I am writing this as a real-life case study that happened very recently.
Doubling the turnover in a manufacturing business while maintaining very high-quality levels and increasing margins is not easy but worth the hard work. Taking a manufacturing business from a jobbing shop to an efficient manufacturing facility involves close analysis of every aspect of the business to identify weaknesses and implement solutions and typically all of the following need to be considered:
Do you have the right people in the right position to cope with a rapidly expanding business? Is there a skills gap? Do you have enough people?
When output goes up its not uncommon for quality to go down and that is very difficult to get back on track once it starts to slip.
Business expansion will put a real strain on your ability to perform if you have weak processes or even worse if you have no processes.
You need to be sure your external suppliers can cope with your expansion plans.
Do you have the right software packages to cope? Sometimes when you decide in increase your turnover, software packages that used to cope quite well start to creak at the seams as more users jump on board and expect more from it.
Being a manufacturing business, do you have enough machine time? Do your machines need upgrading to more efficient models? Is there machinery you could buy that will automate labour intensive activity?
No matter how dedicated you are to the Lean philosophy sometimes you may need more space for extra machinery, storage, facilities and plant.
It is very easy to chase the new turnover targets but it is rather self defeating if your margins drop. This happens in some businesses as desperation to hit the new financial targets causes errors and inefficiency which can reduce your margins quite considerably.
I strongly recommend the integration of KPI’s. You can plot your progress by using the key indicators to show where you are today in comparison to where you were at the beginning of the journey. Creating visuals of your KPI’s and sharing with your team can be very motivational, assuming that things are going in the right direction of course!
So, having assessed all of those points and having implemented all of the solutions you are now reaping the rewards, so what’s next?
Well that brings me to the real reason I am writing this article in the first place and this is the part that is unfolding in front of me as I write.
Having achieved the goal, we are producing high quality products that are delighting clients, margins have increased, on time delivery is 100% and our brand is strengthening as we go.
BUT the staff are bored!
To achieve the goal, the company has become incredibly good at what they do so much so that it’s become a bit like shelling peas. People miss the excitement that fire-fighting used to give them, the manufacturing team miss the intricacies with the products that have been made easy by machinery, the challenge of getting things from A to B is now simplified by software telling them what to do and when to do it.
Mutterings have reached my ears that despite having a full order book and better staff security than ever its not good fun like the old days. Everyone accepts that we can’t return to those days and they appreciate the good things that have come from the changes but it’s boring!
In many ways it a great problem to have but it also needs to be taken seriously as these are the people that made the company great. Now is the time to return the favour—this week we have a team meeting to discuss what we can do to inject more excitement into our working lives.