PROFITABLE GROWTH
In their efforts to draw closer to customers, many manufacturers have lost focus on what should be a company's primary success factor - profitable growth. In today's competitive manufacturing environment, it takes more than quick fixes, outsourcing and downsizing for companies to consistently achieve their growth and profit objectives. While these options may yield temporary financial relief, they will not lead the way to long-term growth and profitability. For companies to grow and consistently exceed bottom line expectations, they need to get lean. And, to get lean they must master the basics of lean manufacturing.
INFORMATION INTEGRITY: It is not uncommon for front office management to become disenchanted with computerized systems results when time schedules and promised paybacks are not achieved. Truism: acceptable systems results cannot be achieved when systems are driven by inaccurate data and untimely, uncontrolled documentation.
PERFORMANCE MANAGEMENT: Measurement systems can be motivational or de-motivational. The individual goal setting of the 80's is a good example of de-motivational measurement - it tested one individual or group against the other and while satisfying some individual egos, it provided little contribution to overall company growth and profit. Today, the balanced scorecard is the choice of manufacturing winners.
SEQUENTIAL PRODUCTION: It takes more than systems sophistication for manufacturing companies to gain control of factory operations. To achieve on-time shipments at healthy profit margins, companies need to replace obsolete MRPII/ERP shop scheduling methodology with the simplicity of sequential production. Manufacturing leaders have replaced their MRP shop order "launch and expedite" methodology with continuous production lines that are supported by real-time, visual material supply chains ... sequential production. The assertion that sequential production only works in high production, widget-manufacturing environments is a myth.
POINT-OF-USE-
CYCLE TIME MANAGEMENT: Long cycle times are symptoms of poor manufacturing performance and high non-value added costs. Manufacturers need to focus on the continuous reduction of all cycle times. Achieving success requires a specific management style that focuses on "root cause" proactive problem solving, rather than "fire-fighting."
PRODUCTION LINEARITY: How linear do your production departments produce to the company's master schedule? As companies struggle to remain competitive, one of the strategies by which gains in speed, quality and costs can be achieved is to form teams of employees to pursue and achieve linear production. Companies will never achieve their full profit potential if they produce more than 25% of their monthly shipment plan in the last week of the month or more than 33% of their quarterly shipment plan in the last month of the quarter.
RESOURCE PLANNING: One of the major challenges in industry today is the timely right sizing of operations. Profit margins can be eroded by not taking timely downsizing actions and market windows can be missed and customers lost by not upsizing the direct labor force in a timely manner. These actions demand timely, tough decisions that require accurate, well-timed and reliable resource information.
CUSTOMER SATISFACTION:
While many business gurus have identified one or more of these manufacturing basics as important to the successful pursuit of business excellence, the fundamental importance of these lean manufacturing basics has been lost in the proliferation of buzz words and the mania of systems sophistication.
We say it is time for companies to put a hold on sophisticated systems development that cause self-inflicted, day-to-day chaos. In its place, they should immediately initiate an action learning program for gaining a company-wide understanding and acceptance of the importance of the basics of lean manufacturing. Once buy-in and commitment have been achieved, aggressive planning and tenacious implementation must follow. In short, let's put the "horse before the cart" - such a program will build a solid foundation for redefining and revitalizing a company's pursuit of profitable growth.
