Operations Management
Facility Layout Solutions
Facility design and the strategic thinking that should precede it are critical. Facilities are expensive, their lifetime is in decades, they take years to commission, they are one of the most important strategic elements of a business enterprise.
Many business problems appear as layout or material handling issues. A properly designed plant layout is a competitive advantage and allows it to:
- Operate At Low Cost
- Provide Fast Delivery
- Produce High Variety of Products in High or Low Volumes
- Accommodate New Products, Unique Services Or Features
- Produce At The Highest Quality Level
Layout is an integral part of a Lean Manufacturing Strategy. Meaningful improvement often requires corresponding physical changes in the layout.
Conversely, a layout re-design can be the catalyst for process improvement. A layout project, properly done, can demonstrate the need for change to an organization reluctant to tear itself apart and rebuild.
- Product-Focused workcells
- Focused Plant-Within-Plant Factories
- Reduced Storage amp; Handling Space
- Kanban Stockpoints
- Point of use storage of Raw Materials
- Integrated Support Areas
Process Improvement
Process improvement is a systematic approach to optimize business processes to achieve more efficient value added results, whether a for-profit, non-profit, government agency, or any other type of organization.
While many techniques were developed and refined in manufacturing, the same methodologies have been successfully applied to service related businesses. While there are differences that various businesses present, the core principles of process improvement and how they apply to business improvement apply across industries and functions.
Process Improvement Keys:
- Define the organization's strategic goals and purposes (Who are we, what do we do, and why do we do it?)
- Customer focus - aligning business processes to achieve higher customer satisfication by defining the process/organization's customers (Who do we serve?)
- Aligning the business processes to achieve the organization's goals (How do we do it better?)
- emphasis on measurable results and defining what constitutes success and failure of the process.
- Establish process owners - For any process realize sustainable improvement, it is essential to identify and include the process owners in the improvement effort
Inventory Management
Why keep inventory?
- Time lags in the supply chain requires that you maintain inventory to use during this "lead time"
- Uncertainty - Inventory as buffer to meet variations in demand and supply
- Economies of scale
Most manufacturing organizations divide their inventory into:
- Raw materials - materials and components waiting to be used in making a product.
- Work in process, WIP - materials and components that have begun their transformation to finished goods.
- Finished goods - goods ready for sale to customers.
- Spare parts
Cost of Carrying Inventory
- Cost of putting away stock receipts and moving material within the warehouse.
- Rent and utilities for the portion of your facility used to store inventory.
- Insurance and taxes on inventory.
- Physical inventory and cycle counting.
- Inventory damage, shrinkage and obsolescence.
- CASH Flow - Opportunity cost of the money invested in inventory.
We work with companies to implement successful inventory management involving balancing the costs of inventory with the benefits of inventory, using proven techniques to:
- Maintain appropriate levels of value added inventory
- Increasing inventory turnover without sacrificing service
- Keeping stock low without sacrificing service or performance
- Balancing lower prices by making volume purchases while limiting slow-moving inventory
- Balancing appropriate inventory on hand without getting caught with obsolete items
Product Cost Analysis
Product costing is the process of understanding all the various expenses that are accrued in the sale, production and delivery of a product or service to a customer.
We work with our clients to help them develop and understand Lean/ABC costing strategies and product/service costs related to:
- Developing and maintaining supplier relationships.
- Transportation costs, including carrier payment terms, packaging, handling, loading and unloading, and loss and damage expenses.
- Payment terms.
- Logistics expenses (warehousing, loading, unloading, handling, inventory control).
- Production costs accrued in actual manufacture of goods including scrap.
- Warranty costs.
- Quality costs, including costs associated with defective products, inspections, product returns, chargebacks, and storage.
- Lot size costs, including inventory and cash flow costs associated with lots of varying size.
- Supplier inventory.
- Overhead costs of supplier and customer transactions, including billing, collection, payment preparation, and receiving processes.
- Product improvement and modification, including costs of correcting defects and standardization of materials and packaging.
- Regulatory/environmental costs.
Quality Assurance
Quality assurance (QA) is a program for the systematic monitoring and evaluating the making of a product or delivery of a service to ensure that standards of quality are being met. While QA cannot guarantee the production of quality products and services, the goal is to maximize the likelihood.
It is important to recognize that the standard of quality is determined by the CUSTOMER and that even goods with low prices can be considered quality items if they meet the market need.
Two key principles characterize QA:
- "fit for purpose" (the product should be suitable for the intended purpose).
- "right first time" (mistakes should be eliminated).
QA includes regulation of the quality of raw materials, assemblies, products and components, services related to production, management, production and inspection processes.
To support our Clients QA needs, we offer training and implementation in the following:
- Lean Techniques including Quality at the Source techniques
- Six sigma and statistical quality control
- ISO Certification Programs
