September 3, 2007  

Hi MBBP Subscribers,  

When it comes to manufacturing performance there is no "Status Quo"...  if you're not winning; you're loosing.  

I wrote this week's article years ago but it is still valid today and worth your time investment. 

Have a nice day, and stay connected.

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

NEVER, NEVER REST ON YOUR ACHIEVEMENTS                  

The following scenario is not uncommon in industry today: 

"I don't care how you do it or what it takes, just make sure that these damned machines are on a truck and on their way to the customer by the end of the month!" screamed the general manager.  

It's six days from the end of the month and the production manager has 75% of the scheduled months shipments in final assembly with a parts shortage list that reads like a horror story. Units are being sent to test with slave components and it will take another miracle to make the month's financial forecast.  

It's now time to pull out all the stops...to hell with the procedures and process controls...it's time for a few "knights in shining armor" to once again salvage the most out of a terrible situation, (usually self-inflicted). 

During my early years in manufacturing, I had the opportunity to perform as a "knight in shining armor" and I must admit that I enjoyed the challenge, the power struggle...and the politics of making difficult things happen in a tumultuous manufacturing environment. In some ways, it was fun but in others it was very stressful and unrewarding. Deep down, I always thought, "There has to be a better way." 

Well, as my career progressed, I was fortunate in joining a team of professional manufacturing people at Johnson Controls in Milwaukee, Wisconsin. Glenn Jonas had pulled together this dynamic team for the purpose of turning around this marginally profitable company through the design and implementation of a state-of-the art computerized manufacturing control system, Materials Requirements Planning (MRP).  

Over a two year period, I participated in Johnson Control's remarkable turnaround success story. Customer service performance up from 62% to 96%...on time deliveries up from 78% to 97%...inventory turnover up from 1.6 to 6.3...company growth up froman annual rate of 15% to 60%...and most important, after tax profits up from 3% to 14%.  

While all these gains were impressive, none was more welcomed than the dramatic change in the day-to-day operating environment---from shop floor pandemonium to a sense of controlled excitement. Everyone felt a degree of participation and contribution---it was a great rewarding experience. 

Little did I know at that time that MRP was best employed as a materials and capacity planning system and that shop floor control was a misapplication of the MRP/ERP technology. As director of operations at Palomar Systems, Escondido, California, I embraced the lean manufacturing and kaizen teachings of Schonberger - Costanza - Imai and pulled together a lean manufacturing team of people that eventually became self-directed and achieved manufacturing performance far greater than what was originally achieved at Johnson Controls. Customer service performance up from 58% to 99%...on time deliveries up from 61% to 99%...inventory turnover up from 1.2 to 8.3...company growth up from an annual rate of 5% to 120%...and most important, profit margin was increased from 32% to 54%. 

So what's my experience got to do with you and your company? First, never think that your achievements are the end of the challenge---your competition is always learning new ways to outperform you. Second, you have an opportunity to share in a similar experience---over the past year and a half, I have been writing to you about the competitive advantages of Kaizen Based Lean Manufacturing---now is a good time to combine this methodology with MRP/ERP? It will help you lower factory stress levels, end shop floor chaos and eliminate the "end-of-the-month" crunch. Finally, take positive action, if you haven't explored the benefits of Kaizen Based Lean Manufacturing...click the below...  just do it! 

http://bbasicsllc.com/kblm.MBBP.htm

Even if your company is in the process of implementing flow technology and/or lean manufacturing, this is your opportunity to gain exposure to some practical tools and techniques that could boost your development and implementation efforts to a higher level. If, on the other hand, you are still struggling with a shop order "launch and expedite" system, KBLM will optimize your manufacturing performance and help your company identify and pursue their full growth and profit potential. Remember, there is no "Status Quo"... if you're now winning; you're loosing.

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