Performing preventive maintenance (PM) on an interval basis (time, cycles, etc) is widely recognized as fundamental to improving maintenance effectiveness, and a path to improving equipment reliability. We believe that maintenance should be considered a reliability function, rather than a repair function. The need for improved reliability has received increasing priority in light of recent US regulations such as OSHA 1910, section 119j, which requires a mechanical integrity program at plants that deal with hazardous materials.
Optimizing the PM process presumes that you have PMs to optimize. Therefore, you should have completed your computer based maintenance management database including:
- All critical equipment: items that constrain or stop production, or create a safety hazard.
- All appropriate PMs and related procedures, overhaul, or turnaround procedures.
- A complete equipment database, including a bill of materials for spares for critical equipment.
- A process for managing work orders, including planning and scheduling, Pareto and cost analysis, equipment specific histories, etc.
If not, or even if not fully developed, you can still get a preventive maintenance program started - more on that to come.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Saturday, September 29, 2007
Friday, September 28, 2007
Product Mix Optimization
It seems that in every manufacturing enterprise the focus - sooner or later - comes to rationalizing the product line. "We have too many SKUs!" Sometimes SKUs are only slightly different, and the more products in a company the more complex accounting, warehousing, and even manufacturing can be. When it is time to assess your product line, we propose the following possibilities:
- Consolidate products with similar characteristics, with a focus on offering the higher value product.
- Subcontracting or otherwise outsourcing production for some small orders to companies that are more suited to small quantities, then increase product pricing such that the product remains profitable. This gives an indication of true market prices and production costs.
- Another way to optimize small-order production products is to set up a dedicated in-house production line that makes nothing other than make small-order products.
- Very selectively take products that have no margin or strategic value, and transferring those products to a competitor - with the cooperation of the customer - to maintain the relationship with the customer.
- Press to develop better forecasts for small-order products, then make large quantities of those products in anticipation of future orders. Since these products are generally small orders, even making a 10x historical quantity, may not have a significant impact on inventory costs or turns. This may not be practical for products with shelf-life or obsolescence concerns.
- Negotiate longer lead times with customers for small-order products so orders can be consolidated, allowing for better production planning.
- Explore faster changeover methods, and train operators to implement them. For all equipment, develop a commissioning and reliability work process.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
- Consolidate products with similar characteristics, with a focus on offering the higher value product.
- Subcontracting or otherwise outsourcing production for some small orders to companies that are more suited to small quantities, then increase product pricing such that the product remains profitable. This gives an indication of true market prices and production costs.
- Another way to optimize small-order production products is to set up a dedicated in-house production line that makes nothing other than make small-order products.
- Very selectively take products that have no margin or strategic value, and transferring those products to a competitor - with the cooperation of the customer - to maintain the relationship with the customer.
- Press to develop better forecasts for small-order products, then make large quantities of those products in anticipation of future orders. Since these products are generally small orders, even making a 10x historical quantity, may not have a significant impact on inventory costs or turns. This may not be practical for products with shelf-life or obsolescence concerns.
- Negotiate longer lead times with customers for small-order products so orders can be consolidated, allowing for better production planning.
- Explore faster changeover methods, and train operators to implement them. For all equipment, develop a commissioning and reliability work process.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Thursday, September 27, 2007
Plant Design and Capital Project Best Practices
We have written on this subject, many times. For this entry let's focus on design objectives. Every great project engineer will tell you that any project begins with defining your design objectives. In our view, a great design objective list includes reliability and maintainability objectives. We also think that a great installation effort includes a process for verifying the quality of the installation - much more and beyond typical verification of process capability at start up.
There is much, much more to plant design and world-class manufacturing than process flows, process chemistry, and standard design methods. These are all important, but a project manager must stay focused on the fact that all of these issues are equally important.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
There is much, much more to plant design and world-class manufacturing than process flows, process chemistry, and standard design methods. These are all important, but a project manager must stay focused on the fact that all of these issues are equally important.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Wednesday, September 26, 2007
Production Planning - Can we really do it?
Production planning (in a non class A environment) can be chaotic, and subject to the whims of marketing - or more accurately sales. Integrating sales and manufacturing strategies, and we always advocate rationalizing product mix can help a lot. There are some actions manufacturing plants can take to facilitate the manufacturing-sales-marketing integration process:
- Document a sales and production planning procedure, including forecasting, supply/demand balancing, verification of production forecast vs demonstrated plant performance, conformance to production plan, etc.
