Improving productivity

Regardless of the size of your business, boosting productivity is essential to enhancing gross profits and maintaining competitiveness. Productivity on the depends on a combination of efficient employees, equipment and processes. Driving improvement in all these areas involves examining the current practices in place and adjusting systems, employee training and even the equipment used to generate parts and components.

Before you can adopt any method for productivity improvement, you’ll need to measure your existing output levels, create a baseline and implement solutions for measuring change. These following eight steps can help you design a more productive and successful business:

Examine the Existing Workflow

The first step is all about identifying pain points in your current workflow. Analyse the people, technology and processes required for production–as well as the procedures, communication tools and resources available across the company. Consider using value mapping as an effective solution for identifying and monitoring projects for process improvement; this strategy enables managers to pinpoint issues and record how changes impact the overall system.

Update Business Processes

Share current workflow problems with project managers to develop improvement plans for the manufacturing process. This could mean re-assigning resources to different areas of the manufacturing floors, managing budgets or becoming ISO certified. Be sure to systematically evaluate performance and interpret any appropriate changes.

Invest in Continued Employee Education

In most businesses there is always changing trends, ways of doing things etc. New technology promising to make manufacturing floors more efficient than ever. Technological advancements often change the skills required for certain tasks, and workers will require access to regular training to keep up with more advanced specialist skills.

Have Realistic Expectations

Client expectations, pressures regarding production and strict deadlines can contribute to unrealistic goals. When workload benchmarks on the manufacturing floor are unattainable without some compromise to safety or quality, employees become dissatisfied, preventing the company from reaching staffing goals. To boost worker efficiency, it’s important to set realistic, clearly defined objectives that ensure a combination of punctuality, high-quality output and safe procedures.

Get Smarter Machining Tools

Manufacturing is an industry in which an employee can only be as productive as his or her tools. While innovative machines can be costly in terms of initial setup and training, advanced equipment can have a positive long-term effect. Manufacturing companies often find that a machinery upgrade helps them stay competitive in a new and innovative market.

Invest in Maintenance

There’s a link between the costs associated with downtime and the time and budget invested into preventive measures. While new equipment can boost productivity, it also requires maintenance to ensure that it continues working at an optimum level. It is important that employees know how to troubleshoot instances of system downtime, to quickly find root causes of errors. Don’t be too quick to blame the tool for problems–remember to think about the process, the blueprint, the material and more.

Stay Organised

The number of lost dollars and wasted man-hours that result from a lack of organization can be surprising. One surefire way to enhance productivity in any environment is to ensure there’s a well-organized place for everything–from materials, to machine tools and documents. When organizing your work area, think about the layout of your machining equipment and tools and whether they currently maximize efficiency. If not, consider rearranging your manufacturing floor to create a smoother workflow.

Encourage Collaboration

The manufacturing floor is most productive when everyone works together towards the same goal with as little waste and conflict as possible. While focusing on work is important, it’s also crucial to ensure that each staff member feels comfortable as part of a team. The better the members of your team can work together, the more they will encourage a productive workplace culture.

Determine the milestones that will help you measure your performance and achievements for your business. Having goals is fantastic, but without milestones or ways to measure performance, how will you know if you are on track to meeting those goals? For that matter, how will you even know when you’ve met your goals?

Why it’s all about cash

In my book the first thing I talk about is cash and the reason for that is without cashflow there is no business.

So there is no point me telling you how you can improve sales, marketing & operational processes if you don’t have cash.

98% of the UK economy employs staff from small & medium enterprises – they are the backbone of the economy here in the UK. There are over 3m small & medium businesses in the US. This is a big market, a big employer.

You may have heard the saying turnover is vanity, profit is sanity & cash is king. Most businesses that fail don’t go out of business because they are not profitable, it’s because they run out of cash.

I will give you an example. A £5m revenue training business – they provided training solutions to the military. This was a global business with clients in many countries. One of their clients was a middle eastern government – and they had won a contract that was going to produce £1m in revenue. To deliver the training it was going to cost around £600k, so this was a profitable piece of work (£400k).

The problem was they negotiated silly payment terms (the middle eastern government were going to pay in 12 months).

So, they had won a £1m contract, was going to cost them £600k to deliver, leaving £400k profit.

However, they were going to incur the £600k costs upfront (flying staff over to deliver the training, hotel, flights, living & subsistence costs for staff [this was a 6-month contract]. So, on paper, they made £400k profit, but had a £600k cashflow deficit. This almost put them out of business!

You may say it was madness to negotiate such long payment terms – I agree – I said to the owner ‘Why did you take the contract’ he said, ‘because it was 20% of our annual revenues’. Like I said turnover is vanity, profit is sanity, cash is king.

In my book I give some tips on how you can quickly release cash in any business.