Give the Buyer What They Want

A recent survey of senior level manufacturing executives pointed to the fact that many were receiving sub-level ROI results from their manufacturing execution improvement programs. Global business advisory firm, AlixPartners, conducted the survey and found that most large manufacturers last year failed to reach their cost-savings targets, despite significant investments in “lean manufacturing,” “Six Sigma” and other productivity programs. Nearly 70 percent say that their manufacturing improvement efforts led to a reduction in manufacturing costs of less than 5 percent.

So why the luke-warm results from methods that have proven to work so well for other companies?   According to Steve Maurer, Head of the Manufacturing Practice at AlixPartners, the disappointing numbers are not a failure of continuous improvement, but rather skewed perceptions and flawed applications. Many companies are applying tools that aren’t right for their organization – implementing tools without first evaluating what they are trying to fix and expected ROI.

In an interview with MBT Magazine, Maurer gave these tips focused on manufacturers and continuous improvement, but which certainly carry over to any aspect of supply chain improvement:

·         Focus on the cash – aggressive targets will help spark more creativity and will force managers to target the truly costly processes instead of quick fixes that save only a few dollars.

·         Choose opportunities before tools – find those problem spots and then decide which toolkit you’ll use.

·         Buy-in must be company wide – all levels of management have to be involved to focus resources on the highest impact opportunities.

Sources: AlixPartners

               MBT magazine