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A quote often attributed to Albert Einstein says that, “the definition of insanity is doing the same thing over and over again,yet expecting different results.” Everyone falls into this trap at one time or another, but in the business world indulging in this thinking can quickly lead to failure. Even if you hit a sweet spot early on and have been going off of intuition for years, you can’t afford to take chances any more in today’s business climate. Repeating what worked previously is only effective for so long.
Smart business people – job shop owners included – should have a strategic view of their business, and use a consistent set of key performance indicators to measure the performance of their business. If you are like most job shop owners, your shop is probably one of the most important parts of your life – providing income for your family today, employment for your staff, and a lasting legacy for generations to come. You can’t afford to be anything but smart when it comes to developing your company.
There is no doubt that owning and running a manufacturing job shop in today’s economy is difficult. You are facing more strenuous demands – customers are demanding price reductions and ever-higher levels of service, material prices continue to increase, and finding skilled labor is a challenge. Your burdens are not getting any lighter. Yet, the need to remain profitable and relevant to your customers does not go away, no matter what the external circumstances. You still need to maintain and grow your business. In your search for effective strategies, you may have determined that implementing lean manufacturing strategies in your job shop could be a viable option to meet these challenges. However, even as you researched or learned how effective lean manufacturing could be, you may have also realized that in many ways it may not apply to the type of job shop you are operating.
If you are an owner or a manager of a job shop or contract manufacturing facility, the old management adage of “you can’t manage what you don’t measure” is more true today than ever before. With the economic uncertainty that still abounds, the demands placed on you by customers for high quality parts at lower and lower prices, and the skills gap between those employees that you might be losing and those available in the workforce, it is critically important to understand the current state of your business through the use of real time key performance indicators or KPIs. The challenge for many job shop owners is understanding first WHAT to measure, then setting a goal or standard METRIC by which your current state is measured against also known as benchmarking, and then putting corrective actions into place to help you achieve or surpass these goals in a regular, sustainable fashion.
How many times has this happened to you...you're out on the shop floor and there's a piece of information that you need to reference and it's back on your computer on the other side of the shop. This could be a quick glance at a CAD Drawing, a quick re-read on a customer's email or the phone number of a vendor. You can't login to a nearby machine, because it doesn't have the right software or information. You don't want to run back to your computer, because that takes time and increases the possibility of getting sidetracked.
For many years, if you were a job shop or contract manufacturing owner you didn’t have to worry about inventory. You bought raw material directly to the job about when you needed it and whatever inventory you did have was usually comprised of raw material drop or remnants or a few finished parts from a previous job overrun.
July 26, 2013 ETM Manufacturing Blog http://etmmfg.com/blog
Topics: Quality Management