There are few situations more frustrating than discovering that results you expected to be good are an unpleasant surprise. Itís too late now to go back and do it differently. Weíve all been there, but recently a fabricator asked me if there was a way to avoid surprises. “Our computer system tells me by job how much profit I should make,” he said, “but month after month we fail to hit the target.”
The birthplace of most surprises is the factory floor. And computer systems do not tell you what is happening in the factory, unless you invest in shop floor data collection systems, and they are expensive. Many bosses spend a lot of time in the factory, but they can't be there all the time. In a 'well oiled' organisation a boss has other things to do. There are customers to look after, sales to be made, improvements to plan and accountants to see. With luck your accountants arenít revealing new surprises. So what can the busy boss do? Fabricators of all sizes can cut back on surprises by adopting the following measures:
- Choose a few important business measures, such as:
- Profile and reinforcement waste. Keep tabs on it by frequently weighing the volume of off cuts and mistakes produced. You can do this using fabric bags hung in a simple frame.
- Production hours and cost. This may involve a few simple calculations.
- Production output. Break it down into categories such as five sizes of windows, two sizes of doors, patio doors, French doors, and conservatories.
- Lost time through machine breakdowns.
These business measures are commonly called Key Performance Indicators or KPIs.
- Set targets for each of the KPIs - targets should be clear and seen as achievable.
- Establish clear responsibility for who provides the input and completes the charts that will be used to display the KPIs.
- Display the charts prominently in the factory so that everyone in the company who is involved in KPIs can see them. Explain to everyone why you are using KPIs, who will update them when, plus where they will be displayed and how they will be used.
- Measure and fill out the charts. Do ensure this is done accurately and on time to create interest with everyone involved. Most people really do like to know how they and their company are doing.
- Go back and change the computer data where necessary, e.g. productivity as you find differences to reduce the opportunity for surprises.
- Identify problems thrown up by the KPIs and set about solving them in an organised way. Also be on the look out to see where training is needed.
- Find an industry benchmark for the measures you have chosen. When the process is bedded in, reset your targets progressively closer to the benchmark.
- Go back and change the computer data, this time to reflect the improvements youíve achieved.
The first step in eliminating surprises is in knowing where you are. By identifying problems and solving them you move up the improvement ladder. Using KPIs does two things. It increases your control and it focuses everyone on improvement. For more information on KPIs email me at firstname.lastname@example.org, or call Helen Ahern or me on 01453 521621.