Why Change What Works?

Mikkel Svold (00:10):

Hello, and welcome back to another episode of Behind Clean Lines, I'm Mikkel Svold. And today, we are tackling the dilemma many businesses are actually facing. And that is, if it's not broken, why should we fix it? And this is basically also an answer to the last episode where we had Nils in the studio, where we talked a lot about agility, and fixing new things, and basically you know looking into the future, and trying to get ready for the future.

(00:36):

But today, we are basically zooming back down on, "Do we need to fix stuff if it's not really broken, and when do we need to do it?" And this is a challenge for many companies. And today, joining us to kind of unpack this topic, we are joined by Philip Skall Hansen, who is the chief production officer at NGI. Philip, welcome here.

Phillip Skall Hansen (00:59):

Thank you very much.

Mikkel Svold (01:00):

And I think just to dive straight in, what is the NGI philosophy behind optimization, optimizing production, and optimizing operations in general? What thoughts go behind that?

Phillip Skall Hansen (01:14):

Yeah, so NGI is placed in Denmark, where we have a fairly expensive workforce. One of our main tasks is to have focus on optimizing in the production, so we don't get too heavy headcount where we are certainly not competitive to the rest of Europe. So, it's a big deal here at NGI. But also we have a lot of different product lines, so we have a lot of machineries that are parallel connected to each other. So, we have a lot of bottlenecks that we focus individually.

(01:48):

So, the whole mindset around optimization is something that goes on in every level at NGI. That is my philosophy. That is what we are trying to do to get the ownership from all the employees, to try and see if we can do small adjustment all the time, to be better.

Mikkel Svold (02:04):

Do you have any, say strategies around... You say small adjustments versus I guess large adjustments? At NGI, would you always just do small adjustments or?

Phillip Skall Hansen (02:18):

No, definitely not. We have a fairly fast R&D department where we do a lot of new products. So, we typically start up with a, if you look at a lifespan of product. Well, we have to start up fairly basis to be able to understand how to produce the parts with a good quality. And as the time goes by when our sales grow, well, then it's the time for us to do things with more than just small adjustments, where we have to look into a bigger picture. How can we do semi-automatic automation on individual parts?

(02:55):

And then as the times go by, well, suddenly we the opportunity to do a big optimization. And again, we focus individually on all machines more or less, since we do not have a long production line that makes all our parts in one hit. So, it's a fairly big job to make the big adjustments, which we do all the time. But with of course the longer scope in the projects from the daily day-to-day operation.

Mikkel Svold (03:26):

And now I'm thinking, if you're in the food producing industry or in the machine building industry, you've been used to building your machines in one way or another, and it basically works. What would it take basically, to say, "Okay, we need to change this?"

Phillip Skall Hansen (03:53):

One of the things that we have a lot of focus on when we are talking about that is, we do not want to have way too much manpower in one specific area. So, we need to break that curve. So, instead of saying, "Okay, now, we grow 10% in this area. Well, instead of hiring 10 extra people, then we need to do something major change. Make a major change in the production setup." Meaning that we need to have new technology, new knowledge in to see, "Okay, how can we do it in a better way than we did last year?"

(04:26):

And this is typically something that we have, actually in all our departments, manufacturing departments where we say, "Okay, we have done..." "NGI is 31 years old now, and some of the machines have been there for the beginning. And now we have more or less all departments where we have changed this mindset." So, we do not just add another employee when we grow. So, now we can do things more automated. But one of the main issues at us is that, it is not standard parts that we produce. So the solutions throughout automation or digitalization is not a standard solution that I can just buy around the corner. So, every time I need to optimize things.

(05:07):

With a big change, we need to start from the scratch to design our own automation sales in the production from the scratch, basically. But we always do it together with the right partner. So, we do not just use one automation partner for example, we use several partners throughout Denmark, always in Denmark, close by, so we can have a discussion over the table, and not on Teams for example. And then each single robotic cell that we have is specialized for NGI. And we do have a lot at the moment, and we have a lot in the pipeline also.

Mikkel Svold (05:44):

And now you say that at NGI, there's this stuff that you actually produce, the components that you produce, they vary quite a lot.

Phillip Skall Hansen (05:52):

Yeah.

Mikkel Svold (05:54):

Would that be the same picture when you look at, say, food production industries or say, machine builders, other machine builders, is that the same picture in general?

Phillip Skall Hansen (06:05):

Yeah, if you look at the machine builders, it is always almost one-off projects they are making. In particular, in Denmark, a lot of the automation partners we have here in Denmark is not standardized solutions that they provide to their customers. So, they also have to think out the whole project from the scratch, in my opinion. Maybe it's wrong, but a lot of them are one-off projects.

