U.S. economy is coming out of its recent stall, the manufacturing
sector expanded at a respectable rate in July on strong orders and
higher productions rates.
Institute for Supply Management said its manufacturing index
registered 62.0 in July, up from 61.1 in June. It was the 14th
consecutive monthly increase and was in line with the consensus
forecast of analysts.
index reading above 50 indicates expansion, while one below 50
indicates that manufacturing activity is contraction. The gauge
has been above 50 since June of last year.
represents a good start for the third quarter, and the outlook
continues to be very encouraging as new orders and production
accelerated during the month," Norbert J. Ore, chairman of the
institute's survey committee, said in a statement accompanying the
the expansion continues, many manufacturers are once again
experiencing problems in meeting production schedules, maintaining
high quality products and satisfying customer requirements. It's
important that your company takes advantage of this opportunity to
increase their competitive edge.
What can you and your company do to improve your competitive edge?
The winners choose to identify and master the 8-Steps of Six Sigma Manufacturing.
If your company wants to eliminate shop floor chaos and
end-of-the-month scrambling and create a fun work environment, be
sure to read this week’s article and pass it along to those who
could benefit from its message.
a nice day, keep the faith, and stay connected.
MANUFACTURING PRACTICES BULLETIN
Now serving 6263 subscribers
Knowledge for Manufacturing People
THE 8-STEPS OF SIX SIGMA MANUFACTURING
their efforts to draw closer to customers, many manufacturers have
lost focus on what should be a company's primary success factor -
profitable growth. In today's competitive manufacturing environment,
it takes more than quick fixes, outsourcing and downsizing for
companies to consistently achieve their growth and profit
objectives. While these options may yield temporary financial
relief, they will not lead the way to long-term growth and
profitability. For companies to grow and consistently exceed bottom
line expectations, they need to get lean. And, to get lean they must
master the basics of lean manufacturing.
Over the past 30 years, we were led to believe that computerized
systems would provide the solution to all of our growth and profit
challenges. Material Requirements Planning (MRP) and Enterprise
Resource Planning (ERP) System gurus assured us that if we
implemented their software programs the bottom-line would take care
of itself. Well it hasn't happened!
most perceived panaceas, each of these programs received a lot of
hype, produced a few success stories but in general, contributed
little towards helping companies identify and achieve their full
growth and profit potential.
For a measure of their shortcomings, one needs only to spend some
time in an MRP scheduled manufacturing facility - especially during
the last weeks of the final financial quarter. In a typical company,
you'll find that converting the quarterly financial forecast into
reality still requires overtime, internal/external expediting, last
minute "on-the-run" product changes and even a little
"smoke and mirrors".
are scrap, rework and warrantee costs that negatively impact
profitability. Then there are quality and shipment problems that
deliver less than acceptable customer satisfaction. Companies have
spent many thousands of dollars in pursuing MRP and ERP only to see
their growth and profits decline due to uncontrolled operating costs
that produced non-competitive pricing.
after introducing MRP/ERP computer systems and more, why is it that
most businesses are still struggling to sustain profitable growth
and are no where close to achieving their full growth and profit
first reason is simple - the results achieved by any computer system
are only as good as the people at the controls and the integrity of
the data they provide.
second is complex - most manufacturing managers facing major
day-to-day problems and constraints adopt a totally reactive
management style. Consequently, their time is consumed with
"band-aiding" and/or finding ways to work around system
and process problems - leaving them little or no time to analyze and
eliminate the root causes of ineffective systems and
does one turn around such a classic "cart before the
horse" syndrome? What's required is first a company-wide,
in-depth understanding of the fundamental of manufacturing
excellence and then a total commitment to the consistent and
tenacious execution of the 8-Steps of Six Sigma Manufacturing™.
below are the 8-Steps:
INTEGRITY: It is not uncommon for front office management to become
disenchanted with computerized systems results when time schedules
and promised paybacks are not achieved. Acceptable systems results
cannot be achieved when systems are driven by inaccurate data and
untimely, uncontrolled documentation.
MANAGEMENT: Measurement systems can be motivational or
de-motivational. The individual goal setting of the 80's is a good
example of de-motivational measurement - it tested one individual or
group against the other and while satisfying some individual egos,
it provided little contribution to overall company growth and
profit. Today, the balanced scorecard is the choice of manufacturing
SEQUENTIAL PRODUCTION: It takes more than systems sophistication for
manufacturing companies to gain control of factory operations. To
achieve on-time shipments at healthy profit margins, companies need
to replace obsolete MRPII/ERP shop scheduling methodology with the
simplicity of sequential production. Manufacturing leaders have
replaced their MRP shop order "launch and expedite"
methodology with continuous production lines that are supported by
real-time, visual material supply chains ... sequential production.
The assertion that sequential production only works in high
production, widget-manufacturing environments is a myth.
Material handling and storage are two of manufacturing's high cost,
non-value added activities. The elimination of the stock room, as it
is known today, should be a strategic objective of all
manufacturers. Moving production parts and components from the
stockroom to their production point of use is truly a return to
basics and a significant cost reducer.
TIME MANAGEMENT: Long cycle times are symptoms of poor manufacturing
performance and high non-value added costs. Manufacturers need to
focus on the continuous reduction of all cycle times. Achieving
success requires a specific management style that focuses on
"root cause" proactive problem solving, rather than
PRODUCTION LINEARITY: How linear do your production
departments produce to the company's master schedule? As companies
struggle to remain competitive, one of the strategies by which gains
in speed, quality and costs can be achieved is to form teams of
employees to pursue and achieve linear production. Companies will
never achieve their full profit potential if they produce more than
25% of their monthly shipment plan in the last week of the month or
more than 33% of their quarterly shipment plan in the last month
of the quarter.
RESOURCE PLANNING: One of the major challenges in industry today is
the timely right sizing of operations. Profit margins can be eroded
by not taking timely downsizing actions and market windows can be
missed and customers lost by not upsizing the direct labor force in
a timely manner. These actions demand timely, tough decisions that
require accurate, well-timed and reliable resource information.
SATISFACTION: Customer satisfaction is in the eyes of the beholder -
the customer. Perceptions are what we need to address when it comes
to improving customer satisfaction. It does us no good to have the
best products and services if the customer's perception of our
"as received" quality and service is unsatisfactory. We
need to plan and implement proactive projects that breakdown the
communication barriers that create invalid customer perceptions.
many business gurus have identified one or more of these steps as important to the successful pursuit of
business excellence, the fundamental importance of these six sigma
steps has been lost in the proliferation of buzz
words and the mania of systems sophistication.
say it is time for companies to put a hold on sophisticated systems
development that cause self-inflicted, day-to-day chaos. In its
place, they should immediately initiate an action learning program
for gaining a company-wide understanding and acceptance of the
importance of the 8-Steps to Six Sigma Manufacturing™.
buy-in and commitment have been achieved, aggressive planning and
tenacious implementation must follow. In short, let's put the
"horse before the cart" - such a program will build a
solid foundation for redefining and revitalizing a company's pursuit
of profitable growth.
you and/or your company want to learn how to master the 8-Steps of
Six Sigma Manufacturing, click here--> http://bbasicsllc.com/kblm.htm
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