Things got behind in production and we”™re trying to catch up. Can you give us any suggestions?
THOUGHTS OF THE DAY: There are lots of contributors to backlog. Check on re-dos and inventory. Take a look at which equipment is the most behind. Look for efficiencies. Build a realistic production plan. Assign staff to talk to customers.
Figuring out the source of backlog will help you to build a plan of attack to get caught up. Classify reasons for backlog including transportation, order processing, production cycling, quality, inventory, equipment breakdown setup and retooling, and staffing.
While some problems may be out of your hands, the customer is still probably going to hold you accountable. Make sure your sales and customer service people understand the time needed to produce and ship. Inform customers of faster shipping options if the customer wants to pay. Get manual orders converted to online by telling customers how many days they”™ll save and offering training on how to automate.
Check if customers understand your production cycles and know when to order to minimize cycle delays. If you typically run a cycle of production the first week of the month, and the customer orders in the second week, that”™s an automatic three-week delay built in. Teach customers how to be smart about when they order.
Waste can slow output significantly. Track daily production errors and reward improvements. Reduce delays by producing less quantity more accurately.
Assess if you”™re carrying the right inventory. Automate communication with suppliers to speed things up. Request immediate notice of supply delays. See if supplier lead-times are realistically factored into production planning and inventory management.
It”™s probably not all of the shop that”™s behind. Figure out your equipment and training priorities. Have enough of the right equipment on hand? Time to upgrade to faster equipment? Are enough people trained to operate each piece? Have enough qualified maintenance staff?
Order new equipment well before you need it, keeping in mind that you could experience months of delays getting new equipment delivered, set up and in production. If cash flow is a problem, use a leasing program to make the purchase.
Consider going to a second or third shift on equipment in greatest demand. Cross train additional operators so that equipment doesn”™t stand idle when someone is out. Set up training to move people up to more complex equipment.
Look for efficiencies. Take a look at whether you can pick up capacity by changing the flow of work through the shop. Should you run bigger batches less frequently? Can you repair and retool on weekends or evenings? Are your maintenance people properly trained and do you have enough standard replacement parts on hand? What if you increase the quantity produced and reduce the frequency of set up on complex jobs?
Never plan based on 100 percent production for any piece of equipment. At best you”™ll get 80 to 85 percent utilization when factoring in equipment maintenance and repairs, inventory issues and employee downtime for training, sick time and vacations. If you plan on 100 percent, the minute that anything goes wrong you”™ll get behind and never catch up because you can never exceed 100 percent production. If you”™re at 100 percent, increase capacity now.
Talking customers through backlog is incredibly important. Be upfront with customers that there will be delays. Find out which customers can be flexible. Prioritize orders based on quality of clients, not just based on last in first out. Calculate quality of clients based on profitability, importance to the future of the business and finally on overall volume. Get your sales reps involved in the communication, as they”™re the ones selling the orders and making initial promises to customers.
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Andi Gray is president of Strategy Leaders Inc., StrategyLeaders.com, a business-consulting firm that teaches companies how to double revenue and triple profits in repetitive growth cycles. Have a question for AskAndi? Wondering how Strategy Leaders can help your business thrive? Call or email for a free consultation and diagnostics: 877- 238-3535.
