strengthen their human resource management and reduce unnecessary employee turnover to achieve product stability.
Machinery: Production capacity, equipment maintenance, spare parts, etc. When a company receives an order, it evaluates the order to determine the best and most cost-effective machines. This includes the purchase of spare parts and routine maintenance.
In this regard, foreign companies from Europe and America typically have dedicated project personnel and cost control staff to conduct cost accounting, aiming to achieve maximum results with minimal expenditure.
For machinery procurement, these companies invest heavily. However, they also maintain strict standards for subsequent maintenance, meticulously adhering to requirements for easily worn parts.
In contrast, while small and medium-sized enterprises (SMEs) in my country may sometimes purchase advanced machinery, their management of subsequent maintenance and easily worn parts lags far behind those of foreign companies.
Materials, the material components that form the product, should be qualified or processed to meet product requirements to avoid product defects caused by raw material issues. In manufacturing, raw material costs account for a large proportion of total costs, generally exceeding 60%, and sometimes reaching 90%, making it a primary target for cost control.
Factors affecting raw material costs include procurement, inventory, production consumption, recycling, and quality control. To control raw material costs, companies generally choose stable suppliers. In Japan, large companies like Toyota have established unique long-term cooperative relationships with their subsidiaries and have formed their own corporate groups with other large companies. Material control plays a significant role in determining product quality.
In Europe and America, companies typically have dedicated personnel responsible for raw materials. They have specialized purchasing staff and dedicated engineers and inspectors to control quality, reducing defect rates. Alternatively, they may station personnel at the factory to address material defects during production.
In recent years, it's evident that small and medium-sized enterprises (SMEs) in my country are increasingly maturing in their material control practices, moving from having no dedicated personnel to manage material procurement.
Methods constitute the technical components of a product. A reasonable process reduces product costs and increases the pass rate. In short, a reasonable process combined with correct production operations results in a qualified product. Simply put, methods can be divided into: work instructions, inspection instructions, and machine operation methods.
Work Instructions: Work instructions are used to specifically guide on-site production or management work. Their structure and form depend entirely on the nature and complexity of the work. When writing work instructions, you should treat your employees as if they were struggling; therefore, the methods should be broken down into steps and kept simple. Japanese work instructions are among the most user-friendly, with simple procedures, and are placed where employees can easily see them.
For example, in a Japanese-owned company, I observed a die-casting machine (where a bushing is die-cast inside a bearing). Operators frequently missed placing the bushing, causing product defects.
To address this, they installed a pre-set electronic balance next to the die-casting machine. Finished products flow directly onto the balance. This avoids defective products, although it's more expensive. However, in the long run, humans are more prone to error than machines.
In many foreign-owned factories, production lines are now automated because the probability of unintentional human error is far greater than that of machines. In my country, due to cheap labor, many small and medium-sized enterprises prioritize short-term costs, leading to numerous product problems.
Many companies in my country consider work instructions useless, viewing them as time-consuming and cumbersome. Some believe they've been doing this work for years, can recite the procedures by heart, and could even do it blindfolded. This is a misconception. Work instructions guide the work process; even the best methods require practical application before the instructions can be revised.
Inspection Guidelines
Due to the varying characteristics and nature of specific operations during product formation, the form and content of inspection guidelines also differ. These include inspection guidelines for incoming goods inspection, inspection guidelines for in-process (work order) inspection, and outgoing inspection guidelines, etc.
Regarding...
For inspection instructions, the most important aspect is the creation of inspection tools: as mentioned above, machines are less likely to malfunction than humans. Faithfully executing the sequence of actions reduces unnecessary movements and ensures uniformity.
In Japanese companies, almost all measurements are replaced by simple, intuitive tools. The reason is simple: to make it easy for employees to understand. This controls product defects and achieves zero defects.
For example, inspection instructions use the simplest methods to control defective products, achieving a 100% pass rate.
Machine Operation Methods
In foreign companies, dedicated personnel typically operate the machines, reducing the chance of damage and maximizing machine utilization. In Chinese SMEs, this is not yet well-developed; some companies lack machine operation methods altogether.
Environment
1. Production Environment, also known as 5S. The factory production environment directly impacts operator productivity. Imagine if there's no designated area around the operator's workbench, and tools are left haphazardly-what will the consequences be?
Of course, decreased productivity and defective products. In this regard, Japan is the originator of 5S development, and European and American companies also attach great importance to 5S in their businesses. The worst performers of 5S are Chinese SMEs. They see it as irrelevant to production.
From the above, it can be seen that there is still a significant gap between Chinese and foreign companies in terms of product control concepts.
2. Auxiliary tools are also important (indirect units)
For enterprises, product production auxiliary tools can be divided into: auxiliary equipment and auxiliary materials.
Auxiliary materials: Whether they are raw materials or indirect costs depends on their purpose. If they are used in production and can be attributed to the cost of a specific product, they can be considered raw materials. If they are used by other departments, are wasted, etc., and cannot be attributed to a specific product, then they are considered indirect costs.
To use an analogy, when you apply for a property certificate, you need many auxiliary documents; without even one, you cannot obtain the certificate. The principle is clear: none of these can be missing in the product production process.
Auxiliary equipment: Production auxiliary equipment includes spare parts, etc. In my country, some enterprises frequently experience production stoppages due to a lack of machine spare parts.
