When I first jumped into a COO role running a factory, I was new to the role and assumed that it was mostly production, quality, warehousing that I’d be looking at. Putting the Toyota Production System to use, lean manufacturing, advanced production systems, all the things that happen inside a factory.
I quickly realized the factory really only took a fraction of my attention, with the real divide looking something like:
⅓ of the challenge before the factory (supply chain)
⅓ of the challenge in the factory (warehouse, quality, production, etc)
⅓ of the challenge after the factory (aftersales, customer support, logistics)
What your specific supply chain, your factory, and your post-build process looks like will vary significantly from mine, but unless in a very unique situation, this “rule of thirds” generally holds up as an approximation.
This rule comes from the very nature of the different problems.
The factory is the place of most complexity, most operations, and where most of your value creation work is. It’s where company vision is defined, where your culture comes to be, where complex software systems are designed and integrated, and it’s ultimately the head of the whole operation.
But it’s still only ⅓ of the challenge in running your operation for 2 reasons:
It all happens under 1 roof. Unlike your distributed supply chains, where mistakes can costs thousands, or millions of dollars and several months of delays, mistakes that happen at the factory can often be solved same day or even same hour with the broader team readily available to tackle whatever comes their way.
It’s streamlined with a single goal - getting the product out the door. In a factory, as much as every day has it’s unique challenges, the main goals don’t change. Materials come in, people and machines do processes on those things, and products go out the door.
In aftersales, customer support, delivery, etc, you’ll have the good fortune of dealing with whatever’s happening in the world today. Your customer Billy had their shipment arrive in pieces after their truck crashed? One of your customers wants to use their product outside this winter in Canada? While another customer is putting them to use in Saudi Arabia this summer?
Before the factory, you’re subject to the processes of all your sub-suppliers, in addition to any geopolitics that might block shipping lanes, tariff wars that pop up, global pandemics, or something as simple as a sleepy captain blocking the Suez Canal for a week.
After the factory, you’re subject and liable for anything a customer might do with your product anywhere, under any conditions, whether it’s their mishandling or their dogs chewing up your product.
This rule of thirds made it easy for hiring reputable deputies who could focus on each of the three areas well.
Head of Supply Chain:
The always on negotiator. Supply chain executives live and die based on their communication. They travel red-eyes across oceans on a whim. They don’t need to be the #1 expert in anything, but they need to be on top of things. If your supply chain is complex and not super robust, this person needs to be ready to fight fires at any given moment.
Head of Factory Ops:
The experienced, systems driven leader. This is the person who can mentor and build a team. They know how to build simple systems and they hate fighting fires. “Slow is smooth and smooth is fast” is the motto here. These are the ones who are reliable, who set the tone for the rest of the factory, and keep them driving towards a consistent steady vision
Head of Aftersales:
The jack of all trades mini-CEO. Not a bull, not about charisma, but all about solving a huge variety of problems quickly and decently. Aftersales is an out-of-sight, out-of-mind part of the business. It’s generally not where the big bucks roll in, so won’t get the attention of the CEO often, but there will be 1,000 tiny weird issues popping up that you don’t want the headache of having to deal with. Aim for an independent generalist, and spend the appropriate budget for someone who will keep your customers happy.
I’ve seen companies under-resource these Supply Chain/Aftersales hires, assuming that they’re simpler parts of the problem than running the factory or designing the product.
If you have a budget for 3 experts in your operations org, there are a dozen departments you could hire the best of the best for. Quality, Production, Delivery, Warehousing, Facilities, IT, etc etc, but covering these 3 areas with your best talent is going to pay off massively, as strong leaders will be able to fill in the gaps and cover everything under their pre-factory, in-factory, and post-factory areas of purview.
Believe me, there’s nothing worse than being responsible for the factory but having to fly internationally for 2 weeks because your supply chain team isn’t adequately resourced to achieve their cost targets.
Running a factory is a lot of fun, so making sure you have deputies who can take care of the pre and post build processes is going to make your job a lot smoother and a lot more fun.
Happy building!