Why it’s vital that manufacturers track their productivity
02 July 2021
Why it’s vital that manufacturers track their productivity.
With ever-increasing costs for materials, it’s easy to lose sight of the productivity of your operations. It’s vital that you retain this understanding, though, as this could further decrease your profit margins.
Monitoring your production output could help to realise extra capacity and therefore enable you to increase your profitability.
If you take the simplest calculation of:
Sales / (materials + resources) = margin
There are two ways that you can maintain your profit margins as materials increase in cost. You can either increase the sales price to your customer, but this may reduce the number of sales you make.
Or you could focus on reducing the required resources to manufacture your products
One key way to monitor your productivity is to track the time taken to manufacture the products. Further to this, you could track each individual stage of the manufacturing process to identify which areas could be improved.
You’ll also be able to identify if individuals are completing their part of the process in a timely manner when compared to others in the business.
By tracking the time appropriately, you can better forecast your capacity and manage the performance of your manufacturing process much closer.
The problem with working trying to maximise the productivity of your people is that it can often lead to an increase in mistakes. Wasting not only time, but additional materials.
That’s why monitoring the time taken in isolation isn’t enough to understand how productive your team are.
It’s important that you monitor the rate of mistakes and errors in your production process to ensure that this doesn’t erode the gains you’ve made by working faster.
Mistakes happen, but you can monitor how regularly these mistakes occur, and if they occur in certain areas more often to help establish if your process needs to change to help maintain your profitability.
There are many other ways that productivity can be tracked and monitored throughout your processes, whether manufacturing or the back office support processes that are required.
We recommend starting with a simple process map to help identify what you can track in your business.
If you’d like any support or advice in putting together this process map and how it could improve your productivity, get in touch.