» PRODUCTIVITY MEASURES & QUALITY CONTROL PROGRAMS
PRODUCTIVITY MEASURES & QUALITY CONTROL PROGRAMS
Premier Business Experts’ Productivity Measures Improve Profits!
As Joseph Moses Juran, the author of several, influential books, noted “Without a standard there is no logical basis for making a decision or taking action.” With this being the case and with productivity for the most part being defined as “output divided by input” or as “effectiveness (i.e., obtaining desired results) divided by efficiency (i.e., getting certain output with minimal input)” or as “value to customer divided by cost to producer,” the professionals at Premier Business Experts routinely use TEN key-management-productivity-measures, TEN manufacturing-productivity-measures and TEN service-productivity-measures for many of their clients! In so doing, the teams at Premier Business Experts examine the five following critical areas: (1) Products (i.e., goods, services and ideas), (2) Processes, (3) Organizational Issues, (4) Commitments and (5) Leadership Concerns. The result of implementing these productivity metrics has been improved profits for clients, as highlighted by the following two stories!
How Premier Business Experts Improved the Profits for a Manufacturer of Oil Field Equipment
Problem: A manufacturer of oil field equipment noticed that its profits were decreasing.
Solution: The professionals at Premier Business Experts began to track a whole host of Productivity-Metrics/Performance-Measures, including the Profit Margin meaning the Operating Profits divided by the Sales and noticed that the Profit Margin Percentage was steadily decreasing. If the Profit Margin had been increasing it would have shown an increased ability to generate high returns from a given amount of sales. However, the exact opposite was occurring with this particular company, thereby suggesting that its costs were too high and eroding profits. A further examination revealed that the component costs had been increasing. Thus, the client began to examine the possibility of using foreign-made, rather than American-made components, and it began importing some of its components from places like India and China. Additionally, the company seized an opportunity to buy the inventories from one of its key competitors, at a deep discount, when that competitor filed for bankruptcy. The result was that the company saw its profits increase to acceptable levels!
The Professionals at Premier Business Experts Streamline Business Processes!
How Premier Business Experts Improved Productivity at a Major Consumer Packaged Goods (CPG) Company
Problem: It was taking a major Consumer Packaged Goods (CPG) company close to a year to introduce new packaged-food products. This meant that whenever a competitor had a successful new product launch, the competitor was able to strongly secure its position in the marketplace and was in some cases launching a line extension before the CPG client was introducing its first product into a new subcategory.
Solution: Premier Business Experts prepared a flowchart of the activities that the CPG client needed to launch a new product. In the process, it was found that it typically took more than three months to get internal approvals on packages, before they were presented to government regulators. The reason was that a “carton sketch” was sent in a circuitous route to (1) Product Development, (2) Quality Assurance, (3) Manufacturing, (4) Labeling, (5) Product Directions, (6) Marketing, and (7) Packaging Departments. If one person was on vacation the paperwork could be stalled for quite sometime before it went onto the next person. Similarly, when a problem was encountered at any step of the way, a new sketch was prepared and the process was started again. Then, once all the internal approvals were obtained, the sketch and all accompanying paperwork were sent via ordinary postal mail to a corporate representative in Washington, D.C. who presented the information to the necessary government regulators. If the government had concerns, the internal approval process started again with a new sketch and new paperwork. Then, once a sketch and its accompanying paperwork were approved by the government, the first cartons from a print-run went through the same laborious internal approval process before they were finally sent via ordinary mail to Washington, D.C.
The solution that dramatically reduced this laborious cycle was to have a “coordinator” send out multiple copies of the packaged-food, carton sketch and accompanying paperwork. One went to each person who could sign off on his or her area of responsibility, or alternatively say what needed to be corrected. The result was that sketches were less likely to get “stalled” in someone’s in-box and sit for days on end. Moreover, when a problem was found a corrected sketch and accompanying paperwork was then sent to each individual who had found a problem and not to everyone else. The paperwork was then faxed, rather than sent via ordinary postal mail to the corporate representative in Washington who could get the sketch in front of the appropriate government regulator within two to three days.
