agile manufacturing

How to Increase Manufacturing Agility in Consumer Packaged Goods

Manuficient Consulting - CPG Agility

Agility is paramount in the CPG industry. This is driven by rapidly changing consumer tastes and preferences, competition – which drives the need for greater differentiation, varying degrees of automation and manual labor forces, constantly changing packaging technology and platforms, and several other factors. Agility is simply defined as the efficiency of change. In other words, how efficiently can you go from your current state to your desired future state? In the CPG industry especially, the future state is a constantly moving target. If your supply chain can’t keep up with the rate of change, then it has no alternative than to become obsolete. This explains the significance of increasing Manufacturing or Operational Agility.

There are several benefits to increasing Manufacturing Agility (this list is not completely exhaustive):

  1. Satisfy a more diverse SKU portfolio with fewer production lines, requiring a smaller manufacturing footprint
  2. Drastically reduce the product development cycle from ideation to commercialization
  3. Scale production capacity to fit fluctuating demand without inflating costs
  4. Significantly reduce the time frame from improvement idea to gainful implementation
  5. Create opportunities to increase asset utilization by picking up orders from competitors and store-branded products

In the CPG industry, the more agile factories or operations win in the long run. Agility helps to keep costs low while making the changes needed to stay competitive. It also brings down the risk of changes significantly since they are less cost prohibitive. There are three main areas where CPG companies need to focus on increasing Agility; people, processes, technology. And there are several approaches to increasing Agility in each of these areas.

PEOPLE

People Agility is referred to as scaling the labor force up or down to meet immediate production needs without inflating costs. This can only effectively be done without compromising critical process knowledge and skill sets. Many CPG companies experience significant peaks and valleys in demand throughout the year. In many cases, manufacturers build inventory or find some way to avoid needing to scale man-power, maintaining a flat workforce with “normal” work hours for each employee. What ends up happening is that they eat labor costs during valleys because productivity slows and people are idle; then they eat labor costs during peaks due to excessive overtime. When you maintain a full workforce when productivity slows, the workforce loses its operational discipline, which is needed for when production demand is high. This creates frustration for both management and the labor force. Its also an expensive way to manage a factory. Below are a few ways to increase the scale-ability of the labor force:

  • Use a fixed crew and fixed production rates but vary production hours based on demand. This would make for inconsistent work hours for employees but help maintain the operational discipline needed for peak volume times. During valleys in demand, production could be scheduled at standard rates; when the crew finishes the work, they could be deployed to other productive work or process improvement projects.
  • Have a fixed full-time crew (based on business case analysis) and use temps to support surges in volume
  • Run with a fixed crew (again, based on business case analysis) and outsource surge volumes to contract manufacturers

PROCESSES

Process Agility refers to the efficiency of changing processes and procedures to meet business needs. In CPG, as well as many other industries, processes need to change constantly to increase competitiveness, reduce costs, increase quality, improve safety, increase moral, improve service levels ,and many other important reasons. Processes in this sense include the specific steps taken by people or technology to get something done. The more Agile a factory or operation, the easier it is to change processes to suit the needs of the business. For a factory that lacks Process Agility, it requires at least 5 years to implement a Continuous Improvement program such as Lean Manufacturing. Contrarily for a factory with great Process Agility, Lean could be implemented and self-sustaining in as few as 2 years. Below are some techniques to be employed to increase Process Agility:

  • Implement systematic management systems that drive operational discipline such as the fOS (factory Operating System). The fOS sets standards for the management function and is designed to drive the discipline needed for Continuous Improvement. Click this link for more information on the fOS.
  • Develop and execute a world-class training program. This helps to significantly reduce the learning curve for on-boarding new employees and implementing process changes with current employees. Click this link for more details how a world-class training function works.
  • Employ Lean practices such as Standard Work to develop efficient processes and reduce learning curves. Also use tools such as Kaizen and Root Cause Analysis to drive rapid process improvement.

