Plano, TX (PRWEB) June 07, 2013
Mark Woeppel, President and CEO of Pinnacle Strategies, recently posted the blog on the company’s website. Woeppel shared, “Industry leaders should look at supply chain policies to find possibilities to increase output – examining rules and assumptions regarding materials and suppliers. There is extra capacity; so the investment in this is zero. If the company is internally constrained, finding that excess capacity means more sales, more productivity, and more profit. The ROI will be infinite.”
The goal is to change the rules that are affecting the ability to make more. In Woeppel’s last post, he wrote about challenging the assumptions. The supply chain or supplier strategy is a great place to start.
Most material specifications are established by a default rule of thumb established to minimize risk of failure. The result is a conservative specification that will cover a wide swath of situations. Seldom are material specifications done to maximize throughput.
Everything is available to challenge: dimensions, tolerances, material specifications, storage requirements, and quality checks, etc. Another place suggested is to look deeper into the supply chain such as the suppliers’ suppliers. What is challenged will be determined by what gives the most productivity.
Pinnacle Strategies found when working with a boom manufacturer, that the output of a particular type of boom was constrained (at all suppliers) by a worldwide scarcity of a key component. This scarcity was about three links earlier in the supply chain. Pinnacle Strategies looked for a substitution. Working with the engineering and supply chain teams at the supplier and the customer, they found another material, which was significantly cheaper, allowing them to purchase three times the amount of the new material for the same price as the old material. With all the materials in full supply, the boom manufacturer was able to boost output tenfold!
To read the entire blog link here: http://pinnacle-strategies.com/blog/2013/05/reconsider-your-rules-on-materials-and-suppliers/
Finding extra capacity is not rocket science, but it does require an eye on the process and a willingness to challenge what you’ve done in the past – sometimes an uncomfortable activity. I enjoy it, though. Eli Goldratt, my friend and mentor, said famously, “Sacred cows make excellent steaks.”
Read how we sacrificed those sacred cows in the materials and supply chain and in turn, achieved great results in lesson 5 in our eBook, “Achieving Top Performance Under the Worst Conditions: 7 Lessons Learned from a Disaster” at http://www.pinnacle-strategies.com/lp2/. The publication reveals key lessons gathered during Pinnacle’s participation in the Gulf of Mexico oil spill recovery effort and poses the question, “if this is what can be accomplished under the worst conditions, what can you achieve right now?”
About Pinnacle Strategies
Pinnacle Strategies is an international management consulting firm focused on operations management excellence. We work with organizations to increase shareholder value by developing high-performance business processes that significantly enhance productivity, reduce costs and time to market, improving profitability and accelerating sustainable growth. Pinnacle Strategies offers results-driven consulting solutions in the areas of performance management, project management, operations management, and supply chain. Pinnacle Strategies is the developer of ViewPoint a service that dramatically simplifies managing projects, enabling project teams to rapidly improve project performance. The RABIT methodology is a proprietary approach that is concentrated on implementing quick response solutions with rapid results. The RABIT methodology culminates years of practical experience and expertise in continuous improvement; it consistently delivers dramatic increases in process output to deliver solutions to industrial and manufacturing firms worldwide. Pinnacle Strategies offers results-driven consulting solutions in the areas of performance management, project management, operations management, and supply chain.