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Why the Need for Change?
The other example of using CI, EW, and VA together is by using a process flow chart. This technique can be used in a variety of ways. First of all, the physical movement of material from the receipt of this material until it arrives in finished goods must be traced. Each operation is identified. At this time, the kind of reporting activity is identified, such as order reporting, inventory reporting, or labor reporting (OIL Test). The number of times each is reported is identified and totaled. The objective is to reduce the number of transactions. The next step is to determine how long it takes to perform each operation or activity. Next, how far is the material moved. This is usually calculated in feet or yards. One of my clients calculates theirs in miles.
Once again, in order to effectively achieve results from the above activities, many departments must work together as a team. These departments are P&IC, production management, manufacturing engineering, industrial engineering, tool engineering, process engineers, management, quality control, etc.
What Types of Relationships Need to Be Integrated?
On page 8-6 of the CIRM Manufacturing Processes Course, three types of internal relationships are given. One is the principle influences on manufacturing within the plant such as planning, control, and execution. The second is those relationships within the plant but not directly involved with manufacturing. The third is those relationships external to the individual plant but within reach of the firm. It becomes the firm's goal, therefore, to develop, implement, operate, and maintain productive systems to meet customers' expectations competitively at the lowest total cost.
The first example concerns inventory levels. It is amazing to me that when I ask simple questions regarding monthly finished goods inventory targets, none can be provided by many companies. The same situation holds true with raw materials, purchased components, or work-in-process inventory targets. One reason, in my opinion, that this situation exists is that departmental walls exist and inhibit the agreement on these targets. Who, then, needs to be involved in these decisions? Manufacturing should be involved with accounting/finance in establishing inventorylevels for raw material, purchased parts, and work-in-process. Since cash flow, profitability, and production are affected by the level of inventory, it is extremely important that agreement on these numbers occurs. Regarding finished goods, it is my opinion that marketing/sales are responsible for maintaining the level of finished goods (MTS) that is required to satisfy the customer demand. Marketing/sales should order the product from manufacturing, who replenishes their finished goods inventory. The finished goods inventory levels also affect the cash flow, which involves accounting/finance.
The second example involves facility planning. This is an interesting example, since it involves both vertical and horizontal relationships, which are potential barriers. The individual facility plan is developed through top-down policy planning. Since this is top down, it progresses from corporate and manufac-turing strategies through capacity planning to individual facilities management. Other factors from outside the organization also affect these decisions, such as federal, state, and local regulations, waste control, logistics, manpower type, and availability. This situation also involves process design and manufacturing operations. In addition to this, the process design and development affects marketing through product development, engineering through research and development, and technology (R&D) and overall manufacturing strategies. Parts and material suppliers also become an integral part of supporting the overall implementation of this effort.
To be Continued
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