Invest in Simplicity

Many manufactures are installing complex MRP programs to manage complex manufacturing strategies.

The quest to squeeze the last penny out of shop floor costs drive managers to increase efficiency by scheduling bottleneck operation to assure continued operation, increase batch sizes to distribute changeover costs across the maximum number of units and to interlink unit operations to remove non value added processing steps.  This requires a production scheduling and cost management system to manage the additional complexity imposed by changes to the operation.

What this also does is require production plans that diverge from the normal flow of orders from the customer and increase the production cycle, thus requiring investment in more raw, in process and finished product inventory along with training and controls to handle the complexity. These costs may exceed the original improvement savings.

What happens if the manufacturer, instead, invests in simplicity?  What is the most direct way the product can be produced as close to the order flow and the customer as possible.  Concentrate, instead on removing change over time and costs so that the line can be cycled more rapidly.

The results will be inventories will decrease, issues will be more apparent, training will be easier and lead times will shorten.

Planning will be simpler; maybe to the point that material and cost tracking will be the only requirements from you management system.  Reduced complexity = reduced costs and happier customers.

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About emkohl
Project Management and Business Improvement Consulting

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