Visual South Insights

Overview

Formal research indicates that companies with a strategic plan perform better and generate better results than those who do not. Per the ASPA (American Society for Public Administration), “There is a direct and positive relationship between strategic planning and performance… It is concluded that strategic planning is a beneficial activity for all firms.” But you need not look to research studies to come to that conclusion. Companies like Dell, Southwest Airlines, IKEA, Cisco, Starbucks, and Proctor & Gamble have all excelled in the marketplace, and returned better than average profits as a result of their robust strategic planning programs.

Planning for success

Capacity planning in manufacturing is a big job and sometimes an even bigger headache. The methods we’ve seen used to perform this task include spreadsheets, whiteboards, pencils and paper, a big stick, and ERP software. In many cases, it’s a combination of any of the above.

In this article, we will explain how to structure your manufacturing capacity planning to work in any software. Our goal is to eliminate the need for using the “non-software” options listed above (although the big stick can usually be reassigned elsewhere effectively).

Everyone needs a plan

Every organization should have an ongoing plan for continuous improvement. In a competitive environment, any chance to improve upon a process can provide the edge a company needs to survive—and ultimately thrive.  A good Business Process Review (BPR) template is a valuable first step in that plan.

What is a Business Process Review?

A business process review, which we refer to as an application process review in our services, is a project that aims to identify areas in your operations that can be enhanced and provide practical solutions to improve your use of software or procedures.

Production reporting is about the data

I’m a big believer in measuring what you want to improve. Measuring gives you data and you’ll see trends (good or bad) emerge. Figure out what is causing the good trends and keep doing that. Maybe you can even find ways to make the good trends better. Figure out what is causing the bad trends and find ways to stop doing that; or at least, minimize it.

Overview

Management consultants help businesses develop strategies, find opportunities, solve problems, and support management that they don’t have the time, resources, or specific expertise to do themselves. It is estimated that 72% of manufacturing companies in the U.S. have engaged a management consultant at one time or another. Based on an annual survey by Guiding Metrics, 87% of the companies that used a management consulting company were highly satisfied with the results, and 78% hired the management consultant for another engagement. For most companies who have chosen to seek this kind of help, it has clearly provided value.

What is a vision statement?

Most people have heard of a mission statement, but a vision statement is typically less well known. While there is some overlap, there is a distinct difference between the two. To put it simply, a mission statement describes what a company is doing to achieve its goals today, and a vision statement describes what a company wants to achieve in the future.

When is standard costing the best option?

The Visual South team works with hundreds of manufacturers with varying manufacturing modes. Many of our customers fall in the “to order” category. That means they are mostly make-to-order; and within that category they are either engineer-to-order, configure-to-order, assemble-to-order, project based, and mixed mode (they build some sub-assemblies to stock that can be used as a component part, finished good, or replacement part). The predominant costing method for “to order” companies is actual costing.

What is a KPI?

A KPI (key performance indicator) is a measurement of value that can be quantitative or qualitative in nature. Manufacturing companies typically use and track KPIs to determine how a particular area of operations is performing. KPIs are ideally presented in dashboard format, giving decision makers the ability to quickly answer the questions like, “How are we are doing?” and “What is causing performance issues?” Think of KPIs as a company or department’s scoreboard for how the team is playing the game.

What is an Application Process Review?

What we do in an Application Process Review (APR) is pretty straightforward, and we perform several for our clients over the course of a typical year. In the review, we observe how the ERP processes have been built to manage the business. Then, we make recommendations to streamline and improve the processes and procedures related to the flow of data in the company. For example, how to use the ERP to alert procurement of projected material shortages, as opposed to having them look for shortages in a spreadsheet – usually after it was manually updated. In essence, an ERP application process review is a gut check on how things are working, and what can be done to make them better.

It ain’t easy on the shop floor

Managing a shop floor is no easy task. Your employees make mistakes, equipment breaks, rush orders slip in, jobs ship late, and days are long. On top of that, there is the constant demand to reduce costs and increase quality. It’s a real pressure cooker.