Operations Payoff

Rick's Blog - your source for news and insights into Operations and Supply Chain Management.

It’s Hard To Manage What You Can’t See

man wearing glassesI’m currently working with a client on a profit improvement project. I asked the following questions:

  • How much overtime is worked in production?
  • How much scrap is created due to mistakes?
  • What is the value of inventory adjustments due to cycle counts and physical inventory?
  • How is payment of the operations bonus determined?

In every case, they didn’t know. It seems the financial statements and key performance indicators don’t track these basic issues. As I spoke with the accountants, it was clear the numbers are in the financials somewhere, you just can’t see them.

One of the best book titles I know is “Learning To See” by Mike Rother and John Shook. It helps teach the reader about value stream mapping. There are other ways to learn to see as well, such as making key numbers jump out of your financial reporting system. Failure work, inventory adjustments, overtime and other information are all clues to improvement opportunities. But you have to be able to see the issues before you can address them. Learn to see!

 

© 2017 – Rick Pay – All Rights Reserved.

 


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