3 min read

People and Profit

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This summer, we’ve been talking about profitability. Who doesn’t want more of that?  Last week, we talked inventory.  Over- and under-inventory issues plague manufacturers that don't know how much of what they need at any given time.  Supply chain issues from COVID have not helped and the longer lead times mean many manufacturers don't know what they can promise by when.  

I haven’t met a manufacturer yet that said they were making too much money. And yet, when asked direct questions, most of those same manufacturers do not know how much they are making on individual jobs or customers, losing on the same or how much profit is even available on a job if they work it properly.

When we dive in with these customers, we talk about areas that they have waste. MUDA identifies the symptoms of waste so you can trace it back to its roots in your shop.  It comes from the Lean, Six Sigma methodology. Lean consultants look to shorten processes and eliminate bottlenecks and waste. They are trained for it and spend years learning how to ask the right questions to get to the bottom of the issue.  How can you start to uncover some of these same issues?

Put yourself at your doctor’s office. While some of us go in self-assessing the problem, you are looking for the expert to tell you what’s wrong. You know what your symptoms are. You describe to the doctor exactly what you’re feeling and when. Rarely do you know the cause. You are waiting for them to tell you the issue.

Can you do the same self-assessment for your shop?

Again, we’re looking to MUDA. MUDA is a series of symptoms that point to an underlying problem of waste in manufacturing. If you notice a struggle with any of the symptoms, you can dig in further to see what kind of a problem you might have. Getting a system or process that takes care of the problem at the root of the symptom is the key to solving it.

Inventory was our first discussion and it’s our first symptom of waste that we look to with prospects. It’s an easy one as stories of inventory not found or not available are often spoken about loudly, unlike future areas we’ll cover like waiting. When an operator doesn’t have the materials they need to do their work, they are likely to speak loudly about it. Whoever is in charge of your inventory will not always talk about over-stocking as they don’t want to point to a problem they may have helped to create, but they will certainly let you know when there’s a shortage. Chances are, that item will also pop up on your delivery charges as you may see your shipping costs increase to get the stock in as you need it.

Taking an aside here, we see many manufacturers struggling with inventory today as a result of the supply chain shortages and shipping issues from the pandemic. Lead times have lengthened and promised receive-by dates are often lost. A system can help with that too. Let us know if you have questions on that.

Over the next few weeks, we’ll talk about non-conformances or defects, waiting, motion, processes and even over-inventory. With the exception of the last one, these are often about your people as much as your processes or inventory. It’s worthwhile to ask your team on each point what they experience. If you leave the conversation open to errors, complaints and the truth of their work day, you may learn the issues that you don’t see. Let them come to the surface to solve them.

A morning huddle is a great place to start.  Ask your team to report on any issues they had yesterday and start to catalog them.  Begin to track how many times they report on one or more issues that you're seeing repeat.  See if you can put these issues into one of the categories of deadly waste that we're talking about.  If you can, there's help for you there.  Every issue on the waste circle can be solved with a series of specific processes.  Whether you build those yourself, work with a consultant, or choose to implement a system to help, these are something you can overcome.  It all starts with a conversation.  Be open.  Listen.  Encourage them to report out so you can solve it.  

We're going to continue the conversation with defects. This is an easier one to pinpoint.  Similar to inventory, defects often have a "loud voice" on the shop because you have to solve the issue to get the product out the door.  

We believe in the critical importance of manufacturing for companies of all sizes right here in North America.  We are a software company that believes in standard toolsets affordable for shops from 20 to 200.  We believe in finding manufacturers the tools they need to work, whether it's a simple Google doc, an Excel sheet or a Production Control system.  To learn more about meeting your targets for 2021 or just getting a question answered, visit us at CIMx Software.


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