- Refinement of a sales and production forecasting system.
- Balancing of supply, demand, and inventory levels.
- Planning raw material demand as a result of these reviews.
- Linking current performance to business financials.
- Creation of a longer term logistics requirements plan.
- Creation of a process for resolving conflicts in the supply chain.
- Linking to supplier and customer information systems for planning purposes.
- Fully integrating production planning, and maintenance planning functions.
- Comprehensive training of production planners in planning systems, integrated logistics, and supply chain issues.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
- Document a sales and production planning procedure, including forecasting, supply/demand balancing, verification of production forecast vs demonstrated plant performance, conformance to production plan, etc.
- Refinement of a sales and production forecasting system.
- Balancing of supply, demand, and inventory levels.
- Planning raw material demand as a result of these reviews.
- Linking current performance to business financials.
- Creation of a longer term logistics requirements plan.
- Creation of a process for resolving conflicts in the supply chain.
- Linking to supplier and customer information systems for planning purposes.
- Fully integrating production planning, and maintenance planning functions.
- Comprehensive training of production planners in planning systems, integrated logistics, and supply chain issues.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Tuesday, September 25, 2007
Leadership Model - The Very Best!
Some business school references say that the most effective leaders build enduring greatness through a combination of personal humility and fierce professional resolve. Great leaders attend to people first, and manufacturing strategy second. Great leaders recognize that the good to great transformation takes time.
Another characteristic of a great leader is that they expect a very disciplined operating culture: disciplined people who require less hierarchy; disciplined thought which requires less bureaucracy; and disciplined actions, which requires fewer controls.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Another characteristic of a great leader is that they expect a very disciplined operating culture: disciplined people who require less hierarchy; disciplined thought which requires less bureaucracy; and disciplined actions, which requires fewer controls.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Monday, September 24, 2007
Tailored Transportation
Tailored transportation is the use of different transportation modes and networks based on product and customer characteristics. Most firms sell a variety of products and serve many different customer segments. A firm that sells office supplies and furniture will have a very different tailored transportation strategy than a firm that sells bulk oil products.
A firm can meet customer needs at a lower cost by using tailored transportation to provide the appropriate transportation choice based on customer and product characteristics. There are numerous forms of tailored transportation in supply chains, including tailored transportation by customer density and distance, tailored transportation by size of customer, and tailored transportation by product demand and value. For example, tailored transportation based on customer density and distance can look like this:
Short Distance:
High density - private fleet with milk runs
Medium density - third party milk runs
Low density - third party milk runs or LTL carrier
Medium distance:
High density - cross dock with milk runs
Medium density - LTL carrier
Low density - LTL or package carrier
Long distance:
High density - cross dock with milk runs
Medium density - LTL or package carrier
Low density - package carrier
The key point is that tailoring transportation based on customer density and distance, customer size, or product demand and value allows a supply chain to achieve appropriate responsiveness and cost.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
A firm can meet customer needs at a lower cost by using tailored transportation to provide the appropriate transportation choice based on customer and product characteristics. There are numerous forms of tailored transportation in supply chains, including tailored transportation by customer density and distance, tailored transportation by size of customer, and tailored transportation by product demand and value. For example, tailored transportation based on customer density and distance can look like this:
Short Distance:
High density - private fleet with milk runs
Medium density - third party milk runs
Low density - third party milk runs or LTL carrier
Medium distance:
High density - cross dock with milk runs
Medium density - LTL carrier
Low density - LTL or package carrier
Long distance:
High density - cross dock with milk runs
Medium density - LTL or package carrier
Low density - package carrier
The key point is that tailoring transportation based on customer density and distance, customer size, or product demand and value allows a supply chain to achieve appropriate responsiveness and cost.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Sunday, September 23, 2007
Demand Forecasting Methods
There are as many demand forecasting methods as there are companies doing demand forecasting. We think that is great, a company that is working to develop and implement an effective demand planning work process should take on an appropriate demand forecasting methodology and "tweak" it to make it effective for them. Different companies have different factors that influence demand - seasonality, interest rates, demographics, etc. There are however, four basic methods of forecasting customer demand:
- Qualitative forecasts, which are subjective and typically rely on human judgement and opinions to make a forecast. This method is appropriate when there is little or no historical data available, or when experts have market intelligence that is critical to making a forecast.
