Seven Ways To Improve Your Profit!

Transcription

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2 Seven Ways To Improve Your Profit! Australian Organisation for Quality Presented by: Paul Hay Phone:

3 Outcomes from the session Participants will learn - 1. Seven Ways to improve your profit 2. How to identify them. 3. How to prioritise them. 4. How to develop action plans 5. Implementation tips

4 Profit Improvement Do you have ideas on the backburner? Why? No time No money Limited knowledge Limited experience Day to day issues take precedent

5 What is Waste?

6 Value Added Ratio Receive Order Ship Product = Value adding operation time (stamp,weld,paint,assemble) = Non-value adding time (receive,store,move,wait,pack) Value-added ratio at a typical manufacturing company 95% NVA 5% VA

7 Toyota identified in their lean production process that there are seven types of wastes. These are:- 1. Overproduction: Where do we produce too much? Products, materials, scrap, etc 2. Waiting: Where do things wait? 3. Transportation: Where do we move things? Travel? 4. Inappropriate processing: Wrong people or wrong equipment for the job at hand 5. Inventory: Build up of inventory 6. Motion: For ergonomics 7. Defects: Rework, refunds, poor quality

8 1. Overproduction Producing more than is required

9 1. Overproduction Manufacturing Service Wholesale/Retail Make to stock Overkill designs Over-purchasing goods producing products with Quoting/proposals Producing excess reports no guarantee of a sale (frequency not price) Working overtime Production Push not sales Over-purchasing Over-servicing Pull stationery Over-paying creditors Over-purchasing Producing excess reports Over-delivering product Producing excess reports Working overtime Overstaffing Working overtime Over-servicing Over-Reviewing Over-servicing Paying creditors early Paying creditors early Over-catering food, Over-delivering product linen Overstaffing Overstaffing Excessive Product Range Delivering more services Excess Paperwork than required by the client Ineffective Advertising Write-offs

10 2. Waiting People or things waiting

11 2. Waiting Manufacturing Service Wholesale/Retail For payment from debtors For payment from debtors For payment from debtors Between processes WIP Between processes - WIP Between processes WIP Stock supply lead time Client response to queries Stock supply lead time For Sub-contractors For staff to become For management decision For management decision available Customer waiting for Customer waiting for For management decision goods goods Staff absenteeism Customer waiting for an Customer waiting for an Customer waiting for an answer to a query answer to a query answer to a query For customs clearance For customs clearance Client files in a queue For credit clearance Machine repair Machine repair Admin requirements Production hold-ups Customers waiting for Admin requirements service Admin requirements Computer to be fixed For government funding

12 3. Transport Movement of goods people and information

13 3. Transport Manufacturing Service Wholesale/Retail Excessive material handling Too many suppliers Information delivery Internal vs external freighters Method of transport (sea, air, road, rail) Factory layout Number of forklifts Too many requisitions Use of couriers Damage to product during transport Amount of walking r Multiple deliveries Travel to clients Location of facilities for patients Computer information (use of , network, internet compared to a disk) Office layout (location of photocopiers, fax, printers) Travel generally Location of machines in relation to Bar/Toilet/cigarettes Use of couriers Amount or walking required distances Excessive material handling Too many suppliers Computer information Office layout Internal vs external freighters Method of transport Warehouse layout Number of forklifts Use of couriers Damage to product during transport Amount of walking required Multiple deliveries

14 4. Inappropriate Processing Using the right tool for the job

15 4. Inappropriate Processing Manufacturing Service Wholesale/Retail Wrong machine for the job Review function Wrong person for the job Wrong person for the job Wrong machine for the Management wanting to Use of outdated job make all decisions equipment (result in Wrong person for the job Use of information machine breakdown and (experience level, skill) technology excess maintenance) Not computerising vs Multitasking transfer Management wanting to computerising of information use of make all decisions Management wanting to macros Use of IT vs manual f2f make all decisions Lack of documented Lack of documented Use of information systems and procedures systems and procedures technology Use of subcontractors Use of subcontractors Lack of documented Use of dot matrix for Colour for draft reports systems and procedures draft reports rather than a Paper waste (use other Use of subcontractors laser side, use screen preview) Pusuing poor sales leads Paper waste (use other Sales staff doing admin Double handling side, use screen preview) rather than talking Double handling

