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The Visible Value Blog

Manufacturing to capability, not capacity, is the way forward

Posted by David Stain

July 29, 2015 at 10:35 AM

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Running a supply chain with numerous variables is a complex undertaking. Lean manufacturing principles support performance improvement, but the ultimate goal of a low-cost, waste-free supply chain that delivers the perfect order on time, every time remains elusive.

 

 

Change, the only constant

Customer demand changes weekly and commodity prices fluctuate daily. Shorter production runs demand new standards of agility and processes that don’t compromise product quality. Little wonder, then, that optimising supply chain operations can be a struggle, and the production line experiences problems.

 

Before moving forward, stand still

When doing what you do is complex and time-tight, it’s sometimes hard to stand back and think objectively about how your processes, performance and productivity could be improved. You’re too tied up in the day-to-day to plan ahead. Headcount, downtime, training, maintenance, health and safety, all present everyday challenges that keep you from taking a wider view.

 

So the concept of manufacturing to capability, not capacity might not sit comfortably, simply because it implies change. But it could be the first step in reassessing how your business approaches supply chain management from now on.

 

From ‘make-to-stock’ to ‘make-to-individual’

Companies that follow lean principles like building to actual customer demand – rather than adhering to forecasts – and bringing material to the plant only when needed, as opposed to keeping large stockpiles on hand, operate far more efficiently. Customer demand is predictable, raw material prices are stable, and suppliers are always reliable, making it easy to map and execute streamlined production processes.

 

Operational visibility is instrumental in providing the information needed to manufacture to capability, not capacity. Make a difference by understanding some of the issues that production knowledge and visibility can help you to overcome.

 

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Topics: Supply Chain, APAC, North America, Latin America, EMEA