4 Steps to Cost and Productivity Improvement
The ability to improve productivity and reduce costs is essential if your manufacturing business is to be successful.
We outline a project based approach, in 4 simple steps, which can achieve excellent results
A project based approach ensures that the correct level of structure and discipline is applied to the improvement process. This is particularly important when trying to achieve and sustain a step change improvement. Some of the considerations to ensure success in change projects are covered in January News and Views.
Step 1 - Environment
Before attempting to make a change, the environment in the workplace should be right. This means both the physical environment and the cultural enviornment.
The physical environment should be professional, clean and tidy. Lean manufacturing tools such as 5S can be used to address this.
Culturally, the organisation has to want the change. Project roles should be defined and coaching should be given to the key personnel who must be prepared and able to use a rigorous approach to making improvements, using the steps PLAN-DO-CHECK-ACT.
There should be a thorough review of the data generated. If data is not used to make decisions and take actions, then don't collect it ! Make sure that only data that is truly useful is generated. Use the principle DATA-ANALYSIS-DECISION-ACTION to determine the data that you really need.
Step 2 - Systems
Systems need to be defined. There should be systems that measure performance on a daily/weekly/monthly/annual basis and that generate the right data to allow the analysis that can lead to decision making and action .
For productivity, it is essential that these performance tracking systems are able to track actual output compared with the maximum possible output. The difference between the two defines the opportunity.
For cost, you should have systems that clearly track all of your expenditure.
There should also be systems for activity planning. This will make sure that you are making the best possible use of all of the time available.
Step 3 - Challenge
Once the data is available, it should be rigorously challenged. The challenge should be carried out by the people who can make a difference. That means those who operate and maintain the production facility and those who spend the money and use the consumables..
Considering productivity, every lost unit of production should be challenged. Why was production less than maximum ? What were the causes ? What can we do to overcome this ?
For cost, every pound spent should be challenged. Is the spend necessary ? How can we do things differently ? What are the alternatives ?
Step 4 - Improve
Action must happen immediately following the challenge process. Some changes will be easy to implement, others may require capital investment. The most important thing is that you know exactly what has to be done to make the improvement.
Continuous Improvement
Once these principles have been achieved, you will have achieved a step change improvement. Equally important, you will have the tools in place to ensure on-going continuous improvement.