This Year’s Production Challenge

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The year has begun. There are several things to be considered when setting your strategic plan in place for the new year. What corrections did you need to make in the last quarter to bring in the previous year as a success. Did those corrections simply accommodate your metrics or did they change the business for the better? A simple example is waste control. At the end of the year, did you not scrap out hardware that you should have dispositioned to attain a cost of poor quality or financial number? Were you balancing your scrap rate against an inventory goal and abandoning better business practices to hit a metric? Did you push high dollar products in front of lower revenue ones that your customer desperately needed? All of these practices are a fault of your prior year’s execution of the strategic plan. The problem with the aforementioned is that you are probably having a very tough first quarter. With that being said, you must analyze what did not execute properly that you have to adjust in the upcoming year.

1. Were your goals too aggressive and based off a desire or ones that had a sound detailed plan that was executional? Many times we set our goals off a desire and not as a strategic plan for improvement. If you look at your projected sales for this year, have you detailed the inventory you will need to attain the increased sales goal? Drill down the data to assure that your year-end projections are based off a carrying inventory that will be required for success. Failure to do so will result in a starved inventory for production in the first month of 2017. Assure that material planning is accurate and that you realize the inventory you need for 2016 is in place that does not deficit the beginning of 2017. Realize that in the last quarter of 2016 you must execute your material properly and not delay material receipts again. Detailed and verified inventory plans are required for each year’s success.

2. Waste planning is essential to success. Whether it be productivity, effectively or scrap and rework levels, your strategic plan now has to be compared to what was executed in 2015. When you set your goals for 2016, you must ask whether they were too aggressive or too lax. Did the goals for scrap materialize or did you hold back execution burdening the upcoming year? If you let your business run and execute to normal practices at the end of the year, congratulations as you did not manage the business to metric attainment. Observe those practices that were successful and which ones required intervention. Determine what the product flow actualizes and understand that unless you have a level three plan that is aggressive for improvement, your goal cannot be aggressive for attainment. A detailed plan for improvement is necessary for any step change and that plan must be reviewed with the responsible managers and the executors of that improvement plan.

3. Plan your sales plan off customer demands. You cannot be overly optimistic in creating the annual operations plan. Base that plan and make adjustments off of the market indicators for the industry you are in, firm contracts that are in place, spares sales that are based off of previous years realizations and firm forecasts, and reasonably project any new product introductions. Being overly optimistic will realize a plan that fails and one that is too conservative will starve your business of resources.

4. Develop a production start plan. At the onset of the year, you will be able to project production starts and build in outsourcing and shared resources. You can also deliver a plan that executes the entire year. That plan will require a review and adjustments throughout the year, but you will be able to project resource and material shortages and the risks associated with them. You must finalize your start plan months in advance to set the demand for material, manpower and process capacities. The failure of many production systems is the inability to project a starts plan and executing it appropriately.

5. Review your plans with all levels of the organization. Include the quality, materials, planning, procurement, and production groups. If possible review that plan with the hourly associates that produce the product. They will either validate the plan and attempt to perform to it or they will point out shortages that you may not have realized. Communicate the entire production plan so that everyone in the organization understands where improvements must be made and when resources will be strained.

Make 2016 a business based off sound date and not from opinions or speculations. The success to you year is based off a strategic plan that executes and is measured so short term adjustments may be made accordingly.

Lean Practices in the Service Industry

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Building a work cell can be confusing and difficult for someone with limited experience. Lets first define a work cell. It can be a manufacturing cell, a service cell or a retail cell. Most of what is described in academia is the manufacturing cell. The rational is that most of academia knows how to invoke the theories of lean manufacturing and the standardization of work. For the purpose of this article, I will describe some of the well know attributes and theories and how they apply to the service arena. Lets take an example in the restaurant business. The work cell can be defined as the person that greets the customer, the taking of an order, and the production of food and the closing of the event.
The hostess commonly looks at a map where table are circled and they determined what is open for seating. They may casually look at server’s load but very little efforts are placed in efficient deployments. Events that will improve efficiency are the size of the groups seating, the time that the previous party was seated, and finally an estimate on the time term of each seating. Let me explain the subjective rating in more detail. If the restaurant is a group of football fans declared by their jerseys, one could assume that in a sports bar or restaurant the term of the seating will be lengthier. This is opposition to those with a very young child that will probably get restless with too long of a stay.

You can observe how the proper placement of people can result in efficiency. The object of a restaurant process is to turn tables, balance server workload and provide good service. Assure that a server has a balance of long stay, regular stay and short stay tables. No one should be sat within the server’s realm within a less than 15 minute time period. A server should have a balance of small, medium and large parties. A simple coding of patrons seating with colored markers an erasable sheet will suffice. The coding does not need to be exact but proper seating will allow maximum seating efficiency. A simple program can be written for a facility having the logic automated. This software would ask three questions and place the customers at the tables they will receive the best service.

The taking of the order should be simplified. Most menus are standard and there always can be a preprinted menu list where a server can check off an item and options. Table orders should always be taken in a specific order, clockwise or counterclockwise, and should always start from a specific point, such as left seat nearest server first. This allows zero error for interpretation of the order and allows anyone to deliver the food. In a perfect work every server would have an electronic pad to directly input the order to the kitchen. However, the cost of implanting this could be more than a facility could afford.

The processing of food should be standardized in some manner so that appetizers do not show up at the same time as the meal or after the meal. In addition, an order should be completed at the same time for a table so that all customers receive product simultaneously. Order processing can be divided into class of food, processing time, food segmentation etc. The primary goal is to assure that there is standard work that assures food is delivered for an order at the same time without judgmental interventions. Standard work can be created in some fashion by the preparers of the food and the serving staff. One of the key initiatives for this effort is the regrouping of the team on a regular timeframe to assure that all staff can contribute to any standard work changes. Visual systems can be employed to assure that the standard work is consistent and handoffs can occur without continuous verbal communications.

Finally, a series will determine how the food gets delivered to the customer. The delivery should be able to be completed by anyone in the staff as the orders were consistent and systemic to a seating chart. There are many other details that need to be defined and explained, but the purpose of this paper was to describe how value stream analysis, work cell and flow analysis, and standard work definition can be completed for any industry to improve its efficiency. Always believe in continuous improvement and hold regular reviews where operators of the cell may give their inputs and receive improved operational methodologies.