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Take 5: Review your Operations for a Great New Year

Jan. 22, 2013
Own the results and then determine a strategy for 2013

By taking time to review your Naughty and Nice list for 2012, you can significantly improve your operations -- and your improvement trajectory -- for 2013. How did your operational strategies and tactics perform in the past year? Did you accomplish your objectives or did you leave performance improvement (and associated earnings) on the table?

1. Lean Initiatives

Review your lean initiatives from 2012. Consider how well your team performed in terms of quantifiable results and strategic objectives met. Review your value stream maps from the start of the year and end of the year. Is there noticeable change and less waste? What measurable improvement did you obtain? Have you conducted a lean audit recently -- either yourself or through a third party?

2. ISO 9001/14001

Formalized quality and environmental systems, in part because of their required bureaucracy and documentation, get a reputation for being “required to keep our customers, but not really a value add.” It’s time to review the systems in management review, examine your audit schedule for 2013, and examine the findings from the previous year. Were the findings from audits meaningful? Did the performance of the business noticeably improve because of the systems or in spite of them? Does the internal audit process add value to your operation by helping to identify strategic and tactical opportunities for improvement, or are they overly political with auditors afraid to find too many problems and offend the other departments? If there is little value added, perhaps it’s time to consider outsourcing your internal audits to an organization that isn’t mired in the politics of your organization.

3. Plant Safety

Now is a great time to review your plant safety record and current initiatives. How did you fare last year in terms of injuries, near-miss accidents and lost time? Do you only react once a problem occurs, or do you have a proactive management practice looking for potential safety risks and leading teams to create a safer work environment? Is your operational culture one of “safety first” or do your teams feel they need to get jobs completed regardless of the risk? If the culture is the latter, what will you do this year to change the culture?

4. 5S Visual Factory Management

Take two walks through your plant. One walk should be conducted during operating hours. Look at the way tools and material are moved and stored. Are they accessible but at the same time controlled? Is there discipline in the cleanliness and upkeep of the operation? Last year were there meaningful changes to how machines are run and operations conducted so as to improve cleanliness and order? 

Take the second walk through your plant after hours. In what condition is the plant left at the end of the final day’s shift? Do workers and management have the internal drive to ensure a clean and safe working environment -- or does the workshop look as it did exactly during operating hours?

5. Cost Deployment

Perhaps the most challenging aspect for small and midsize manufacturers is to best understand their direct and indirect costs. The challenge isn’t categorizing them as direct and indirect, but rather fully explaining in explicit detail how much each operation in the plant truly costs the organization. Take a look at the financial control of your operation. Do you only aggregate data and therefore limit the quantitative analysis available to your managers and lean thinkers? Do you and your team fully understand the cost of everything that happens (or doesn’t happen but should) in your plant?

As you review your operations and the performance of each aspect -- keep a list of the things that went right (The Nice List) and the things that went wrong (The Naughty List). Spend a few minutes alone as well as with your management team to really identify why the Nice List items worked and why the Naughty List items didn’t. Own the results and don’t allow “noise factors” (such as “the economy”) to be the only accepted causes. Then, determine a strategy for 2013 that will accelerate the Nice List items and will fix or replace the Naughty List items. 

Happy New Year!

Jason Piatt is president of Praestar Technology Corp., a provider of consulting and training services to manufacturers in the Mid-Atlantic region specializing in lean, Six Sigma & strategy formation.

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