Mikkel Svold (06:34):

Yeah. And now how do they know when to innovate and how to optimize, or when to optimize their operations?

Phillip Skall Hansen (06:42):

Yeah, that's a good question. I cannot answer on the machine builders, on how they do that. But what we do here is that, we're always making sure that we have the right partners, even if it's from a small tool in our standing department, for example, that needs a new overhaul, where we then find a sometimes by accident, sometimes by networking, find the right partner. Then he can certainly make a major change for us, which leads us to automation on the later stage.

(07:15):

So, from my point of view at NGI, one of the things that we have learned the last couple of years is that we have to focus from, it is not just the robotic when you're talking of automation and so on. But it's often all the way from the bottom that we have to focus. From the tooling, from the old machine, and then all the way up to digitalization. And all the other buzzwords, Industry 4.0 and so on. But it starts from the bottom basically. When we're talking assets, machines, robots and so on, it starts from the bottom, but it also starts from the bottom when we are trying to drive this change throughout the production.

(07:54):

So, we have to have all our hourly paid employees with us, so we don't have the resistance for the change. So, this is also something that we are really focused on is getting the ownership to the people, and then train the people in the new optimized process. Yeah.

Mikkel Svold (08:15):

Do you have any specific example of when you did this?

Phillip Skall Hansen (08:17):

Yeah, we are currently undergoing a big change in our vulcanization department, where we are vulcanization with rubber, where NGI started 31 years ago. So, basically we have been molding rubber for 31 years without major change. We have done several changes to cope with the growth, but now for the first time in 31 years, we can do a major change. And this is all the way from the raw materials that we use that have been optimized to the machines, to the robotics. But now also, we had to involve the people that have been standing at a manually operated machine for many years. We have a long, what's it called? When people have been here for a long time?

Mikkel Svold (09:08):

Yeah, they've been here for a long time.

Phillip Skall Hansen (09:09):

They've been here for many years. So, the guys that we have in the production have been here for plus five years, a lot of them. And some of them have been here for the whole company's lifetime, plus 30 years. So, they've been doing the same all the time. And now suddenly there is a big change coming up, and they have to accept this. But this is where we use quite a lot of focus in my team in the production, to tell them, "Okay, you're not losing your job even though there is coming a robot."

(09:35):

But that robot means that we can keep the production in Denmark, still earning good money for the company, even though we have expensive Danish labor. So, our goal would be to say, "Okay, we want to grow with the existing manpower that we have today. But without hiring new people, we can keep up with the growth with more automated processes."

Mikkel Svold (10:05):

I want to come back to talking about introducing change, and introducing, I guess optimizing operations. When do you know that it's time to do something? What are the triggers that you would rack on to say, "Okay, now we actually need to do something to optimize our production and our operations?"

Phillip Skall Hansen (10:26):

Yeah, that could be several factors. It could be quality issues, where we say, "Okay, if we do not change anything, we would face quality issue when we see a rise again in the growth, that could be one of the main topics to do changes." But often it's because that we are having, again, too much labor in one department, where we can see, "Okay, even every six months, we need to hire one new people to keep up with the short delivery times that NGI has." We are working with exceptional short lead times, so that demands a lot on our workforce, and that takes often quite a lot of people.

(11:11):

So, for us, what we are doing all in my team is that, we are very present, we are focused on this task, actually it's very important for us, it's a strategic subject. But what I try to learn, the people that I have, and also for myself, we use the time on the floor. So, we go around, talk to the people, see what they're doing. So, we always have this feeling around what's happening. So it's not a spreadsheet, it's not data that we are looking into and think we take a decision out of that. No, it's a combination of data that has been proven in the real world also. And then we can do the discussion and make the changes.

Mikkel Svold (11:51):

That must also create quite a lot of dilemmas because, again, you look at a production that's actually working right now, and then you want to implement something or a big change. Can you try and talk about some of the dilemmas that you meet in choosing whether or not to change operations?

Phillip Skall Hansen (12:08):

Yeah. So when it works, why will I touch it?

Mikkel Svold (12:11):

Yeah, it's not broken.

Phillip Skall Hansen (12:15):

It can always be, what can you say, an issue if you touch something that works, and then you suddenly think you have the answers for everything. You make the change, and then suddenly the process doesn't work, or the machine doesn't work or whatever it is. So, again, I think we have been fairly good on this since we are present. Again, we know why is it working, and why it's not working, and then we can do the changes out of that.

(12:41):

And sometimes also, we say, "Okay, we don't change it, if it works." It depends really on the production, on the process, but also on the product. Is this something that we want to invest in in the future, or is this something that we say, "Okay, we have the product, we don't really want to invest a lot, so we have focus otherwhere?"

