7 Steps To Improving Production To Meet Growing Demand
Robert Sher
In this article, I’ll talk about my approach to overcoming production challenges, focusing on proven methods that can be applied by most facilities, and I’ll also outline the steps you can take to improve your own operations.
First, let's begin by understanding that all problems and opportunities begin and end with people. Workers on hourly pay alone have no reason to work faster. Fear tactics are rarely sustainable motivators and often lead to a "revolving door". Replacing workers is costly; (a) finding good labor is challenging, (b) training new hires is expensive, (c) new hires are slow and need more attention, and (d) newbies make costly mistakes. Whenever possible, look for ways to reduce turnover. Below is a case study from an eCommerce client I helped.
1. Create some healthy competition.
Speak to the workers, create teams, and instill some healthy competition between the teams. From here, create individual assembler accountability, such as a production log to track individual performance. Anyone lagging will need retraining.
2. Incentives/awards
With great reporting and measures, it is easy to recognize top performers. I found the best way to motivate people is with incentives rather than threats of punishment - this is called positive reinforcement. Be patient, it can take 4 to 6 weeks to get everyone on the same page. Once you gamify work, they'll have fun, build better relationships, and produce more than they ever have.
3. Promotions
Recognize top performers with gift cards and make it public. With my last client, the production error rate fell from 27% to 3%. That's an enormous amount of efficiency! To reduce employee turnover you may need to set a new pay rate for new hires while increasing the pay rate for existing employees.
4. Workflow
Spending a lot of time with production personnel, you'll begin to see workflow opportunities. Address those one at a time. From tools to warehouse materials, most changes improved morale, camaraderie, and output.
5. Inventory management
As the pace of sales increases, being diligent about supply-side inventory will become a crucial consideration. Implemented inventory tracking tools and an inventory schedule to stay ahead of projected/forecasted order volume.
6. Order balancing
Despite your best effort to hire enough people, demand could continue to outpace the speed of hiring and training new personnel. As orders continue to pour in you'll find that certain products will take considerably longer to produce due to extensive customization. Figure out your hourly profit margin for each product as well as daily profit by the model to decide which models you want to concentrate on, and for which models you want to delay production.
For example: CogA takes 1 day to make at a profit of $5K. CogB takes 2 hours to make at a profit of $1000 and you can produce 6 CogB's in a day. That means your company will make $1000 more per day focusing on CogB's.
With this approach, you'll satisfy more orders, and improve profits while reducing the risk of refunds, complaints, and negative reviews.
7. Calendar
Manage the production calendar by creating weekly sprints and monthly goals that involve everyone on the production floor, including management and the sales team. Make the calendar one of the focal points to unite your team around a common mission that is easily trackable and transparent.
All production facilities are a little different and this setup may not be right for your business. Schedule a free call with me so we can review your specific business needs.