- Time series forecasting methods use historical demand to make a forecast. These are typically based on the assumption that past demand history is a good indicator of future demand. Time series forecasts are appropriate when the economic environment is stable, and the pattern of basic demand does not vary significantly from one year to the next. This is the simplest method to implement and can serve as a good starting point for a demand forecast.
- Casual forecasting methods involve assuming demand patterns correlate highly with certain factors in the economic environment, the state of the economy, interest rates, etc. For example, if product pricing is strongly correlated with demand, a company can use casual methods to determine the impact of price promotions on demand.
- Simulation forecasting methods attempt to imitate the customer choices that give rise to demand to arrive at an accurate demand forecast. Using simulation methods, a company can combine time series and casual methods, as well as specific customer input from sales and marketing.
A company may find it difficult to decide which method is most appropriate for forecasting demand. In fact, using multiple forecasting methods, and then using the combination of their forecasts as the actual forecast is usually the best method. That is why we advocate customizing a demand planning process to fit every unique client.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
- Qualitative forecasts, which are subjective and typically rely on human judgement and opinions to make a forecast. This method is appropriate when there is little or no historical data available, or when experts have market intelligence that is critical to making a forecast.
- Time series forecasting methods use historical demand to make a forecast. These are typically based on the assumption that past demand history is a good indicator of future demand. Time series forecasts are appropriate when the economic environment is stable, and the pattern of basic demand does not vary significantly from one year to the next. This is the simplest method to implement and can serve as a good starting point for a demand forecast.
- Casual forecasting methods involve assuming demand patterns correlate highly with certain factors in the economic environment, the state of the economy, interest rates, etc. For example, if product pricing is strongly correlated with demand, a company can use casual methods to determine the impact of price promotions on demand.
- Simulation forecasting methods attempt to imitate the customer choices that give rise to demand to arrive at an accurate demand forecast. Using simulation methods, a company can combine time series and casual methods, as well as specific customer input from sales and marketing.
A company may find it difficult to decide which method is most appropriate for forecasting demand. In fact, using multiple forecasting methods, and then using the combination of their forecasts as the actual forecast is usually the best method. That is why we advocate customizing a demand planning process to fit every unique client.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
Components of a Great Demand Forecast
We like to frequently talk about demand forecasting; why? - because many, many people say that it cannot be done. Of course it can be done, and done well. Perfectly? No, all demand forecasts are wrong, but having a disciplined demand forecasting process can have a significant impact on the bottom line - reduced inventories, efficient capacity utilization, and improved customer service. Demand forecasting is not magic or "art" and usually begins with interpreting past demand correctly.
The information that a firm knows about customers past behaviour sheds light on their future behaviour, as well as the responses they will have based on the firms actions. Good demand forecasting involves a firm identifying the factors that influence future demand and then determine the relationship between these factors and future demand. Developing a good demand planning process requires a firm to be knowledgeable about numerous factors that relate to the demand process, including components like:
- Past demand
- Planned advertising or marketing efforts
- Planned price changes
- Expected changes in supply of raw materials, components, labor and logistics
- State of the local, regional, and national economy
- Actions by competitors
A firm must take into account these and other factors, and clearly understand past actions and customer demand, before it can select an appropriate forecasting methodology.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
The information that a firm knows about customers past behaviour sheds light on their future behaviour, as well as the responses they will have based on the firms actions. Good demand forecasting involves a firm identifying the factors that influence future demand and then determine the relationship between these factors and future demand. Developing a good demand planning process requires a firm to be knowledgeable about numerous factors that relate to the demand process, including components like:
- Past demand
- Planned advertising or marketing efforts
- Planned price changes
- Expected changes in supply of raw materials, components, labor and logistics
- State of the local, regional, and national economy
- Actions by competitors
A firm must take into account these and other factors, and clearly understand past actions and customer demand, before it can select an appropriate forecasting methodology.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to engage new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
Saturday, September 22, 2007
Demand Forecasting - Part 2
There are certain characteristics of demand forecasting that supply chain managers should keep in mind:
- Forecasts are always wrong. Forecasts should include both the expected value and a measure of forecast error. If we forecast sales of a certain SKU to be between 100 and 1900 units, and another forecaster estimates sales to be between 900 and 1100, both forecasts expect average sales of 1000, but the sourcing strategies for the two scenarios would be very different.
