SMT007 Magazine

SMT-Oct2016

Issue link: http://iconnect007.uberflip.com/i/734166

Contents of this Issue

Navigation

Page 28 of 99

October 2016 • SMT Magazine 29 A leader would have challenged this ap- proach and become a champion of improving the operation's infrastructure to permit costs to be captured to help ultimately maximize mar- gins. So, often another difference between leaders and managers is a leader will advocate change by taking the longer view. The manager is nor- mally preoccupied with meeting short-term goals, sometimes at the expense of long-term company growth and health. Making my department "look good," even at the expense of other departments, is often the competitive dynamic set up by poor man- agers in the traditional organizational struc- ture. To illustrate the ends a manager might go to achieve this objective, let me share another true story: As you probably know the total cost of a product is the sum of the material and labor costs. The cost of material almost always dom- inates—typically, anywhere between 60% and 90% of the total product cost. In the material procurement world there is a metric called pur- chase price variance or PPV. It is simply the dif- ference in the cost a procurement group esti- mates when quoting a bill of material (BOM) during the bidding phase (let's say the company is an EMS), and what they actually end up buy- ing the material for when the job is won and the product is being prepared for actual produc- tion. In this case the procurement manager would purposely inflate the material cost during the quote phase, so when called upon to actually buy the material a positive PPV could be report- ed—purportedly because of the excellent nego- tiating skills of the manager and procurement department. This "strategy" was exposed when customers started to challenge the material side of the quote. "You have all that volume buy- ing leverage, yet we get better material pricing when we quote the bill than you have provided in your proposal!" It is an example of why in my mind it makes sense to dismantle the traditional organization- al hierarchy of departments. Your electron- ic product customer doesn't pay for your pro- curement department. They don't care that you have a process engineering department and a test engineering department and a production department and a finance department and a project management department and a market- ing department. They buy products! What your customer cares about is the price, quality, timely delivery of the product, and, sometimes, design-for-production input [5] for a new product design—that's all. Character is an important trait of a good leader. I think in many ways it is the most cru- cial attribute: I like the often repeated defini- tion that character is doing what is right when no one is looking. No compromise when the times get tough. Setting an example by exhibiting behavior that is consistent with the values of the compa- ny is critical for the leader (assuming the com- pany has admirable values). Good delegation skills are another compo- nent of a good leader. The ability of being se- cure in one's decision-making, and not act de- fensively when those decisions are challenged will enhance the ability to lead (i.e., not having to be right all the time). Being empathetic is another good attribute of a leader. Daniel Goleman discusses the im- portance of empathy in his books on emotion- al intelligence [6] . A unique leadership skill in today's organi- zations is dealing with the inability of many in the workforce to defer personal gratification and the rampant narcissism that exists. It's hard to have a truly functioning team when mem- bers of the team effectively have a blinking LED sign hanging around their necks that says "look at me!" Managers are much more effective if they are also leaders. Managers that are leaders ap- peal to the workforce by their virtue. They do not manage by fear and intimidation. They en- " Being empathetic is another good attribute of a leader. " DO THE HIGH PAID MANAGERS IN YOUR ORGANIZATION ADD VALUE?

Articles in this issue

Archives of this issue

view archives of SMT007 Magazine - SMT-Oct2016