4 Ways to Improve ProductivitySo-called “lean” manufacturing is easier said than done, but there are several improvements that can increase your firm’s output. Lean companies operate as efficiently as possible, using the least possible staff time, equipment, and raw materials.

Here are four ideas to consider implementing this summer to help boost profits for the remainder of 2021 and beyond.

Use of Raw Materials More Efficiently

The prices of many manufacturing inputs — such as metals, chemicals, and lumber — have skyrocketed over the last year. Likewise, rising fuel prices have increased shipping costs. Plus, cyberattacks and geopolitical instability threaten the viability of supply chains due to delays, tariffs, and price fluctuations.

In the current high-cost, high-risk environment, efficient use of raw materials is even more essential than before to preserve profits. The term “waste” refers to more than just scraps on the plant floor. Waste also may include excessive energy consumption, defects, motion, transport, queue time, and inventory.

Analytical tools can help reduce waste by limiting the number of “touchpoints” that slow down the production process and complicate matters. Start by collecting data at every touchpoint in the supply chain and production cycle. Apply the metrics that make sense for your industry. For instance, if your processes require raw materials to cool down or heat up, factor the time into your equation. When your fact-finding is complete, assess the ways you can be more efficient in the future.

You can avoid a bottleneck through a simple shift in production sequence or some other modification. It’s important to recognize that frontline workers often provide simple, but effective, solutions. As a bonus, engaging your workers in the brainstorming process can help with their buy-in when you implement changes.

Give Incentives to Workers

Financial incentives can help persuade your employees to ramp up production. If you go down this path, the main question is: Should you offer individual or team incentives?

Individual incentives. These incentives focus on specific tasks performed by frontline workers to increase productivity and avoid delays. If you can isolate certain tasks where a definitive need for improvement is identified, giving individuals a specific list of set goals may be the optimal approach.

Team incentives. These incentives reward collective efforts. Your company will achieve more in less time if your entire team “rows their oars in unison.” Because most tasks are done in conjunction with others, team incentives are usually easier to implement than individual incentives.

Manufacturers usually provide team incentives to improve the overall efficiency of the assembly line. This encourages cooperation among workers that are striving for common purposes. It also reduces finger-pointing when one person, or a handful of workers, makes a mistake or fails to meet a set goal.

Extend Lean Principles to Offices

Lean efforts initially focus on the production process because it provides the most significant direct benefits. But the same principles can be applied to your back offices and corporate headquarters. These locations may also be affected by cost increases, supply disruptions, and delays. 

Apply the principles you’ve learned on the plant floor to selling, accounting, and other administrative functions. You might break office staffers into groups based on products or marketing aspects. Map out a workflow to identify potential bottlenecks and sources of waste.

People in the trenches know what works and what can be done to help streamline processes. Engage your administrative staff in efforts to improve their department’s efficiency. 

Seek Outside Guidance

It’s easy to miss operational inefficiencies when you’re too close to the process. You might need to call in external resources for guidance. This could include reaching out to industry specialists or financial consultants with experience helping companies in your niche implement lean strategies. 

For more information, contact your CPA. He or she can help you implement lean strategies in today’s volatile marketplace, as well as refer to nonfinancial consultants to help improve the technical aspects of your manufacturing process.