16 A costly practice which masks the problems 5. Inventory

17 5. Inventory Manufacturing Service Wholesale/Retail Excessive raw material Houses that won t sell Stationery printed Work in progress Signage material Finished goods Stationery printed Product range Pallets material Finished goods Working capital (opp cost) Catering supplies food, Pallets Overdraft (interest) linen Working capital (opp Stationery Medical supplies cost) Printed material become out of date Overdraft (interest) Product range Working capital Knowledge/skills Consumables Work in progress in a Superseded Stock Tools professional firm Number of beds Number of gaming machines Plant and equip for lease Overdraft (interest) Range of services Inactive files

18 Workplace organisaton 6. Motion

19 6. Motion Manufacturing Service Wholesale/Retail Production line Vehicle layout tools, POS counter layout Workstation ergonomics consumables, work Office layout in tray, Office layout fax, filing, instructions filing cabinet, PC copier Finding things Warehouse layout Desk layout in tray, filing Desk layout Picking up a piece of cabinet, PC, phone Bar layout paper and not actioning it Factory layout Picking up a piece of Stop/start mentality Picking up a piece of paper paper and not actioning it Stock picking and not actioning it time management Disorganised desk, Stop/start mentality Stop/start mentality workplace in general Poor location of tools Access to information via Access to management Stock picking IT rather than manually Disorganised desk, researching e.g. in a workplace in general library Access to management Disorganised desk, workplace in general Walking distance Access to management

20 7 Defects Faults, Mistakes and Rework

21 7 Defects Manufacturing Service Wholesale/Retail Poor instructions Poor instructions Poor instructions Communication of Computer input errors Scrap perishables requirements misread orders Computer input errors Scrap trim Manual errors misread orders Computer input errors Machine failure Manual errors misread orders Computer program In store stock manage Manual errors errors Manual errors Machine failure Design errors Computer program Manual errors Incorrect advice errors Computer program errors Poor workmanship Returned stock Print Ink Runs Errors in contacts (measured by credit Poor design Missing deadlines notes) Poor specifications Poor quality of Poor workmanship purchased product Poor quality of purchased product Missing deadlines Missing deadlines

22 Summary Over production Defects Waiting Waste Motion Transport Inventory Over Process

23 Waste Hunt Step 1: Brainstorm List as many wastes you can think of under each of the seven wastes. Step 2: Value ($pa) Guestimate the value of each waste item per annum. (NB- don t ignore missed revenue opportunities that may occur as a result of poor quality i.e. defects or inappropriate processing). Step 3: Ease of Removal (1-10) You also need to look at how easy that waste is to remove from your business. 1= very difficult 10=easy

24 Waste Hunt Step 4: Prioritise Pick the three highest ranking wastes to eliminate (from both the dollar value and the ease of eliminating). NB - You may want to pick 1 or 2 that are easy to accomplish, but also pick 1 which has significant dollar value, but not too difficult to remove. Step 5: Develop an action plan Guestimate the value of each waste item per annum. (NB- don t ignore missed revenue opportunities that may occur as a result of poor quality i.e. defects or inappropriate processing).

25 Summary Over production Defects Waiting Waste Motion Transport Inventory Over Process

26 Conclusion As can be seen, all businesses have waste as defined from the customers perspective. Waste can add significant costs to a business. By reducing or eliminating waste, more can be achieved with the same resources or resources can be reallocated to have a greater impact on the business. As a result of the elimination of waste, you can significantly improve the cash flow of your business.

27 FREE Business Diagnostic Finally, at no cost, you can undertake a health check on your business by visiting our web site click on How is your business sailing and complete our business and life balance diagnostic. You will then receive our feedback.

28 For You BONUS OFFER - for attendees Over 200 examples of Waste me for your FREE copy

29 Contact Details Paul Hay Kestrel Solutions Level 4, 232 Adelaide Street Brisbane, QLD 4000 Australia Phone:

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