Tag: #Audit

Whereas the fluctuation of productivity is followed by fluctuation of profitability (source: Arthur Ha, L. S., W.F.), it matters a lot how much is the productivity, right? That’s why you need a Productivity Audit! You need to know:

As we told in previous articles, KPI’s in general (Productivity as well) are values that represent short period outcome (period for calculation can be a shift, a week, a month, a year), and they are influenced by our intervention.  It is a high importance to know: what is the value of Productivity (H/Hmax)? Is it 65%; 75%; or 85%? Does the way I manage the unit assure me high profitability, or I still have room for improvement (how much it is?), or I still miss to control important details in daily production?

Most of the companies defined their system of Productivity figures and day by day work on their improvement, while others are still in a process of defining necessary ones. In a both case there is a question: does existing figures give a reliable model of production, or some aspects still remained uncovered? (For example: in a Hungarian metal parts company welders were paid after pieces produced and it was a strong believe this assures high productivity. In reality this resulted in a lot of individual easy doable parts, what couldn’t compose a sellable unit, so production volume remained behind.)

Doing an Audit, you enhance the credibility and reliability of figures you have.  Even more important, you assure that you follow all relevant parameters and cumulative effect of small, everyday changes doesn’t lead to corruption of parameters and values! (For example, an international company from S.M. makes External Productivity Audit over challenging areas each 6 month, to discover anomalies before they become overgrown.)

Audits of course, are very different by area they cover (a machine, workshop, product, company) and of depth in entering into details. Still, they have the general characteristics similar:

1. VSM (Focuses at certain segment of VSM =Value Stream Map)
2. Operational studies are used: Efficiency, capacity utilization on bottleneck positions, work instructions)
3. FE (Floor Experience), TUE (Time Utilization Experience), FMBE (Floor Manager Behavior Experience) – studies that quantifies behavior patterns
4. MS (Management System) – where information arrives, and what happens upon values
5. Conclusion, Proposal – Auditor gives his opinion in a percentage of Productivity and proposal how to mobilize currently unused opportunity.

Beyond the scope of Audit:

A Productivity Audit is agreed and planned: over what part of VSM, main focus, duration, but solutions with investment in new technology and machines are not examined.

What prevents me to do it:

1. “My company is doing well.”

Yes, it is. Are you sure, there is no more room for improvement? For sure doesn’t appeared signs of erosion in MS?

2. “We’re functioning mainly fine, except of … but we are not going to solve that because of  … (to big investment, to much Down Time, to big construction).”

So many times heard this sentence, and in 95% proven: mentioned reason not that size and other, more serious weakness let profit to leak away!

3. “Our production is unique and we have very complicated system. I don’t know, how somebody from outside could …”

Each company (even these ones with the same product) is different and unique. Auditor’s experience lays in recognizing principles beyond surface and calculating how fare is the produced result from ideal.

4. “I don’t want somebody to tell me, what I should do!”

Real Consultant will never tell to Client, what he should do! He is auditing the premise, makes benchmarking and measurement and describes the situation, giving you options as a comment. Customer will decide which option will take!

5. “Installed machines and solutions at our plant represent Top Secret. I don’t want to reveal them.”

There is a Confidentiality Agreement to be signed off. Believe me, Consultant wouldn’t hazard to appear as a source of rumors!

Summary:

To do an External Audit gives an impartial vision about Productivity of units done by a skilled experienced person with unbiased eyes, working exclusively on discovery of further improvement possibilities. At the end you receive the ratio H/Hmax in figures, and options to mobilize possibility what is there and it is not used in a moment.

Ask for details or schedule an Audit clicking at CONTACT or write a mail at robertburu@gmail.com or send a WhatsApp message at +40 753 057 303!