You can’t get around the news that 3 major banks in the US have now failed. This is news everywhere. How does an institution lose 90% of its value overnight and not make the news? For businesses that had their money there, this was a major loss or at least a significant cause of stress. Would they get their money back and, if so, all of it or just some?

We talked about cash early on in this series. When I’m talking to anyone about tracking their numbers, the first thing I’m worried about is making sure they know their daily cash position. Daily cash is oxygen for the business and makes sure you know that there’s nothing nefarious going on, because once you get your daily cash report, you’re going to find that you want to know, also, what came in and went out. Every day. You’ll ask more specific questions about specific details that go unnoticed, generally, in the month end reporting.

Which brings me to your shop. I’ll come back to the banks.

WHAT ARE YOU MAKING?

What’s the thing you’re making, picking, packing, shipping, assembling, or producing? Whatever it is, whether it takes months or minutes or even seconds, you must have a few “oxygen” metrics. Those things that, if they are true, mean you’re doing well. Daily run rate. Shipping volumes. Order numbers. Things that you track, daily or weekly, that give you the information you need to know you’re doing well or about to lose 90%.

I’m going to go a little off-track here to talk to the parents out there that just went through the college selection process, as our house did. Here’s a moment in time where you think to yourself, perhaps, where did the time go? Eighteen years ago, which seems like minutes, they were just so small and now, perhaps, they tower over you. That growth goes somewhat unnoticed as it’s happening a little bit at a time. One day, it feels like you get up and you’re looking up at your 6 foot something teenager. You don’t notice the daily changes as you’re living them.

Similarly, with your production, you may not be noticing the uptick or downtick in volume, errors, scrap, missing materials and other critical numbers that actually tell you how you’re doing. And why, perchance, are you even letting today’s performance dictate tomorrow’s? Are you sure that the work the team is doing is at its apex?

THE FDIC in your organization

The FDIC is going to step in to save people’s accounts if they’re with an insured bank. And it’s a great idea to know if you’re with one of those – that’s critical. (Go check now if you don’t know.)

What is the insurance in your organization? What is the metric that you can track that tells you, honestly, how you are doing? And how are you supposed to be doing? The thing that most manufacturers report to us is that they can’t possibly track anything that quickly other than on a written white board (which they usually refer to as an andon board) because they don’t have true access to the information. They don’t have the data they need.

Do you?

The FDIC has insured accounts to a certain level. It’s the level of risk they are willing to take for an organization (a bank) that has undergone yearly auditing. (I’m not going to comment today on the level of accuracy for those audits based on the recent failures.) They have determined an acceptable level of performance for financial institutions based on what they need to see and they set that bar. And the organization itself has a long history of no change. Think about this:

  • In 1980, the FDIC more than doubled its covered amounts to $100,000.
  • It wasn’t until 2008, post the Great Recession, that the FDIC upped its limit to its current $250,000.
  • It was a temporary lift.
  • Two years later, in 2010, it was made permanent.

Keep in mind that $250,000 today is worth just $181,159 in 2010. It just doesn’t go as far.

WHAT'S YOUR NUMBER?  WHEN'S THE LAST TIME IT CHANGED?

Are you looking at the production of tomorrow or the production you got (and maybe didn’t expect) from yesteryear? It’s so hard, looking at that whiteboard, to know what’s possible. You can’t know what your team is capable of. You’re basing your output on prior periods, not performance standards. Perhaps you’ve sunk to 2010 levels. Do you know?

I know you care. You need the number that you can track today that signals that you’re doing well. Today. For tomorrow. Think about tracking a number that tells you performance rates based on current conditions. And if we’ve learned anything about current conditions it’s that they’re ever-changing. The top-to-bottom disruption caused by COVID has caused all of us to rethink what we’re doing and how.

Could you – dare I say it – support some work from home? Could you do partial days or weeks for those who need flexibility? Would that help you draw and keep talent? I think the question I hear most people asking is how is that possible, given the state of irregularity many of you may operate under. You need something to help you manage, daily, changes that are inevitable for you right now. That’s how you manage your business with the “insurance” that you’re performing at the top level no matter what’s happening.

Support and empower your team with a system that gives you the data you need to know. A system you can rely on for visibility, productivity and flexibility.  Push the Connect button about to learn how we help teams with this. Or if you have a question, reach out to info@cimx.comWe are always happy to help.

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

 

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