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Understanding your manufacturing process

For those home businesses which create their own products - no matter what they are - knowing how to make them efficiently (and not just effectively) impacts directly on profitability. Wayne Ohlen shares what he's learnt hands-on
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Manufacturing can be a tough business to make a profit. Often the manufacturing process system is a poorly understood part of the company business model - whether or not it is a large and complex system, for example car assembly, or a simpler process like hand knitting jumpers for a home business.

Production is seen as the dirty end of the operation, the \'poor\' relation or \'out the back\':  the \'black box\' where things, including money, go in one end and magically pop out the other as \'Product\'.  But it is very hard for a marketing department to create sales without a product, someone has to make it.

Leverage your investment

/> Production plant and people represent a considerable investment in Capital and Labour resources and should be used efficiently.  Each product batch or run made in the \'factory\' creates a host of data. This product and process data, if collected, can be used to create a stock of useful and profitable information and can reduce dependence on the \'I think\' scenario for the day to day, on line, manufacturing decisions, while use of the accumulated information database can help you make rational decisions, and create a positive feed back loop. Reduce reliance on serendipity for small and large decisions to improve the odds on solving problems quickly or even eliminating problem events by taking the right option first.

Understand failure costs
Too often process failure costs are not fully identified or are hidden in indirect expenditure and often, over time, they incur further unallocated costs.   It is not just the impact of the immediate raw material lost, but the rest of the hidden failure iceberg costs, for example, reprocessing, waste disposal, reduced factory output, disrupted production schedules, wrecked stock control with regard to both raw materials and finished product, inferior product, and low staff morale.  These all add up to create customer dissatisfaction and reduced profit margins.

What information should you record - and how should you do it?
The amount or degree of information which should be collected generally will depend on the process complexity and available resources, but it need not be expensive or time consuming.  It\'s just a matter of recording events and conditions that occur during the manufacturing process, from start to finish.

It is essential to be honest when recording data, and very important that real information is collected, rather than \'I think it is\' or \'what it should be\'. The collection should not be viewed as a potential weapon in staff discipline, but an independent tool in improving the overall system operation. Unlike organic garden composting, for most of us \'garbage in\' will result in \'garbage out\', negating totally the reasons for collecting process data. The object is to learn what is really occurring to your process.

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