In teaching workers how to do their part of the production process, Michael Sanders uses some of the same principles I’ve used for decades in language teaching. Meet the students where they are, not where the university catalogue says they should be, take everything down to the simplest level—including advanced concepts—and start there. But Mike has ideas which could transform the Filipino economy.
We spoke over Facebook Messenger while he was at home in Abu Dhabi and I was home in Tagaytay.
Why don’t you start by telling us why you came to the Philippines?
What brought me to the Philippines was I knew people who were able to manage a business with a lot less effort than was required in America. At home I was the salesperson, bookkeeper, worker,scheduler, fitting officer—everything. In the Philippines you can hire people to do these jobs, which frees up a lot of your time. I had friends who had large businesses but didn’t seemed to work very much, or at least to have control over their schedules It’s much easier to start a business in the Philippines because, apart from the cultural differences, there are fewer hurdles to get over.
You were doing engineering, and you also had inventions, right?
At the beginning I had a cabinet shop. I built high-end, customized kitchen cabinets and fixtures. I did some senatorial offices, kitchens for wealthy people and a beauty parlor. (Link to Mike making a cabinet in ten minutes)
I also had a lot of experience with industrial automation. When the word got around that I had a “well-oiled machine,” people started turning to me for help, resulting in the production consulting business I told you about years ago. All my clients were manufacturers of furniture and cabinetry. I was also involved in robotics, sheet metal fabrication and almost all types of automation-related manufacturing processes.
It would be a stretch to call what I did “inventions.” I found solutions to the unique problems of my clients, who were using high-tech machinery while taking advantage of the low cost of labor. That’s a hybrid situation—a lot of humans around automation and robotics and CNC machines, which are like the Swiss army knives of manufacturing. (Link to how it works)
In America or Germany, handling the materials would be automated, but in the Philippines it’s cheaper to have people loading and unloading the machines. My specialty was managing the machines’ downtime by automating the people. I just adapted the systems I’d seen in the past, modifying them to work better in the Philippines. (Link to a new machine arrives in the shop)
What you have there is a very different ballgame. There’s a huge gap between the labor-intensive Third World systems and high-tech First World systems, with nothing in-between. Compromises have to be made. Labor is cheap, but you still have to get the technology to the 21st century. Otherwise, you’re not competitive, so you can’t do it at all.
I use Germany as my fall-back example because I think it’s recognized as the king of manufacturing and high-tech production. I’ve seen many German engineers and technicians coming in, spending a week with a company and accomplishing nothing, absolutely nothing. It’s not the fault of the engineer or of the Filipino workers. It’s a lack of communication between the two.
The idea that we’re going to do it the Western way because it’s better, that idea gets old real quick, and nobody wants to hear it. It was painful to admit to myself that, although I may have been an expert in my field in America, I had a lot to learn in bringing my experience to the Philippines. It did not transfer directly. I had to accept that my clients were already successful or they wouldn’t have been able to hire me. I was an expensive investment for them.
At the same time I had to push for change, which nobody wants although they may think they do. What’s needed is a lasting improvement. I saw many foreigners come in and implement a lot of difficult and complicated changes to improve the production process. Then they would leave and everything would go back to the way it was before. Basically, without the continuous presence of those engineers the changes wouldn’t last.
I’ve heard that about several different projects. Why is that?
Suppose the foreigner or the paid expert is on site and is implementing the new ideas. The CEO, the manager and others are involved and the resources are available. Suddenly the light is on. The change under consideration gets a lot of attention, and it’s treated with a sense of urgency. Then the expensive consultant leaves, and the spotlight is turned off. Then what happens? That’s the test of the expert’s solution. If the workers go back to doing what they did before, did they ever consider the solution a good idea? They may have just been doing what they were expected to at that moment. That ends as soon as they don’t have to worry about it anymore.
You’ve probably heard that the workers were afraid that with an increase in productivity they’d lose their jobs or their hours would be cut back. I don’t think that is the overt motivation behind it.
I’ve heard that, but that struck me as being more of a ‘Western explanation.
I’ve heard it described most brutally by Filipinos. They say the workers are lazy, they don’t want to have an increased output and they want to keep the status quo because that’s what employs them—something like that. The workers are supposedly worried that increasing productivity means they’d lose their jobs. But the companies are paying for these improvements because they need them to avoid over-stressing their manufacturing process. Increasing productivity doesn’t mean less work, it means more money. Whether that money trickles down to the workers is a different story which I won’t get into because it just makes me feel bad.
I think the real culprit is that the workers never signed off on the “improvement,” that nobody consulted them, but they were being forced to go along with it.
Yeah. That sounds likely.
To avoid that pitfall, I’d spend a day or two, as long as necessary, working side by side with the laborer, even doing the job. They might have thought I didn’t understand, but I’d work at it long enough to discover on my own what the problems were. I’d write them down, figure out what to do and call a meeting with everybody involved. I never discuss a problem unless I have a solution already.
