Visual Management vs The Hidden Factory

The Usual Tools-
- 5S/6S Production Boards (Preferably Electronic for ease of update)
- Schedule Boards/Production leveling
- Tool Boards
- Andon lights/boards
- Kanban System (Pull System)
- Floor Markings/Color Coding
The most common Visual Management methods in factories have been around for quite a while. Providing Management and those being managed with a way to quickly and visibly understand what is happing now and what needs to happen next traces back to military visual standards and Naval flag signals.
Visual communication is the one of the most universal ways of communicating a large amount of information quickly, and the current visual methods could be considered very similar to the ones the original military mindsets used so long ago.
The original Toyota Way has two key pillars- JIT (Just In Time mfg.), and Jidoka (Automation with human intelligence, because work stops immediately when a problem first occurs. This leads to improvements in the processes that build in quality by eliminating the root causes of defects). In War, everything has to be Just in Time, and you don’t keep throwing your troops at the same problem even when you keep losing the battle. You stop and figure out the root cause of your previous loss before you move from a defensive posture.
Visual Controls (if implemented with the correct culture) are excellent management tools.
One of the common cultural issues is the “punishment culture”. When employees are punished/chastised for reporting process failures, quality improvement is not likely to occur, as the factory will become a “Hidden Factory.”
In the Classic “Hidden Factory” Scenario, every department is in its silo and reporting only vertically.

Central Management gets the data funneled to them (but rarely walks the process actively). Few want to admit when something goes wrong, so things they see as inconsequential are omitted. Everyone turns in sterling reports, but the bottom line always suffers. Examples: Rework time, scrap costs, internal investigation costs, customer complaint investigation costs, Re-scheduling costs.
There are a host of visual Controls that can be used in a Lean (or just a practical) workplace to help combat the communications barriers common to factories. The first and most crucial step is a culture change from the top down with full buy-in from the employees before a large-scale implementation can begin. Once the employees are confident they will not be chastised for speaking up about what is wrong internally with the processes, then the implementation can begin (Kubiak, 2017) (CSSBB Primer, 2014).
The Basic Visual Controls to implement are (based upon need):
- 5S/6S
- Sort (Seiri)
- Separate the needed from the unneeded items in the workplace, discarding all unnecessary items
- Set/Straighten (Seiton)
- Arrange in an orderly way- A place for everything and everything in its place (labels and shadow boards are frequently employed at this phase)
- Shine (Seiso)
- Clean and wash the work area
- Standardize (Seiketsu)
- Creation of and regular performance of the first 3 Ss
- Sustain (Shitsuke)
- Discipline to maintain the first four Ss
- The 6th S is emphasized more and more: SAFETY
- Safety should be an emergent property of 5S. Still, sometimes it is not, so safety has been often added to be sure it is addressed, and particular emphasis on safety usually improves job safety overall.
- Sort (Seiri)

5S Will not magically reveal the Hidden Factory (though it will hint at it), but it does help provide the foundation of readiness, safety, discipline, and accountability required. Having the entire workforce learn to maintain their area and be responsible for sustaining the effort is one of the first steps toward a culture of success.
- Production Boards (Preferably Electronic for ease of update)
- Production Boards give an “at a glance” idea of where jobs are, what is coming, what went wrong, and allow everyone to see the outcome without any hidden factory effect (if the culture is correct). Regular and disciplined or automated updates are required, and two-way communication with the floor team during regular meetings at the production board (huddles) is the most effective way to identify possible points of improvement to supervisors so they can assign teams to deal with the issue. It is always best to train floor personnel to solve problems with critical thinking skills rather than trying to direct the entire factory.
- Schedule Boards/Production leveling
- Heijunka Boards can provide clear communication for how the production load is to be smoothed out.
- Unexpected bottlenecks because of unexpected material shortages or constraints due to planning are much less likely if the entire plan is visible to the whole of the factory. Deviations that cause a problem can be addressed, and the need to level the load due to demand is part of the built-in process.
- Tool Boards
- Tool boards will emerge from a 5S program, creating shadow boards to identify any missing tools (an excellent antidote to the disease of not telling anyone that a needed tool is missing). These boards also help shorten cycle times by reducing the time necessary to find tools.
- Andon lights/boards
- Andon Lights usually are green while the workstation is running with no problem. When a sensor detects a problem (or a person manually stops the process), the light shifts to red to signal everyone of machine downtime, a quality problem, tooling issues, operator problems, or material shortages or jams in the process. More sophisticated systems use an electronic board that communicates what the problem is (and where it is) to the entire factory so that the needed people can respond ASAP. Andon lights/boards are an aspect of Jidoka.
- Kanban System (Pull System)
- A visual signaling system (usually using Kanban cards) used to control the flow of inventory in a “pull” system. Kanban controls the flow of WIP and finished goods into and out of “supermarkets,” lines, and production cells. A production Kanban indicates the number of parts needed to replenish what has been consumed (usually rectangular). A withdrawal Kanban shows the number of parts removed from the “supermarket.” A signal Kanban is a type of withdrawal Kanban that triggers production when the minimum amount of containers has been reached (often Triangular). Kanban systems can get much more complicated but are much more effective than traditional inventory management if implemented correctly with the correct cultural mindset in place within the organization.
- Floor Markings/Color Coding
- Markings and color coding are used to indicate flow direction. In a traditional factory tracing the path would look insane. Still, when the machine paths are laid out in the most efficient pathway and marked so that there is no confusion, Cycle times are significantly reduced, and one of the Major Wastes of unnecessarily transporting material is alleviated (Lean Enterprise Institute, 2014) (CSSBB Primer, 2014) (Kubiak, 2017).
Conclusion
When the culture is defensive and non-communicative between departments, only a few at a time know just a portion of what is happening at any one time, and employees are waiting to see what the punishment for the process going wrong is, then the Hidden Factory rules. When communication is openly shared and put on full visual display, and problems are discussed and tackled with minimal regard for rank in a cross-functional way as soon as they arise, good things begin to happen. Those who understand the processes best solve the problems, using visual cues and logic (not commands from supervisors) to run the factory and address problems. The Hidden factory can be significantly reduced by open communication and being willing to face the negatives rather than pretend those negatives do not exist.
REFLECTION: FOR STUDENTS: Is the culture currently conducive to learning to be manager or boss? How do you think the culture you are learning in will help you become more of a coach and less of a boss?
FOR ACADEMICS: Is teamwork being taught purely from a results perspective or from a coaching perspective (to help the students learn critical thinking and problem solving)?
FOR PROFESSIONALS/PRACTITIONERS: Culture eats Strategy for breakfast (a phrase originated by Peter Drucker). No Strategy however brilliant can overcome a culture of fear. Cultural change is the foundation of Quality improvement and must always be attended first, or the attempted QI initiative will be taken down due to resistance to change created by a feeling that a “new culture” is trying to usurp it’s place. For this reason, the culture of change has to cascade from the top down, and buy-in at every level must occur, with cultural buy-in moving to the next level down only after each level is fully (or vast majority) bought in.
Bibliography
CSSBB Primer. (2014). West Terre Haute , Indiana: Quality Council of Indiana.
Drucker, P. (1954). The Practice of Management. New York City: Harper & Row.
Kubiak, T. a. (2017). The Certified Six Sigma Black Belt Handbook Third Edition. Milwaukee: ASQ Quality Press.
Lean Enterprise Institute. (2014). Lean Lexicon. Cambridge, MA: Lean Enterprise Institute.