Page 29 - MetalForming September 2012

product. In-process operations slowed, so that we pulled a vacuum in the flow. Then shipments slowed during the first part of the following month.
• Some orders, not even scheduled for the month, were rushed through because they could be finished. We then asked customers to accept prod- uct early.
• Production of orders scheduled for the month, which would not ship the last day, would stop in favor of those that could ship. The result was an on-time delivery miss, with a longer recovery.
• Maximum overtime was sched- uled to ship as much as possible. This situation became embedded in the company culture. Management thought it was the norm, and employees count- ed on the overtime.
• Many times, we were paying for premium freight. And often, costly shipping mistakes occurred.
• The cost of quality increased, as everyone was in a hurry and could eas- ily lose attention to detail. Same goes for safety. Take a close look at when quality and safety problems occur at your company, and see if they correlate to rushed production.
The Calendar Can Be Your Worst Enemy
If you are experiencing any of the above, you are being micromanaged by the calendar. In my experience working with metalforming compa- nies, this practice can reduce profits by 10 to 20 percent.
Rather than manage based on a monthly production schedule, I rec- ommend managing on a three-month moving average. While on the surface it appears this may not change anything, actually everything changes. This means there is never an end of the month to worry about. The trends become apparent, making the compa- ny easier to manage.
While this seems to be an easy, quick fix, the change is difficult but worth- while. The challenges:
• Owners and operators will not give up the 30-day culture without a good
deal of pain. Believe it or not, it is the same as an alcohol or smoking addic- tion. Just wait for the last week of the month to occur and see who gets the jitters.
• After the last-week-of-the-month drill, everyone breaths a sign of relief and takes a casual stroll into the first week of the month—a reward for saving the company. This becomes a part of the culture difficult to remove.
• Overtime will be expected, and many will seek to retain it. But experi- ence has shown that if the three-month moving average is properly executed, the business will expand such that overtime still will be needed.
Just as the light went on for the head of the unit I worked for years ago, prof- its can increase at a rate never thought possible. Maybe this will be the last time you micromanage. MF
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