If the government found problems, the corrections were handled only with those who were affected and a new sketch and paperwork were faxed to the corporate representative in Washington, D.C. Then, once the sketch and accompanying paperwork were signed off on by the government, cartons were printed. However, rather than sending the final cartons via ordinary mail the first cartons printed were immediately sent to the company’s Washington, D.C. representative via Federal Express. The result of these changes was that the entire regulatory process went from often taking several months to consistently taking less than three weeks. Because of these improvements in productivity, the company can more rapidly respond to competitive challenges.
Premier Business Experts can Improve the Quality of YOUR Business!
Those at Premier Business Experts have also put into place systems to ensure that the quality requirements for products and services are met. In other words, they have developed Quality Assurance (QA) programs on behalf of businesses. Moreover, they have installed sets of procedures to test samples of products and services to uncover defects and indicate the needed corrective responses. Explained differently, Premier Business Experts have implemented Quality Control (QC) programs.
Going beyond QA and QC programs, the professionals at Premier Business Experts have helped both hierarchically-managed production and matrix-organized service entities to develop and implement Total Quality Management (TQM) Programs with (1) Customer-driven standards, (2) Prevention mentalities, (3) Supplier Standards, (4) Root Cause Analyses and (5) Continuous Improvements, using Deming, Shewhart, benchmarking and other tools! They have done this by defining Statistical Process Controls (SPC’s) such as Process Flow Charts, Check Sheets, Pareto Analyses and Histograms, Cause and Effect (e.g., Fishbone) Diagrams, Run Charts, Scatter Diagrams, and Control Charts, as well as by delineating Quality Functions in terms of the Assignments of Responsibilities and by Examinations of SPC Tool Usage. In fact, the talented individuals at Premier Business Experts have Implemented Statistical Tools and Statistical Quality Control (SQC) Methods, such as Sampling Plans, Assessments of Process Capabilities and Taguchi Methods.
As shown by the following story, the results from such efforts have been improved uniformity of products and improved profits!
How the Professionals at Premier Business Experts Reduced Manufacturing Costs
Problem: A manufacturer of frozen dinner products found that it was “over-filling” its packages by significant amounts, which was costing it tremendous sums of money.
Solution: Premier Business Experts analyzed the situation and found that according to federal laws products labeled as dinners had to have net weights of at least ten ounces and that the skeletal-muscle-tissue (i.e., meat, poultry or fish) component had to be at least 25%. As a case in point, a “Chicken Breast Dinner,” had to weigh at least ten ounces and have a “Chicken Breast Component” weighing at least 2.5 ounces. Moreover, the federal government allowed for 10% of the dinners to have a net weight lower than the value stamped on the carton. Thus, the company was tracking the weights of its dinners and had as its target only one in twenty dinners falling below ten ounces in terms of net weight, in order to “be safe,” which was a good policy. However, the company did have a problem in terms of its assembly line processes. Specifically, the company was filling the trays in the order of (1) starch component, (2) vegetable component and (3) skeletal-muscle-tissue component. This meant that the company was making sure that it had enough of the starch and vegetable components to cover for a slightly less than 2.5-ounce, skeletal-muscle-tissue component in its ten ounce dinners, which was resulting in a large amount of greatly overfilled dinners. Thus, the solution was simply to reverse the order of fill from most expensive to least expensive component. Explained differently, the meat, poultry or fish component was added first. Next, if the skeletal-muscle-tissue component was at or slightly below 2.5 ounces, a targeted amount of 2.5 ounces of vegetables was added, but if the meat, poultry or fish component was slightly above 2.5 ounces, a targeted net weight (i.e., before adding the starch component) of 5.0 ounces was sought. Lastly, the least-costly (i.e., starch) component was added to bring an individual dinner up to the net weight of “10.0 oz.” stamped on the carton, with a target of only one in twenty dinners being slightly below that amount. As a result of Premier Business Experts’ QA programs and QC procedures, this company reduced its overall costs by an average of 7% for each type of dinner it made. Explained differently, the SQC (Statistical Quality Control) techniques of using control charts and sampling to monitor the final products’ net weights and SPC (Statistical Process Control) methods of using control charts and sampling, to examine each stage of filling, added 7% to the bottom-line profits!
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