TECHNOLOGY

Technological Agility refers to the ease of changing the technological capabilities used for the efficient making of a product. This could mean changing packaging ability from a canning to a pouch filling; or from vacuum sealing to over-wrap; or from a carton to a sleeve…I think you get the idea. In the CPG industry, formats change frequently. By now, every marketer in CPG has identified the impact that an attractive new packaging format has on product sales. Those same marketers can tell you how frustrating it is when they get push-back from the manufacturing folks that “there’s no way we can do that”. Well the truth is that it can be done – it can always be done. The only factor is what it’s going to cost, which is a function of Technological Agility. A factory with high Tech Agility can run multiple packaging formats on the same production line. On the other hand, a factory with low Tech Agility needs a separate line per format at best; and at worst, simply doesn’t have the capability to efficiently process different formats. Below are a few ways to improve Tech Agility:

  • Use of sensors and servo motors to automatically adjust for changes in package sizes. This also helps for automating product changeovers.
  • Design line layouts that allow processing equipment to be swapped in and out based on production needs. This creates modularity and makes better use of the factory footprint.
  • Outsource smaller runs to contract manufacturers to test market results instead of investing in new equipment
  • Employ 3D printing for late-stage-customization to increase SKU variety without making significant changes in other production areas
  • Engage plant technology and process experts in the product development and design processes. This reduces the time wasted on designs that are not feasible and cannot be manufactured.
  • Leverage data sharing systems so that information from across the supply chain can be used in the product development process. This allows people to understand performance data, capabilities, capacities, costs and other key information across the supply chain.

As new generations usher in new ways of experiencing life, manufacturers in the CPG industry need to have the Agility to keep up with changes without inflating costs. Agility not only enables market leadership, it also removes a significant amount of risk from experimentation – bringing the fun back into the factory. An Agile factory or supply chain creates business opportunities for itself and its customers, who may also need contracted work for store-branded products in new and exciting formats. A manufacturing efficiency expert such as those at Manuficient can help you increase the Agility of your supply chain and match your production capabilities to current and emerging market trends.

Download Your FREE Whitepaper Today!:  Why Most American Continuous Improvement Initiatives Fail

Regards,

Calvin

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Copyright © Calvin L Williams blog at calvinlwilliams.com [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

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New Booklet: The fOS – A Guide to World-Class Execution for American Manufacturers

Manuficient Consulting - fOS Booklet CoverAs any manufacturing leader who has attempted to implement Lean, Six Sigma, Agile Manufacturing or any other Continuous Improvement initiative can tell you, it’s not quite as “plug and play” as it seems in all the books and websites. It’s now being estimated that as many as 70% of American Continuous Improvement initiatives fail. This video provides some insight to this phenomena and sheds some light on some of the prevailing reasons:

The new booklet from Manuficient Consulting titled: The fOS, provides the solution for American manufacturers to cultivate the Operational Discipline needed for successful CI implementations. The goal of the fOS is world-class execution, which is widely regarded as 85% Operational Equipment Effectiveness (or OEE). I wanted you to be among the first to get a copy and get a head start on implementing some of the best-practices used by America’s most successful manufacturers to drive Operational Discipline and a culture of CI. You can access the booklet from:

The fOS – A Guide to World-Class Execution for American Manufacturers

The booklet is also available at Smashword and other select retailers.

Regards,

Calvin

fOS Lead Capture2PPM Lead Capture2

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Manufacturing Change Management: Leveraging Forces of Change to Grow

Manufivient - Threat - Opportunity

In manufacturing, change happens – rather you’re ready for it or not. Sometimes these changes are expected and sometimes not so much. There are many forces acting on the manufacturing system (or any business system for that matter). These forces create pockets of pressure and vacuums that ultimately result in disruptions to the manufacturing system if not handled effectively. There are many sources that these forces can emerge such as: corporate mandates, governmental mandates, personnel changes, competition activity, technological advancement, customer taste changes, new market pursuits, improvement events, etc. This list barely chips the iceburg. When the forces of change becomes strong enough in any direction, the manufacturing system has to have the agility to quickly adapt and sustain acceptable productivity levels. Change is risky but absolutely necessary; it is also unavoidable. With that said, how can a manufacturing system be in pursuit of perfection, when the system is in a constant state a flux? While I’m a huge proponent of Lean Manufacturing, the reality that the manufacturing system is in a constant state of flux highlights a limitation of Lean, which sometimes assumes that processes remain generally the same. It also exposes the urgency of Agile Manufacturing.

