The Three Areas of Your Shop in Numbers

Whether you build, make or stock and ship, you have three key areas of your shop that determine whether you will be profitable and by how much. Lose in any one of these three areas, and you may lose it all. Win, and you may or may not be successful. They are that critical to keep an eye on. And, when we say “keep an eye on”, we’re not talking about walking around and looking with your eyes. That’s one way to get information.

It's also extremely ineffective and often wrong.

The three things that are most critical for you to both track and support are your people, your processes and your inventory. A quick word about inventory before we get started. When we talk inventory, we are referring to:

• raw materials that you will use in production,
• parts that you will consume in production,
• parts or subassemblies that you make and will either use or stock,
• parts or materials that you stock for sale,
• substances and parts that you source for use in your production process,
• tools that you use in production, and
• things that might weigh or measure things for you in production.

This goes far beyond your ERP inventory tracking. We’ll talk about that further in later blogs but know that you need to control the sourcing of your materials and products from end-to-end to really count it as inventory control.

Your PEOPLE

We’ve talked about people before. Today, we’re going to take a different approach and talk about the type of people you have. We’ve heard our customers talk about “people on the carpet and people on the pavement” referring to those in the front office and those in the shop. Both have critical needs in production and need complete production control to help them do their jobs.

The Executive Team – This may be your e-team or your board, they need information. Not at the end of the month. Any ERP system can drill out a report at month’s end to let you know your financial performance. We’re talking live, in-the-moment, production performance. They need immediate access to the performance of this period over the prior one and this period in relation to last year. They need the value of the work on the shop floor to predict future billings and cashflow. They want to see pretty pictures that tell the story of the shop – how it’s doing this morning, right now.

The Sales Team – They need access to production information as well. They are an often-overlooked group, but if you talk to your production team, you may find out that this group regularly presses the team to meet promised deadlines and you may even find them wedging their customer jobs in front of others by going down to the shop and asking for favors. This team needs real-time access to production information to be able to make more realistic promises on your and your team’s behalf.

The Customer Service Team – This team needs to give customers real-time information when they call. Customers may call asking for the status of an order and they need to know or else they’re guessing. They may also spend a lot of their time walking around trying to find the order in question, which is a useless waste of time. Customers may call asking to make a change on an existing job and this team is the one who often determines whether or not that’s possible based on where it is in production. If that information is wrong, they are also guessing. My experience tells me that a CSR will always err on the side of appeasing the customer, whether you can see that promise through or not.

 

The Quality Team – You hired this team to ensure your quality meets or exceeds company and customer expectations. You hired them to improve the quality you have. If you don’t have a system, this team is brought to its knees with lack of data and they are using baling twine to hold together what you have. They may track quality on spreadsheets and they may be able to report it all to you but they are not able to do more than just that – track it. They are covering issues as they happen, which is covering up what’s really going on.

The Purchasing Team – This team often has no idea what you need to do the work you have to. They often buy in patterns or when someone makes a request. In today’s world of supply chain delays, that no longer works. Just-in-time inventory has been elusive for even the most prepared teams. This team needs predictive purchasing demands; what you need and when you need it by. They need to know how much you require, and how often you use it so they can make the right purchase. They need access to both forward-looking and historical purchasing demands to ensure that they buy what you need when you need it.

Other Team(s) – We could include the production team, operators, supervisors, and calibration teams here. Material handlers. Shippers. Invoicing. Transportation. You have a million teams and they all need access to as much information as you can give them to do their jobs most effectively and make you the most profitable.

 

How reliable are the systems you depend on to provide accurate, timely information?  The information critical to measuring production performance and finding ways to improve it. Not great? We can help, just drop us a note at info@cimx.com. Or solve this and many more production problems faster with a Process Gap Analysis of your shop. Either way puts you on the path to discovering Complete Production Control.

Contact CIMx Software to see how a Manufacturing Execution System can improve production control for you.