Assume Nothing: 5 Tests Every Manufacturer Should Run Quarterly, from Industry Week.
Spring brings showers, flowers and a fresh round of decluttering at homes and offices all around North America. Others will use the time to perform an annual review of broken work processes. Manufacturers can’t wait that long; conditions change too frequently.
North American factory activity has been trending down for months after entering the fall of 2014 on a sustained rally. In the U.S., the Institute for Supply Management said its index fell from 52.9 in February to 51.5 last month — the fifth consecutive monthly decline. In Canada, the RBC Canadian Manufacturing Purchasing Managers’ index ended at 48.9, a small improvement from record lows in February but also a net contraction for the industry overall. (A score of 50 or above signals sector-wide growth.)
Preparing for these sorts of shifts is never easy, but these five common sense tests can help to determine factory readiness before changes begin to take hold.
1. Utilization versus capacity. Chances are you’re already running this test at least weekly. Managers who don’t have a clear sense of the mix are bound to have a tough time winning new business while keeping existing clients happy. This metric can also be used in context. Do complaints rise along with utilization? If so, your factory may need training and support to handle new business and cut down on churn.