- Long term forecasts are usually much less accurate than short term forecasts. This is why like to "tweak" longer term forecasts with monthly and/or weekly planning as we develop sourcing and production schedules.
- Aggregate forecasts are usually much more accurate than disaggregated forecasts. It is usually much easier to forecast the annual sales of a company than it is to forecast demand for a given product, or even annual demand at the SKU level. The greater degree of aggregation, the more accurate the forecasts.
Tomorrow we will review how to deal with forecast error, components of a good forecast, and the benefits/limitations of various forecasting methods.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to take on new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
- Forecasts are always wrong. Forecasts should include both the expected value and a measure of forecast error. If we forecast sales of a certain SKU to be between 100 and 1900 units, and another forecaster estimates sales to be between 900 and 1100, both forecasts expect average sales of 1000, but the sourcing strategies for the two scenarios would be very different.
- Long term forecasts are usually much less accurate than short term forecasts. This is why like to "tweak" longer term forecasts with monthly and/or weekly planning as we develop sourcing and production schedules.
- Aggregate forecasts are usually much more accurate than disaggregated forecasts. It is usually much easier to forecast the annual sales of a company than it is to forecast demand for a given product, or even annual demand at the SKU level. The greater degree of aggregation, the more accurate the forecasts.
Tomorrow we will review how to deal with forecast error, components of a good forecast, and the benefits/limitations of various forecasting methods.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to take on new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
Friday, September 21, 2007
Demand Forecasting in a Supply Chain - Part 1
Forecasting future demand is critical to a supply chain managers decision making and planning processes. There are numerous ways of predicting future demand based on historical demand information. More importantly, there are also many ways to forecast demand AND estimate a forecasts accuracy.
Production and distribution decisions are critical for a company's supply chain, but world class firms use forecasts of future demand as the basis for many other decisions made in the "push pull" phase of their supply chain. Important decisions by functional area that depend on demand forecasts include:
- Production: Scheduling, inventory control, aggregate planning.
- Marketing: Sales force allocation, promotions, new product introduction.
- Finance: Plant and equipment investment, budgetary planning.
- Personnel: Workforce planning, hiring, reductions in work force.
Ideally, supply chain decisions should not be segregated by function, as they are highly interrelated - and should be made jointly. Mature products with stable demand are the easiest to forecast. Forecasting and the corresponding management decisions are much more (if not extremely) difficult when either the supply of raw materials or the demand of finished products is highly variable. In highly variable, or seasonal demand environments forecasting demand is critical to make sure a manufacturing firm does not over or under produce, since there is little chance to recover. Ideally supply exactly matches demand.
More on this complex subject tomorrow - Characteristics of great forecasts...
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to take on new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
Production and distribution decisions are critical for a company's supply chain, but world class firms use forecasts of future demand as the basis for many other decisions made in the "push pull" phase of their supply chain. Important decisions by functional area that depend on demand forecasts include:
- Production: Scheduling, inventory control, aggregate planning.
- Marketing: Sales force allocation, promotions, new product introduction.
- Finance: Plant and equipment investment, budgetary planning.
- Personnel: Workforce planning, hiring, reductions in work force.
Ideally, supply chain decisions should not be segregated by function, as they are highly interrelated - and should be made jointly. Mature products with stable demand are the easiest to forecast. Forecasting and the corresponding management decisions are much more (if not extremely) difficult when either the supply of raw materials or the demand of finished products is highly variable. In highly variable, or seasonal demand environments forecasting demand is critical to make sure a manufacturing firm does not over or under produce, since there is little chance to recover. Ideally supply exactly matches demand.
More on this complex subject tomorrow - Characteristics of great forecasts...
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to take on new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
Thursday, September 20, 2007
Can we REALLY Develop a Strategic Training Plan?
You bet! The journey toward operational excellence involves, and is heavily reliant on a pervasive and effective training effort at all levels - in all disciplines. As you plan your operational excellence effort, a great training framework, or "strategic training plan" should include the following elements:
- Establish Corporate objectives: return on assets, unplanned downtime less than 10% etc.
- Analyze the skills necessary to achieve these objectives, given your current state.
- Identify your current skills inventory - types and quantities.
- Review anticipated attrition, focusing especially on workforce demographics.
- Review planned changes to processes and equipment and the resulting training needs.
