Every manufactured part has a story—including how something is made, how much it costs, how much it can be sold for and if you make it again. A good manufacturing story will be filled with precise detail and accuracy, and will guide your future processes based on a truthful history. And this means your customers will want more. Why? Because you are manufacturing like a boss, which means you must:
- Master the four key transactions: obtaining purchasing receipts; issuing material; WIP to finished goods; and shipping/invoicing.
- Know your costs (freight, labor, outside services, overhead, material, other) with great accuracy.
- Price your parts competitively and profitably.
- Quote your jobs with speed and accuracy.
- Reduce risk by knowing instead of guessing.
When you are doing the above, you are making parts faster and better, watching it all in real time and knowing exactly what everything costs. So how do you become a “boss” manufacturer? Get back to the basics and master these 13 to do’s:
Prepare to win. Manufacturing can be won or lost in how prepared your company as a whole is, not just individual people. Your employees must be well trained in accurately capturing data, holding each other accountable and understanding how daily processes impact costing.
Have accurate bills and routers. Without them lead times will be incorrect, causing mate-rials to be ordered at the wrong times, inventory overstocks or fees for expediting materials.
Set realistic due dates. Plan your work orders correctly to set yourself up for success. Issuing due dates on a work order for a week from now, when you know it will take several weeks to make the part, will set your shop up for failure.
Obtain correct cost and conversion factors. You should always know a PO’s cost.
Have timely PO receipts. When you enter the PO receipt on time, traceability of any material needed to complete the PO will not be lost.
Issue material on time. Controlling your inventory is one of the most important components in manufacturing.
Watch your cycle count adjustments. The more cycle count adjustments made, the less inventory control there will be.
Finish your job. If you’re not closing out jobs correctly, materials will continue to be issued out, leading to incorrect demand.
Have a plan. A plan to handle rework or bad parts on work orders where the bulk of the parts have been completed should be in place.
Track labor and perform daily balancing. It’s better to find labor mistakes as soon as they happen so the cost is corrected immediately. Don’t wait until it’s too late.
Close work orders on time. This will save you time, money and major headaches compared to parts being cycled in and out because you forgot to close out a work order.
Compare estimates to actuals. Having something to base costing on is important because you don’t have a way to know if your cost is correct without a baseline.
Stop guessing and start knowing. Know your costs with high precision instead of guessing at what it really costs to get a part out the door.
In manufacturing, it’s easy to lose focus. As time goes by, we find ourselves working harder for the same results. Typically, this means we have stepped away from the successful plan that got us to the top of the mountain; at this point, we need to get back to basics.
Editor’s Note: This column is based on a whitepaper. To read the full version, visit www.globalshopsolutions.com/13-to-dos-to-manufacture-like-a-boss.