Can’t cope with Demand right now! Production – Capacity – Optimisation Part II a
Source: 24th March Lean Leadership Way Institute. YOKOTEN series: Contributor: Mark Forkun
Are you delivering on time!
“Over the past few years business has been so good that one of our biggest challenges was getting stock produced and delivered on time, even if it cost us a little more”!.
“If you are in the Home Delivery business or a Production company in the medical, hygiene and disinfection sector, you are probably working flat out.
Right now there are many opportunities available for you to improve the performance of your business operations.
Your Call Centres are totally stretched. Some of your staff are even taking calls from home.
Warehouses are full or turning stock over at the rate you have never seen before. The branch warehouse manager is under great pressure to deliver on the KPI’s. With a packed warehouse, new recruits and a constant flow of more orders, its taking the strain on the employees.
Transport and Delivery are working flat-out. Standardised procedures and processes are difficult to keep in place. With the increase in volumes and the recent intake of new employees, many KPI’s are just not being met.
Production is working 24/7. Production Planning and Production Realisation are Pure Fiction. You don’t have time to review why realised production volumes are so different to the planned production volumes per shift. Everyone knows, there is a crisis, we have chaos, we have a non-stable situation. We are doing our best.
Your Direct costs of labour per unit produced or delivered are completely off track to standard or budget. Your In-Direct costs right now are not even on anyone’s radar screens.
The Sales department have never been so happy. Their 2020 budget has just been achieved, a dream come true.
A little voice in your head keeps asking the following nagging questions.
- We are all really busy but are we doing the right things, right.
- What could we do differently so that delivery times are better met
- Is the bonus system really something we need to redefine, again!
- Do I really have the right KPI’s to monitor my business!
- Are we tracking delivery times in the right way!.
- What new ideas have sprung up from the employees over the last two weeks, which we need to capture and use to improve our business.
- What can you do as a Leader to keep people engaged and show your appreciation.
Lets take the following question, as it directly relates to client satisfaction and the profitability of our business.
What can I do to shorten my delivery times to clients!
Thank the employees
Before you do anything, personally call or go and meet and thank all your employees who are working long hours to sustain the flow of incoming orders. This will be an important signal to employees that in the thick of the gun smoke you are there with them.
Introduction
- Shortening the time to deliver a service or product will directly impact on your variable costs which will directly affect the profitability of your business.
- If you are in the Home Delivery business, you have a number of specific KPI’s that manage the effectiveness of your business. One of these is On-time-in-full – OTiF
- In production, it will be the Lead Time or the Cycle Time with respect to the client Takt Time. In Other words did we deliver after, on or before the date expected by the customer.
- Shortening the OTiF, LT or CT is an outcome of many other initiatives that needed to be implemented, so as to arrive at the results.
- Very often there are many hidden wastes; Muda, Muri and Mura within your system of work that creates these three types of waste.
- Is your business run along the lines of the Continuous Improvement Methodology?. You and your employees will know that Muda is a set of 7 wastes that can be identified and managed by the employees at the front lines of the business.
- Muri & Muda are the wastes where the responsibility lies with management.
- If your operational employees regularly identify and eliminate behaviour or process (Muda) which adds no value to the business, you’re in a good place.
Assess where your business really is right now
- Ask yourself the question. Is my business fire-fighting, each day is a struggle just to get things done, if so then you are in the Reactive stage of running a business. This will mean it will be extremely difficult to improve your delivery times to clients within a short period of time.
- If your business is in the stable stage of development, then improving delivery times will be much faster and easier.
- If your business is in the proactive stage this means, you are well prepared to manage the kind of situation you have right now. This being so, you will have dedicated at least a few senior team members to monitoring opportunities for further improving your business.
to be continued…