Mikkel Svold (13:01):

Yeah, because like I introduced in the very beginning, Nils Finmark, who was here in the last episode, he was talking a lot about future-proofing your organization, future-proofing production. Also with the special focus on the food production industry. So, hygienic manufacturing. Now, he was saying you need to change in order to stay ahead of competition, in order to stay relevant, in order to basically stay alive in five years. Is that pressure for development, and change, and transformation, is that always beneficial? Is that always a good thing?

Phillip Skall Hansen (13:43):

It's a hard question. But I think from my point of view, when we were talking about the operations, we for sure have to be agile. As Nils said, we are following the commercial side of NGI quite closely. So, whatever works for our customers, we will adapt in the production.

(14:05):

Yeah, I think with the customer focus that we have a lot here at NGI, that takes a lot of focus in the operation. And if we look on the PLC, product life cycle, there is the tendency that... Of course in the beginning, as I said earlier in this interview, is that in the beginning of a product, there are different focuses than optimization. And because we have a lot of different product variations within each individual category, it is often hard for me to make one fully optimized machine to begin with. We need to see what are the customer needs, and where do we sell? Which specific items do we sell? And then we can focus on optimization on those items. So, yeah, we are really joining around the commercial side of NGI in their operation. So, it is not the operation that NGI that demands to sell what they have to sell. We do whatever sell wants, and then we fix it.

Mikkel Svold (15:07):

And doesn't that create a lot of misunderstandings and tension, and...

Phillip Skall Hansen (15:13):

In between who?

Mikkel Svold (15:14):

I mean, between what is sold. And then you come back to production and say, "Okay, we sold this part. Or for machine builders, we sold this machine, can you produce it?" And the answer is basically, "Nah, no, we can't."

Phillip Skall Hansen (15:28):

We can always produce. No, but this is what they really said the NGI side, our competitors, that we do whatever the customer wants. We can do it. We have proven it for a long time now, and we can do it in a cost-efficient manner. So, this is our whole setup at NGI. So, yes, it creates some tension, but this is what whoever works in the operation side of NGI knows and has committed to. So, we do the change over at the machines, we do the optimization wherever we need it in order to deliver to the customer what he wants, and when he wants.

Mikkel Svold (16:03):

Yeah, yeah. I think now just wrapping it up. For companies, kind of grappling the decision of whether to optimize now, whether to keep what they already have because they know it works. And also to kind of still push on this journey that Nils was talking about following the market, staying agile. What advice, or I guess, guiding principles would you offer?

Phillip Skall Hansen (16:33):

Yeah, so it's quite simple for my perspective is, stay present to them. In all-

Mikkel Svold (16:40):

Yeah, what does that mean?

Phillip Skall Hansen (16:41):

Yeah, what does that mean? In my opinion, you have to be close by the production. Or if you are not able to do it yourself, then you need to have some good people that are present. They're looking at the people, the machines, and also can understand the data behind it, and then make the right decision out of that. But basically you have to be aligned in all aspects of the company. So, sales and operation are really-

Mikkel Svold (17:07):

It's not an easy task, is it?

Phillip Skall Hansen (17:09):

Definitely not. Definitely not. But it is necessary to take the right decisions. You can easily take a decision, but to make the right decision at the right time, that is focused.

Mikkel Svold (17:19):

Just real quick, how do you actually do that? How do you keep the entire organization on the same track? Not just the right track, but also on the same track? Is that by weekly meetings, or how do you actually do it?

Phillip Skall Hansen (17:32):

No, as Nils stated, we are agile here at NGI. So, we don't use a lot of time on meetings and so on. But all the doors are open, we are flat organized. So, if a salesperson come into my office and say, "Philip, I have a good idea, I think this is where we have to focus." Then we can take a decision over the coffee in the morning, and that really makes NGI, NGI.

Mikkel Svold (17:54):

I think we should let that be the last words. That's a really good wrap up. Philip Skall Hansen, thank you so much for stopping by to talk about this.

Phillip Skall Hansen (18:01):

You're welcome.

Mikkel Svold (18:01):

It was really interesting to hear basically what's pretty close to a case story about how to keep operations optimized, I guess. And of course, to you dear listeners, if you enjoyed this episode, and may be also others you've already heard and want to stay updated on future ones, please hit the subscribe button on your podcast platform, podcast app, or wherever you listen to podcasts. It will really help this podcast spread around and spread the word. So, yeah, please do hit that like button, subscribe button. And also if you feel like it, go give us a rating, star rating. That's it for now. Thank you so much for joining Behind Clean Lines, and until next time.