5 Tips to Improve Operational Efficiencies
If it’s been a while since you’ve assessed your company’s manufacturing and distribution (M&D) operations, you could be missing out on important efficiencies. Streamlining your M&D operations can lead to better quality, faster production times, reduced waste and cost savings, potentially resulting in higher profits and a competitive advantage in the marketplace.
The following tips can help you get started.
#1 – Look for bottlenecks.
Inefficiencies in the manufacturing process can lead to production delays and increased costs, which is why it’s important to conduct a thorough review of your end-to-end process and prioritize focus on bottlenecks.
Watch out for the following issues that can lead to bottlenecks:
- Machine issues – Machines have the potential to fail due to inadequate maintenance, lack of staff training or outdated/aging equipment. Conduct a thorough review of your production line machinery to identify any inefficiencies.
- Production delays – If you notice longer-than-expected delays in the process, it’s important to quickly identify and address the root cause. Are you having problems receiving parts from vendors? Are your employees undertrained or understaffed? Solving for these challenges can go a long way toward improving efficiencies.
- Incomplete work – Another issue that can lead to a bottleneck is backlogged work, which is why it’s important to prioritize completing any orders that have been piling up. Completing backlogged work can also create temporary constraints that may be mistaken as true process bottlenecks.
Bottlenecks are inherent in any manufacturing process, and opportunities for improvement nearly always exist. Be sure to continuously monitor your manufacturing process and address any inefficiencies quickly.
#2 – Implement lean manufacturing methodologies.
Adopting lean manufacturing principles and methodologies reduces cost by limiting waste. All forms of waste must be identified and reduced (ideally removed) for lean manufacturing to be effective.
Per Lean Six Sigma, there are eight common types of waste that occur in manufacturing, most easily remembered using the acronym TIMWOODS:
- Transportation – Unnecessary movement of products or materials
- Inventory – Excess raw materials, works in progress or finished goods
- Motion – Movement of people that’s not directly adding value to your product or service
- Waiting – Idle, unproductive time for people or equipment
- Overproduction – Producing more than the next process (or customer) needs
- Overprocessing – Unnecessary steps/processing or adding features that don’t provide customer value
- Defects – Production rejects, items that require rework or items resulting in returns or scrap
- Skills utilization – Failing to fully use people’s talents, skills and capabilities
The above provides a framework to assess manufacturing processes and identify waste. Once identified, waste can be eliminated and processes can be improved using various lean tools and methodologies.
#3 – Embrace automation and technology upgrades.
If you haven’t completed an operations assessment or technology review in a while, you may be surprised at all the benefits recent technological and automation advancements can offer.
Automation can help lower your production costs. It can also improve product accuracy, consistency and quality and streamline the production process. Seek opportunities to incorporate conveyors, robots, sensors and programmable logic controllers (PLCs) into your process. Once automation is implemented, it’s critical to develop a process to monitor and control these processes including — but not limited to — personnel required to test, maintain, service and train others on the new automated capabilities.
Many manufacturers have started using artificial intelligence (AI) to provide real-time data analytics, identify potential maintenance issues before they occur, optimize production schedules, improve machine functionality and streamline human labor. An often under-appreciated attribute to successfully upgrading your technology is ensuring full integration with existing systems and equipment.
#4 – Define KPIs and visualize performance versus targets.
Key performance indicators (KPIs) are quantifiable metrics of progress and performance toward an intended result. KPIs help provide focus on items that contribute directly to departmental, functional and company success. They also highlight the importance of aligning people (and compensation models) to company strategy.
It’s critical that KPIs be understood and communicated — dashboards or other tools are paramount to visualizing actual performance versus targets. Timely visualization helps identify potential issues so that corrective or preventive actions can be implemented quickly while also providing positive reinforcement when performance meets or exceeds targets.
While KPIs measure performance, they also
- Keep people informed
- Keep people involved
- Keep people interested
- Keep people inspired
#5 – Solicit employee feedback.
Employees often offer the best insights to improve M&D operations. After all, they’re the ones with hands-on experience navigating the operational challenges your business faces. Make an effort to regularly engage with your employees, and encourage everyone to take ownership of their job functions and equipment. Check in with your staff regularly to hear their concerns and recommendations for improvement.
Also, consider offering regular training sessions on topics that are important to your employees. These may include job-specific skills they need for success or life-focused skills, such as leadership development or personal financial management.
Not only can asking for your employees’ insights help you identify potential improvements in your processes but it can also lead to a more satisfied and loyal workforce, potentially resulting in higher retention rates. Higher employee retention means a more skilled workforce, less turnover and less time spent training new employees, which can ultimately result in even greater operational efficiencies.
Next Steps
Could you use help streamlining your company’s operations and improving business performance?
Creative Planning Business Services specializes in identifying and driving sustainable enterprise value for clients using an approach tailored to your unique business needs and challenges. We offer a wide range of business advisory services that catalyze improvements in your people, processes and technology that seek to result in revenue growth, profitability increases and working capital optimization.
To learn more, schedule a call with a member of our team.
