“I’m Dealing With Too Many Current Production Issues To Even Think About Expansion” (Lesson 3)

The number of CEOs and business owners of smaller, rapidly growing factories that have accepted this myth is mind-blowing and increasing every year.

It’s not surprising, given the bigger demands, expectations and obligations imposed by customers, union groups and all levels of government. Demands for longer product shelf-life, faster delivery response times, smaller pack case counts and higher-cost packaging material enhancements are just a few items susceptible to customer expectations.

It’s the old refrain of “People want more, more, more…” —and all for fewer dollars.

Your customers are constantly chasing any opportunities to exploit the “value positioning” of your products and brands. They are looking to apply this value propositioning to every aspect of business they conduct, whether it be with the specific products you are selling or the broader purchasing experience.

And don’t forget the day-to-day challenges of materials and ingredient delivery, production-line quality issues, equipment breakdowns, product distribution and people management.

It’s a bit like a tsunami hanging over the whole company, always threatening to flood it with significant devastation. And it becomes the CEO’s or business owner’s primary responsibility to keep this tidal threat under control and suppressed.

It will always be your challenge as a leader to keep immediate issues under control so that your best company assets—”your staff”—can perform their daily magic, delivering the daily production outputs so that orders can be filled. You must direct your staff to respond like a fire-fighting team, coming together to find a solution for each of those problems that have become too big for any one person to solve.

And this daily grind tests your working relationships, sometimes straining good employees to the point of leaving rather than staying to deliver an unrealistic outcome.

Even with these challenges, it doesn’t mean that the two- to five-year company expansion plan or sales and profit growth targets should be ignored. It is important for growing businesses to find a workable balance between the daily grind and where you want the company to be in the future.

 

Finding The Balance

The starting point to establishing a balanced perspective is pursuing quantitative data and information on operational metrics. Unambiguous, targeted information can quickly become the roadmap for deciphering and unlocking your factory’s real strengths, weaknesses and areas for improvement.

How many evenings have you driven home after another challenging day contemplating which part of the operation or supply chain should receive your focus tomorrow or in coming days, weeks or even months?

Specifically, you need to look at and compare…

  • daily production targets vs. actual production output rates,
  • machine downtime losses vs. production uptime results,
  • quality defect and reject data as well as production wastage date, and
  • inventory stock holdings vs. finished goods holding vs. days of stock coverage.

Collecting and interpreting this data over a meaningful timeframe to generate actions or action plans that can translate into significant measurable improvement can be hard, especially for smaller organisations when they lack the resource base to facilitate the initial data collection. However, it’s critical for future planning.