It’s no secret that today’s marketplace is competitive. Producing quality products to be sold at an affordable price in a timely manner sounds like a fairly simplistic premise. However, getting that premise to work effectively in any manufacturing environment is often the cause of many board oom meetings, new process development and late nights for plant engineers and managers.
So, what is operational excellence and why is important to the success of your business?
If you consult any business book or blog or magazine, you are likely to find a variety of definitions for operational excellence (OE). The term was first coined about 20 years ago for a Six Sigma deployment at the formerly named Allied Signal. Instead of looking at all the parts of a business separately, OE is a way of looking at a business as a whole and making changes to promote excellence in all areas.
It’s important to implement Operational Excellence practices because it helps businesses streamline to provide the best product at the lowest cost. There’s that simple premise again. It’s what we all want to do and it can help your nonwoven product succeed in the marketplace.
There are many facets to OE, but here are five best practices that cannot be ignored.
- Make sure every employee “gets it.” Everyone in your company should understand not only what your company is trying to do but also why and how. It’s important that everyone buys into the idea that you’re trying to get great products to market at the best cost. In that way, all employees can identify areas to improve.
- Minimize waste. Apply lean practices to all key processes. And don’t just focus on material waste but also consider transportation, overproduction, waiting times for your employees between processes and even accidents.
- Apply Activity Based Costing (ABC). This method of costing supports operational excellence because it helps you allocate overhead costs to each product effectively. For example, if an engineer spends x hours on a given product, those dollars should be factored into products costs along with the cost to store the product in a warehouse (yes, include building space rental or mortgage costs based on square footage and even heating and cooling costs). This will give you an accurate picture of how much it really takes to produce your nonwoven product.
- Document everything. Make it easy for your employees to log and document the improvements they make.
- Improve…continually. That’s what operational excellence is all about. Continue honing and improving all your processes at every level of manufacturing in hopes of one day achieving…perfection? Well, we can dream.
Operational excellence may look different for your business than for another. But, whatever you do, ensure that you keep striving for that simple premise: great nonwoven products at an affordable cost. Because, in the end, it’s all about what consumers want to buy.
Blog image courtesy Stuart Miles/freedigitalphotos.net