Manufacturing is a wealth producing sector of an economy. In the last decades there has been a tendency to outsource manufacturing to countries with lower labor costs and fewer regulations. But these trends are changing, particularly because developing countries have increased their labor costs, introducing more and more environmental and labor laws. Even if they are not at the level of developed countries yet, the tendency to adopt these regulations is there. Production in the US is a realistic option now. However, as a small business owner with manufacturing in the US, you have to manage your production process very carefully.
Today’s manufacturing process requires:
- Improve productivity
- Use of industrial symbiosis
- Avoiding physical hazards to the employees
- Eliminating harmful materials
In addition, environmental law, labor laws and other restriction have a huge impact on the cost and efficiency of manufacturing.
An important tool is Manufacturing Process Management, a collection of technologies and methods used to define how products are to be manufactured.
Production process planning
This is an important tool for the production process which can have a major impact on productivity. It is the process of arranging, controlling and optimizing work and workloads in a production or manufacturing process.
Scheduling is used to allocate plant and machinery resources, plan human resources, plan production processes and purchase materials.
Usually there is either forward or backward scheduling.
Forward scheduling: Planning the tasks from the date resources become available to determine the shipping date or the due date.
Backward scheduling: Planning the tasks from the due date or required-by date to determine the start date and any changes in capacity required.
Production scheduling brings many benefits such as inventory reduction, increased efficiency, optimized labor, accurate order and delivery date quotes.
Production Organization Systems
Two of the most effective systems on the market are Kaizen and Six Sigma.
Kaizen is Japanese and means “change for better”. Transferred to a business sense it means “continuous improvement”. In a production process it means a permanent improvement along the whole production process, including connected processes like purchasing and logistics. This system leads to “lean manufacturing”. The Kaizen methodology includes making changes and monitoring results. Basically the Kaizen process never ends. Toyota is one of the most famous practitioners of the Kaizen process.
Six Sigma is a set for techniques and tools for process improvement, developed by Motorola in 1986. Jack Welch took it for his central business strategy at General Electric in 1995. Six Sigma improves the output quality of the process, by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. It uses a set of measurement methods, most of which are statistical. Additionally, it creates experts in the use of these methods (Champions, Black Belts, Green Belts etc.) within the organization. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has qualified value targets.
Today the tendency is to combine Kaizen (lean management) with the Six Sigma (production measurement) methods.
Alliance SBDC Business Consultants can provide guidance and support to help you implement this type of advanced production management and planning.