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Production Control Solutions

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Lean Manufacturing, Basics, Principles, Techniques

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Here's what one of our 12,000 plus subscribers
wrote about the MBBP Newsletter:

"Great manufacturing articles. Thanks for the insights. I often share portions of your articles with my staff and they too enjoy them and fine aspects where they can integrate points into their individual areas of responsibilities. Thanks again."

               Kerry B. Stephenson. President. KALCO Lighting, LLC

I. Letter From Our President

Dear CKN Subscribers:

In the New Year, it will take more than quick fixes, stock buybacks and token downsizing for manufacturing companies to consistently exceed earnings expectations. While these strategic options may yield temporary financial relief, they are not the way to long term growth and profitability. For manufacturers to consistently exceed profit expectations, they will need to fight it out in the markets they serve by providing higher quality products at competitive prices with shorter lead times or lose market share. Best options? Speed up business processes, improve product/service quality and reduce operational costs. A major challenge to their success will be the need to upgrade the knowledge of manufacturing people. The ability to learn faster than their competitors may be the only sustainable competitive edge.

Steven Covey, Tom Peters and Peter Drucker agree that at the top of all management's "must-do" list should be an agenda that provides their people with on-going education. This is easy to say but hard to do when faced with the day-to-day challenge of running a business. To this end, Ann Dubois, our administrative manager, wrote each of you last week about our E-learning tutorial that's helping companies increase their manufacturing competitive knowledge with no need to send their people to off-site seminars or commit 
them to a disruptive training schedule. The tutorial is based on four successful "business turnaround" experiences and is entitled "Kaizen Based Lean Manufacturing (KBLM)." If you're thinking about ordering it, I suggest that you take action now, simply e-mail or fax your "ship to" address and a 
purchase order number to Ann @ 413-502-2839.

In this millennium, linear production will separate the manufacturing winners from the also-rans. Why---because nonlinear production is a product's highest cost driver. Leading companies will be using KBLM not MRP to control their factory floor operations and achieve linear production---providing vital contributions to the company's bottom-line results. If your manufacturing team is perplexed by the root causes of nonlinear production and/or the end-of-the-month crisis, our lead article on "Production Linearity" should help 
them put in place a plan of corrective actions.

Teamwork is critical to proactive problem solving and achieving linear production. Make sure that all your team members read Mr. Pritchett's article on "Make Sure You Make a Difference."

I'm a strong advocate of the philosophy of management by walking around (MBWA). I came across an old article on MBWA that I have condensed for you. I hope the author, Peter Slosson, doesn't take offense. It's the third article in this CKN issue. 

Our final contribution comes from the book, "The 80/20 Principle" by Richard Kock. I extracted his application of the Pareto Principle as it relates to career success.

We suggest that you both print and archive this newsletter for current and future reference. Feel free to make copies and share with colleagues.

This newsletter has reached your desk because we share a common objective -- to help key manufacturing people avoid "burnout" while achieving their full performance potential.


Bill Gaw, President
Business Basics, LLC

Production Control Solutions for winners.

II. Production Linearity
    By Bill Gaw

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. 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 continuously improve linear production.

Why is linear production so important? It's simple; "It's where the money is!" Scrap, rework, overtime and poor quality are all non-value-added costs that increased as a function of the famous "Hockey Stick Syndrome." That is, as we delay our production schedule completion toward the end of the month (or worse, to the end of the financial quarter), there is a tremendous pressure put on Manufacturing that produces shop floor chaos that generates significant non-value-added cost. 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 to 20% of their potential profit margins because they have 
developed and fostered a manufacturing team that perpetuates the "Hockey Stick Syndrome." 

Companies that continue to live with the end-of-the-quarter "push" will never achieve their full growth and profit potentials. How do you smooth schedules and achieve linear production? The challenge is in how to keep daily pressure 
on the critical path of scheduled achievement. We need to have the visibility of all critical tasks and milestones from day one of the quarter and create team awareness and commitment to their timely achievement. Our manufacturing team must become sensitive and proactive in the execution 
of early production planning details and they must learn to apply their creativity and energy in a linear style. To be sure, up front planning and execution can yield amazing manufacturing results and lead to profitability beyond expectations. 

The most effective production manager I've ever known used a huge magnetic board to schedule production planning details and monitor production linearity. An early focus on details, corrective actions and recovery planning was his management style. He would hold early morning meetings every day to status yesterday's progress on the magnetic board and to establish the daily challenges. He was an expert at team dynamics and his people always new what they had to do and they were always provided the tools to get the job done. The combination of the magnetic board, the morning meetings and his team dynamics skills made this production manger an effective leader and an expert in achieving linear production.

Today many production managers are still trying to solve their linear production problem by pursuing a sophisticated computer software solution. Most companies are now using MRPII/ERP manufacturing systems to control their production environments. These systems do not provide a focus on the detail, up front tasks and milestones that are critical to linear production and consequently have not presented a solution to the "Hockey Stick Syndrome." On the other hand, using an old magnetic board in this day and age of computer sophistication may not be an acceptable alternative. A good tradeoff might be to develop a simple computer spread sheet specially designed to plan critical production milestones and to measure/monitor production linearity. 

Using this daily schedule as the "bible," the next step would be to retrain the "Knights in Shining Armor" to gradually shift their manufacturing paradigm from end-of-the-quarter "fire fighting" to daily proactive problem solving. 