- Do not forget to include "soft skills" training: team building, conflict resolution, etc.
- Review regulatory and legal training requirements.
- Perform a gap analysis of the shortfall between skills -quantities, as well as specific regulatory requirements. Focus training on losses from ideal.
- Develop a strategic training plan including budgets, timing, metrics, priorities, etc.
- Establish clear expectations and outcomes from the training effort, and measure them.
- Recognize that a great training effort involves exposing people to principles, methods, techniques, etc and the real learning does not occur until they actually practice the training.
- Repeat the above steps - at least annually!
These steps, and others as determined by your specific plant culture, can help you develop a strategic training plan. This means developing a strategic training plan vs a reactive, or "what do we have to train on to prevent the errors we are seeing" type culture.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to take on new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
- Establish Corporate objectives: return on assets, unplanned downtime less than 10% etc.
- Analyze the skills necessary to achieve these objectives, given your current state.
- Identify your current skills inventory - types and quantities.
- Review anticipated attrition, focusing especially on workforce demographics.
- Review planned changes to processes and equipment and the resulting training needs.
- Do not forget to include "soft skills" training: team building, conflict resolution, etc.
- Review regulatory and legal training requirements.
- Perform a gap analysis of the shortfall between skills -quantities, as well as specific regulatory requirements. Focus training on losses from ideal.
- Develop a strategic training plan including budgets, timing, metrics, priorities, etc.
- Establish clear expectations and outcomes from the training effort, and measure them.
- Recognize that a great training effort involves exposing people to principles, methods, techniques, etc and the real learning does not occur until they actually practice the training.
- Repeat the above steps - at least annually!
These steps, and others as determined by your specific plant culture, can help you develop a strategic training plan. This means developing a strategic training plan vs a reactive, or "what do we have to train on to prevent the errors we are seeing" type culture.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to take on new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
Sunday, September 16, 2007
Scheduled and Unscheduled Downtime
Downtime, both scheduled and unscheduled, are frequently -but incorrectly - viewed as the responsibility of the maintenance department. Unscheduled downtime is typically for reactive maintenance - breakdowns or "emergencies." Scheduled downtime is usually for preventive maintenance, project work, or planned maintenance. Operational excellence has us working to minimize or eliminate unscheduled downtime, and optimize scheduled downtime by minimizing downtime for any given goal.
In our experience, a great deal of unscheduled downtime for equipment maintenance has a root cause associated with poor operating practice - running pumps dry, operating conveyors without routinely adjusting tracking, or even poor operator preventive maintenance practices (lubrication etc). Operational excellence requires operations and maintenance work together as a team to properly identify the root causes of unscheduled downtime and work together to eliminate it.
Properly done, losses due to equipment downtime can be minimized and support costs in manufacturing costs, delivery performance, time delays, and inventory planning can be reduced through increased reliability.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to take on new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
In our experience, a great deal of unscheduled downtime for equipment maintenance has a root cause associated with poor operating practice - running pumps dry, operating conveyors without routinely adjusting tracking, or even poor operator preventive maintenance practices (lubrication etc). Operational excellence requires operations and maintenance work together as a team to properly identify the root causes of unscheduled downtime and work together to eliminate it.
Properly done, losses due to equipment downtime can be minimized and support costs in manufacturing costs, delivery performance, time delays, and inventory planning can be reduced through increased reliability.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence best practices. We are no longer providing on-site consultations, and are unable to take on new clients. To pose a question, post a best practice, or otherwise contribute to the dialogue send a note to webmaster@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Sales@SynchronousLLC.com with SUBSCRIBE in the subject line.
Saturday, September 15, 2007
Communicating Performance Expectations
Implementing an operational excellence effort always includes communicating goals, objectives, and new standards for performance. Developing goals is great, but f they are in a drawer in the office they probably wont see much progress! Some suggestions for effectively communicating performance expectations include:
- Prominent graphical display of current plant key performance indicators, including trends and targets.
- Job profiles defined and reviewed quarterly. These profiles should include some flexibility to encourage teamwork and allow for skill cross training.
- Daily and shift plant performance reviews and immediate corrective action. This should focus on teamwork and planning - not reactive behaviour.
- Regular personal development and performance review process. This should occur quarterly and ideally be a positive experience - no surprises!
- Regular communications from the plant leadership team regarding company performance, expectations, and major developments. Be positive!
