Continuous Improvement: A Crucial Component of Economical Manufacturing
By Dave Baumann
It is well understood that Continuous Improvement is an essential component of manufacturing economics. Today, the marketplace is challenged even more by the increased attention to economically sustainable (manufacturing) development – the awareness and concern with the environmental impact of economic growth and global expansion of business and trade.
Sustainable Manufacturing, as defined by the US Department of Commerce is “the creation of manufactured products that applies processes which minimize negative environmental impacts, conserve energy and natural resources, are safe for employees, communities, and consumers and are economically sound.”
Broadly interpreted, Sustainable Manufacturing must make optimum use of technology and non-technology solutions, from the selection of materials and production processes to the organizational mission and metrics. This means an organization’s focus can not be limited to minimizing the energy used, but to every tool used by the organization to create value.
- A manufacture of commercial products was using 100 castings a month, each weighing 350 pounds. They set an objective to reduce material conversion costs. At the end of the process, not only were the material costs reduced, but the shipping costs, machining time, cutting tool usage, and chip handling and disposal costs as well. The savings generated totaled over $600,000 per year.
- A Tier 1 automotive supplier made a product that required its employees use a particular type of moderately expensive glove to ensure finger prints were not left on the part during one phase of the processing. An internal audit found that glove usage was a significant percentage of the monthly plant operating expense. A team investigated the waste containers at the end of each shift for a week and found that numerous disposed gloves were still usable. It was learned that gloves were thrown away at each employee break and new ones taken. This was resolved by requiring employees to turn in a failed used pair in order to receive a new pair– saving about $200,000 per year.
- Through a focus on everyday expenses, an organization learned that the majority of copy paper is used only on one side. They saved the paper and ran it through the copy machine again from time to time. They also bought their own shredding machine, shredded their waste paper and used it for packing material. This effort saved approximately $25,000 a year.
Your business parameters will never go away. Today’s competitive market place demands that goods and services be made better, quicker, and less costly. It is vital then to cultivate your organization with the drive to learn, to invest the time to discover and encourage the innovation needed for improving the processes that your resources use. It is also vital that the same method be applied to the conversion of the resources used in the production of finished goods.
So, step back. Sometimes that ‘view from 5,000 feet’ can be very revealing. Your economic success depends on it!
Oak Hill Business Partners is a professional services firm serving small and mid-sized business with world-class financial, business, growth development, and operational solutions. We will work with you and your team to develop and execute an overall systematic approach to drive out non-value added costs. Whether it is the processing of request for quotes, order entry, factory paperwork, shop floor processes and flow, quality, tooling, shipping, or other factory and internal support systems, we have the expertise to support you so you can focus more effort on your core expertise. For more information, Contact Us today.
Dave Baumann is a Partner in Oak Hill Business Partners, specializing in manufacturing engineering and operations management. He has more than 35 years of experience in manufacturing in many industries.