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How to start unlocking more cash and create opportunity for business.



Demand management is a core element to a business, being able to stabilise requirements as much as possible can ease the burden on processes and standardise performance.


How? By performing relevant analysis and define what the strangers are, areas of unnecessary variation and through demand analysis to establish strategy for creating flow through the system.


Variety and flexibility are necessary to Customers!

Absolutely, customers want fast flexible products and response but how much variation is created through a businesses own actions.

Example: Every, and I mean every manufacturing business I have been in has duplicated product..... just to let that sink in. My job is easy when the first thing i do in a business is review the products of most use and here i am going to assume everyone is aware of pareto analysis if not a quick google will explain but its a simple data review. Every time out of that data I will find at least 2 products that perform the same function, usually expensive ones as I also check trends on costs. Now at first you will go that's fine its obviously a risk management strategy for a critical item so there is an alternative. Nope! if that was the case items would be planned in to designs, connected to bills of materials and referenced in build instructions and unfortunately thus far other than the designs and ERP data i have been involved in I haven't seen this done.


Now its easy to criticize but not hard to see the issue here normally I find this happens where designs are created by different engineer with different preferences or they no means for checking existing products families or are unaware of who or how to check. So two (or more) part numbers are created different parent assembly's, different description, different supplier and different cost and sometimes another supplier could do the same thing quicker and cheaper and supply all of them but no one is looking at the data! its always rushing through, never to be reviewed again and a supply chain struggle is created for ever more.


Solution

Process, understanding the influences and ensuring a robust review process can save a business thousands! Software such as ERP can assist with this but wont solve the fundamental issues at a base level, you need to capture the data some how any how in a meaningful way that benefits the whole business.

I cant stress enough the compound effect of reducing time early on multiplies the extension of time, effort and ultimately cost towards the end. The better you do it and keep doing it the faster and better you will get, Enabling a deeper understanding of your business and functions and enabling targeted beneficial development when and where you need it for growth.


Conclusion

Today review your products all the way down to consumables, pulling out high users and high cost items first. Identify the ones created by business decisions that perform similar or the same functions and mandate a design review to collate as many as possible if not all in to one offering. Update designs, update Bill of materials, review stock capability and the new requirements for max/min levels, review procurement strategy and supplier capabilities as this may provide further cost savings and i guarantee you will gain increased flow of production from these simple reviews and changes.


This could be done with a task team but needs to be driven top down and requires leadership. If you require assistance or have any questions contact me below or visit www.qualityprocessanalytics.co.uk/contact.

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