An effective Change Management System is essential in our pursuit of the perfect manufacturing system. This is based on the definition of a perfect manufacturing system being one that can sustain above 85% OEE, even under changes of any frequency and magnitude. This being a manufacturing system that is both Lean and Agile – or Leagile as some are now calling it. A Change Management System can help prime the organization for upcoming changes as to minimize disruption and avoid compromising any element of manufacturing execution. There are several critical components of any effective Change Management System:

1 – Change Tracking Log – This provides a database of past and future changes and allows effective prioritization. The log allows for changes to be spread out on the factory’s calendar so that non-critical changes can be scheduled around critical ones. The Tracking Log also helps to predict how upcoming changes will affect one another. Finally, the Tracking Log helps to identify which key stakeholders have signed-off on the change and which buy-offs are still pending.

2 – Change Management Communication – CM Communication provides the critical change information to the right people on a regular basis so that all stakeholders remain aware of what changes are coming down the pipeline. This helps leaders to predict how upcoming changes will impact their areas of accountability and allows them time to take steps to prepare. The CM Communication could occur in the format of a weekly meeting, emails, publishing printed documents or whatever works best within the context of your manufacturing environment.

3 – Risk Assessment – This is a process that provides a safe format for all key stakeholders to assess risks and voice their concerns about an upcoming change. The Risk Assessment also provides a platform to collaborate on any mitigating actions needed to sustain acceptable business performance.

4 – Key Stakeholder Buy-offs – Stakeholder Buy-offs allow key stakeholders the opportunity to approve or dis-approve on the quality of execution of the agreed-upon mitigating actions from the Risk Assessment. Depending on how your CM System is designed, the owner of the change will likely have the obligation to provide as much evidence as needed to validate effective execution of mitigation actions. This could include test results, photos, training sign-off sheets, or any other form of proof.

5 – Change Management Review Process – The CM Review Process is a step to ensure the integrity and Continuous Improvement of the CM process itself. Its possible to develop CM metrics to measure the team on the effective execution of the CM process. For example, one metric could measure if the change owner obtained 100% of required sign-offs before the change actually took place. Another could measure the delta in OEE% for a process following the implementation of a change.

Implementing an effective Change Management System is an initiative in itself. Just like any initiative, its success or failure depends primarily on the discipline of its leaders to see it through even when others have not bought in. An effective Change Management System can be a tremendous asset for people on all levels in the factory and the company at large. It provides a systematic way to drive the changes that need to be made. So if you’re an operator on the plant floor, you can use the CM System to initiate a change for much-needed improvements in your production area. Likewise, the Plant Manager can use the CM System to ensure team engagement and support before engagement. Additionally, in the most Agile organizations, CM Systems are used company-wide to affect changes initiated across different business units such as Marketing, Sales, Distribution, Finance, or other.

A manufacturing efficiency expert such as those at Manuficient can help create a Change Management System tailored to the nuances of your organization that helps sustain and drive Continuous Improvement.

Visit my Excelville Profile for tools and resources for your operations excellence initiative.

Regards,

Calvin

fOS Lead Capture2PPM Lead Capture2

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Copyright © Calvin L Williams blog at calvinlwilliams.com [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

The Detrimental Impact of Cutting Costs at All Costs: A Case of the Goose and the Golden Eggs

Manuficient - Golden Eggs

A factory and all its glory is a business asset. Within a factory, you have many things at play: people, processes, technology, culture, waste, organizations and sub-organizations, hierarchy, opportunities, dreams, breakthroughs, failures, successes, entitlements, disenfranchisement, rewards, consequences – this list can go on forever. Its possible (and no doubt has happened) for a person to live a majority of their life inside the four walls of a factory. The job of a factory is to make stuff at the highest possible quality and lowest possible cost. From a purely economic viewpoint, you pump money into a factory and it pumps valuable product out. The intent is to pump out more value that you are pumping in because this is what generates wealth. This creates a dynamic where wealth can be maximized in two ways: one is to maximize the value being pumped out; the other is to minimize the money being pumped in. Let’s look at the merits of each approach separately:

Maximum Value Creation: Most manufacturing businesses are built on this principle. This is what gets sold and what customers come to know and love about the company. When you see the product on the shelf at Walmart, it says “look at all these fantastic features” and “new and improved”. Entire companies are built on the value that they bring to their customers’ lives. The factory is an asset that creates value for both the company and it’s customers. When a manufacturing company creates a valuable product, it can grow until the market becomes saturated. Up until that point, the company is presumably profitable, products are selling faster than you can make them – let the good times roll. Many people don’t realize that Lean Manufacturing was created as an approach to maximize value creation and strengthen the company’s viability. At some point, the market does become saturated and the company’s growth becomes flat – or even worse, starts trending the other way as many companies saw between 2008 and 2011. People come to miss those good ol’ times when the financial statements always had great news to share. With increasing pressures from all angles to turn those numbers from red back to black, many companies start looking at alternative ways to grow wealth.

Minimum Cost Operations: Cutting costs is another way for a company to grow wealth. A company should not carry costs that are not needed. In fact every company has an obligation to its stakeholders, especially its shareholders and customers to remove unnecessary costs from its business processes. The challenge is removing costs without compromising the value that it has brought to its customers’ lives. Cost cutting should be a careful, continuous, and deliberate process as to continue nurturing and protecting the asset that is the factory. Factories thrive on happy employees, innovation, and streamlined processes. When cost cutting impedes on any one of these critical factors, the factory as an asset becomes malnourished and productivity suffers. When the manufacturing base becomes malnourished, the company overall may soon find itself in trouble. Many companies have gone as far as divesting completely in their in-house manufacturing base and instead opted for outsourcing to China and other countries to take advantage of lower labor costs. This is done at many expenses, including destroying the innovation pipeline, losing core capabilities, shipping jobs abroad, and funneling American dollars to other countries. Unfortunately, its difficult to capture these costs in a financial statement. This approach essentially delegates the company’s most important job, to maximize value creation – in other words, compromising their core capability to create value for their customers.

Growth for a manufacturing business is achieved by maximizing the amount of value being created in its processes. As such, value creation should never be de-prioritized to cutting costs. However, every company has the obligation to continuously reduce operating costs while maximizing value. This is the true and original intent of Lean, Six Sigma, Agile Manufacturing and other continuous improvement initiatives. As the definition of value changes for customers, so should the manufacturing processes. This requires agility and continuous innovation, which every healthy factory needs. A manufacturing efficiency expert such as those at Manuficient can help you assess your manufacturing business’ value proposition and identify areas to reduce costs effectively.

Visit my Excelville Profile for tools and resources for your operations excellence initiative.

Regards,
Calvin

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Copyright © Calvin L Williams blog at calvinlwilliams.com [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

Manufacturing Execution Strategy: Technique vs Speed

Manuficient - Swimmer

In manufacturing, there is an optimal point where you have achieved the ideal balance between technique and speed for a process. The trick is knowing when you have struck that balance; and the answer may not be what you think.

I have a son and a daughter who are just shy of two years apart in age. They have a completely different approach to learning a new thing. Swimming, for example, is one of the things they are learning to do at the same time. My son’s approach is to go as fast as possible. He doesn’t care how much energy gets wasted in the process or if he has nailed down the proper stroke or anything like that. He just wants to go fast. In the manufacturing setting, he would be like the supervisor who speeds up the production line to the point where it begins to take a toll on quality, morale, and even machine lifespan; all for the sake of getting the most units produced for that day. For my son, the budding swimmer, the consequences are not so severe. His agility and strength will quickly improve, especially while he is young. He will achieve a pretty good speed early but potentially peak out before he reaches his potential, especially if he remains in the same sport. He will then either need to unlearn all his bad habits and improve his technique in order to get better or he’ll pick up something else where he can win. In the manufacturing environment, speed can be a little more dangerous. For one, running the line faster than it is capable of running reduces machine uptime, quality, and morale. These things cause the production crew to create work-arounds to sustain the increased speed that over time turn into bad habits. You may be able to get some pretty strong results early on but cannot be sustained over the long run due to the amount of wear that it places on the system. Also the higher-ups get “drunk” off of the increased rates (even if they are short lived) and that supervisor finds himself in a position where he is expected to produce ever-increasing throughputs with a declining production system. This approach is best suited for an environment where sheer strength and agility are the predominant requirements such as places with frequent changeovers, constantly evolving product offering, and shorter production runs. However a much higher investment in production system maintenance, and training is required.

I have a daughter who is also learning to swim. She makes little to no effort to go fast, but her inclination is to master the technique of swimming. She will swim laps across the same stretch of pool for the entire time. If you give her a tip to improve her technique, she will incorporate immediately and continue her laps. As such, she is constantly evolving her method and developing good habits. She is also gradually increasing speed as she becomes physically stronger. In the manufacturing environment, her approach would be akin to the craftsman or master artisan, patiently working to perfect the craft. This approach is perfect for environments that experience infrequent change and mastery of delivery is the predominant requirement. Fewer changeovers, longer production runs, and longer SKU lifespan would be the ideal state characteristics. This approach is great for long-term growth but less than ideal for short order production runs.

In manufacturing, you will find both approaches winning the day depending on the needs of the business. However there is a fundamental approach that applies across all types of manufacturing environments. The key is to analyse the perimeters of the specific manufacturing environment and identify those elements of the business that will probably not change for a long time and those elements that change frequently. For those elements that are long-lived, the slow and steady approach to management should be applied. For those elements that are constantly changing, techniques of speed and agility should be mastered. There are four core elements to every business: people, processes, products (or services), and technology. All of these elements evolve at different rates within the company, therefore the management strategy should be selected to fit the rate of evolution for the given element. A manufacturing efficiency expert such as those at Manuficient can help you identify the rate of evolution among these four axis and help develop the most effective management strategy to optimize performance in each area.

Visit my Excelville Profile for tools and resources to help implement you continuous improvement initiative.

Regards,

Calvin

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© Calvin L Williams blog at calvinlwilliams.com [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

Is Your Company Inadvertantly Putting the Breaks on its Own Continuous Improvement?

Manuficient - Brake Light

Getting better at something can take a lot of work. As any change agent can tell you, change is difficult, especially when there are people involved. Change requires shifts in the power structure, disrupting old habits, and pushing people out of their comfort zone. The reason that’s a problem is because you simply cannot get better if you cannot change. The two are inseparable. In many cases, there are just as many forces at play to prevent change than there are to create change. Sometimes those forces are created by the way the company works, or its business system. The business system is the array of its policies, people, processes, suppliers, customers, culture, and technology. Sometimes, the business system is designed in a way that inadvertently discourages continuous improvement. But don’t fret. In this post, I will uncover a few of the culprits that are putting the brakes continuous improvement in your company.

At any point in time, a manufacturer can capture its current state situation. Although the current state is just a snapshot in time, it can reveal some very interesting information. This information could include throughput levels, process efficiencies, conversion costs and so on. It could also reveal recent trends that provide some indication of what can be expected for the future. Those trends provide some insight to how “primed” your organization is for a continuous improvement initiative such as Lean, Six Sigma, Agile manufacturing or anything else you’re trying to do. A positive trend over time indicates that the organization is more likely to embrace change or continuous improvement. A flat trend over a long time indicates that the organization may be stagnated with some degree of resistance to change or improvement. These are the most difficult ones because there may be gatekeepers who won’t see a need to change. Making the case for continuous improvement will take quite a bit more effort in this instance. If the trend is negative over a long time period…well there’s bad news and good news. The bad news is that if you don’t improve, you won’t stay in business. The good news is that if you don’t improve you won’t stay in business. Making the case for continuous improvement in this case is a piece of cake.

With that said, there are some arrangements where business systems have embraced their inefficiency. These systems have decided to implement practices that allow some inside the business to profit from their inefficiency instead of eliminating it. I’ll give you a few examples: the contractor who is paid by the hour has an incentive to consume more hours to complete a job. Another is the airline that allows passengers to pay for priority boarding and seating. Their incentive is to keep the “normal” process so cumbersome that people will pay to cut in line and circumvent their terribly inefficient process. In this case, the airline has created a nice new revenue stream from their own inefficiency. You see where I’m going with this. These would be examples of policies killing the culture of continuous improvement. Over time, the people of an organization grow to accept inefficiencies as “the way it is” and they learn to capitalize on them as well. Inefficiency leaves room for corruption, which only breeds more inefficiency. This is what leads to a culture of poor performance and resistance to continuous improvement.

