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Ways to Optimize Operations

Optimizing operations generally comes in two flavors:

  1. Designing a product or process for a specific purpose to maximize output or minimize cost. This also may entail standardization of product or process.  In this case, optimization occurs at the front end during the design phase.
  2. Designing a product or process with flexibility to allow maximize output or minimize cost. In this case, optimization occurs at a later time when the system in question is online.

With regard to #2, flexibility usually isn’t associated with optimization since flexibility usually comes with an associated cost.  However, if the cost of adding flexibility is outweighed by potential benefits, then the optimization resulting from flexibility has value.

Switch inputs

Switch inputs to the process.  Allows to shift to lower cost alternatives, mitigate availability issues, and reduce scheduling issues.  Input examples: raw materials, commercial off the shelf (COTS) components that are interchangeable, labor, and services.

Option: Switching

Premium: Cost of switchover, higher costs due to flexibility.

Exercise Points:  Cost of one input justifies switch to another, availability of one input becomes too difficult and justifies switch to another, quality of one input drops to a point that justifies switch to another.

Switch outputs

Switch outputs to the process.  Examples: A farmer chooses crop mix to maximize profits, based on cost and market prices.  Switch production mix on a bulk chemical plant.

Option: Switching

Premium: Cost of switchover, higher costs due to flexibility.

Exercise Points:  Market price of one output justifies switch to another, market demand of one output justifies switch to another.

Fit for purpose process

Production processes that are designed for a limited product mix can be optimized for cost and efficiency.  The trade-off is balancing demand with output to keep assets productive at a high rate.  Too little throughput = lost sales.  Too much capacity = wasted capital.

Fit for purpose product design

For products that may not need many configurations (options available for sale), a design that is specific and can be manufactured in a repeatable manner can save unit cost, tooling cost, and cost to support it once deployed.

Base model product design

For products that are highly configurable (many options available for sale), consider developing as a base model + options design.  The base model contains as many features as possible that are sold with every unit. The base model is customized with optional features.  Can be combined with modular design to customize by adding modules.

Implement a knowledge management program

Knowl-edge Man-age-ment

Company’s organization of knowledge: the organization of intellectual resources and information systems within a business environment

Bing Dictionary

When an insight is learned, it should be documented, distributed, and available.  A central repository for best practices along with templates to help people share insights is important.  Encouraging best practice sharing is also important.  Performance reviews could have best practice development targets as part of each employees performance objectives.

Listed below are some areas where KM can be used:

  • Project lessons learned.
  • Business processes (workflows).
  • Design standards and guidelines.
  • Manufacturing standards and guidelines.
  • CAD part library.
  • Anything that may be repeated in the future.

Project Lessons Learned

When projects are winding down, it’s important to do a lessons learned debrief.  Any insights into what worked well, and what didn’t work should be documented and shared.  This an important point, things to avoid are also best practices, not just things to do right.

Business Processes

Small businesses are especially susceptible to disruptions due to vacation, medical leave, and other employee absences.  Many times there are one or two people who know how to perform a given job function and trying to cover for them can be difficult.

Documenting job procedures (workflows) allows for people to better fill gaps when necessary.  It also facilitates cross-training since the documentation can be used for training purposes.

An added benefit of documenting workflows is the discussion that ensues.  Quality can be improved by making sure all parties are doing similar work.  The discussion process may also uncover areas that can be streamlined to increase efficiency.

Design Standards and Guidelines

Developing design standards and guidelines requires an investment in time and research, but the long-term benefits can be significant.  Standards help ensure quality and consistency among products, and can reduce time spent analyzing designs.

Manufacturing Standards and Guidelines

Manufacturing standards and guidelines ensure workmanship standards and improve consistency of finished product.

CAD Part Library

Storing frequently used CAD parts, such as fasteners, in a central repository can result in a major savings in modeling time.  As the repository is populated, the savings become even greater.

Anything That May Be Repeated In The Future

This is the catch-all for things that don’t fit in the categories above.  If something is likely to be repeated in the future, it may make sense to document it, maybe.  Documenting every possible thing that might be repeated can become cost prohibitive in a hurry.  These items need to be decided on a case by case basis.

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