Rumor around the water cooler is that a growth initiative has become priority number one for your organization. That’s smart. It’s time to grow the company, right? The big question should be: does your company have the capacity to support your strategy?
Growth Planned Right
The Operations department is a vital component of any growth initiative. It should never be overlooked or added in later on into the initiative. Quite the contrary, it is vital that Operations is included from the onset into any initiative for growth in a company that relies on manufacturing of any kind. It is key to the success or failure of a growth initiative. Why is that? Isn’t this something the company can handle when it‘s needed? Shouldn’t the focus be on Sales first? The answer to this is no because there is too much at stake.
Whether your company plans for an organic or inorganic growth initiative, some key factors for the success of this growth remain the same. The ability of your company to deliver what it promises is one of the top factors. This delivery is not simply the addition of another shift or cranking out more product. You need to know what it will take to make that possible and then plan carefully for this event. If not, you will likely be left unable to fill orders on time, see your quality go down, costs go up, miss deadlines and thus invite your customers to look elsewhere into the future. On the other hand, if you have properly planned for growth with Operations, you will be prepared for potential increase in production and can react to this demand quickly and without unnecessary costs or time problems.
A case study: Being Prepared
A few plant managers of mine had the Operations team constantly working on improvements to improve capacity and efficiencies. Any time space was opened up on the plant floor we had to “Police Tape” the area off for non-use. How I wish I had a dollar every time a forklift operator asked to drop a pallet in these nice open taped off areas. Operational practices were under constant focus for reduction in processing time, examples:
- MRP processing time reduction from 12 hours to 1 hour.
- The “Manning” plan adjustments at the start of shift to immediately capitalize on efficiencies.
- Plant layout changes occurred every 6 months.
- Active preventive maintenance throughout the facility.
- Receiving documentation improvements to eliminate Accounts Payable issues.
These practices were implemented without any plan for future business, but the plant was prepared to take on opportunities if they should arise.
The first knock on the door from Sales & Marketing at the plant in Indiana was to add a new product and small assembly line for an existing customer. We had the space taped off which made it easy to cut & paste: business won. The second knock was also new product for this same customer which would require more space than we had taped off from our improvements. And the kicker was corporate office would not approve a plant expansion. After 36 CAD drawings and with a can-do attitude, the Operations team was able to approve the new business fitting into the current facility: business won. After I had moved onto another facility I heard this operations team was able to successfully gain additional business with a new assembly line, product and customer without expanding the building.
What will it take?
It is vital to address the following questions within your plan for growth:
- How do you plan to grow (organic versus inorganic)? Do you plan to grow thorough an increased product line or increased sales; or through acquisitions?
- Is your company prepared for this growth? In other words, can Operations handle this growth in a way that will realistically benefit the company? What will happen when increased sales orders come through? Do you have the floor space or the workforce to support this?
- What obstacles within Operations need to be addressed to make your initiative successful? A culture that supports on-time delivery?
- How will you manage these identified obstacles? Will you have increased overtime, a workforce who know the machinery well enough to work effectively.
- What is your competition doing to prepare for growth? They certainly won’t be sitting around waiting for you to overtake them.
Once you have addressed these questions effectively, you can take action with an initiative that will have a much higher opportunity for success. At the same time, you will have increased the cohesiveness of the company overall. I have addressed these issues in detail, but it contains more information that I would expect should fit comfortably here in a post. Growth Initiative: the role of Operations in its success It goes into much greater detail and offers tangible solutions, and it should help you make your plan for growth much more successful.