6 Tips for Greater Manufacturing Workplace Efficiency

The old adage “time is money” is especially true in the world of manufacturing.  The more time and materials you waste, the less profitable you become.
AAFCPAs outlined the following six tips to improve workplace efficiency based on our proven experience working closely with manufacturers over the past 40+ years:
Do Not Skimp on Training
Many manufacturing inefficiencies come down to the same root problem: lack of training.  Well-structured onboarding and training programs allow companies to realize measurable returns on investment in the form of quicker up-take, more reliable results, higher employee retention, and ultimately, more sustainable employee productivity. Employees need to understand how their role aligns with the goals of the company, and must be trained appropriately on key elements, including: processes, equipment & technology, work area and safety, product features & benefits, and company culture. The key to successful, well-structured training is consistency, and is best accomplished through firm-wide buy-in and documentation of the training program. Your end game is to develop people for a long and successful career with your company, and proper training can provide individuals with the skills to not only succeed in their role, but also to drive innovation and efficiency for the entire organization.
Optimize Tracking to Find Ways to Reduce Downtime
Idle machines and employees means lost productivity—and potentially lost business.  Finding ways to minimize downtime and optimize labor productivity is key to making the most of your resources.
It is important to understand the root causes, frequency and ultimate effects of downtime. Plant team members often collect downtime information by recording items such as: stop/start times, operator/crew, plant area and equipment affected, component that failed, maintenance comments, root cause, and the solution employed.  Examples of root cause may include: scheduled (or lack of) preventative maintenance, management decision, user error, improper engineering or installation, or poor process design.
When a downtime event happens, such as a timing belt failure due to misalignment, it’s important to look beyond the timing belt on that one particular machine.  Look at other alignment issues with similar plant equipment, and the alignment program for the complete plant.  When the root cause is identified, maintenance and operations crews are able to make more strategic decisions about investing in downtime reduction measures.  This helps ensure that a problem is truly eliminated plant-wide by applying corrective action to the root cause of the problem.
Prioritize Scheduled and Unscheduled Tasks
More thorough data leads to better decisions, which could mean better operational efficiencies, minimized risk as well as cost reductions.  Analyze downtime data and prioritize improvements to those bottlenecks which cause the most risky, frequent and costly limitations to throughput.  Regularly communicate priorities to your staff so they know what to work on when scheduled or unscheduled tasks are complete.
Reach Out Directly to Employees, and Personally Ask for Their Feedback
As previously mentioned, your end game is to encourage individual contributions that drive innovation and efficiency for the entire organization. Employees are on the front line, and tend to know what’s working and what is not, and what is standing in the way of achieving targets and milestones.  Spend time on the plant floor, and seek feedback from plant employees.  Seek out key employees, observe first-hand the issues they are experiencing, and let them know that you value their ideas and opinions. Also, take the time to explain to them how their responsibilities advance the company’s overall efficiency goals.  Your employees will feel valued and more committed to influencing achievement of the critical goals of the company.
Monitor Targets and Communicate Follow-Up
Employers often set targets and feel their job is done.  Targets and milestones need to be monitored and progress verified regularly in order to ensure improvements are achieved.  If incremental progress is insufficient, you must determine whether methods need to be refined or abandoned.
Regular follow-up also reinforces the importance of targets, and keeps management and plant floor employees on track, ensuring there is consistent and meaningful effort throughout the lifetime of the project.
Create a Culture of Accountability
Every employee, regardless of seniority, needs to understand that he/she is accountable for his/her actions and decisions—and accountability starts at the top.  When management displays personal accountability, they help build a culture of accountability and employees feel bonded through that shared responsibility.  Accountability means keeping commitments, including: completing tasks, producing a work product that is consistent, being on-time and attentive, working towards common business goals, and owning mistakes.  A culture of accountability leads to peer motivation to meet or exceed expectations.
Over the years, we have seen that these six tips, although basic, are not always practiced.  They are sure winners to improve workplace efficiency, profitability, and long-term competitiveness.
AAFCPAs has been helping sophisticated, privately-held companies succeed since our founding in 1973.  Our industry specialists have over 40 years of proven experience in delivering business advisory, assurance and tax services to manufacturers.  If you have additional questions about optimizing workplace efficiency, please contact your AAFCPAs partner, or Jack Finning, CPA, CGMA, at 774.512.4105, jfinning@nullaafcpa.com.

About the Author

Jack Finning
Jack has been serving AAF clients since 1981. Jack provides assurance, tax and business consulting services to a variety of closely-held businesses, as well as sophisticated, nonprofit organizations. He advises clients in the specialty areas of revenue recognition, executive compensation plans, and government contract compliance. Jack specializes in business transaction advisory services for both buyers and sellers of private companies. This includes due diligence, tax structuring and post-transaction integration. Jack oversees many of AAF’s employee benefit plan audits.

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