September 3, 2008

Hi MBBP Subscribers, 

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

A demonstration of practicing what I preach is evident by the steady growth in our subscriber's list. I work very hard at keeping our MBBP subscriber list on a growth curve. Since our first issue, 5-years ago, we have increased our number of subscribers each and every year. I’m happy to say we have just passed the12,500 “mark on the wall.” Thanks again for your help.  

I wrote this week's article, "NEVER, NEVER REST ON YOUR ACHIEVEMENTS," years ago but it is still valid today and worth your time investment.

The new article appears below.

Have a nice day, and stay connected.

  

Bill Gaw

Business Basics, LLC
6003 Dassia Way
Oceanside, CA 92056
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 products 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).

Winning is Sweet!

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 must 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 from an annual rate of 15% to 60%...and most important, after tax profits up from 3% to 14%. Today Johnson Control is a mega company and the Jonas Team had much to to with its success..  

Success is no Status Quo

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 mis-application 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 years, 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... here'sa reason to check it out today... I've just put together what I consider to be the best world class lean manufac-turing training program available anywhere... not in the books of Amazon.com... not it the library of APICS... and not in the Harvard Business School Press.  I've entitled it: