to all Blog Posts

Why Shopfloor Management is necessary and important

Published: · Last updated: · 9 min reading time

Shopfloor Management Defintion

Now that we have clarified the initial problem, the definition of Shopfloor Management (SFM) follows. Synonyms for shop floor are “workshop” or “factory floor”. It is the place where value is created. Shopfloor management is clearly based on lean management. Managers go directly to the site where value creation takes place. Permanent improvements and optimization of processes directly at the point where employees are working are the main goals of Shopfloor Management. But there is more to store floor management. The processes around the production should be optimized, and the management and leadership tasks of production. There are four essential components of store floor management to achieve these goals. In the following section, they will be discussed in more detail.

In Shopfloor Management, the manager should act more as a coach and motivator with authority for the employees and apply less of an authoritarian management style. Like a coach, the manager should motivate, qualify and inform the employees. Through the role of a coach, which the manager should take, a continuous improvement process should be created in the daily work routine. The long-term goals of the company vision and the short- and medium-term goals should be distributed to all areas or departments of the teams.

In short, the purpose of shop floor management is that management is located much more employees, and the process improvement happens directly on the spot. The employees’ focus in the supporting areas, such as development, IT, logistics, sales, etc., should be on ensuring that production functions efficiently and without errors. However, the process improvements made by SFM also serve to meet customer requirements daily. After all, it is essential to have a satisfied clientele.

Shop Floor Management: These four essential components exist

SFM consists of four core components and, when you get right down to it, an additional fifth component, which we will discuss individually below:

  • Leading (on-site)
  • Communicating with each other
  • Presenting key figures in visual form
  • Solving problems sustainably
  • Continuous improvement process (CIP)


Leading (on-site)

Leading on-site is an essential part of SFM. The Lean approach is recognizable here and, in turn includes three requirements that are placed on leadership:

  • Hansei
  • Genchi Genbutsu & Gemba
  • Hoshin Kanri
  • Hansei

Hansei is about self-reflection and living an open error culture. However, the aim is to clearly refrain from blaming others and instead create a positive error culture. Mistakes are therefore considered valuable. This, in turn, should provide the opportunity to improve and develop constantly.

Genchi Genbutsu & Gemba means that employees are guided directly at where they work or where things happen. The word Gemba means production. So the managers should be in the direction of the place of production. As already mentioned above, the problem with many managers nowadays is that they are too far away from the employees. They are often in meetings and conferences with customers and other managers all day long and get little of the actual day-to-day activities of their employees. The purpose of communicating closely with their employees is to help managers better empathize with and understand their employees on the one hand and to develop a better understanding of the root cause of a problem and how to solve it on the other.

Hoshin Kanri is a leadership method that sets directionally defined goals from the highest level. The long, medium and short-term goals are to be broken down to all areas, departments, and teams. This is achieved by defining smaller breakthrough goals. These are derived from the corporate vision. The entire company is then aligned with these transparent and uniform goals. A further step is to concretize the goals in terms of time and content at the lowest level. The Hoshin approach the cohesion and communication among each other. Hoshin Karan is also divided into three components: Daily Management, Cross-functional Management, and Hoshin Management. Daily Management ensures that employees are given clearly defined goals. Crossfunctional Management is responsible for ensuring that the goals of each area are aligned and aligned with each other. Finally, Hoshin Management aligns all areas and activities with corporate goals. Interface representatives ensure that key performance indicators are coordinated beyond their scope. There is also coordination with middle management.

Communication with each other

Communication is indispensable in today’s world. Whether in private or in business, nothing works without communication. Communication is an essential requirement for a manager. Only good communication prevents misunderstandings. Communication takes place directly at the place of action and not far away. The manager should promote the self-management skills of the employees. As mentioned elsewhere, the manager should act as a coach and not in an authoritarian manner. Communication with employees should take place at eye level. The manager asks the employees questions that are intended to make them think. This type of questioning is intended to give employees a sense of claiming success for solving a problem for themselves. This, in turn, leads to employees being motivated to come up with their solutions. Likewise, this should generate new ideas from the employees. In addition, the manager receives information first hand and not via numerous detours. As a result, the decisions that need to be made take place directly at the point of action. Communication between the manager and the employees is essential, and communication to the individual interfaces. This is the only way to ensure that any problems that may arise can be addressed and resolved as early as possible through the presence of the interface representatives. Only with functioning and well-regulated communication is it possible to ensure that information can be provided at the right time with the necessary quality and low expenditure of resources.

