Tight Rope Balancing Act: Managing Tight Margins

Discrete manufacturers require a group of professional administrators to carefully orchestrate a variety of functions to run their operations successfully. Similar to a tight ropewalker, the individual whose job is to monitor, adjust, and control the supply chain must take cautious, yet determined steps, balancing an inordinate amount of inventory, sales, and assembly information to avoid disaster, and to ensure production victory.

Furthermore, a fluctuating marketplace, where the cost of raw materials can change overnight, combined with inventory soft costs, wastes, and shrinkage, along with production inefficiencies makes the act of managing tight margins, like the addition of an elephant strapped on the back, one false step equals an annihilation of profits. Therefore, uncovering programs and tools that can help ease, or eliminate this burden provide manufacturing companies better opportunities for expansion through increased profits.

Software Solutions

In recent decades, inventory management procedures have evolved along with technology. Bar-code scanners and advanced EDI systems have provided a more effective, accurate method for cataloging, counting, and monitoring inventory levels. Developed and perfected by industry leaders like Toyota, to effectively control tight margins, the lean principles inherent in these software solutions effortlessly maintain safety stock and consumable inventory, while performing much of the planning, scheduling, and shipping requirements.

Innovative plans allow manufacturers of any size to now:

  • Move from an inefficient push manufacturing system, to the best practices of a pull system, with production signals originating at the point of sale.
  • Decrease administrative costs associated with supply chain management.
  • Minimize raw materials, work-in-progress, and finished product stock levels to lower the amount of company assets embroiled in housed inventory, freeing capital for use in other profit-centric areas of operation.
  • Integrate quality control and production line yields and information into one, easy to access performance report.
  • Increase visibility into every aspect of operations, from sales to shipment deliveries, to maximize batch efficiency.

Professional Assistance

Businesses that offer these programs also provide professional assessment, set-up, and integration services, which allow a customization process to occur before software implementation. Knowledgeable associates evaluate current procedures and production problems to develop a plan tailored specifically to each manufacturing situation, working with companies to initiate solutions that effectively control inventory turns.

Manufacturers can successfully balance the intricate factors that contribute to increased profits by controlling tight margins with innovative software and professional assistance. Applying the lean principles needed to navigate the operational tight rope, without a colossal fall.

Interested in learning more? View this 20 minute On-Demand video, “How Are You Managing Your Compliance Requirements?” and find out if your company is meeting its regulatory & customer obligations.

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