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MiMfg Magazine
May 2019
Turning Caution into Profits
By Murray Sittsamer • The Luminous Group
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, manu-
facturing 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.
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Murray Sittsamer is president of The Luminous
Group. He may be reached at 248-561-5802
or [email protected].