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Manufacturing Cost Reduction

Profitable Manufacturing Growth

 


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February 27, 2006

Hi [[firstname]],

Many years ago Vince Lombardi led the Green Bay Packers 
football team to unprecedented success by having an 
almost obsessive focus on doing the FUNDAMENTALS very 
well. 

It's amazing how many companies have great visions 
yet fail to achieve their full growth and earning 
potentials. They're a lot like the Green Bay Packer's 
football team before the arrival of Vince Lombardi...
all the potential in the world but with no focus on 
executing the fundamentals of their business. 

I realize the word "FUNDAMENTALS" is not very sexy. 
But it is a very important thing to understand. 

The fact is, the fundamentals of manufacturing... the 
things that serve as a solid success have not changed 
since before I was born... and won't change after 
you're dust.

It's tempting to think that they do -- that the 
introduction of Enterprise Resource Planning (ERP), 
Material Requirements Planning (MRP), and Six Sigma 
change the fundamentals.

I understand the temptation.

I can only caution against it, and invite you... 
urge you... to be a serious student of manufacturing 
history and both the evolution and revolution in 
manufacturing.

Mastering the proven fundamentals of what has worked 
in the past will give you the foundation needed to 
predict what will work today... and tomorrow! Are you 
aware that the Japanese success can be attributed to 
their study and mastery of Henry Ford's manufacturing 
fundamentals. 

Henry Ford first introduced manufacturing 
fundamentals at his River Rouge operation 
in 1920. Using these fundamentals as a basis 
for his production line concept, the Ford 
plant was able to go from receipt of iron 
ore to casting the engine block, and to 
shipment of the machined engine block in 
a final assembled car in an astonishing 
forty-eight hours. The Japanese used Ford's 
fundamentals as their roadmap to world class 
manufacturing. NOW THAT'S LEAN!


The first thing business teams need to do is identify 
the fundamentals that are requisites to their success. 
Next, they need to provide a process for obtaining 
"top-to-bottom" company commitment to the flawless 
execution of these fundamentals. This commitment 
becomes a launching pad for achievements beyond all 
expectations.

Be sure to read this week's article, "How To Exceed 
Performance Expectations."

Have a nice day, and stay connected.

Bill Gaw
bg@bbasicsllc.com
760-945-5596

P.S. I have developed a "World Class Manufacturing 
Certificate Program" for those of you who need help 
in reaching your full growth and earning potentials.

Check it out at:

http://bbasicsllc.com/world.class.manufacturing.MBBP.htm


=====================================
MANUFACTURING BASICS & BEST PRACTICES BULLETIN

Now serving over 11,326 subscribers

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

FUNDAMENTALS OF 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 manufacturing 
success. For manufacturers to consistently exceed performance
expectations, they need to fully understand and effectively
execute the FUNDAMENTALS of profitable growth. 

While many of these fundamentals have been documented and 
presented in hundreds of management articles, books, video
presentations and seminars, their intra-relationship and 
synergistic importance to achieving solid growth and
healthy profits has not been effectively defined and
communicated.

Over the past 30 years, we were led to believe that
computerized systems would provide the solution to all our
growth and profit problems. In manufacturing and
distribution, systems like ERP were to provide the computer
sophistication to significantly improve our delivery chain
performance. In engineering, Computer Aided Design (CAD)
systems were to be the high-tech innovation for improving
engineering design and speeding the time-to-market process.
In sales/service, Microsoft Office was to provide the
missing link in effective business communications while e-
commerce software was to improve order sales capture rates
and order processing speed. 

In their efforts to draw closer to customers, many business
management teams have lost focus on what should be a
company's primary success target-- profitable growth. They
have pursued Total Quality Management (TQM), Enterprise
Resource Planning (ERP), Business Process Reengineering
(BPR), ISO-9000, and Six Sigma with each respective guru
reassuring them that if they followed their program ... the
bottom-line would take care of itself. 

Well, it hasn't happened! Like most perceived panaceas, each
of these programs received a lot of hype but produced few
success stories. While these programs contributed to better
quality and improved customer service, they accomplished
little towards helping companies identify and achieve their
full growth and profit potentials.

For a measure of their shortcomings, one needs only to spend
some time in a 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 costly overtime,
internal/external expediting, last minute "on-the-run"
product changes and even a little "smoke and mirrors."
Results are scrap, rework and warrantee costs that
negatively impact profitability and production problems that
hinder growth. Companies have spent many thousands of
dollars in pursuing MRP/ERP and ISO-9000 certification, only
to see their business decline due to uncontrolled operating
costs that produced noncompetitive pricing. Other companies
have won the Malcolm Baldrige Award for Quality and Business
Excellence and subsequently fell far short of achieving
growth and earnings expectations.

So, after introducing all these 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 potentials? The
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. The
second is complex -- most business 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 processes. 

How does one turn around such a classic, "cart before the
horse" syndrome? What's required is a top down, in-depth
understanding of the importance of the fundamentals of 
profitable growth and a total commitment to their consistent 
and tenacious implementation.

Like Vince Lombardi, who achieved success by having his team
focus on the mastery of football fundamentals -- we need to 
have our manufacturing teams focus on the mastery of 
manufacturing fundamentals. 

Proactive planning and tenacious execution of fundamentals 
require leadership above and beyond just satisfying "day-to-
day" accountabilities. Some managers can't envision the
benefits of mastering relevant fundamentals, other simply 
can't find the time. Like practicing blocking and tackling 
in football, it's not glamorous, and like most football 
heroes, managers prefer to run with the ball. But without 
the tenacious and flawless execution of manufacturing 
fundamentals, companies will never exceed expectations. 

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 
manufacturing fundamentals. Once 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 growth and profits.


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

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.

To help MBBP subscribers reach their full growth and 
earning potentials, I have extracted a portion of the 
Kaizen Based Lean Manufacturing Training Package and 
created a cost-effective, Performance Management 
(Balanced Scorecards) Training Module.

What Does it Cost?

Much less than you would imagine. In fact, I make the 
training module affordable so that it can fit easily 
within your personal or your company's training budget. 

I want you and your company to discover the fundamentals 
of effective Performance Management and the best way to 
do that is to make it affordable. 

Take a few minutes and check out the Performance 
Management Training Module... a $97.00 bookstore 
value for only $58.00. It's a download PowerPoint 
presentation with commentary and lessons learned 
by yours truly and can be at your desk the same 
day you order. 

Review it now at:

http://bbasicsllc.com/e-lp-bsc-MBBP.htm

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

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

http://bbasicsllc.com 

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

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

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: http://bbasicsllc.com 


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 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:


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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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