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Who is Bill Gaw?
And why should we listen to him?
Manufacturing Cost Reduction

 The Hockey Stick Syndrome

 

 


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Today, let's focus on the "End-of-the-Month Scramble." 

In 1973, I started a new job as shop operations 
manager at a large OEM manufacturer. My new boss was 
concerned about non-linear production that was driving 
high non-value-added costs and poor on-time delivery 
performance. I was brought into the company to help 
solve what he called the "hockey stick" problem... 
shipping most products at the end of the month. 

I had recently participated in a successful Class A, 
MRP implementation, so, when my boss suggested that I 
install a magnetic schedule board to track DAILY 
production progress;- I said, "no, hell no!"

My boss, a good leader and an effective salesman, 
convinced me to install the board and initiate a 
morning production status review meeting. 

Six months later the magnetic board, that I was sure 
would be a failure, became the primary tool in our 
efforts to eliminate this company's hockey stick 
syndrome and we eventually achieved high production 
linearity. Results: We eliminated overtime, reduced 
scrap and rework, improved quality, eliminated late 
shipment and most important helped our company 
exceed all growth and profit expectations.

Today, the magnetic board has been replaced by the 
PC spread sheet but the daily meeting and tenacious 
follow up on early monthly tasks is still your best 
bet for achieving linear production.

If your company is struggling with the end-of-the-month 
scramble, it is vulnerable to loosing customers and 
giving up 10-20 points of its profit margin. 

If this be your case, don't pass up reading this 
week's article, "If You're Not Linear, You're Not 
Really Lean!"

Have a nice day, keep the faith, and stay connected.

Bill Gaw 
Business Basics, LLC
bg@bbasicsllc.com
760-945-5596

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MANUFACTURING BASICS & BEST PRACTICES BULLETIN

Now serving over 10,686 subscribers

Competitive Knowledge for Manufacturing People 
=====================================

IF YOU'RE NOT LINEAR, YOU'RE NOT REALLY LEAN!


Companies will never achieve their full growth and 
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." 

Is your company experiencing high non-value-added 
costs and customer complaints due to the end-of-the-
month scramble? 

As companies struggle to remain competitive, one of 
the strategies by which gains in speed, quality and 
costs can be achieved is to pursue and achieve a 
linear production process. 

Why is linear production so important? It's simple; 
"It's where the money's at!" Scrap, rework, overtime 
and poor quality are all non-value-added costs that 
increase as a function of the famous end-of-the-month 
syndrome. That is, as we delay our production schedule 
completions toward the end of the month (or worse, 
toward the end of the financial quarter), there is a 
tremendous pressure put on manufacturing. 

This pressure produces shop floor challenges that 
generate significant non-value-added costs. We usually 
end up making the production plan and financial 
forecast because the knights in shining armor come 
through with a last minute, heroic performance. 

BUT AT WHAT COST? Some companies actually give up 
10-20 points of their potential gross profit margin 
because they have developed a manufacturing team that 
functions well within the end-of-the-month syndrome... 
and they unknowing perpetuate the syndrome by rewarding 
their knight in shining armor.

Is your production linearity and bottom line results 
limited by:

* Poor forecasting and production planning 
* Inaccurate and late data/documentation 
* Last minute schedule changes 
* Inside of lead time orders 
* Production/quality problem "finger-pointing" 
* Shop floor non-value-added fire-fighting 
* Untimely material availability 
* Non-value-added scrap and rework 

If you answered "YES" to any of the above constraints, 
you no doubt are experiencing the eternal, end-of-the-
month scramble. In my experience, it is the major 
contributor to a company's non-value-added costs and 
is the primary cause of lost customers.

If you've ever said, "There must be a better way"... 
there is, and it's not more computerization!
Believe this... you'll never optimize ISO 9000, Lean 
Manufacturing and Six Sigma results if you don't 
eliminate the end-of-the-month syndrome. Your first 
priority and focus must be on production linearity. 

* How linear is your order fulfillment system? 
* Which processes are driving it? 
* Where is it on your company's "must do" list 
* Does everyone know what tasks must be completed
in week #1? 
* Is there as much focus on completing the tasks 
of week #1 as week #4? 

DO YOU GET THE PICTURE? 

Company's need to step back from the stress of day-to-
day events and take a hard look at reality. Most 
managers and their teams have far too much on their 
plate... and more is being added. They have little to 
no time to stand back and survey their situation let 
alone come up with a proactive linearity plan.

If this describes your environment, we can help:

HERE"S ONE OPTION 

Check out our 5-Day, onsite, "Linear Production Survey 
and Linearity Corrective Action Plan" by clicking on 
the below link:

http://bbasicsllc.com/manufacturing.survey.htm

We do an unbiased survey of your order fulfillment 
system, identify and size linearity improvements, and 
develop a roadmap and proactive plan to permanently 
eliminate your end-of-the-month syndrome. 

HERE"S ANOTHER OPTION:

Check out our 1-Day, onsite, "A Focus on LINEAR BASICS"
By clicking on the below link:

http://bbasicsllc.com/lean-manufacturing-forum.htm



Don't let the end-of-the-month scramble create an 
unhealthy, stressful, working environment for you 
and your colleagues. Take a positive step, put this 
bulletin into the hands of someone who has the 
vision and authority to make a positive contribution
to your company's bottom line. 


=====================================

A COST-EFFECTIVE TRAINING MODULE

Manufacturing leaders have a responsibility to 
educate and train their team members. Individuals 
have a responsibility to train themselves. Without
continuous learning, you will never reach your full 
growth and earning potential.

In order to help MBBP subscribers optimize the 
benefits of continuous improvement projects, I 
extracted a portion of the Kaizen Based Lean 
Manufacturing e-Tutorial and created a cost-effective, 
Kaizen Management training module. 

Take a few minutes and check out the Kaizen Management 
Training Module... a $149.00 value for only $97.00... 
it's only available to MBBP subscribers. To review it, 
go to:

http://bbasicsllc.com/training-modules.htm

=====================================

You are welcomed to print and share this bulletin with 
your manufacturing teams, peers and upper management ... 
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=====================================

Business Basics, LLC
6003 Dassia Way, Oceanside, CA 92056
West Coast: 760-945-5596

Manufacturing Knowledge you'll not find in the books 
at Amazon.com... neither in the APICS library 
nor in the Harvard Business School Press

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ISO 9000:2000 - Strategic Planning - Supply Chain 
Management - MRP Vs Lean Exercises - Kaizen Blitz 
Lean Six Sigma - Value Stream Mapping

All at one Website: http://bbasicsllc.com 


 Manufacturing Cost Reduction for Winners

 

Manufacturing leaders have a responsibility to educate and train their team members. Help for developing a self-directed, World Class Manufacturing training program for your people is just a click away:


http://bbasicsllc.com/training-modules.htm

You are welcomed to print and share this bulletin with your manufacturing teams, peers, suppliers and upper management ... better yet, have them signup for their own copy at:

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Manufacturing Knowledge you’ll not find at offsite 
seminars nor in the books at Amazon.com


Lean Manufacturing - Balanced Scorecard 
ISO 9000:2000 - Strategic Planning - Supply Chain 
Management - MRP Vs Lean Exercises - Kaizen Blitz 
Lean Six Sigma - Value Stream Mapping

All at one Website: Good Manufacturing Practices

 


 Manufacturing Cost Reduction for Winners

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