Restarting a manufacturing operation is a huge undertaking in calm times. When you factor in the complexities of the post-pandemic environment, it can be overwhelming. Follow these six steps for a clear path to stabilize operations, optimize throughput and maximize your profits.
Step 1 – Plan Ahead
- Get a head start on assessing and planning for recovery with this Yes or No checklist:
- Do you know your cash and liquidity positions?
- Do you understand your labor position and risks to key roles?
- Have you assessed your supply chain and demand?
- Have you factored in your available production capacity to optimize your production schedule?
- Do you understand trade-offs and how to optimize flow?
Step 2 – Rethink Your Supply Chains
Assess inbound and outbound supply chains. Don’t leave it to just the material. Look at the time and costs of international shipments, as they may be different than pre-crisis. Since many pockets of the country are going through the curve at different rates and times, global commodities are likely to see a whiplash effect as stockpiles of raw materials head to new markets. The times to clear customs are likely to be different as well. Set aside time to develop an alternate sourcing strategy, and also push for 100% transparency in the supply chain tracking. After an alternate sourcing strategy is developed, risk assess it by asking questions such as 1) What happens if the U.S. and China implement new tariffs? and 2) What financial risks do I have with currency translations?
Step 3 – Know Your Critical Talent Skills and Needs
Identify the critical skills and roles in your manufacturing process and consider re-assessing those jobs whose functions have been re-defined by the crisis. Develop a depth chart for these roles and evaluate the weak point(s). Next, create a training plan to fill in skills gaps, and assess the new expertise that you need to bring into the organization.
Dedicate an “accountability room” to set priorities and individual assignments while reviewing the inter-dependencies of decisions until things get back to normal. In this accountability room, it’s essential to gather concerns from the team, provide feedback and resolve any issues in quick manner.
Further, challenge the team to do great things – emphasize the need for people to step up, take more responsibility, be more accountable to protect the business’ survival through this challenge and to help each other protect their jobs. Make this a higher calling in a global crisis … one that can be met if everyone digs deeper and puts the greater good above individual interests.
Step 4 – Connect to Value Chain with Increased Engagement
Chances are that pushing for 100% transparency in your supply chain is an immensely challenging task, but you can get there with a plan and improving your processes. The complex inter-dependencies in industries such as automotive and electronics components have driven decades of continuous improvement that may have not yet reached your operations. With the new stresses and unknowns, it makes sense to add new methods and tools to gain that visibility. Work with your upstream vendors/sources and your downstream customers. They are facing the same changes and challenges you are, so talk frequently and ensure the whole process works seamlessly toward establishing an achievable schedule – every day for every shift.
Step 5 – Put Emphasis on Safety
Anytime you re-engineer a workflow or production space, add safety into every step. We recommend applying 5S to operating a facility while keeping people safe from typical injury vulnerabilities and the coronavirus. Also, safety walkthroughs are critical – especially if changes have been made on the plant floor and people are in new roles.
Further, decide how to work in social distancing in your operations during recovery. Identify what changes are needed in sanitation, PPE needs and inventory shipping and receiving. This also demonstrates leadership’s emphasis on safety even more and shows you care about employees’ well-being.
Step 6 – Understand Investment Trade-offs
Lastly, understand risks of capital debt versus reinvestment. We recommend businesses apply for low-cost loans if they’re strapped for cash. The funds, for example, can be used to purchase new equipment for a line that will set you up for success in the future. So, it may be better to get the loan rather than fighting the good fight only to see slow equipment limit profitability and restricting growth opportunities. Understand the loans available from the Small Business Administration (SBA) and their implications on your company’s debt and other elements of your P&L. For instance, a new press may enable you to shut down two presses and reassign labor to value-added roles.
When you’re exiting lockdown from a generational pandemic, you have only one chance to get it right. Follow these guidelines and give yourself the best chance to get back to normal operations – or become even better.
Bill Currence is the president and founder of Cornerstone Consulting Organization (CCO). The company focuses on situation-specific business consulting – from enterprise strategy and operations to manufacturing systems solutions. CCO works with clients in a variety of manufacturing industries, such as automotive, healthcare and plastics.