Manufacturing Floor Expansion | Lean Six Sigma | Rea CPA

Too Big Or Too Wasteful?

Manufacturing Floor Expansion | Efficient Solutions | Ohio CPA Firm
Having to wait months to build out some much needed extra space can be disheartening. However, working to improve processes and reduce waste can have positive short- and long-term results. Read on to learn more.

How To Make Better Use Of Your Space

Your business continues to grow and now it’s time to consider expanding your facility. But most contractors in your area are backlogged and the process of planning and building could take more than a year. Now, as a business owner, you’re faced with a very real problem of figuring out how your business can go on functioning for as long as it’s going to take to get a crew in to start your expansion. In this scenario, perhaps the best option is to consider ways to make better use of your current space in order to work more effectively.

Re-engineering your floor plan is no easy task – physically or conceptually. It’s more than just moving things around to create space or lining up the machines in a more linear way to promote efficiency.

Your first responsibility is to identify and understand your process constraints. If you don’t, you risk making your production issues even worse because these issues may not actually be space-related at all.

Before shutting down production or moving anything, start by looking for the “waste” listed below in your processes.

Read Also: From Good To Great: Five Ways You Can Improve Your Business

Identify The Waste

Signs of waste and inefficiency can show up in many forms – and they can cost you more than space. Inefficiency can cost you in time, productivity, internal and external customer satisfaction and money.

Some common symptoms include:

  • Overproduction. This is viewed as the deadliest type of waste because it results in other types of wastes, and it could definitely be causing those space issues you’re facing. Keeping people and machines “busy” might make a manager feel better, but it could actually hurt the bottom line.
  • Too much inventory. If you’re making more than your demand, then you have to move it, store it and likely purchase more. Ensuring your warehouse is operating with a balanced inventory is essential. Problems can occur when too many items take up much-needed space, which usually happens when your company orders a mass amount of product to keep up with demand or when demand for your product is too low.
  • Poor quality. If you are using space to rework parts or reports, you could have a problem with defects or poor quality as well as a space issue.
  • Poor organization. Do you routinely send out “search parties” to locate tools, information or documentation? This ongoing problem can be eliminated with better processes and organization.
  • Excessive motion. Moving items from one area to another (staging, racking, etc.) is par for the course. But if the moves are significant and take up too much time or space, you may have a problem.
  • Process variation and complexity. Do you battle with long change-overs that often lead to errors and delays to internal and external customers? These issues can reveal waste concerns.
  • Working harder, not smarter. Idle time, delays or continually waiting for information is a great way to waste time … and time is money.

Having to wait months to build out some much-needed extra space can be disheartening. However, working to improve processes and reduce waste can have positive short- and long-term results.

Listen to episode 115, “Managing The Daily Grind & Maximizing Personal Productivity With Lean Six Sigma,” on unsuitable on Rea Radio, featuring Lesley Mast, principal and tax director at Rea.

Assess the Situation, Identify a Solution

In addition to identifying areas of waste, consider conducting a survey to help you assess how space is being used throughout your facility. Then work with your staff to determine which arrangements are ineffective and ways you might be able to improve. For example, your floor space may be limited, but you could potentially utilize overhead storage and rack inventory.

Another great way to maximize industrial utilization is to use mezzanine space. By adding a ceiling and building on top of it, you can use the existing footprint of your building twice. One classic example of this is to build office space over the restrooms and break room. Another is to place a return processing department right over the shipping areas.

The Lean Six Sigma Solution

Lean Six Sigma is a continuous improvement methodology designed to help you identify and eliminate waste and inefficiency throughout your operations – from the manufacturing floor to office and administrative processes. A powerful management tool that leading organizations across all industries use to increase operational efficiency and capacity, Lean Six Sigma improves processes and quality while increasing profits.

Lean focuses on lead times and the reduction of inventory by producing only what is necessary. A Lean process for production is driven by actual customer orders – not forecasts. This way, demand “pulls” a product through production, instead of relying on forecasting to “push” it onto the shop floor. The Six Sigma discipline is geared toward improving product quality and consistency by reducing any manufacturing flaws, waste and quality issues.

Utilizing your people, process, equipment and resources in the most effective way is a key tenet of Lean. The ultimate goal of a manufacturing floor plan is to create value: for external and internal customers. The timing of your process and the sequence of your activities should always begin with the end in mind and should leverage visual management cues.

Assembly and production do not always require the use of the entire floor plan either. Manufacturers who seriously embrace Lean practices investigate and implement cellular manufacturing, which maximizes production in the most minimal of spaces.

For many manufacturers, linking Lean with Six Sigma is a perfect marriage, providing the tools needed to meet real demand with high-quality products in the shortest time possible. World-class organizations use Lean Six Sigma and problem-solving tools to eliminate waste, improve efficiency, increase quality and use of space and make more money. It is worth the time to see if the process would help you and your business.

Reach out to me to discuss how Lean Six Sigma can help you get more from your existing space and more.

By Lesley Mast, CPA, MAcc-Taxation (Wooster office)

Looking for more ways to do more with less in your business? Check out these great resources:

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Is Your Business Suffering From Waste & Inefficiency?