Artificial Intelligence (AI) is bringing new thinking to old industries. With AI, work processes performed by humans are undergoing transformation. Ubiquitous, cheap connectivity and instrumentation from machines on the shop floor are enabling human tasks like…
The Theory of Constraints has been a factor in the manufacturing community since the 1980s. Today, there is a large community of consultants that advises manufacturing firms to focus on…
The new industrial revolution, otherwise known as Industry 4.0, or Industrial Internet of Things (IIoT), implies the development of the so-called ‘Smart Factory’. Accordingly, large manufacturing businesses share a common strategic imperative: improve….
Take a step back into the late 1700s and early 1800s where manufacturing went from hand packaging goods one-by-one to being mass-produced by machines fueled by the game-changing steam power. Fast forward a few decades, and now we have emerged into Industry 4.0 and the…
For decades, the Six Sigma methodology for quality management has helped manufacturers get quality standards under a very tight range of product variability. Just imagine if you could apply that same rigor to managing profitability of all the products your firm manufactures.
The long-running TV gameshow ‘The Price Is Right’ gives contestants the chance to win cash and take home big prizes if they are good at naming the right price for various products. The manufacturing business works precisely the same way.
Profit Velocity’s predictive manufacturing analytics show you how changes will impact profitability. You can scan through numbers on a spreadsheet to analyze the results or generate colorful charts to visualize where each product lands on the profitability scale in different scenarios.
The ‘profit per unit’ analysis most manufacturers focus on does not address the speed of profits whatsoever. This is why having a profitability analysis that uses time-based analytics gets manufacturers and investors on the same page.
To chart the best path to reach your profit goal on time, you first need to understand the true return on assets of each item you make. The flaw in traditional manufacturing analytics is that it doesn’t provide a true picture of production cost per unit. Without precisely factoring in production time, you cannot accurately calculate total manufacturing costs.
At far too many of the manufacturing companies we’ve encountered, Sales and Production are at odds, if not at each other’s throats. Blame and resentment between those who make products and those who sell them is often at a slow boil, weakening the organization and eating into the bottom line.