Communication Structure with the DMS

A quick glance at a DMS (daily management system) makes it look like a Lean toolbox.

To ensure the successful integration of these Lean tools, “bonding agents” need to be put in place for the daily management structure to persist.

But let’s take a step back and ask the right questions.

First, it is important to implement a dashboard for the team leaders of the production department. How can we make sure the data fed into the dashboard generates value? How can we coordinate communication based on a bottom-up or top-down approach? How can we communicate the business strategy using these dashboards?

To understand all this, we will analyze the communication structure that needs to be implemented to support DMS activities. At Createch, taking account of such elements has been a key factor to success for our clients.

What Is a Communication Structure?

When we read “communication structure,” we often think of “marketing.” We sum up communication by saying it’s basically talking to each other. According to the Merriam-Webster Online Dictionary, communication is a process by which information is exchanged between individuals through a common system of symbols, signs, or behavior. It is also a verbal exchange between a speaker and a hearer, where the former expects a response from the latter.

In a larger sense, communication is a message passed from one person to another.

Structure, for its part (according to the Merriam-Webster Dictionary), is something arranged in a definite pattern of organization.

Communication structure is therefore a coherent system that allows the passing of messages from one person to another (or from one group to another).

How can we analyze and subdivide a company to determine its different levels of communication?

In order to deliver the right message to the relevant groups without polluting the available bandwidth, it is important to create mutually communicating levels within your organization.

The essence of a DMS is to enable the daily monitoring of issues, production plans and activities, and to seize opportunities, all the while aligning with the corporate vision.

Tier-Based Approach 101

In order to create a stable communication structure, it is preferable to reorganize the company in tiers. Each tier corresponds to a level of exchange and is based on a dashboard of indicators, and on either a bottom-up or top-down communication approach.

The Toyota system proposes an organization in three to five tiers. Each lower tier sends information and results to the tier above it. This is what we call bottom-up communication. In contrast, we refer to the top-down approach when each top tier shares targets, predefined during a corporate vision statement exercise¹.

Tier 1 encompasses work cells or sectors. It includes the sector’s employees and their team leader. At tier 1, the team leader is the owner of his communications meeting which he organizes at the beginning of each quarter, and his dashboard of indicators, which he feeds with data several times a day.

Tier 2 is at the department level (can include several sectors or cells). It includes the team leaders of each sector, and the supervisor of the department. Just like in tier 1, the higher-ranked officer is the owner of his communications meeting (taking place right after that of tier 1), and his dashboard of indicators, which merges the information from each team leader’s dashboard, at the supervisor level.

Tier 3 is at the company or plant level, depending on the size of the organization. Tier 3 brings together the results of the departments, and merges them with the results of all supervisors. Note that this structure applies to all types of companies (microbusinesses, SMEs, big businesses, etc.) and all industries (manufacturing, distribution, services, private or public).

The stakeholders of the highest tier in your organization will meet before a dashboard of indicators (either physical or virtual) combining the strategic priorities supporting the corporate vision that was previously defined.

How to Identify the Targets of the Organization

The two following cases can be characteristic of the way your company is currently organized.

• Case #1: You have not clearly stated your corporate vision, mission and values. The few indicators in your organization are only used to read financial results often expressed in dollars. Your employees know there is a company culture, but they don’t understand or have not seen the actual indicators.
• Case #2: Your corporate mission and values have been clearly stated. You have already implemented many indicators at several levels in your organization. You even automated specific indicators with your ERP, or with a tool such as Power BI or Tableau. These indicators are shared each month with all employees.

In both cases above, the bottom-up approach is non-existent. In case #1, the indicators expressed in dollars don’t “speak” to shop floor employees. In case #2, the number of indicators used at all levels are not aligned with the corporate strategy, and require a lot of time, energy and monitoring. They offer few solutions for improvement, problem solving and performance increase.

These two cases point to symptoms that command a vision statement exercise, and the transformation of these symptoms into strategic priorities with which all company tiers will align. The method used to perform such an operation is called Hoshin Kanri².

Operationalizing the Communication Structure

You defined your tiers, and your indicators are aligned with your vision: it’s now time to operationalize your communication structure. In order to maintain some rigour in communications, you need to map your future structure.

The main elements to identify at each tier are the following:

• Define the topic or title of the meeting. Your employees will come together around a common terminology.
• Define the audience. Who needs to attend the meeting, and what is their role?
• Define the frequency. Daily, weekly, monthly? It is preferable to maintain a high meeting frequency to change the result-reading approach. This allows the company to go from a passive mode (put-out-fire mode) to a proactive mode (problem solving and improvement).
• Determine to which level the communication applies. At which tier does this communication happen?
• Define the type of meeting. Seated? Standing? It is recommended to hold the meetings standing up to increase communication efficiency and to limit the time of meetings.
• Define the meeting place. Meetings should take place as close to the action as possible, i.e., on the shop floor.
• Define the duration, start time and end time of the meeting.
• Define the owner of the meeting. During the meetings, this person will be responsible with enforcing the rules defined in the framework of this exercise.
• Define the meeting agenda. Who will speak first? What will that person talk about? Which indicators support his/her testimony? How long will he/she be speaking for? Imposing an agenda prevents drifting away from the scope and limits the time of the meeting.
• Define the incoming and outgoing data. Each participant should be prepared, and should bring potential solutions to the table. Meetings should not be used to report, but to confirm information, and to go into “action” mode.
• Define the indicators on which the meeting is based. The indicators are linked to the corporate vision, and are standardized across all levels.

Conclusion

In conclusion, the steps and resources to remember for creating a communication structure are the following:

1. Organize your company in tiers.
2. Define the content of the structure.
3. Create the right indicators and assign them to the right tiers, then align with the right goals and the right targets.
4. Roll out the structure, tier by tier.
5. Improve continuously.

If you would like to learn more on this topic, discuss with our experts, or if you need support, do not hesitate to contact us.

References
¹ Liker, J. K. & Hoseus, M. (2008). Toyota Culture: The Heart and Soul of the Toyota Way, McGraw-Hill, pp. 289-316.
² Ahmen Soliman, M. H (2006). How Toyota Creates a Culture of Continuous Improvement. Createspace Independent Publishing Platform.
Liker, J. K. & Hoseus, M. (2008). Toyota Culture: The Heart and Soul of the Toyota Way, McGraw-Hill, pp. 294-297.