People Confuse Activity with Productivity
A recent special report from BMO indicated that productivity in the Canadian manufacturing industry continues to lag far behind that of the United States since 2007. While there are multiple external economic factors which are outside of the Entrepreneur’s control (i.e. the strong Canadian Dollar, legislation and regulations, taxes, trade barriers, etc.), there are also many internal issues that contribute to a company’s low productivity and cash drains such as:
- Low production quality and more labour than budgeted necessary to rework the rejects.
- Interruption to the production flow due to bad production control or resource planning.
- Lack of exacting materials due to inaccurate information exchange or supply chain quality.
- Poor planning, low efficiency, employee mistakes, repeated errors, quality controls, etc.
- Inaccurate company data causing errors in the decision-making process.
- Higher than expected cost of the product than what was planned.
Interestingly, not all productivity problems originate in the Production department. They arise as a result of a culmination of disparate issues from various business units in the company. For example, the product’s design which accounts for about only 5% of a product’s total cost, actually dictates about 80% of the total manufacturing cost. Studies indicate that 75% of all production faults come from the design function; only 80% are detected in test and in use.
TRIAVICA has the experience to look at the entire organization, analyze the productivity problems, determine the root-causes and help our clients choose the appropriate solution for the business environment and to provide maximum benefits. Some of the solutions that we have implemented are:
- Business process development and training.
- Implementation of IT tools to computerize key activities: design, production control, material management, inventory control, accounting, quality control, etc.
- Implementation of robotic applications for high volume manufacturing.
- Help redefining strategy and objectives of the inter-related departments for the business to operate more smoothly as a whole.