Over or Stop?

I was recently on trip with my family. We were travelling by train, so none of us were in charge. We were, no doubt, along for the ride. Coming around a bend in Colorado, there was something in the track. I’m still not sure what it was – a rock, debris, a track switch? – but we went over it.

Choices the engineer makes supersede even the conductor. I was several cars back, but I thought the engineer had several choices, even at that point. We were not travelling fast, so stopping comes to mind first. Maybe slowing down further and pushing it? We did not do either and instead ran right over it. You could hear it go under every car and though there was no issue with it, the disturbance left us wondering if the best choice had been made.

Production Operations

You knew that I was going to tag that back to your production team. I always do. It’s where we’ve spent the last 30 years – with the production operations teams at manufacturers all over the United States. You have a decision to make this year. You can choose to plow along the same track that you’ve been on, or you can decide to make a change. What is the thing that is in your way? That’s the thing that I want to talk about today.

• Perhaps your inventory is never correct. It’s difficult to track the various ins and outs of inventory daily without a system that knows how to account for overages, overstocks, shortages, and scrap.
• Maybe you still don’t know what’s going on in your shop daily. With the wealth of digital tools available to you today, it would be a shame not to have an instant-read dashboard at your fingertips to immediately know what’s going right (and wrong).
• It could be that your team is ever- Some of you have gone to variable schedules to keep your workforce. Others struggle with people showing up on a regular basis. Still more of you have areas where you are short-staffed always.
• Possibly you’ve had a shift in work from make-to-order to make-to-stock or more custom work than usual and your team is struggling with mapping all the changes that need to happen to support that.
• Even minor variations in the volume of jobs can significantly impact the team’s performance.

Faced with one of these challenges or something else, what have you selected to do about it this year? Let’s have this be the year of change for you. Get rid of what’s holding you back. Invest a little now to save yourself costly downtime and disruptions in the future.

Paperless Manufacturing

Expect some big bumps in the road as you transition to a paperless manufacturing environment. This isn’t an easy “flip the switch” scenario where you can simply “run over” any problems and keep going without looking back. A successful transition requires a thoughtful and deliberate approach (much like navigating a family train trip). It’s crucial to regularly pause, evaluate and re-evaluate progress, address any emerging challenges, and make necessary adjustments to the implementation plan.

We’re not talking a SMART factory here. This might be more than you and your team can take on. Making some smaller steps towards solving these problems is the first step for you and your team this year. Getting rid of all paper also might not be possible for you and your team, unless you were planning to implement a kanban system with barcoded bins and a conveyor system. Let’s talk about minimizing paper (and thus errors) where we can.

I want to go back to that list to give you a few ideas of where to start. These are not exhaustive, but a good start to get you thinking about how to solve your greatest problem(s) today. Let’s start with that inventory problem. It’s a common one we see and we almost always get the same response from manufacturers when we ask how they’re managing inventory. It sounds like one of three consistent answers:

• “Not well.”
• “Our finance system purchases it but doesn’t really track it well.”
• “We have a custom Microsoft Excel (Access) sheet to track it.”

None of these is really what we want to hear. Inventory (along with salaries and lease costs) are likely to be your three largest expenses each year. You cannot bury the cost of your inventory in Cost of Goods Sold (COGS). It absolutely impacts the costs that you incur and thus your profitability.

You need a tool to actively manage your inventory.

What do I mean by that? Here are a few things that we think are critical to ensure that you have an accurate inventory and can reliably trust that you can keep inventory levels down to a minimum so you don’t waste precious dollars on things you don’t need right now and won’t require this month. You need:

1. an accurate count of current inventory. That means the system that you use should auto-increment or -decrement inventory once you purchase it or use it. You will also need an easy way to make adjustments to current inventory and an historical record of those changes.
2. an accounting for work-in-progress (WIP) Any time that you or your team completes a step in production that alters the inventory you have – specifically where you may report value progress on the balance sheet or to your customer – you should have a record of that WIP inventory change.
3. a system that tracks promised inventory. This is inventory that is already spoken for in an order or job that’s upcoming, but the inventory hasn’t been moved from its holding area. If you don’t know it’s spoken for, it’s tempting to take more jobs than you can with what you currently have.
4. an early-warning system for insufficient inventory. It’s good to have this both when the job is initiated and also when the work has gotten to the step in the process that requires it. Otherwise, your team is spending countless hours on a seek-and-find mission that has no good outcome for you.

Need to know more about inventory and what to ask for in a system? Just connect with us. We can help. And next week, we’ll tackle dashboards.