 Performance Appraisal in Manufacturing Industries – Challenges & Solutions

A. Industry background

Manufacturing industries are characterized by complex processes that involve tools, human labor, machinery with an aim to achieve the economies of scale. Such industries build products from raw materials using human labor, machinery, and increasingly automating technologies. Manufacturing processes tend to fall into an operational spectrum with high volume/low complexity production processes at one end, and low volume/high complexity processes at the other. Some of the most significant manufacturing sectors are aviation, maritime, vehicles, chemical, clothing, electronics, heavy machinery, medical devices and tools and dies.

B. Key challenges

While the industry is grappling with low participation rates in performance appraisals across the departments, manufacturing leaders have not been able to make a transition from annual to monthly performance reviews, let alone the weekly or daily frequency required for the most performance-sensitive environments. This has led to manufacturing leaders suffering a lack of actionable performance data for use in optimizing and driving ongoing performance, which can prove costly.

According to proven research, 36 percent of the industry leaders consider operating cost competitiveness as the reason for industry disruption.

In addition, Covid-19 has exacerbated the shop-floor productivity issues that exist within the manufacturing sector, particularly in the high-mix, low volume area of production.

Pandemic-driven global surges in demand for goods have pushed manufacturers into an extraordinary world of constantly pressurized delivery deadlines. Global component shortages, social distancing requirements, and unscheduled plant closures, (as a result of quarantining procedures), have disrupted production workflows. As a result, manufacturing organizations are struggling to deliver critical products to points of extreme need.

As a response to these extraordinary global pressures, Mckinsey Consulting are proposing a new approach to manufacturing, termed active performance management. They argue that APM is more likely to deliver lasting gains in this new normal than current performance management methods which rely on ‘lean levers’ and a narrow focus around productivity and margins. APM promises to be more effective because it excels in three areas where current methods fail to deliver. These are:

• Real-time performance visibility
• Daily performance planning
• End-to-end accountability

Research shows manufacturing organizations that incorporate APM into their operational model generally see productivity improvements of between 30 and 50 percent within 8 to 12 weeks of deployment. At the same time, these organizations see an increase in on-time deliveries and unlock additional capacity.

C. Solutions offered

AssessTEAM is uniquely positioned to help manufacturing organizations move to monthly, weekly, or even daily performance tracking thanks to some of the powerful features within its real-time performance appraisal system.

1. Custom (evaluation) schedules and automated reminders: Quickly define your own evaluation schedules within the system, e.g. daily, weekly, monthly, quarterly, and the system will send out reminders raters to complete evaluations.

2. Real-time performance visibility: AssessTEAM is a highly automated performance appraisal tool that allows small and large manufacturing organizations to effortlessly track and performance appraise thousands of staff in a 360-degree format, using multiple KPIs on a daily basis. Automated and dynamic online dashboards provide enable real-time performance monitoring

3. Centralized data-management (for HR’s to track reviews): Performance and project profitability data is efficiently stored in the centralized AssessTEAM system for rapid access and extraction.

4. End to End Accountability: Library of job-titles and KPIS means you can quickly include all job roles in your performance planning and performance appraisal process, ensuring end-to-end accountability. 360-degree feedback dramatically increases performance visibility and enhances accountability.

Manufacturing and Production KPIs