This is not meant to be a comprehensive list. Every plant has their own culture and history - a great performance improvement and communication plan needs to tap into that. Synchronous is unable to accept new clients or conduct on-site consultations. We are committed to maintaining a dialogue on operational excellence best practices and maintaining state of the art. Suggestions for topics can be directed to our web site at General@SynchronousLLC.com Many thanks to our clients who have allowed us to be part of their transformation efforts, we are honored to share in your successes.
- Prominent graphical display of current plant key performance indicators, including trends and targets.
- Job profiles defined and reviewed quarterly. These profiles should include some flexibility to encourage teamwork and allow for skill cross training.
- Daily and shift plant performance reviews and immediate corrective action. This should focus on teamwork and planning - not reactive behaviour.
- Regular personal development and performance review process. This should occur quarterly and ideally be a positive experience - no surprises!
- Regular communications from the plant leadership team regarding company performance, expectations, and major developments. Be positive!
This is not meant to be a comprehensive list. Every plant has their own culture and history - a great performance improvement and communication plan needs to tap into that. Synchronous is unable to accept new clients or conduct on-site consultations. We are committed to maintaining a dialogue on operational excellence best practices and maintaining state of the art. Suggestions for topics can be directed to our web site at General@SynchronousLLC.com Many thanks to our clients who have allowed us to be part of their transformation efforts, we are honored to share in your successes.
Friday, September 14, 2007
How Can We Implement Operational Excellence Without Alienating Our Work Force?
Implementing operational excellence frequently equates with reducing operating costs. In most manufacturing environments reducing costs means reducing labor costs since "people" costs are typically a significant percentage of overall plant costs. We think a great effort to reduce "people" costs includes the following elements:
- Terminate poor and marginal performing employees.
- Do not replace workers lost through resignations, retirement, etc.
- Reduce or eliminate contract labor. Use current employees even when retraining s required.
- Reduce or eliminate overtime - a smaller paycheck s better than no job!
- Accept and incent voluntary reductions in work force.
- Aggressively reallocate employees for new or different jobs, even if retraining is required.
Please be advised that Synchronous has transformed our service offering to providing industry and operational excellence concepts and advice, but we are currently unable to provide on-site consultations or engage new clients. Current clients can continue to expect the same fully dedicated support and advice, but on limited hours of availability as we have already communicated to designated company contacts - usually the project manager. Thanks to all of our loyal and dedicated clients, who have allowed and honored us to be part of their transformation efforts...
- Terminate poor and marginal performing employees.
- Do not replace workers lost through resignations, retirement, etc.
- Reduce or eliminate contract labor. Use current employees even when retraining s required.
- Reduce or eliminate overtime - a smaller paycheck s better than no job!
- Accept and incent voluntary reductions in work force.
- Aggressively reallocate employees for new or different jobs, even if retraining is required.
Please be advised that Synchronous has transformed our service offering to providing industry and operational excellence concepts and advice, but we are currently unable to provide on-site consultations or engage new clients. Current clients can continue to expect the same fully dedicated support and advice, but on limited hours of availability as we have already communicated to designated company contacts - usually the project manager. Thanks to all of our loyal and dedicated clients, who have allowed and honored us to be part of their transformation efforts...
Monday, September 10, 2007
The Bullwhip Effect
The "bullwhip" effect is an extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being back ordered to being in excess. This is usually caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving products down the chain.
The bullwhip effect can be avoided by carefully synchronizing the supply chain. This is the primary reason we advocate integrating your internal company supply chain with your suppliers supply chain and your customers supply chain. The benefits are many including better planning and scheduling, smarter inventory management, and preventing the bullwhip effect.
Please be advised that Synchronous has transformed our service offering to providing industry and operational excellence concepts and advice, but we are currently unable to provide on-site consultations or engage new clients. Current clients can continue to expect the same fully dedicated support and advice, but on limited hours of availability as we have already communicated to designated company contacts - usually the project manager. Thanks to all of our loyal and dedicated clients, who have allowed and honored us to be part of their transformation efforts...
The bullwhip effect can be avoided by carefully synchronizing the supply chain. This is the primary reason we advocate integrating your internal company supply chain with your suppliers supply chain and your customers supply chain. The benefits are many including better planning and scheduling, smarter inventory management, and preventing the bullwhip effect.