I imagine they were pleased to have a friendly, Tagalog-speaking American rolling up his sleeves and working along with them, rather than prancing around with a clipboard.
Yeah, well…The workers might have known exactly where the problems were but been unable to articulate them. Or thought no one would listen. Or maybe they saw the problem but didn’t know what should be done about it.
I realized that I needed to suggest changes that were self-sustaining within their organization. If I forced people outside their comfort zone with changes that were too drastic or too foreign for them, they’d revert to the old way. That doesn’t make clients happy. They’ve spent a lot of money without getting what they were hoping for.
So what’s the solution?
I hate to say it, but I think of it as related to information technology, getting information into the hands of the workers when and where they need it. Suppose you’re manufacturing widgets which are each composed of twenty parts, each having twenty separate operations, and no three widgets are the same. That’s where I’d step in to help. I’d create customized reports, basically PDF documents to be printed out and stapled together and then distributed to the workers. Each worker would have a different package of instructions that they would understand: where a hole has to be drilled in this part or what operations have to be performed on it. The goal is to eliminate stacks of parts piling up. Typically, giant stacks of parts accumulate, and at some point they have to be unstuck and re-sorted, and the process started all over again.
If you prevent that, you can keep the process flowing constantly, to the point that the workers don’t understand the parts they’re working on. They don’t know what assembly it’s going into, and they don’t need to know. They just need to focus on the part in front of them. That’s IT, getting the information in the right hands at the right time.
That worked. We even experimented with going paperless by using iPads or android tablets. We’d bolt one to the side of each machine, and it would be updated with the latest information about what the workers were doing at that moment.
This isn’t a new idea, but I had to simplify it, distill it down to the degree that was compatible with the Philippines. And that while making it cheap and keeping it serviceable by the internal departments within that company. Most of these were medium to large size companies with hundreds of employees and their own IT and engineering departments. They had people who knew how to write programs. I had to keep the solution within their ability to maintain it.
Now, there are off-the-shelf software programs that do all this, but they are incredibly expensive,, like a million pesos and you have to hire expensive people to customize and operate the software, which is another million or two. Actually, before I came in the clients I’m thinking of had bought the software and hired the engineers, and it didn’t work. Two years later they gave up and went back to what they’d been doing before, using a paradigm from the 1980s or 1990s.
This also increased accountability. Once you start feeding specific instructions to your employees you monitor their progress in a very direct way. So no more excuses when the task wasn’t done on time because the holdup is obvious.
Saying this makes me feel like a scrooge or something, but it’s also a way of getting the workers’ complaints to management and vice versa. Otherwise, each side is always blaming the other. Because I was an outsider I could be impartial and truthful. I was just looking for the problem and trying to find a solution.
This is the last way I want to describe my work, but the truth is a lot of it was developing a database. Think of an American 1090 tax form and how it’s designed to take in and deliver information. The individual forms are simple and meant to be filled out in real time, not stored for later use. Then they get checked on the production floor.
I’m trying not to make an infomercial for what I do. I can’t claim a 100% success rate. I do know that a lot of my clients today are still using the system, the procedures, methods or techniques that we put in place together five years ago.
Change can’t come piecemeal. You have to make a plan and then implement a structured, logical change to a process. You do it with a cycle, a few batches or maybe a week’s work, then go back and find out what worked and what didn’t. You fine-tune it or throw it away and start over again. If you don’t do that, it’s likely that your changes will slip back to zero.
The situation has to be viewed holistically. Yes, I described IT as the most important part, but so is having a printer—and printer ink and printer paper. Maybe having a printer on the shop floor is part of the solution, which means having a computer there too, as well as electricity and IT cables. You need folders to put the papers in because printed papers in a dirty, greasy environment don’t last long. The solution involves having a broom available in the right place, having the right flavor of grease, making sure the right size of screwdriver or an Allen wrench always available where it needs to be.
The European expert who comes from a clean, air-conditioned factory has no experience with sweat dripping down on the paper or a pen not working because the paper is greasy. And anyone who works with their hands for a living knows that pens don’t write on greasy paper. You need to use a sharpie or a marker.
Often the work environment is really bad. There’s no way I’m going to convince the owner to add air-conditioning, but maybe proper lighting if management is presented with a buttoned-up solution. “We need a roll of LED strip lighting and two 240-volt power supplies. You can buy them at this place for 2300 pesos. It will make a big difference.” Suddenly the money’s available.
I’m a big fan of making an explanation with graphics, where there’s no language barrier. Complex ideas can be represented with a few captioned images. The explanation gets laminated in plastic and stuck to the side of the machine. Or sometimes the explanations run to ten or twenty pages which go into an industrial 3‑ring binder and bolted to the machine. The worker can then flip through a chart of clip‑art to follow the process and then sign it with a dry erase marker. Then at the end of the day the supervisor can walk by and check that each person has done their work, like the chart in McDonald’s bathrooms with the signature of the person who cleaned it last.