As part of your continuous improvement initiative, it will serve you well to take a close look at the policies, people, processes, suppliers, customers, culture, and technologies that might be hindering your growth. You will need to identify who in the organization is profiting from inefficiency and create conditions where the only way to profit is by ever increasing efficiency (with outstanding safety and quality of course). An expert with a trained eye such as those at Manuficient can help to quickly identify and remove these systemic speed bumps for your continuous improvement initiative.

Visit the Manuficient website for more information on this topic.

Visit my Excelville Profile for tools and resources to support your continuous improvement implementation.

Regards,

Calvin

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© Calvin L Williams blog at calvinlwilliams.com [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

The Manufacturing Agility Index: Measuring the Efficiency of Change

Agility

How well does your organization handle change? Is it managed deliberately or do you use a shoot first, ask questions last approach to changes? What is the level of resistance that you face for easy process changes? What about the difficult ones?

Change is inevitable. The only choice we have is to proactively work to change for the better. And if you’re not actively getting better, then you only have one other way to go. Staying the same is just not a realistic expectation. This is the driving force behind the concept of Continuous Improvement.

In this post, I want to introduce the concept of the Agility Index, which is a measure of your organization or factory’s ability to process change. The lower the number, the more difficult change is; likewise the higher the number, the more agile the organization or process. The term Agile in business is much more popular in the world of software development and project management but the concept of Agile Manufacturing is increasing in popularity driven by the realization that markets are demanding greater variety and Agility can absolutely help drive down manufacturing costs. Agile Manufacturing is a relatively underdeveloped discipline that many believe is the next step in productivity to Lean Manufacturing. However, in my view, Lean and Agile are uniquely independent disciplines. Each is more applicable to some manufacturers than others. The goal of each is ultimately improved customer service and retention. Although Agile attempts to help manufacturers break into new markets sooner than competitors to gain advantage.

Agility can be described as the cost of change. Cost can be measured in time, energy, dollars, or even psychological displacement. And since change is inevitable, its in every manufacturer’s best interest to reduce the cost of change – or increase its Agility.

To measure a manufacturer’s agility, you first need to create a scale that measures magnitude of change. There are three factors that are used to quantify the magnitude of a change: Degree of Change, Scale of Change, and Complexity of Change.

Degree of Change: To get the full grasp of agility, you have to first see the business system as a process (or array of processes). All processes have three core elements – Inputs, Process, Outputs (with Suppliers and Customers being conditional factors as in the SIPOC model). Based on these three core elements, there are 4 degrees of change that I’ll go into detail about in a future blog post. The  greater the degree of change, the more difficult it is to implement. At the simplest level, a product changeover would represent a change from the current state to a future state process.  On the other end of the spectrum, a full implementation of a new product line or production plant would be a change in the fourth degree.

Scale of Change: Scale of change measures how many people or assets are affected either directly or indirectly. Some people will have an immediate need to change their behaviors and some will just need to be aware of the change that has taken place. For obvious reasons, the more people affected by the change, the more difficult the change is to implement.

Complexity of Change: This is a measure of how much of a learning curve is needed for the people affected by the change. A future state process that requires one new process step is much easier to implement than a future state process that requires 100 new steps for example. The greater the complexity of change, the more difficult it would be for an organization to implement and return to steady state.

Each of these factors are measured on a scale of 0 and 100% and multiplied across to measure the magnitude of change.

So here’s where all of this matters. One can fairly easily determine how much a change should cost. For example, if all of the waste was moved from a changeover process, it would require XX minutes. However, the actually process it taking YY minutes historically. The Agility score for that type (or magnitude) of change can be calculated as XX / YY. From there, you can actually calculate a savings potential for increasing Agility to 100% for that process.

Based on this information, you can use what is called the Agility Index to determine what the true cost of changes of greater magnitude such as implementing a new production plant would cost due to poor agility and how much could be saved by increasing Agility. Organizations with great agility will have a much lower “cost of change” than an organization with poor agility. Therefore, increasing Agility in the manufacturing environment would be substantially lucrative in many cases.

Good luck with your efforts to increase your organization’s Agility. Feel free to reach out to us if you would like a 50+ point analysis of your manufacturing Agility with recommendations for what could be done to drive improvement.

Visit the Manuficient website for more information on this topic.

Visit my Excelville Profile for tools and resources that you could use to increase Agility.

Regards,

Calvin

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© Calvin L Williams blog at calvinlwilliams.com [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.