Present key figures in visual form

The employees involved in the process must be able to answer the following questions:

  • What are the team’s mission and goal?
  • What metrics are being used to measure this?
  • How much does the ACTUAL state deviate from the TARGET state?
  • What exactly are the processes, and what are the problems related to these processes?
  • What measures are planned to solve these problems, or what improvements can be introduced?

Various key figures serve as a basis through which the whole should and can be visualized. Care must be taken to limit the key figures to be visualized to what is absolutely necessary. The key figures serve both for controlling and as information for further planning. Suppose the corporate goals are consistently broken down to the various process levels. In that case, they have a high value for SFM since the processes are aligned with the customer, and the individual processes for achieving the goals are clearly in focus. Those key performance indicators must be made visible on the management board that aligns the respective business unit with its objectives, which are of decisive importance for the customer that follows its process. The key performance indicators highlight potential problems and obstacles in the process. The so-called SMART principle plays a significant role in the orientation of the key figures. The key figures must meet the following requirements:

  • They must be specific (s = specific).
  • They must be measurable (m = measurable).
  • They must be accepted by the employees (a = accepted).
  • The target and limit values must be selected in such a way that they are realistic (r = realistic).
  • There must be a timeframe for implementation (t = timely).

The key figures can be presented in different ways, such as quality, costs, deadlines, and people.

Solving problems sustainably

It is essential to proceed in a systematic way when solving problems sustainably. Here it is vital to use methods that are not complicated. The procedures must be appropriate to the level of education of all employees. It is not enough to teach employees approaches to problem-solving in the form of (just one) training session(s). Solving a problem is a learning process for employees that develops gradually. For the process of problem-solving, one should use the PDCA cycle brought out by W. E. Deming. This is a continuous improvement process with four recurring steps:

  • Step 1: Planning phase (plan).
  • Step 2: Apply or try out the solution (do).
  • Step 3: The improvement measures must be checked and evaluated (check).
  • Step 4: The learning successes are evaluated, and action is taken (act).

Continuous Improvement Process (CIP)

CIP is a fundamental prerequisite for store floor management to live a lean culture in the company. Initially, the CIP comes from the Japanese. There it is known under the term Kaizen. Kaizen is made up of the words kai=change and zen=the good. Everything is to be changed for the better, which is ultimately reflected in the processes.

Ultimately, lean thinking should lead to a change in thinking among employees and managers because lean culture is an entirely different way of thinking than our Western culture. Ultimately, the company should constantly be learning through continuous improvement while at the same time measuring the methods used.

What are the advantages of shop floor management for companies?

Since continuous process improvement takes place, the following advantages arise for companies:

  • If something deviates from the actual process, it is possible to react more quickly.
  • Resources are used optimally
  • Sustainable planning and control
  • Optimization potentials and results are recognized and presented much better.
  • Significantly more transparency of target/actual states and trends
  • Better communication within the team and higher self-discipline

What problems can occur with shop floor management?

Where is a lot of light, there is naturally also shadow, which is also the case with Shopfloor Management. At the same time, the continuous improvement process creates new challenges for companies to which they must adapt. For example, management and employees must work together optimally. However, since this is often not the case, this remains a major challenge for employees and management. Shopfloor management must not be used for control purposes. Instead, communication between management and employees should be promoted or improved. Another danger is that divisional thinking can occur. A too-tight schedule can also be an obstacle to Shopfloor Management.

What does Lean Management mean?

Lean management is about the continuous improvement of operational processes. Various lean methods thought patterns, and procedures are applied to harmonize processes with each other and create a production system that eliminates waste. All of this extends throughout the company’s operations and beyond.

The core theme of lean management is to focus on the customer and reduce costs. This involves looking at where there is potential for waste to eliminate it subsequently. All types of waste along the value chain are to be eliminated by lean management. The advantage for the businesses and customers is that by eliminating waste, the products or goods can be offered to the customer at a lower price. Lean management can be applied to various areas in a company. These include the office (lean administration), production, and logistics.

Conclusion: Only if a precise definition of processes, the description of interfaces, and the early reaction to errors are applied in Lean Management, high-quality products can be produced.

Learn more in our blog about how Lean Transformation can work in your company.

About the author

Sumrit is a creative thinking, strategic Marketing professional who thinks outside of the box and delivers results. Leading all FORCAM Marketing activities in the UK, Sumrit has an entrepreneurial and problem-solving approach to business, sharing value-based communications and propositions.

Sumrit Shidu

Marketing Manager UK