Peter W. Lang, MBA
Today, the manufacturing industry faces many challenges. There is global competition, the economy is still rocky and technology is constantly changing. On a positive note, lawmakers are working to find ways to revive an industry (manufacturing) that once fueled our local economy.
As a business owner, it is important to be proactive and find ways to keep your manufacturing business running efficiently. Below are a few steps that can help your bottom line:
Identify wasted time and effort and make changes. Typically, the longer it takes to produce and ship a product, the more costly it becomes. If a product sits unfinished or is held in staging areas, the clock keeps ticking and costs are accumulated.
Did you know that, on average, the actual processing or conversion time to produce a product is approximately five percent of total product lead time to the customer? The remaining time and effort can be considered non-value added or wasted time! By identifying and eliminating the non-value creating tasks in business operations, your business will become more efficient which should result in a reduction in product cost. Work to create protocols to drive time out of processes and continue to challenge your organization to reduce the product to customer lead times. The better you get at identifying and eliminating these “time wasters”, the more efficient you will become.
Stop trying to find temporary solutions to a problem. Instead, identify and address the root cause of that problem. We see it all the time, quick temporary fixes that mask bigger problem areas in manufacturing operations. In many cases, management is focused on addressing the symptoms of the problem and not the problem itself. For example, if an operation or piece of machinery is constantly breaking, some companies will stockpile inventory so that production is not impacted. The company may become so focused on reducing the inventory that it fails to address the root cause problem, the reliability of the process or piece of equipment. The bottom line— tackle operational problems as they happen. Do not hide them, or focus on the symptom; address the root cause and fix it!
Make an effort to understand your customers. To sell your product, you need to know what your customers value and what it will take to meet their expectations. We have all heard the words, “Value is in the eyes of the beholder”. In this case the beholder is your customer. Have you ever asked your customer what he or she is willing to pay for? Some customers may value quality above all else, while others may value delivery time reliability or product cost when deciding whether they want to do business with your company. Sit down with your customers, learn their priorities and reorient or reconfigure your operations as necessary.
It may sound cliché, but never underestimate the power of the team. Empowered teams that leverage brainstorming and problem-solving techniques are the engine for the most successful and sustainable continuous improvement efforts. We see the results time and time again: a single team member with an improvement idea or solution presents it to his teammates and, through a brainstorming activity or problem solving technique, the team produces a breakthrough for the organization—an approach to a problem or a solution that no one person could ever have imagined! With minimal investment, an empowered team can be unleashed and become the hub for out-of-the-box thinking and innovation within your organization. Empowered teams can be your ticket to a new and improved method of doing business that is innovative, cost effective and critical to efforts in exceeding customer expectations.
Act. Identifying improvement opportunities may be the easy part. Everyone has ideas, especially in our workplaces, but how many good ideas ever get implemented? Unfortunately implementation of productivity improvement ideas is not as common as it should be. Regrettably, many organizations have a graveyard full of great ideas and solutions that were never implemented, including some that may have saved failed businesses. It is much harder to implement change than one would think. Why is that? People are slaves to routines, creatures of habit, perhaps unwilling to change or may not see the benefit of change. To overcome complacency, you must act quickly when you have good ideas and solutions, as time can be your enemy. Organizations that are leaders and innovators in their fields or industries do not let good ideas and solutions die or sit too long, they act.
Continuous improvement is not a program. It is a culture and a philosophy that must be embedded in the DNA of an organization. Programs come and go. They typically start with a lot of momentum and some excitement, but then run their course, people get tired of them, resources are diverted elsewhere, and they die a slow death. An effective continuous improvement culture requires an ongoing effort to improve products, services or processes. These efforts may involve small improvements over time or a larger improvement all at once. Either way it is dependent on diligence and a team effort in which each member is held accountable.
These tips are a guide to improving your business through efficiencies. They will assist in dealing with today’s constantly changing technology which, in turn, will lead to greater profits.
For more information please contact Peter Lang at 617.658.5231 or email@example.com.
Peter Lang is a partner with BlumShapiro, the largest regional accounting, tax, and business consulting firm based in New England. Lang works out of BlumShapiro’s Newton, Mass., office as a member of the firm’s consulting group, and he has significant experience in business development, project management, and business process improvement as it relates to manufacturing and technology. BlumShapiro also has offices in Connecticut and Rhode Island. The firm employs nearly 400 professionals and staff, offers a variety of services, and serves a wide range of companies and organizations.