DriveYourSucce$$

Five Manufacturing Issues to Check Before Making a Capital Expenditure on Equipment

Far too many companies think a large capital expenditure is the ultimate solution to a lack of production throughput. Unfortunately, long after they’ve made their purchase, they’re still left with the same issues that plagued them in the first place: low manufacturing productivity rates, low production throughput, constant work stoppages, inaccurate cycle time counts, and an inability to track efficiency in work cells and work stations.

Warehouse Carrying Costs Per Square Foot: Three Simple Steps

Recently, a visitor contacted me by email and asked if I knew how to calculate warehouse carrying costs per square foot. In this case, it's different from calculating storage costs, where the emphasis is on capturing multiple costs and then dividing it by the square footage of the company's warehouse. Instead, this approach is about defining the company's specific costs to hold inventory for long durations, and then using that amount to determine the cost per square foot. 

Two Videos Explaining the Importance of Charging Customers NRE: Non-Recurring Engineering

The following two videos explain the importance of charging customers for design time on one-off designs, special orders and or customized products. The first video explains the importance of determining your company's NRE multiplier, while the second focuses on managing your customer's expectations when it comes to providing them with a custom-made product. Ultimately, it's about managing your customer's expectations about the cost of the design, the amount of time needed in manufacturing, and the high costs of customer change requests. 

Cellular Manufacturing Simplified: Reduce Shop Floor Work Stoppages

The most basic principle of cellular manufacturing is that a manufacturer can lower cycle times and increase production throughput simply by eliminating work stoppages and the root causes of downtime. Sounds pretty easy doesn't it? Well, it's not quite that easy. Success means the work cell itself must be well-designed, free of obstructions and most importantly, easily navigable. Therefore, if you've decided that you need to redesign the work cells on your shop floor, then this article will provide you with five simple steps to eliminating work stoppages and improving cycle times. 

Bill of Materials Best Practices: Simple Strategies to Reduce Costs

One of the issues I often come across with manufacturers is their willingness to ignore the importance of proper bill of materials (BOM) management. Instead of amalgamating the volumes of their most common raw materials, consumables and spare parts, they just produce one new BOM after another, each one calling for an entirely new sub-component parts list, instead of relying upon what’s already available in inventory.

Selling in a Demand-Driven Industry: Shorten Product Lead Times With Pre-Manufacturing

Companies that sell into demand-driven industries are often at a loss to explain how they can speed up their product to market lead times, and yet still deliver what is considered a custom-made finished good. In this case, we’re referring to companies that manufacture or assemble customer specific products. However, despite the fact that the finished good must be customized, manufacturers can deliver a “one of a kind” product and still shorten their overall turn times. So, how is this possible?

Choose the Right Supply Chain Strategy: Make it an Easy Choice

Companies are always asking me what the best inventory management and supply chain strategy is and I have always replied with the same answer; it doesn’t exist. Now, most immediately assume that my answer implies that there is no perfect way to manage inventory – and there isn’t. However, that’s not what I'm implying. What I am stating is that no single strategy works all the time and in all business environments. Ultimately, success isn’t about choosing the “best” inventory strategy, but about choosing a strategy that works for your enterprise and its customers.

Any Business Can Fail, Regardless of the Market, the Value Assertion or the Business Model

There is one rule all aspiring entrepreneurs and business owners should abide by; any business can fail. History has shown time and again that those “can’t miss” opportunities rarely, if ever, work out. There are no guarantees. There never has been and there never will be. Unfortunately, too many entrepreneurs make the assumption that they can’t possibly fail, or that the businesses that are currently succeeding aren’t likely to fail anytime soon. It simply doesn’t work that way. It's a reality of business ownership and one that some business owners ignore completely. 

Simplifying Lean Manufacturing: Work Cell Output, Cycle Time Variances & Production Volumes

One of the issues with lean manufacturing is that implementation often relies upon complex six sigma calculations, analytics and concepts, some of which are redundant, time-consuming and admittedly, quite laborious. It’s a reason why some of my customers are reluctant to use these applications when measuring work cell output. However, lean manufacturing need not be complicated. In fact, lean principles should follow a common sense approach to increasing production throughput; allow work to move without interference or obstruction from one work station to another and from one work cell to another.

Fixed Asset Management: Straight Line Depreciation on Capital Expenditures

How should a company depreciate a capital expenditure? Is it something that is done at the point of purchase, or does it make more sense to depreciate the value of that fixed asset over time? Well, simply put, depreciating a fixed asset is considered a non-cash expense, one that allows a company to reduce the book value of the investment. Reducing the book value allows the company to reduce its earnings. So, why would a company want to reduce its earnings in such a scenario?