Whether you’re a large or small company, running a business can be complicated. Most managers must deal with hundreds of issues every week, ranging from technical product, material, and machinery decisions and finance concerns to closing the next sale. Yet success “in the big picture,” requires an ability to focus on basics.
Just what are the basic elements that should have the full attention of top management? Listed below are just a few examples where the majority of money is consumed in a manufacturing business – and where efforts should be focused.
Maximize the material yield. Lumber, veneer and panels are the largest cost in a wood products company’s financial statement. Yet this commodity is often mistreated from the moment it arrives at the shop.
Haphazard storage practices lead to warping and other damage that adversely affect the ability to obtain maximum yield of usable parts. Poor design and management of the cutting process also can compound the loss by sending too much wood to the waste bin. Smart managers monitor their sawing methods and material yields regularly.
Optimize the workplace layout and design. Sound ergonomics combined with logical placement of the material being processed relative to the workstation or machine is basic to any efficient factory. Don’t squander expensive labor and machine capacity with wasted movements.
Clean and organize the plant floor. If there is one tenet in lean thinking that anyone can implement, it is 5S (sort/straighten/scrub/systematize/standardize). Removing all unneeded materials and equipment, scrubbing the factory, creating a formal place for every required production input, and keeping the plant floor organized are musts for efficiency.
Manufacture accurately the first time. Properly designed, sized and processed parts result in substantial assembly and in-service savings. Remaking defective parts is costly. Accuracy starts with sound product engineering, calls for clear communication of specifications to the front line workforce, requires easy-to-use measuring tools, and demands constant inspection.
None of these prerequisites is complicated, but they require constant attention to detail.
Segregate defective parts early. One sign of a poorly trained workforce is its failure to isolate defective parts immediately when an imperfection is first identified. By doing so, you create more calendar time to replace or rework the faulty part without delaying the work order. In addition, labor in downstream operations is saved by eliminating further processing of a bad component.
Combine operations where feasible. Two simple plant layout techniques often translate into faster, more efficient processing. First, positioning two or more single-function machines within arm’s length can create a flow line. Operators then can pass individual workpieces to the next machining step without destacking, moving, and restacking the parts.
If warranted, the flow line area can be equipped with flexible dust, air, and electrical connections to enable the rearrangement of these machines for processing different parts. Secondly, it allows you to utilize the lengthy cycle times on machines productively. By placing a second machine within reach, the operator can often complete an additional process step while waiting on the machining center.
Pay attention to tooling. Oftentimes the last piece of equipment purchased for a new machine, tooling is vital to the success of the operation. Tearout, chipping, visible knife marks, and other machining defects caused by improper or poorly maintained tooling mean excessive sanding and higher scrap rates.
Don’t forget the office
Other examples of critical basics are found in the office.
Get on schedule. Keeping your plant on schedule is the key to completing jobs on time and satisfying your customers. Nothing concentrates a plant’s attention on minimizing machine times and reject rates more than trying to stay on schedule.
Know your costs. You simply must know which products and customers are contributing to your success or merely adding to your losses. Cost data is often painful to accumulate and analyze.
Collecting machine processing times, material yields, and reject rates requires the
involvement of your frontline workers as well as someone to crunch the results into meaningful information. But once you have reasonably accurate cost knowledge, you can set standards for your operation and calculate what your profit ought to be.
Set expectations for every employee. The costs you develop for pricing have another valuable use: setting expectations for labor productivity, yields, and overhead costs. Once you cost your products based on a set amount of labor hours, you have established a performance target for your frontline workers. Most workers want to know what is expected of them and providing that information is one of a manager’s principal jobs.
Measure your performance. These targets provide meaningful benchmarks against which to monitor your plant’s performance in key areas such as labor productivity.
Attending to these basics will bring immediate good results. The bottom line: Being the best you can be should be your overriding goal. If you can’t handle the basics, you can’t be the best. Period.
5 traits of a good leader
Leaders have vision. A great leader thinks with imagination, beyond the here and now. We’re not talking about being a wild-eyed visionary. The ability to see old things in new ways or create new processes from old ones will better serve a company than pipe dreams. A vision that cannot be translated into a profitable business model is of no value.
Leaders take risks. The dilemma of choosing between a perilous opportunity and the status quo is easy. The former may bring failure, but the latter might lead to obsolescence. Remember, in the no-profit zone you either change or exit the business. There are no other alternatives.
Leaders accept failure. Innovation and change end in failure more often than success. Success is won only by exploring lots of ideas. And being willing to fail means a readiness to pull the plug on an idea that’s not working.
Leaders are consistent. And to them the truth matters. Employees want to see their company do what it says and be honest. You won’t build a dedicated team by being dishonest or by saying one thing and doing another.
Leaders cultivate more leaders. The best-led companies have leaders embedded throughout their organizations.
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