You may not be in the medical field or make medical equipment, but we could all take a lesson from a surgical team. I recently had the opportunity to watch them in action for a planned surgery and the attention to detail was amazing. The team worked flawlessly together and double-checked the work multiple times. There were small little processes they used to ensure that all was done correctly. I wonder how well I am doing that in my own work? How about you?
The medical field is more careful than most fields. Similar to their compatriots in aerospace, there is no margin of error that’s acceptable. In any job, that’s a heavy lift, but when the job is perfect manufacturing, it’s even more complex. The list of instructions, safety measures, quality checks, and material tracking you must do to comply with just the bare minimum standard may far exceed what you do day-to-day.
consider the checklist
A checklist is designed to remind you of what you need. In the surgical field, it’s become so critical that they have the surgical checklist standard. You can find the one that the World Health Organization cites here.
I use a checklist every time I travel. Although I may travel often, there’s inevitably at least one thing I’m going to forget. Usually, for me, it’s the phone charger cable. Or my brush (tooth or hair – it’s about an even split). I recently made the missing charger problem better by ensuring that both my PC and my phone charged with a universal C charger, but that’s just a means of getting around the checklist that I should be using. And, I've amassed a half dozen brushes over my travels (over-supply of inventory there).
Checklists are meant for people who have done the job at hand a million times and those for whom it might be rare. They are a means to jog your memory to that power cord you’ve seen a million times and use every day but forget to grab and put in the luggage. You may take a quick look at the checklist for remembering or physically check off each item as you go; the level of detail may depend on how complex the task at hand is.
is your bom enough?
No, it’s not.
We often speak to manufacturers who believe the Bill of Materials (BOM) serves this function. The BOM is usually readily available to them if they have an ERP. For manufacturers who use QuickBooks, we find they keep the BOM with a routing (sometimes) in Excel or Word. [Manufacturers are resourceful and are using the tools they have at hand to solve the issue].
Using our surgical checklist example to eliminate errors, the BOM just doesn’t hold water as they say. There are several key issues with the BOM – some obvious, others less so. First and foremost, the BOM does not typically adjust for quantities without someone intervening (more specifically, calculating) quantities. When the BOM doesn’t do the math for you, it can’t check your actual inventory on-hand (if you even know that to the degree of accuracy required) or the cost, either.
Let’s say you make something very simple with 2 bolts and 2 plates and let’s imagine that the plates are titanium, so they are expensive and something you won’t want to waste. The customer has ordered 5 of these.
My math tells me I need 10 bolts and 10 plates. I likely only need one tool to do the work and maybe I quality check one part. If I were making 1,000 of these, I might need to perform the quality check on 10 or more of them. The BOM can’t tell you the frequency of quality checks. It also can’t record them. It won’t link the checks to parts from the same lot. In our example, if the bolts came from a bad batch (lot), could you honestly:
Find out where you put all those by using your finance system and a BOM?
Measure the cost of each bolt or just a box?
Know how much time it takes you to set up the machine to do the job (15 minutes, let’s say) and the time to do the work (1 minute)?
If not, you won’t know where the best cut-off point is for production. If you make 1 of these, for instance, it takes you 16 minutes and the cost per part is high. If you make 1,000, it will take you 16 hours and the time to do the machine setup is completely insignificant to the total cost of the job.
Think about what you make. How much more complex is it than the plate and bolt thing we were making? Each level of complexity in manufacturing takes you one step further from that ERP or BOM being able to help you with it. In our example, those plates were expensive and not something you want to waste. I would argue that in today’s economy (or any economic conditions), you don’t want to actively waste anything in manufacturing.
what kind of checklist do you need?
I hate to say it depends, but truth be told, every manufacturer is going to be a little bit different here. The checklist should have the BOM at a minimum, scaled for quantity, cost and time. Without these, you never know if you’re making any money and if you’ll be able to produce it on-time. Here’s a few additional data points you might consider:
Reserved inventory – We encourage manufacturers to know how much inventory they currently have, where it is, what it cost them, and where they plan to use it. That last one is tricky. It means that you know how much you will be using based on all the orders that you currently have, that have not yet used, the inventory in question. This reserve is critical because, if we know anything about manufacturing, it’s that it’s constantly changing and if you reduce inventory count before use, you run the risk of over or under-stocking inventory as it’s almost always wrong.
Quality checks – Every manufacturer should have a list of quality checks that they need to perform to ensure that the product is built, packed and shipped properly. This is not about the shipping label – your ERP or shipping company app should be able to handle that. This is about knowing that you’ve completed the specific requirements for your customer to accept the shipment.
Take the example of a manufacturer that sells an item for $1,100 per piece. The product needs a special oil which is required in the product box and weighs less than 1 ounce. Customers need the oil to use the product. The manufacturer’s shipping department regularly forgets to include it in the product box. Getting a shipping weight pre-packing is critical for this customer as they ship pallets and would not be able to track the small differential in weight at that volume.
How can we help?
We make manufacturing software. Only manufacturing software. We’re not looking to serve a million markets with a broad tool that does everything from invoicing to payroll. We are specialists and, well at least today, our specialty is the manufacturing checklist.
As always, we’re here to move the conversation forward with you. If things we’ve said pique your interest in what’s possible for your shop, reach out and ask us the questions that you have. We’ve been doing this for more than 25 years and we’re happy to share our insight with you.
Over the course of this project, we will identify critical issues we see, what’s causing them, and what you can do to stop them. We’ll go through almost 20 areas before we end this series on how to buy a system. These pieces should serve as a step-by-step guide to get you there.