Over the last several years, many of our small-to-medium size clients have been trying to achieve greater profit maximization by fine tuning their full scale production facility. Each has endeavored to reap wider profit margins by executing lean events and performing six sigma analyses. Yet, many have failed to reach their ultimate goal.

When examining why these organizations have ultimately not yet achieved their goal, we have found one common theme. Each began their operation as a small 'job shop' servicing either one very large customer or many small customers. Moreover, each has systems, people, and processes in place that worked well when the facility was a 'job shop.' The implication of applying this template onto a 'large scale' repetitive production facility is an increase in employee friction and inefficiency. Because an organization's departments are intertwined, companies foolhardily attempt to 'lean' a function or department such as purchasing or inventory only to find that the rest of the operation will not cope or align themselves with the change. The outcome is an erosion of profit maximization.

To resolve this problem, you must first clearly understand whether you are currently a 'job shop' or a mass production environment. After understanding your current environment, you should then focus on aligning the organization's functions along three dimensions: organization structure/roles, skill set and information/data flow.

The following are 35 questions to assess whether your organization is truly a 'job shop' or a mass production environment.

Sales

1. Is your sales cycle shorter than three months?
2. Does your sales department "close deals" without the need of intensive interaction with other departments, especially engineering?
3. Is a majority of your employed sales staff's salary derived through commissions?
4. Does your sales staff have and use a catalog with pre-priced products?
5. Does your sales staff sell off product data sheets?

Program/Project/Product Management

1. Do you have more Product Managers than Project/Program Managers?
2. Is there a handover from engineering to Product Management after which no major engineering activities are required?
3. Can you sell the same product with marginal or no changes?

Engineering

1. Is the ratio of engineering cost to total cost 5% or less?
2. Are your Engineers primarily developing new products (not for projects)?
3. Can your operation begin work without constant engineering updates?

Planning

1. Does your planner usually meet the previously planned output goal?
2. Do your planners use a ERP or an enterprise planning system without any help of spread sheets or MS Project?
3. Does your planner infrequently have non-customer related 'get on the same page' meetings?
4. Can your planner rely on historical sales data to forecast future plans?
5. Does your planner instill a 'frozen' planning period into the production plan?

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