In order to be operating efficiently (not just effectively) we need optimal facilities, employees and product, for the respective scale;  all three.  Smooth flow and the minimization of wasteful steps are essential to creating anything close to single piece flow or skipping the unnecessary stacking and unstacking of WIP. And while it may not be the case, the assumption needs to be that your competition is set up efficiently with waste eliminated and you are to find a new way to squeeze more juice out of your products, people and line.

 

Changing and improving plant and employees is doable overtime, but improving and measuring your raw material inputs is a piece of cake. It can happen this week and with fantastic results on your employees and their efficiencies at the same time. 

Let your team know where your plan is taking them. If you haven’t been tracking time, yield and products, start doing it. Let ‘em know that your competition knows a helluva lot more about pricing and understanding flow than you do, and it’s been too long since we really have put the office’s theories about yields and costs to the test on a per cell basis. They will be curious about all the “new work” on the floor. Keep it constructive; we are not pointing fingers or looking back; this is about improving efficiencies. Give your team a tangible goal that your time studies will achieve and how success on this project will positively impact their lives. Set up your team with a notebook at each conversion point and gather some data if you don’t have it already.  

 

 

Going into this, be mindful that smaller shops generally don’t have the cut list diversity required to justify the usage of lower grade material. The ability to measure/quantify and compare results over time and against varying species is vital in determining the current state and whether you are using the right product for the cut list. 

Analyzing costs per cell is not that difficult. Power consumption, labor x mod-factors, maintenance and supplies. For now forget about depreciation, the building, heat, interest, office overhead, and the bosses Corvette collection. Not everyone in the industry has these costs, I want to know how are we doing on the actual cost to convert. Apply the costs to convert to your products and begin to hone in on the conversion per cell. 

 

This is incredibly powerful as you determine how yields in cells not only impact the amount of successfully finished product you create but the power consumption on the grid, the maintenance on the machines, the purchasing communication, the receiving and the administrative work to produce the wood in THE SCRAP BIN. Failure to review your kiln dried product conversion is not very different from shipping green lumber across the country when you know others are capable of drying it closer to the source, halving your freight expenses. It doesn’t make sense to process scrap unless an economic argument can be made for it.

 

Are you pricing your products based on realistic yields, flow and costs? Are you placing appropriate premiums on various length products? Which products are subsidizing others? Are you using the right raw materials based on product substitution, price variances and the affected unit production costs that you figure from those flow rates? How were your original systems vs. what you have learned? Check it out and make the changes as necessary. Make sure you are happy getting business (and are able to quantify what each order should mean to your bottom line) BEFORE you even take the order. There will still be time to change your plant or your people, but you need to be certain you are using the right inputs ASAP.

 

Expect that you should be getting the most out of your raw materials and expect the most out of your employees as well, but understand that you are not even close to that today. Again, assume that it IS possible to manage a plant so well that people are actually working in concert and to the benefit of its stakeholders. Decide whether you think that this utopian plant might as well be under your control. Why settle for less? 

 

Go get ‘em.