If you put that much detail in your solution, the chances of its sticking are much better, but it requires a dramatic increase in the amount of work needed from the facilitator or expert. I spent many long nights at a computer stealing clip-art to put together easy-to-read instructions, like the ones for assembling a piece of IKEA furniture.
If I’m talking to the manager I might say, “We can track the productivity of individual employees and see the bottle-necks and develop a quota, basically for what we expect to get done, which helps us plan for tomorrow’s batch and next week’s batch. Next thing you know you are able to accurately and consistently schedule production a month or two in advance.” It’s very powerful.
At a certain point, the workers understand and appreciate that I’m trying to make their job better, and I’m trying to elevate their effort up to the management level. That’s the flip side of monitoring and accountability. I am putting the workers in a situation where their role has become more important. They’re no longer just members on a spreadsheet or just hours on a time sheet. They add value to the process—it’s called “value added”—and the process becomes visible.
In the overall system it often becomes apparent who is not adding value. They tend to be managers. Those people are the ones who are going to lose their jobs because they hadn’t been managing a process, but managing people. When the workers are receiving their instructions in a very specific format and in the context of their responsibility, they don’t need to be cattle-prodded anymore. The workers can clock in, go to their stations and start doing their jobs. The information they need about the day’s work has come out of the printer and is waiting for them at their work stations.
I don’t know how unusual what I’m describing is. I’ve seen videos of manufacturing in Shenzhen, China where they’ll have a cutting edge, high-tech German CNC machine surrounded by an army of Chinese people feeding the machine. You talk to any manufacturer of high-end machinery and they tell you their number-one market is China. The Chinese buy good machines when they need them.
In Germany that high-tech machine will be surrounded by conveyor belts and laser scanners and robots with arms picking things up and moving them around. This is what they call “lights out manufacturing” because at five p.m. when the last guy leaves the factory he turns the lights off. The robots don’t need lights. When everybody comes back in the morning the machines are still going. It’s an extremely expensive paradigm. When anything goes wrong at all, you lose tons of money. The price of the electricity alone is impressive, whereas in a Third World country most of the machinery is fueled by rice. You just give the workers a lunch break. The high-tech machines are only doing what the humans can’t do.
Mixing robots and human power is still not considered out of date in places like the Philippines. Filipinos already speak, read and write English, which is a big help in the international business world, right? Filipinos are very tech-savvy. Believe it or not, you could take the poorest, least educated Filipinos off the street and teach them to be decent CNC operators within a few weeks. Once they understand that this is basically a fancy cell phone, fundamentally no different than what they play video games on, the ball gets rolling real fast. You don’t have to start from scratch. You can put together a very robust manufacturing process quickly.
Some people will argue with me on this point, I believe that people are more versatile than robots.
Of course. Look at language.
The lights-out manufacturing I described in Germany is only good for one process. Changing from making blenders to making toasters would mean starting from scratch with all new machines. That’s millions of dollars. But if you have a handful of CNC machines—again, the Swiss Army knife of manufacturing—and a good human workforce, that’s versatile. You can go from making blenders to making toaster ovens to making guitars to making furniture. It’s the same basic building block of machinery. You just move the machines, maybe build new in-feed and out-feed tables and modify your IT schema to reflect the different manufacturing processes. But that can be done in a matter of weeks or even days. Or switch from tennis rackets to a space ship part. They’re very similar, and the equipment is all the same. The less automation you have the easier it is to adapt to the next thing.
In these markets, like the Philippines, you could have a new kind of job shop. You may have heard of Indigogo or KickStarter, Crowdfunding websites that promote a new product or new idea. .A shop with 20 to 50 employees and ten machines can produce anything from a vacuum cleaner to—here’s an idea—a web-connected tennis racket that’s interactive and can monitor the force of your swing in real time and make automated updates on Facebook. Somebody’s going to buy that tennis racket that I just invented.
In the Philippines shops could be making the first 100 prototypes of new products. That’s a huge market. The 100 prototypes are very expensive. The next 2,000 could still me made in the Philippines. But once you start hitting ten thousand, then you go to China. With large quantities the profit margins are tiny. The Chinese companies are making money from the raw materials, not the labor. One of the advantages of the communist business model is that the money can be moved around.
I would love to see countries like the Philippines, Vietnam and Malaysia taking advantage of the resources they have, mixing the workforce with high-technology and connectivity. I can install a CNC machine in the Philippines to make products for someone in California. The distance makes no difference. The operator speaks English, the managers speak English, there’s a real time connection live-streamed to a browser back in California. The product can be shipped off days after it’s finished. That’s powerful.
It would be wonderful if the Philippine government could get its act together and support a prototype industry It’s not a difficult idea to sell, as I know because I dipped my toe into the market.
What I did in the Philippines is different from what I’m doing now in the UAE, but I’ll wait for you to drive the car in that direction.