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Auditing Manufacturing Systems 


Many manufacturing companies have been using a Manu­facturing Resource Planning (MRP II) system for years. How often have these same manufacturing companies audited and reviewed all the business management pro­cesses under the MRP II umbrella to see if they are under control, well managed, producing the desired results, simple and reliable? Probably never! This is unfortunate because there may be many golden nuggets of opportunity just waiting to be mined.

Auditing the current manufacturing business manage­ment processes and MRP II systems will show a manufac­turing company where they can "reengineer," streamline, enhance, and simplify these processes to reduce and elimi­nate the non-value-adding activities/steps and unneces­sary costs. Manufacturing companies throughout the world are facing the same basic manufacturing problems: balanc­ing the Demand = Supply equation and managing the Supply chain link. At the same time:

• Markets are constantly changing.

• Technology continues to rapidly improve.

• Competition is getting tougher, leaner and meaner.

• Customer's wants and needs are constantly chang­ing—they continue to raise the high bar of excellence— not by inches, but by meters.

As each of the above elements change, manufacturing companies need to "rethink" the existing business strategy to remain a competitive force. Manufacturing companies can no longer afford a "business as usual" attitude—this will only cause "results as usual."

New Strategic Approach

The "new" strategic approach to reengineering contains ten key elements:

1. Review each and every business management process (from receipt of customer order through shipment) to make sure it can handle the required change with speed and flexibility.

2. Products and services may have to be repositioned to remain competitive.

3. Silos of excellence have to be broken down. The tradi­tional functional walls and barriers within an organi­zation must be torn down and replaced with horizontal processes that are streamlined and cut across the traditional silos.

4. Companies must utilize their most precious and tal­ented resource—people!—to implement the new busi­ness strategy and take ownership of the new stream­lined processes.

5. "Think outside the traditional box" when it comes to changing the business strategy and processes.

6. Set "stretch" goals and objectives.

7. Have flexibility (speed) in all aspects of the business processes.

8. Allocate the required critical resources (money, time and people) to implement the new strategies and change the processes.

9. Management throughout the organization must pro­vide "guided discovery." They must also delegate au­thority and assign accountability and responsibility for reengineering the manufacturing business man­agement processes.

10. Follow up to ensure results were achieved.

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Obstacle to Success

Unfortunately, just understanding and agreeing to the new strategy aren't enough. The organization needs to ensure there is support, ownership, buy-in and commitment throughout the organization from top to bottom. People must view "change as the status quo" and understand "The definition of insanity is doing things the same way and expecting different results." The biggest obstacle is the acceptance of the need to change because:

• Change is stressful and takes time.

• Change isn't easy because old habits and mindsets are hard to change.

• Change is usually poorly implemented and managed.

• Change is resisted. An excellent quote is "No organization is so screwed up that someone doesn't like it as it is."

• People cling to the past and hang on to what they know and understand.

• People fear change because they don't understand why change is needed.

• Poor communication causes myths, misconceptions, and misunderstandings about why the change is needed.

To be Continued


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