Smith Industries, LLC

Felipe Pereira is Director of Fabrication Operations at Smith Industries in Midland, Texas, where he leads equipment and skid shop fabrication for oil and gas and data center projects. A chemical engineer with an MBA in project management and a Six Sigma Green Belt, he has spent his career in heavy fabrication and EPC work in Brazil and the United States.

Using One Equation to Understand the Shop

Chemical engineering and fabrication management looked like two different careers to me for a long time. Over the years, I found out they are one, and what led me there was the first equation I learned at university. It is the equation I use every day on a shop floor, and it is the one almost no factory applies to its own work. Every process engineer knows it. Before solving it, we do something more important.

We decide what falls inside the boundary and what stays outside. In shop terms, we are paid for hours, materials, drawings and equipment that run. Out is the completed fabrication that leaves the shop and becomes revenue.

Generated is what the organization creates through continuity and know-how, such as a welder moving directly to the next piece or an experienced worker following instructions without stopping to ask. Consumed is what disorder takes away through waiting, rework, broken setups or time spent searching for tools. Accumulation is work in process, scrap and finished equipment sitting in the yard.

This explains why more people do not always mean more output. One Brazilian shop increased headcount by 50 percent but lost more than 30 percent of its tons per hour. When In rises and Consumed rises with it, Out can fall.

Making Every Hour Accountable

A man finishes his vessel at two in the afternoon. He cleans his station. Then he stands there, because the next piece was never staged for him. Four hours of paid time entered. No product left. Nothing recorded it, and the month still looks like it closed. Every plant closes its mass balance. Almost none close its labor balance.

When a visible plan and a routine that holds are in place, something changes. Nothing gets pushed down anyone’s throat.

When the sequence is posted where the work happens, and every man knows which piece is his, when it is due and what comes next, people stop asking what to do and start telling you what is in the way. That is when you begin to solve the problem before it turns into a delay.

Accountability changes, too and not in the direction people expect. Once everyone can see what was promised and what was staged, a late piece has a traceable cause.

Planning is what keeps the equation in balance.

Looking at the equation again, of those terms, only two are yours from inside the boundary: Generated and Consumed. In chemistry, a product comes from a reaction. On the shop floor, it comes from planning and training.

A sequence briefed before the month starts raises generated. A welder who moves straight to another piece of the same design keeps his setup. A man trained to the standard does not stop to ask. Discipline lowers Consumed: the small deviation is corrected the same day, before it becomes the way things are done here.

The way to connect planning and training to the floor is to stop handing them down. The foreman builds his own sequence based on the financial KPIs and presents it to his supervisor a month ahead. He is not receiving a schedule; he is defending one. Training follows the queue instead of the calendar: if the next piece of equipment needs a procedure a man has not run, he trains before the piece arrives, not after the first rejection.

But none of this works without ownership, and ownership has a condition. You cannot own what you cannot see. If the sequence changes every Tuesday and nobody knows the standard, asking a supervisor to take ownership is asking him to accept a result he did not control.

So ownership starts above him. The leader owns the conditions, meaning the plan is briefed, the material is staged, and the standard is known, and that is what earns the right to expect ownership at the bench.

If I had to name the one leadership lesson that shaped how I run a floor, it is that one.

Housekeeping and safety are part of production.

To support this concept, you need a place where the team feels comfortable working and where the next day's task is prepared the day before. Keeping the shop floor clean and organized creates that environment. A man who is not losing time looking for a tool or a piece is producing. This is also why safety is central to productivity and not separate from it.

The last fifteen minutes of every shift are for cleaning the station and staging the next piece. Not after hours, not as a Saturday campaign. On the clock, as part of the company's culture.

Working this way, in a plant inside a global EPC contractor, we led a team that broke production records. More than 205,000 FDI in one month, where FDI is the number of joints multiplied by pipe thickness and fabrication difficulty. Radiographic film acceptance reached 98.7 percent. Productivity went from 0.8 to 1.65 FDI per man-hour, with half the crew we had before we started. No lost time injuries, and overtime under control.

Where excellence actually comes from

When a visible plan and a routine that holds are in place, something changes. Nothing gets pushed down anyone's throat. The team asks for the new tool and starts looking for better ways to do the work, because they can finally see where the hours go, and they would rather work smarter than harder.

Today, that new tool is usually artificial intelligence, and the same rule applies to it. Nobody commissions Advanced Process Control on a unit with drifting flowmeters and basic loops left in manual. You instrument, you reconcile, then you model. AI in factory management is APC for management, with the same prerequisites. Close the balance first, and the same tool starts pointing at the waiting, the rework and the broken setups, which is where the money actually is.

For anyone who wants to grow into leading a floor, my advice is short. Learn to measure before you learn to command. Learn to listen before you talk. Lead by example, plan, delegate, and own the conditions you control.

A production manager belongs on the shop floor more than in his office, because the closure error is not visible from a desk. The good ideas do not come from a computer either. They come from the people on the front line that lives with the bottleneck every day.

The key is learning to work with your team side by side. You find the solutions together, you take the results together, and the hard jobs you get through become the stories they tell years later.