Instant Manufacturing: Top 10 Strategies to Instant Profits
How to make most of your products instantly
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Instant Manufacturing - Top 10 Strategies to Instant Profits: How to make most of your products instantly
By Andrei Kossyrine
© Xpress Software Inc. - All Rights reserved
http://www.xssoftware.com
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Making manufacturing more profitable is not a "one size fits all" solution. This change in thinking and operations is also not accomplished in a single step or procedure change. The following is one of a series of topics designed to enhance the profitability of manufacturing in general.
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Don't stop at shortening your lead time. You would shortchange your potential. You can get an even more lucrative business using the "Instant Manufacturing" strategy.
Instant Manufacturing is very simple: Make all of your products instantly - within minutes or hours after you receive an order. Of course, if you make plastic or metal and it has to "cook" for a few days, instant manufacturing will not look this "instant" to you, but you get the idea.
The initial investment of Instant Manufacturing technology is higher, but it provides much bigger returns on your money. Imagine what that investment can do for your customers. Think of what it can do for your business.
Your dealers can rid themselves of most items in their inventories. Why stock up on lots of products if you deliver the goods the next business day?
Your resellers can advertise all of your products as part of the "Quick Ship" program or "in stock". Your customers will receive the product one or two days earlier (or even sooner).
Your customers don't have to settle for what's in stock. Think of all that last-minute shopping that occurs almost any time of the year. You can make sure your customers have their purchases when they need them and that their personalized.
Do you currently upcharge for rush jobs? With Instant Manufacturing, you can. Most clients will gladly pay a 5, 10, 15 or even 25 percent premium for the privilege of same or next day service and receiving their orders ahead of everybody else.
Or you can forego "premium" pricing in lieu of the much bigger market share after you educate your market about your new next-day shipping standards on all of your products.
So, how do you do all of that? Let's take a look at the Top 10 Instant Manufacturing Principles:
1) Automate as much as possible. A no brainer. Cut all unnecessary manual interventions from your order and manufacturing processes.
2) Make all your computer systems talk to each other in real time. Incoming orders should be processed immediately, going into scheduling and then production.
3) Use the difference between a "business day" and a "calendar day" effectively. Let's stop here for a moment. In most cases you will be able to deliver much faster than you do now. You can use two- or three-shift schedules to use that off-business hours time that's so valuable to your clients.
For example, if you have longer manufacturing processes, you can publicize that orders placed before 10 a.m. are processed and scheduled at 10 a.m. They go through two, three or even four-shift manufacturing processes, using 24-hour work days and are ready to be shipped by 4 p.m. the next day. It's still the "next business day" for your customers!
4) Use reliable JIT vendors with proper agreements for all your materials. You need as much support from your suppliers as possible to pull off Instant Manufacturing. Reward the ones that support your business and replace the ones that don't.
Take a look at Herman Miller for example. Nearly all of HM suppliers are delivering the materials just in time. HM imposes severe penalties for the ones that miss the schedule.
5) Communicate electronically with customers and suppliers. Have your systems talk to everybody involved. Implement a "no surprises" policy where all necessary information is instantly available for all parties involved.
And remember, the faster information about your orders and products goes to your customers, the sooner you get paid.
6) Have a single document travel all the way with the product through the factory floor. Use barcode on this document to track the order status, flow of goods and labor cost through the plant.
7) Monitor on-time shipping performance and tie-in bonus structure to being on-time. Your people have to WANT to ship orders on time, otherwise Instant Manufacturing will continue to stay on your wish list.
8) Set up your monitoring systems in a way that automatically alerts shift supervisors if something goes wrong with any order or product. Have the system relate "red alert" status to your plant manager if the problem is not fixed within one to two hours. And if nothing is done within four to six hours, have the system page your CEO.
9) Install Executive Dashboard software for all your executives. Let them watch in real time the system for all key corporate factors: incoming orders, work in process, assembly, shipping, AR, AP, etc. - sort of like watching a stock market chart in real time. Except this time it's your company lifeline.
Let everybody compare the numbers from today to last week, month, even year. Watch for trends, performance swings and any other unusual activities. This allows your managers to make vital decisions based on real-time information, not only last month's reports.
10) Manage by exception. Have your systems automatically process and schedule all the orders without any human intervention. Use your personnel to check on the order only if there is a problem. That strategy saves a lot of time, effort and manpower.
There are many more strategies that you can use to implement Instant Manufacturing - like getting rid of all the paperwork in the office, having barcode-based drawing lookup, using dynamic Bills of Material to automatically create custom and semi-custom products, etc. But doing all that, even in overview format, would push this article well into encyclopedia length.
You have to analyze where you are right now and use your best judgment to allocate the resources to get to Instant Manufacturing.
Consider, if you prefer, using an external consultant to do this because in most cases we often cannot see the forest because we are too close to the trees.
And be prepared for instant growth, because in today's fast pace society, whichever manufacturer offers better products faster will get all the business it can handle.
Good luck!
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Since 1996 Xpress Software Inc. has provided
technical assistance in lean manufacturing methods,
computer systems and business process automation
to maximize manufacturing profits.
Visit its website www.xssoftware.com or contact
Andrei Kossyrine at andrei@xssoftware.com.
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