I worked with a secondary processing manufacturer that was losing money because they didn’t have their production systems under control. They were running smaller batches than they should have been to placate the relationships with their customers and the sales team. Promises were being made to their customers without thinking about effect on the cost of production, such as small bespoke batches to customers at very short notice.

Although this was being done with the best of intentions, of course, as part of a customer relationship strategy, this made the production line change from one product to another far too frequently. Their production runs were too short to give optimal manufacturing efficiency. It was costing the company lost production time and increased inventory. This was difficult to track to the individual sale and, therefore, impossible to price correctly.

Not only did it create inefficiencies in the process itself, but there was also a lot of wasted material. The machines themselves spent too much time not producing because they were changing from one product to another and there was significant waste in the yield from raw material to finished goods, due to the high number of pattern changes.

I was called in to assist, and our approach was to focus on balancing the demand management processes and customer expectations with the operational demands of running a more efficient and sustainable process. The outcome was a significant increase in manufacturing efficiency and operating yield, reduced inventory levels and increased delivery performance from the customer’s perspective.

No matter what industry or sector your company is in, it’s well worth a thorough investigation into your operational processes and costs if you truly want to maximise your ROI.