It is not that long ago – late 1970’s – that an industrial press release typically consisted of text plus black and white photograph posted second class snail mail to probably around 20 editors of monthly hard copy feature based magazines. These magazines only used black and white internally and if you sent more than one release a month the effort was wasted as only one was ever likely to be used each month – they were rarely kept for later use – although some did occasionally turn up in annual features.
That was it – 12 releases a year in black and white per company, with occasional opportunities for a feature if your client advertised Advantages Of Manufacturing Business a lot and/or you knew the editor quite well. Strangely it worked, it was the only game in town and everybody played it.
So what happened – well first low-cost colour printing, then low-cost publishing, product based journals that made money on selling advertising to companies keen to submit product editorial, the transfer of responsibility and cost for writing of feature articles from editors to the companies in the industry.
Then the internet happened and things really took off. Directories – which had been expensive (perhaps purchased alternate years) and little used – now came into their own as up to date readily searchable information sources. Then online journals, frequently as a sort of “copy” of the parent hard copy magazine and these soon also took on the role of industry directories.
Printed newsletters which had been expensive and poorly received were replaced by e-newsletters – much less expensive and actually better received by virtue How Long Has The Tech Industry Been Around of the much larger circulations made possible, but also because they became so easy to use – just click-and-go, don’t want it? Then unsubscribe.
Websites of course were initially expensive artistic exercises until everyone calmed down and got to grips with the idea of a company website as a continuously updated product brochure, data sheet, sales platform, corporate statement, help line etc. – available 24/7.
Along with online magazines of course came online editorial and advertising – initially this advertising was hugely over-priced and actually held back development for perhaps a couple of years, but when prices became more realistic then the whole online publishing scene too off. With this came the advent of the voracious web – capable of taking as much content as we are able to throw at it – limited only by the cost of creating sensible material in the first place.
So far so short of Blogging and Social Media – for some the jury is still out (yes, even now) – although we have been running industrial online blogging and social media activities for nearly two years now in parallel with PR programs and have seen a 2 to 3 fold increase in client web profiles over that time.
What you may ask is a web profile? Well, we define it …
Tag: analysis
An Example of Cell Analysis and Design in Lean Certification Practice
The lean certification practice includes many building blocks that cover a wide-range of manufacturing and business practices. Lean training helps a manufacturing company grow while keeping costs low, or even cutting costs by developing efficient means of growth. One aspect of the lean certification process is grouping machines and labor into cells. Cells have the property of being a small subset of the overall manufacturing line. By creating cells, expansion can be done in incremental amounts. These building blocks are also easier to move. Once a cell has been created, it can be placed at different locations along the manufacturing line, or it can be moved to another site all together. Therefore, creating these modular blocks is a major facet of the lean manufacturing process.
When approaching a manufacturing line for the first time, and trying to impose a lean certification on that line, an analysis of the process flow is a necessary first step. Typically, a product line is not laid out in cellular design. The usual design is to have one continuous flow from beginning to end. In fact, this was of laying out a manufacturing line makes sense, because it is efficient, so long as product demand doesn’t change. That is where the costs start to rise. Typically, a manufacturing line is setup to produce items at a certain rate, with an allowable amount of growth projected. The initial design generally does not allow for huge changes in demand, nor does it take into account future technological advances. A manufacturing line can grow old and inefficient, as technology advances and demand increases.
Cell analysis looks at the production line in terms of grouping things together, shorting travel distances, and putting intermediate inspection stations in place along the Industrial Production Engineering way. The goal is to create a self-sufficient unit that requires a certain output, and delivers an identifiable output at a certain rate, and already inspected for quality.
The usually boundaries of a cell are at existing machines already in the manufacturing line. Once the boundaries are distinguished, the equipment and the personnel within that cell can be moved or upgraded as necessary for advancement and inspection.
A cell usually incorporates more than one machine, although a single large machine that requires multiple people to operate may qualify as a cell all by itself. Sometimes controlling the machine is a place to begin to look for upgrading a piece of machinery.
Inspection is a key to cell design, as well. By requiring each module in the line to have an output that is quality inspected is more efficient that having a single large inspection at the end of the process.
Creating cells and making modular design part of the lean training process is a key Secondary Sector In Indonesia factor in allowing growth while keeping costs low for manufacturing operations.…
COST MANAGEMENT: Squeezing the (NON)VALUE Out of Overhead – An Activity Analysis Approach
In the Pleistocene era of manufacturing cost accounting (actually, only about one hundred years ago – it just seems longer), product costs were classified as: Labor, Materials and, Overhead – in that order. The order was not haphazard; it connoted the relative importance in dollar size of each. Labor was then the highest cost component, materials was next and overhead was a poor third. Well, now at the dawn of the twenty-first century and actually around the middle of the twentieth century, the order is reversed. Overhead is the most expensive component of the cost equation. In fact, as labor declines to third in the cost hierarchy and materials costs begin to stabilize in some of the mature manufacturing companies, the management of overhead spending can be the strategic management element in the profitability success equation. Knowing that overhead is the major component of manufacturing spending and putting aside the arcane methods for its accounting and allocation, how then can the senior management of manufacturing companies discern value in overhead in relation to its cost? Let’s take a look at some of the options and combine them into an overall program to find the value and reduce the costs.
What really is manufacturing overhead?
In plain managerial terms, manufacturing overhead is that agglomeration of expenses that don’t “add value” to the products made by the enterprise. Non-value-added activities, now the bogeyman of the era of Lean Manufacturing, are those activities that customers wouldn’t pay for if they knew the extent to which they existed. The most cited example of non-value-added activity is a quality inspection function. The customers would be saying to themselves, why would I want to pay for this when you the manufacturer should have been able to get it right the first time? The strategic implication being, of course, that if we were able to reduce or eliminate non-value added activities; the customer would not have to pay for them through lower prices. The potential for lower prices is largely a near term marketing issue but, in the long run, the costs incurred for products have a structural impact on a company’s and an industry’s prices and profitability. Recognizing that all non-value-added activities can’t be eliminated, some are placed in the category of “non-value-added, but necessary.” These are typically those that are driven by regulations (e.g., GMP, OSHA, FDA, SEC etc.). Other non-value-added activities, despite not being regulation driven, are tenacious in their seemingly innate ability to survive because people believe that if they weren’t incurred, dire consequences would follow.
From a micro-economic perspective, manufacturing overhead is a large component of the break-even point of the enterprise and therefore part of squeezing out value lies in minimizing it. It is the fixed period cost base that the enterprise must cover with incremental gross margin. Accounting gives us numerous expense classification and departmental views of overhead in the detail needed to analyze and reduce/contain this strategically important manufacturing cost component.
Manufacturing overhead has a time and variability dimension…