Finally, it is important to differentiate between shipment linearity and production linearity. In a widget, make-to-shelf manufacturing company that builds substantial finish goods inventory and in highly engineered capitol equipment manufacturing companies the two linearity measurements will not be equal.

Shipment linearity may be more of a function of Sales' bookings and customer's preference rather than nonlinear production. Consequently, the measure of production linearity must be developed to measure the performance of the manufacturing process and not be influenced by Sales 
bookings or customer related shipment delays. 

Production Control Solutions for winners.

III. Make Sure You Make a Difference
     By Price Pritchett

People who make the team are supposed to make a difference.

Just having your name on the roster doesn't mean you're earning your keep, making a difference takes more than just showing up, doing only enough to get by, or merely going through the motions. Staying "busy" is no big deal 
either. You need to do what counts.

Even if someone is gifted, talent alone doesn't guarantee that the person will be a good individual contributor. Often the top performer is not the most talented person on the team, but the person who puts out the most effort. Others in the group may be blessed with more raw ability than you, but when it comes to the "try" factor, everybody has equal opportunity. Effort comes down to attitude, not talent.

If the team means anything to you---and if you're to mean anything much to the team---you need to try. Invest yourself in the group. Make a commitment, a personal effort that produces meaningful results.

Concentrate on giving the group what it needs at what comes easy…or what you have been doing by habit. Contribute in such a way that you clearly add value. Make enough of a difference that the tam would obviously miss you if you weren't there.

Production Control Solutions for winners.

IV. Management By Walking Around--- It Never Goes Out of Style
     By Peter S. Slosson

In this age of fast-moving change, we are inundated with new management fashions and fads. However, there is one method that is often overlooked but has endured through generations of American business managers. It is universal in application and works in all types of businesses. This technique is commonly called "management by walking around." Like many lasting and insightful ideas, it is simple in concept and practice---get up from your disk and walk around the ship and the office. While walking around, follow these simple steps.

Walk---slowly. Take your time and be seen.

Listen---with all of your senses. As any shop "old timer" will tell you, he can hear, or even smell, if a shop is productive.

Talk---to everyone you see. Get to know them. Ask about their families, hobbies and outside interests. Let them get to know you and trust you. Ask about their job. What's good about it? What would they like to see improved? 

Test---your assumptions and ideas. While walking around, look at product quality, systems and procedures. If you see a problem, work with the people responsible, in a positive way, to solve it.

Praise--- people. When you see them doing something well, let them know you recognize and value positive contributions. Emphasize positive performance and show appreciation. Everybody likes to be told they are doing a good job.

Management by walking around is one idea that never gets old, never goes out of style. Any manager can practice this technique in any type of business. Although this is not the answer to all management challenges, it should be fundamental in every manager's daily routine. Try it.

Production Control Solutions for winners.

V. The 80/20 Principle
     By Richard Koch

The 80/20 Principle is the key to unlocking higher profits in your business, greater rewards in your career, and deeper satisfaction in your personal life. 

Put simply, the 80/20 Principle asserts that a minority of causes of effort usually lead to a majority of the results or rewards. This means that 80 percent of what you achieve in your job comes from 20 percent of the time spent. 

The pattern underlying the 80/20 Principle was discovered in 1897 by Italian economist Vilfredo Pareto. The concept has since been called by many names, including Pareto's Law, the 80/20 Rule, and the Principle of the Least Effort.

In his book, Mr. Kock gives us the following 6 Rules for Career Success:

  1. Specialize in a very small niche. It is better to know everything about one tiny area than to have a superficial understanding of many areas.
  2. Make sure the niche is something you enjoy and in which you can excel. It's difficult to succeed in an area unless you have the passion and enthusiasm to become obsessed with it.
  3. Realize that knowledge is power. Keep learning until you know more about your area than anyone else.
  4. Identify your market and your core customers, and serve them best. Your market is those who might pay for your knowledge.
  5. Identify where 20 percent of effort gives 80 percent of return. Look for ways to impress your customers with relatively little effort.
  6. Learn from the best. Find out what their secrets are that allow them to do 20 percent of the work and get 80 percent of the results.

Production Control Solutions for winners.

VI. Business Anecdotes and Famous Quotes

In a pet store to shop for fish food, a man's attention is diverted to a parrot in a nearby cage. In addition to being handsome, the parrot is singing "Easter Parade." The man buys the bird, takes it home, and dotes on it.

At Easter, the man has some visitors. Offhandedly, he remarks that he has a bird that is able to sing, "Easter Parade." His friends laugh at him. He's willing to bet money. His friends put up fifty dollars against his fifty. Taking the bird out of the cage, he pets it gently and says, "Sing." The bird doesn't open its beak. He asks it to sing again. Not one note. No matter what he does, the bird won't sing. The man pays off on his bet.

When the friends leave, the man grabs the bird and says, "I may cook you tonight. Why, Didn't you sing?"

The bird says, "Take it easy. Just think of the odds we'll get this winter with 'White Christmas'!"

- - - - Milton Berle

Inch By Inch, It's a Cinch

The person determined to achieve maximum success learns the principle that progress is made one step at a time. A house is built a brick at a time. Football games are won a play at a time. A department store grows bigger one customer at a time. Every big accomplishment is a series of little accomplishments.

- - - - Robert Fulghum

"You never know how a horse will pull until you hook him 
to a heavy load."

- - - - Paul "Bear" Bryant

"The number-one reason why people leave their jobs is to pursue personal development---the chance to learn something new. If you want to hold on to your best people, you've got to make sure that they're learning, growing and 

- - - - Russell J. Campanello

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