Every factory tour is a performance. The aisles are swept. The best operators are on the line. The scrap bins are emptied or hidden. You are walked through the showroom floor, handed a capability brochure, and told everything runs at 95% on-time delivery. Then you leave thinking you just saw a great factory. Instead you saw a Potemkin factory.
Written by David Collins III, CEO of Manufacturing Transformation Group.
The Staged Tour
We have walked through hundreds of factories. We know exactly when we are getting the formal tour and when we are seeing the real operation. The tour version looks like this:
- Someone senior greets you at the front office and walks you through a pre-planned route
- The route passes through the newest equipment and the cleanest area of the plant
- Operators on the tour path are working steadily and wearing all required PPE
- There is no visible WIP pileup, no scrap on the floor, no idle machines
- You end up in a conference room with a PowerPoint about certifications and capacity
None of this tells you anything useful. A factory that is about to miss your delivery, ship you defective parts, or go out of business can look exactly like this for the 90 minutes you are on site.
There are ways to get around these staged tours especially if you are a foreigner in China. Look at my picture. I am a tall American and stand out in every factory I visit. Operators and managers see me coming. To get around that, I don't tell the factory I am coming until the day before. I also go with my Chinese staff.
What to Actually Look At
The Scrap Bins
Find them. They may not be on the tour route. Walk to the back of the production area and look for the bins, the rework station, the pile of rejected parts. Count what is there and see if they are labeled. Look for commonalities in the defects.
Some factories, especially the less sophisticated ones, don't hide scrap bins. Instead, they will insist that this is just the price of doing business and that their defect rates are "normal". Still count the defects and the scrap. Excessive scrap is not normal for any process.
This is the fastest way to understand the real quality level of a factory. Faster than reviewing any report or asking any question in a conference room. The scrap rate tells you what the factory's process control actually looks like — not what their ISO certificate says it should look like. A factory can have ISO certification and still have high scrap. The ISO will show that the scrap is documented; not necessarily that the factory has fixed the issue.
The Maintenance Shop
An organized maintenance area with labeled spare parts, a visible PM schedule, and work orders on a board means the factory takes maintenance seriously. A chaotic maintenance shop with parts scattered everywhere and no schedule posted means every breakdown is an emergency.
Ask one question: "What is your ratio of preventive to reactive maintenance?" If they cannot answer, you have your answer.
Check the schedule on each machine. Look at the dates and the results of the maintenance and inspection. Sparse records and overly uniform results are usually a sign that they are not really performing preventative maintenance on a regular schedule (or sometimes at all).
The Bathrooms, Break Rooms, and General Cleaniness
This sounds trivial. It is not.
The condition of employee facilities tells you more about management's attitude toward their workforce than any HR presentation. Clean, well-maintained break areas signal a company that invests in its people. Dirty, neglected facilities signal a company that views labor as a cost to minimize.
Factories that treat their people well have lower turnover, higher engagement, and better quality. It is more important than wages or other forms of compensation. High wages are nice but no one wants to work in an environment where they feel disrespected and poorly treated.
The Areas They Skip
When your tour guide walks past a door without opening it, that is where you want to go. Could be a warehouse, a tool crib, or the receiving dock. The back corner of the plant where the oldest equipment sits. The areas that did not get cleaned this morning because they were not on the tour path. Poking around the warehouse is a great way to see how effectively they use the components and final product. It is not uncommon that I would find raw material that is years old. Sometimes the material is too old to be used and sometimes it is perfectly acceptable. Either way it is unused cash lying around and shows a lack of efficiency on the part of the manufacturer.
Ask to see them. A factory that says no is telling you something. A factory that says yes and shows you a mess is also telling you something — but at least they are honest about it.
The Operators
Not the ones on the tour route. Walk up to an operator on a random line and ask: "What are you making right now? What is the target for today? Are you on track?" That is why it is often good to have someone that speaks the language. Often, I do not speak to the operators myself in China. It is not because I don't speak Chinese (I don't) but because operators are more likely to be open to speaking with someone that speaks their language than through an interpreter.
An operator who can answer all three questions works in a factory with a functioning daily management system. An operator who looks at the supervisor before answering works in a factory where information flows one direction — down.
If you can, talk to them without their manager standing next to them. You will get a very different conversation. That is often why it is better to be in a group so one person can hang back to speak with the operators while the rest stay with the factory tour.
The Whiteboard
Find the production tracking board or the KPI display. Look at the date. If it was last updated today, the factory uses it. If it was last updated two weeks ago or later, it is decoration. My Chinese is not always great but I can tell if the last update to the white board (or the maintenance record) is a month ago. It is not uncommon to see it over a year out of date.
Then look at what is on it. Are there red items? Are those red items assigned to someone with a deadline? Or are they just red — acknowledged but not acted on? Sometimes there will just be tasks without dates, assigned responsibilities, or actions.
A board full of green is either a world-class operation or a factory that sets targets low enough to always hit them. A board with some red and evidence of corrective action is a factory that actually uses the system. Even world class factories do not run perfectly and have some tasks that need to be improved.
The Night Shift Test
If you really want to know how a factory runs, show up unannounced on the night shift.
Everything you saw during the day tour — the clean aisles, the PPE compliance, the supervisor presence, the disciplined process — will be different at night. Quality degrades. Shortcuts increase. Supervision thins out. The night shift is the truth of how the factory operates when nobody important is watching.
Most buyers never see the night shift. If your product is being made on all three shifts, you need to know what shifts two and three look like. As someone who has worked a few 3rd shifts in his life in a well run operation, there are differences but they should be small. Even in the best run factories, the night shift is often different than the day shift. They are generally less productive; that said, the 3rd shift should not be radically different than the first.
The 60-Second Assessment
You do not need a week-long formal assessment to get a read on a factory. Within the first 60 seconds of walking the floor, look for these five things:
- Floor condition — Clean and marked, or oil-stained and cluttered?
- Operator body language — Engaged and moving with purpose, or idle and disorganized?
- WIP between stations — Controlled and labeled, or piled up with no flow?
- Visual management — Boards current and used, or dusty and ignored?
- Sound — Steady production rhythm, or constant stops and alarms?
These five observations take less than a minute and tell you more than an hour in the conference room. Trust your gut. If the floor feels wrong, it usually is.
Need an honest look at a factory?
MTG conducts factory assessments that go beyond the tour. We show up, walk the floor, talk to operators, check the scrap bins, and tell you what is actually happening — not what the PowerPoint says. Get in touch to schedule an assessment.
