Why some factories are more productive than others.

Everybody wants to boost factory performance. Before managers can take meaningful steps to do so, however, they need an accurate way to judge what good performance is and to compare performance among facilities. The trouble is, the measurement systems in place at many factories fail to tell managers what they really need to know. The authors studied 12 factories in 3 companies over time. They devised a new measuring system called total factor productivity (TFP) to gauge each plant's overall efficiency. They then identified the practices that, when managed right, really make a difference: investing in new equipment, reducing waste, and cutting work-in-progress inventories by solving the problems that produced them in the first place. Perhaps the study's most interesting finding is that what managers do to mitigate or fuel confusion within factories has a profound impact on TFP. Constantly changing the way things are done--materials used to make a product, manufacturing procedures, product specifications--disrupts operations, discourages people, and impedes learning. Good managers limit the number of changes introduced at any one time and carefully handle their implementation. Even spending big money on hardware fixes will not help if a factory's processes are out of control. There is no substitute for mastering firsthand the details of a factory's operation and constantly pushing to make it run better. Creating order and promoting understanding of factory processes make for a powerful combination--and a powerful lever on competitiveness. [ABSTRACT FROM AUTHOR]