Sure, skilled workers, efficient equipment, and thoughtfully-designed processes are necessary for achieving desired manufacturing performance. But they aren’t enough. You also need an operational governance model.
It can help you make decisions, delegate responsibilities, escalate problems, and transform priorities into quantifiable outcomes in a structured way. Otherwise, you might grapple with repetitive production issues, slow decision-making, and inconsistent implementation of corrective actions.
With a governance model, you can decide how to direct, oversee, and enhance operations at different levels. It’s especially useful when running multiple sites. This way, factory managers enjoy the flexibility to handle local requirements around regulations, customers, workers, and machines. And corporate leaders get to ensure network-wide consistency.
Essentially, a suitable governance model links organizational strategy with what happens daily on the shop floor. Besides improving accountability, it powers operational excellence.
What Is an Operational Governance Model in Manufacturing?
It’s a framework you use for defining operations management, decision-making, performance monitoring, and accountability maintenance.
Key Aspects of Operational Governance
Say, you wish to reduce unplanned downtime and scrap while improving on-time delivery. Though your goals are clear, individual facilities don’t know what to prioritize, who will address performance deterioration, or how to review progress.
Operational governance can answer these queries, since it encompasses:
Decision Rights
These define who’s in charge of operational decision-making, change approval, resource allocation, or exception authorization.
Accountability
This area clarifies ownership related to performance results, processes, corrective steps, and improvement initiatives.
Performance Management
It revolves around indicators to be monitored, their definition, and frequency of review.
Escalation and Troubleshooting
This area focuses on what transpires when a deviation remains unaddressed or surpasses a team’s authority.
Continuous Improvement
It defines how effective improvements are confirmed, documented, and shared.
Governance vs Standard Operating Procedures (SOPs)
Governance isn’t the same as having SOPs.
Procedures detail how work needs to be carried out. Governance decides how standards are ensured, exceptions tackled, and how you respond to gaps between expectations and actual performance.
Clarify Decision Rights and Responsibility across Levels
Establishing who takes which decisions is integral to operational governance. Else, vital issues might remain unfixed. So, consider distributing responsibilities across:
Executive Leaders
Executive leaders should outline operational principles, standards, strategic priorities, and performance-linked expectations that must hold true across the network. These might include key KPI definitions, quality expectations, safety requirements, and risk escalation rules.
Regional/Business Unit Leaders
They are in charge of coordinating execution across sites. They should spot repetitive performance gaps, address problems that cross factory boundaries, and facilitate the exchange of successful practices.
Plant Managers
Plant managers are responsible for coordinating workforce priorities, quality, supply chain, maintenance, and production. They also ensure the alignment of local decisions and execution with broader organizational aims.
Department Managers and Supervisors
Within their areas, department managers and supervisors track performance, look into deviations, and assign solutions. They also convey unresolved issues to the right decision-maker.
Frontline Employees
Operators are often those who first detect unsafe environments, quality deviations, equipment malfunctions, or process improvement opportunities. With suitable authority and proper reporting channels, they can address the above.
Note the Difference between Accountability and Approval Authority
For instance, a supervisor might be responsible for handling a recurring stoppage. However, when it comes to approving a big equipment investment, they might lack authority.
Hence, prompt response and escalation should be the supervisor’s job. And the investment decision must be made by the appropriate manager.
You can also leverage a responsibility matrix for major operational processes. It will identify the:
- Person responsible for the result
- Roles accountable for execution
- Specialists to be consulted
- Leaders to be informed
This way, decisions won’t get stuck in between departments. And you can concentrate on truly demanding problems.
Set Up a Common System for Performance Management and Review
If different departments assess success differently, governance cannot be effective. For example, defect reduction might be of prime importance for the quality staff. And machine availability might be a concern for the maintenance team. While both perspectives are crucial, independent management of these goals can trigger conflicting decisions.
What to do?
Pick KPIs In Line With Overall Factory Performance
A smart governance model constitutes a balanced group of operational indicators, linking department-level activity with overall plant performance.
For starters, you can use the SQCDP framework, covering:
Safety: Near misses, incidents
Quality: First-pass yield or FPY, rework, scrap
Cost: Production expenses, overtime
Delivery: Schedule attainment, timely delivery
People: Critical skills gap, training completion, absenteeism
The exact indicators depend on your operating environment, products, and company strategy.
Standardize Metrics across Facilities
Say, downtime is estimated at one site from the moment a machine halts. At another site, certain stoppages are excluded. So, you cannot compare their outcomes fairly. In fact, you might read a plant’s requirement for help incorrectly.
Hence, standardizing metrics is essential for interpreting operational data accurately and strengthening governance.
Don’t Force Every Management Level to Review the Same Information
That’s because every decision-making level cares about different things.
For executive and plant leaders, it’s typical to worry about at-large trends, resource-related requirements, and risks associated with materials. Department leaders require a decent view of cross-functional issues. And frontline employees need thorough information (shift-specific) for swift action.
