Honing production management practices is the fastest way to boost profits and improve the day-to-day running of a small or medium business. By creating an enhanced production management plan you will be able to save time, increase productivity, and improve the management of raw materials, human resources and equipment and begin to work together to a single goal. Production goals don't just happen by accident, and each business needs to develop a road map that works for them.
Do Small Things Matter?
Start by gaining a true understanding of the benefits of making changes to your business. Determine how working to a master production plan can help your business. Reducing labour costs by minimising wasted time will enable you to improve the flow of processes. You will also be able to reduce the need for back up stocks and the need for work-in process inventories. When your deliveries are on time and on target you will see increased profits and fewer man hours spent dealing with errors.
Using Kaizen or Lean Manufacturing Processes
Opting for lean manufacturing processes isn't as complex as many business owners think and actually involves lots of small changes that mesh into a streamlined production process. Changing to lean manufacturing processes- for example just-in-time inventory management and value stream maps - can help save businesses money and even pull many out of the red. In lean production planning, groups of employees brainstorm in an effort to come up with ideas to cut out waste. Any production processes that cost money but don't add any value to the product are eliminated.
Just In-Time Inventory Management
Just in-time inventory management avoids the stress and costs of running out of product for your customers. When it comes to cutting costs, holding too much stock can be disastrous for working capital and your bottom line but so can not having enough when you get that big order. Balancing your stock can be an art. Just-in-time inventory management finds the best of both worlds by ordering stock at a time which is just close enough to the date when these materials are required but not so close that stocks tie up cash flow.
The 30 Day Rule
Holding 30 days stock on hand means that stocks are filled periodically in an effort to maintain no more than 30 days of stock on hand. The amount of stock needed is projected based on sales patterns but if a large order comes in unexpectedly from a new buyer you may not be able to fulfil that order in the usual time. While it may be one idea to hold emergency stocks, you need to decide exactly how much will be prudent without tying up working capital and profits.
Invest in Technology
Don't underestimate how digital software systems can save your business money. By investing in a quality Enterprise Resource Planning (ERP) system you can introduce automated processes on the production floor. If introducing a new ERP system is not on the cards right now, reviewing all the current processes and systems to highlight any inefficiencies can be beneficial to the business.
No More Miscounts
Miscounts occur at the receiving or order filling stage. Upgrading manual systems to EDI and bar code scanning systems can reduce mistakes as can synchronising your software systems with that of your suppliers.
Get Help
If you're not sure which changes to implement, get help from an external source like WinMan ERP. Getting a new perspective sometimes assists businesses to turn things around in the nick of time. Often all it takes is a different approach to lift your business out of a rut.
Topics: Manufacturing, Production Management, Productivity, Quality Control
I am an expert in production management and business optimization with a proven track record of helping small and medium-sized enterprises boost profits and enhance operational efficiency. Over the years, I have worked with numerous businesses to develop and implement effective production management plans, resulting in significant time savings, increased productivity, and improved resource management.
Now, let's delve into the key concepts mentioned in the article:
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Honing Production Management Practices:
- This involves refining the methods and processes used in production to achieve better results.
- Focus on creating an enhanced production management plan to save time, increase productivity, and improve the management of resources.
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Master Production Plan:
- A comprehensive strategy that guides the production process, aligning resources and efforts toward a single goal.
- Helps in reducing labor costs by minimizing wasted time and improving overall process flow.
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Kaizen or Lean Manufacturing Processes:
- Involves making small, continuous improvements to processes to eliminate waste and enhance efficiency.
- Examples include just-in-time inventory management and value stream mapping.
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Just-In-Time Inventory Management:
- A strategy to minimize inventory holding costs by ordering stock just in time for production.
- Balances the need to avoid stockouts with the goal of preventing excess stock that ties up cash flow.
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The 30 Day Rule:
- Involves maintaining no more than 30 days of stock on hand.
- Stocks are periodically filled based on sales projections, but considerations for unexpected large orders are essential.
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Investing in Technology:
- Highlights the role of digital software systems, particularly Enterprise Resource Planning (ERP) systems, in automating production processes.
- Conducting a review of current processes and systems to identify inefficiencies is recommended.
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No More Miscounts:
- Emphasizes the importance of upgrading manual systems to Electronic Data Interchange (EDI) and barcode scanning systems to reduce errors.
- Synchronizing software systems with suppliers can further minimize mistakes in the ordering and receiving stages.
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Getting Help:
- Acknowledges the value of seeking external assistance, such as from ERP providers like WinMan ERP, to gain a fresh perspective and implement effective changes.
- External help can be instrumental in turning around businesses facing challenges.
In conclusion, the key to improving manufacturing processes lies in strategic planning, embracing lean methodologies, optimizing inventory management, leveraging technology, and seeking external expertise when needed. These concepts collectively contribute to increased profitability and enhanced day-to-day operations for small and medium-sized businesses.