Please be advised that Synchronous has transformed our service offering to providing industry and operational excellence concepts and advice, but we are currently unable to provide on-site consultations or engage new clients. Current clients can continue to expect the same fully dedicated support and advice, but on limited hours of availability as we have already communicated to designated company contacts - usually the project manager. Thanks to all of our loyal and dedicated clients, who have allowed and honored us to be part of their transformation efforts...
Sunday, September 9, 2007
The Workplace of the Future
Many great organizations - both big and small are pioneering the workplace of the future - a combination of traditional and nontraditional work practices, settings, and locations. The evolution in the nature of the US economy is drastically changing where and how people work. It is currently estimated that between 30 and 40 million people are either telecommuters or home based workers.
Potential benefits of alternative workplaces for employers can be reduced costs, increased productivity, and a competitive advantage is recruiting and retaining top talent. Alternative workplaces are certainly not for everybody, or for every job, and can be difficult to implement even in organizations that are well suited to them. Ingrained behaviors, practical hurdles, and the challenges of managing both the cultural and system "improvements" can make the transition difficult.
Executives considering alternative workplace strategies should consider the following issues:
- Are you committed to new ways of operating?
- Is your organization informational rather than industrial?
- Do you have an open culture and proactive managers?
- Can you establish clear links between staff, functions, and time?
- Are you prepared for some push-back?
- Can you overcome external barriers to a new workplace strategies (ie small homes and/or apartments)?
- Are you prepared to invest in the tools, training, and techniques to make the initiative work?
- Can you really eliminate office and other "fixed" costs?
Please be advised that Synchronous has transformed our service offering to providing industry and operational excellence concepts and advice, but we are currently unable to provide on-site consultations or engage new clients. Current clients can continue to expect the same fully dedicated support and advice, but on limited hours of availability as we have already communicated to designated company contacts - usually the project manager. Thanks to all of our loyal and dedicated clients, who have allowed and honored us to be part of their transformation efforts...
Potential benefits of alternative workplaces for employers can be reduced costs, increased productivity, and a competitive advantage is recruiting and retaining top talent. Alternative workplaces are certainly not for everybody, or for every job, and can be difficult to implement even in organizations that are well suited to them. Ingrained behaviors, practical hurdles, and the challenges of managing both the cultural and system "improvements" can make the transition difficult.
Executives considering alternative workplace strategies should consider the following issues:
- Are you committed to new ways of operating?
- Is your organization informational rather than industrial?
- Do you have an open culture and proactive managers?
- Can you establish clear links between staff, functions, and time?
- Are you prepared for some push-back?
- Can you overcome external barriers to a new workplace strategies (ie small homes and/or apartments)?
- Are you prepared to invest in the tools, training, and techniques to make the initiative work?
- Can you really eliminate office and other "fixed" costs?
Please be advised that Synchronous has transformed our service offering to providing industry and operational excellence concepts and advice, but we are currently unable to provide on-site consultations or engage new clients. Current clients can continue to expect the same fully dedicated support and advice, but on limited hours of availability as we have already communicated to designated company contacts - usually the project manager. Thanks to all of our loyal and dedicated clients, who have allowed and honored us to be part of their transformation efforts...
Saturday, September 8, 2007
Vendor Managed Inventory - VMI
Many manufacturing companies in the process industry are optimizing their supply chain by using vendor managed inventory (VMI) programs, sometimes referred to as continuous replenishment. VMI is exactly what is implies, a supplier has access to the customers inventory data and is responsible for maintaining the required inventory desired by the customer. This activity can be accomplished by the vendor conducting regularly scheduled reviews of on-site inventory, or increasingly in the process industry by remote monitoring of storage tanks. If on site reviews of inventory are required, a good supplier will count stock, remove damaged or outdated goods, and restock inventory to predefined levels. The vendor obtains a receipt from the customer and subsequently invoices the customer.
Please be advised that effective 1 September 2007 Synchronous will transform our service offering to providing industry and operational excellence concepts and advice, but we will no longer provide on-site consultations or engage new clients. Current customers can continue to expect the same fully dedicated support and advice, but on limited hours of availability as we have already communicated to designated company contacts - usually the project manager. Thanks to all of our loyal and dedicated clients, who have allowed and honored us to be part of their transformation efforts...