How to Build a Dependable Escalation and Troubleshooting System
With a performance indicator, you can figure out what is wrong. But the issue won’t get resolved automatically. So, the operational governance model must explain the next line of action.
Outline Clear Rules for Escalation
Imagine – a production line stops repeatedly. The frontline worker reports it and the supervisor examines the problem. The maintenance team then steps in. But if the line encounters another stoppage, replacing certain equipment components might be necessary. Or you might have to revise the preventive maintenance plan.
But without a well-defined escalation pathway, different teams might tackle the event differently. In between shifts, information might disappear. Or you will end up treating the problem’s symptoms repeatedly instead of addressing the root cause.
However, a structured escalation method involves:
- Identifying deviation
- Assessing its severity
- Assigning ownership
- Investigating cause
- Carrying out corrective action
- Verifying result
- Updating relevant standard if required
Also define thresholds. For a minor problem that the frontline team can safely fix, the plant manager shouldn’t have to intervene. However, a major quality or safety hiccup might need to be escalated.
Use Structured Methods for Solving Problems
Teams can leverage the Five Whys method to examine a problem’s underlying causes instead of sticking to the first visible explanation. Plan-Do-Check-Act (PDCA), on the other hand, offers a structured cycle for change testing, result assessment, and solution standardization.
Also ensure your governance model specifies:
- Speed of acknowledging critical problems
- When to move unsolved actions to the next decision-making level
- What evidence is necessary before closing an issue
Remember – every corrective action must be linked to a responsible individual, a deadline, and what successful completion means.
During daily management meetings, review recurring issues and overdue actions too. You can build an operational history that helps teams to spot patterns instead of addressing the same issues repetitively, from scratch.
Balance Local Plant Flexibility with Enterprise Standards
While a governance model must offer consistency, it shouldn’t assume that all plants have the same operating conditions. Variations can exist in terms of product families, equipment, regulations, or customers. Hence, a process that works seamlessly in one factory might have to be adapted before being introduced somewhere else. What’s the solution?
Keep Non-Negotiable Standards Separate from Local Practices
Enterprise-level requirements should cover whatever’s mandatory for comparable, reliable, and safe operations. You can include KPI definitions, controls linked to quality and safety, requirements for tracking actions, escalation conditions, etc.
In areas where distinctions are reasonable, retain local flexibility. For instance, a plant might require a specific schedule for maintenance owing to some special equipment.
However, the governance model must clearly define how to request, appraise, approve, and document exceptions. Else, temporary workarounds can turn into unofficial standards and network-wide inconsistencies.
Make the Best Practices Exchange Repeatable
A plant performing well might unlock a better changeover process or a smarter minimization hack for recurring defects. Hence, your governance model should help:
- Assess the improvement
- Check if it aligns with standards for quality and safety
- Decide where else to apply it
Incorporate Operational Governance in Daily Work
A governance framework is only effective when employees leverage it during actual production, consistently.
Ensure a Regular Management Rhythm
Team meetings held daily must review performance vis-à-vis expectations, spot abnormalities, and delegate prompt actions. Departmental reviews should deal with unsettled issues.
Plant leadership reviews must revolve around resource constraints, major risks, repetitive losses, and decisions beyond departmental authority. And corporate reviews should focus on strategic priorities, trends across the network, and best practice-sharing opportunities.
Also, such meetings must be connected events.
Evaluate Governance Periodically
Evaluate if decision-making speed has improved and vital actions are being wrapped up punctually. Check if there are fewer recurring problems and factories are applying specified standards consistently.
Keep a tab on governance health indicators too, like:
- Time to fix key issues
- Overdue actions
- Escalation response times
- Rate of recurrence
- Proportion of verified improvements embraced by relevant sites
Support Execution with Digital Tools
Digital tools bring action owners, meeting records, performance indicators, escalation pathways, and improvement histories together in a unified environment. You also rely less on physical boards, emails, and spreadsheets this way. They anyway compromise cross-site and cross-shift visibility.
However, technology shouldn’t substitute a well-designed governance model. So, first be clear about decision rights, accountabilities, review routines, and rules of escalation. You can then digitize and refine them.
Operational Governance Model: Key to Strengthening Accountability and Scaling Excellence
What’s a successful model? It’s a bridge between manufacturing strategy and the routines, responsibilities, and decisions shaping everyday performance.
The model doesn’t just outline consistent KPIs and decision rights. It also structures the path of escalation and balances organizational standards with location-specific flexibility. And it integrates effective improvements into normal operations.
However, building a robust governance model is challenging with whiteboards and spreadsheets. Fabriq helps with its smart, digital touch. You can easily structure tier meetings, standardize shift handovers, and track problems and actions. Also ensure visibility and accountability at all leadership levels across the network.
Connecting governance with execution and scaling operational excellence just got simpler.
Here’s how Fabriq boosts your governance model’s visibility, applicability, and repeatability.
