Telephone
517-372-5900

As of 2/20/19, all users must create a new account. Click “Login” and then “Create an Account” or contact MMA at 517-487-8542 for assistance.

Menu

Turning Caution into Profits

This article appeared in the May 2019 issue of MiMfg Magazine. Read the full issue and find past issues online.

The stock market is up, manufacturing orders are strong and we continue to see capital expansion but many manufacturing companies in Michigan are holding back on discretionary expenses. There is concern about recent state legislation, challenges finding talent and caution about the economy overall.

When there’s caution in the air, management looks to find ways to preserve cash and assess risks facing them. But risk management should not focus only on minimizing and mitigating potential risk. A well-managed, ongoing manufacturing company will also look at risk taking as a path to growing revenue, profits and value in the future.

Nothing Risked — Nothing Gained

Risk-taking can take many forms. One way is doing something you have not done before in order to gain a return. But doing something totally different might have too large of a downside; e.g.: starting a new product line or entering a new market. More conservative risk-taking could be building on, or improving, what you have in-place.

Manufacturing clients we work with and other companies we visit have in-place some form of a structured operating or production system. These include systems that comply with Standards such as ISO 9001, IATF 16949, and AS 9100; systems for Advanced Quality Planning, and management of the factory floor. There’s little risk in implementing these methods because they have been tried before, and generally yield good results. Unfortunately, they are often seen as costs of doing business, and not drivers of process excellence.

Can You Get More Things Right the First Time?

From my view working with clients and potential clients over the past 25 years, most companies adapt those methods and tools, but rarely do they step back to assess if there are better ways to regulate their engineering and manufacturing operations. Is there something beyond satisfying customers’ needs and meeting the fiscal year budget?

Pat Riley, former basketball champion and coach has a great quote, “A champion needs a motivation above and beyond winning.” Are your employees motivated to get to zero defects? Not just zero defects out the door, but every action right the first time? Or is it more like “if we make a profit, it’s good enough”? Or “let’s fill all the open orders, and we’ll have a good month’?

Death by 1,000 Cuts

I’ve come to realize that quality systems, manufacturing methods and quality programs; are often not aligned with the ultimate business objective… every action right the first time. Without that, problems are caught down the line, or at the customer. The cumulative impact of small errors and missed opportunities to get things right is like death by a thousand cuts… each are very small — maybe even unnoticed — but together they’re a killer.

Excellence Drives Profit

Customer scorecards for quality and delivery are important indicators, but they barely touch the surface of assessing the full, deeper picture of operational performance. Internal metrics (macro and micro), Internal Audits and Operational Assessments are better indicators of if and where losses occur.

Try it yourself. Consider the cumulative costs and consequence of many small actions not done right the first time, and inspire your team to strive for excellence in everything they do. It does not cost much to empower a passion for excellence and the improvement to your profits and cashflow could be significant.

About the Author

Murray SittsamerMurray Sittsamer is president of The Luminous Group. He may be reached at 248-561-5802 or murray@luminousgroup.com.

This article appeared in the May 2019 issue of MiMfg Magazine. Read the full issue and find past issues online.

The stock market is up, manufacturing orders are strong and we continue to see capital expansion but many manufacturing companies in Michigan are holding back on discretionary expenses. There is concern about recent state legislation, challenges finding talent and caution about the economy overall.

When there’s caution in the air, management looks to find ways to preserve cash and assess risks facing them. But risk management should not focus only on minimizing and mitigating potential risk. A well-managed, ongoing manufacturing company will also look at risk taking as a path to growing revenue, profits and value in the future.

Nothing Risked — Nothing Gained

Risk-taking can take many forms. One way is doing something you have not done before in order to gain a return. But doing something totally different might have too large of a downside; e.g.: starting a new product line or entering a new market. More conservative risk-taking could be building on, or improving, what you have in-place.

Manufacturing clients we work with and other companies we visit have in-place some form of a structured operating or production system. These include systems that comply with Standards such as ISO 9001, IATF 16949, and AS 9100; systems for Advanced Quality Planning, and management of the factory floor. There’s little risk in implementing these methods because they have been tried before, and generally yield good results. Unfortunately, they are often seen as costs of doing business, and not drivers of process excellence.

Can You Get More Things Right the First Time?

From my view working with clients and potential clients over the past 25 years, most companies adapt those methods and tools, but rarely do they step back to assess if there are better ways to regulate their engineering and manufacturing operations. Is there something beyond satisfying customers’ needs and meeting the fiscal year budget?

Pat Riley, former basketball champion and coach has a great quote, “A champion needs a motivation above and beyond winning.” Are your employees motivated to get to zero defects? Not just zero defects out the door, but every action right the first time? Or is it more like “if we make a profit, it’s good enough”? Or “let’s fill all the open orders, and we’ll have a good month’?

Death by 1,000 Cuts

I’ve come to realize that quality systems, manufacturing methods and quality programs; are often not aligned with the ultimate business objective… every action right the first time. Without that, problems are caught down the line, or at the customer. The cumulative impact of small errors and missed opportunities to get things right is like death by a thousand cuts… each are very small — maybe even unnoticed — but together they’re a killer.

Excellence Drives Profit

Customer scorecards for quality and delivery are important indicators, but they barely touch the surface of assessing the full, deeper picture of operational performance. Internal metrics (macro and micro), Internal Audits and Operational Assessments are better indicators of if and where losses occur.

Try it yourself. Consider the cumulative costs and consequence of many small actions not done right the first time, and inspire your team to strive for excellence in everything they do. It does not cost much to empower a passion for excellence and the improvement to your profits and cashflow could be significant.

About the Author

Murray SittsamerMurray Sittsamer is president of The Luminous Group. He may be reached at 248-561-5802 or murray@luminousgroup.com.
MFG Forum 2017
Events
MFG Forum 2017
The 2017 MFG Forum will outline the threats, discuss best practices and provide resources for protecting valuable manufacturing assets from cyber attack.
Mfg Excellence Awards 2017
Events
Mfg Excellence Awards 2017
This program recognizes excellence in manufacturing by honoring those who make a positive impact in their community and in their industry.
MFG Forum 2018
Events
MFG Forum 2018
The MFG Forum guides industry leaders through emerging issues like Industry 4.0 and provide resources to maintain Michigan’s manufacturing advantage in the 21st century.
Insurance Forms
Insurance, Internal Page
Insurance Forms
Download and print the forms you need to manage your benefits program.
Manufacturers Recognize Vantage Plastics for Community Impact
News
Manufacturers Recognize Vantage Plastics for Community Impact
MMA is proud to announce that Standish’s Vantage Plastics has been selected as the 2017 recipient of the MFG Community Impact Award.
Manufacturing’s Plan for Michigan
Advocacy
Manufacturing’s Plan for Michigan
Michigan’s economy is growing — but more remains to be done. Discover the industry’s top priorities for the 2017-2018 Legislative Session and help keep manufacturing moving forward.
Building a Competitive Michigan
Advocacy
Building a Competitive Michigan
MMA legislative and regulatory successes have saved Michigan manufacturers billions of dollars in recent years.
Reduced UI Taxable Wage Base Available in 2018
Advocacy
Reduced UI Taxable Wage Base Available in 2018
Eligible employers will qualify for a reduced taxable wage base of $9,000 for calendar year 2018 thanks to MMA-supported legislation passed in 2011.