Please be advised that effective 1 September 2007 Synchronous will transform our service offering to providing industry and operational excellence concepts and advice, but we will no longer provide on-site consultations or engage new clients. Current customers can continue to expect the same fully dedicated support and advice, but on limited hours of availability as we have already communicated to designated company contacts - usually the project manager. Thanks to all of our loyal and dedicated clients, who have allowed and honored us to be part of their transformation efforts...
Friday, September 7, 2007
Sustainability - The Triple Bottom Line
Every day we hear more and more about sustainability and sustainable development. For those of us in the operating and manufacturing business units, we frequently have to ask - what does this mean to us? Well, first of all, the triple bottom line refers to economic prosperity, social justice, and environmental quality. Fuzzy? I know... but ignore at your own peril.
There are lots of resources to learn more about how to integrate sustainability into your manufacturing strategic plans (operational excellence too...) Here are a few starters:
The International Organization for Standardization, ie ISO 14000 describes an environmental management system www.iso.org
The World Business Council for Sustainable Development offers information at www.wbcsd.org
The Business for Corporate Responsibility provides socially responsible business solutions at www.bsr.org
The global reporting initiative provides structure for corporate social responsibility at: www.globalreporting.org
Please be advised that effective 1 September 2007 Synchronous will transform our service offering to providing industry and operational excellence concepts and advice, but we will no longer provide on-site consultations or engage new clients. Current customers can continue to expect the same fully dedicated support and advice, but on limited hours of availability as we have already communicated to designated company contacts - usually the project manager. Thanks to all of our loyal and dedicated clients, who have allowed and honored us to be part of their transformation efforts...
There are lots of resources to learn more about how to integrate sustainability into your manufacturing strategic plans (operational excellence too...) Here are a few starters:
The International Organization for Standardization, ie ISO 14000 describes an environmental management system www.iso.org
The World Business Council for Sustainable Development offers information at www.wbcsd.org
The Business for Corporate Responsibility provides socially responsible business solutions at www.bsr.org
The global reporting initiative provides structure for corporate social responsibility at: www.globalreporting.org
Please be advised that effective 1 September 2007 Synchronous will transform our service offering to providing industry and operational excellence concepts and advice, but we will no longer provide on-site consultations or engage new clients. Current customers can continue to expect the same fully dedicated support and advice, but on limited hours of availability as we have already communicated to designated company contacts - usually the project manager. Thanks to all of our loyal and dedicated clients, who have allowed and honored us to be part of their transformation efforts...
Monday, September 3, 2007
Best Practice: Proactive Maintenance
Proactive maintenance is the ultimate goal of a best practice reliability effort. Plants that have good proactive maintenance programs have progressed beyond routine preventive maintenance, and beyond predictive methods to estimate when failures will occur. Proactive programs aggressively pursue root cause analysis, and encourage communications between operating departments to understand and eliminate failures. The constant focus is to identify and deploy comprehensive efforts to extend equipment life. Predictive maintenance techniques are a critical part of a proactive maintenance program, because they provide the diagnostic capability, and the vision to understand machinery behavior and conditions.
Proactive maintenance is more of a state of mind rather than a specific methodology. A great example is when a plant staff has realized that alignment and balancing of rotating equipment can dramatically extend machinery life and reduce failure rates. They have also realized that no matter how well they perform these functions, they must maintain high standards from their equipment suppliers for reliability and validation testing. Proactive maintenance cultures continuously seek to improve they way they design, buy, store, install, and operate their plants so they avoid the need for future maintenance.
Synchronous experts are committed to extending the state of the art in operational excellence for the process industry. Whilst we are unable to continue to offer on site consulting, we are dedicated to continuing the dialogue. Send us your best practice operating procedures to General@SynchronousLLC.com
Proactive maintenance is more of a state of mind rather than a specific methodology. A great example is when a plant staff has realized that alignment and balancing of rotating equipment can dramatically extend machinery life and reduce failure rates. They have also realized that no matter how well they perform these functions, they must maintain high standards from their equipment suppliers for reliability and validation testing. Proactive maintenance cultures continuously seek to improve they way they design, buy, store, install, and operate their plants so they avoid the need for future maintenance.
Synchronous experts are committed to extending the state of the art in operational excellence for the process industry. Whilst we are unable to continue to offer on site consulting, we are dedicated to continuing the dialogue. Send us your best practice operating procedures to General@SynchronousLLC.com
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