How Can Operations System Design Help Manufacturers?

Operations system design for manufacturers has become a key issue in the manufacturing industry. This is because manufacturers are facing a lot of challenges such as increased competition, decreasing market share, supply chain issues, cost reduction and more.

Operations system design is a process or methodology that can help companies to improve their performance and achieve their objectives by implementing new strategies and processes on how they operate their business. It involves analysing the current performance of your company, identifying areas where improvement could be made and then developing solutions that will increase efficiency and profitability.

Some of the important concepts used in operations system design are the following:

Demand and Capacity Management

The demand and capacity management system are the main engine driving operations. It works by matching product demand with production capacity, which includes both production equipment and labour. The most important aspect of demand and capacity management is how it deals with shortages or excesses.

In a manufacturing environment, demand is often very unpredictable. This means that there are times when the factory needs more workers than normal, but also times when it has an excess of workers on its hands. Demand can also fluctuate depending on seasonality and other factors outside of your control as well as within your control (such as sales promotions).

The first step in creating a robust demand and capacity management system is to understand what drives your business and how this affects your supply chain requirements. For example:

If you’re making products on a seasonal basis, then you need to know when those seasons occur so that you can plan ahead for them.

If you’re planning sales promotions or other marketing initiatives, then you’ll need to know how many people will be needed to support these activities so that they don’t negatively impact production schedules or increase costs unnecessarily.

Planning and Scheduling

Planning and scheduling are the process of determining the activities or tasks to be performed, the sequence or order in which they are to be carried out, and the resources and time required for each.

Scheduling can be done manually or automatically. Scheduling systems can be used in manufacturing, warehousing, distribution, and other areas where work must be performed on a sequence of tasks that must be completed in a specific order. Manufacturing scheduling processes may include:

Multi-process workflow management — Scheduling of multiple processes to optimize resource utilisation and minimise total cost of operation.

Workload forecasting — Forecasting the amount of work that will need to be performed over time, so that sufficient resources can be allocated for production. (See our blog on Sales, Inventory and Operation Planning.)

Shop floor control — Monitoring the actual performance of each machine in the shop floor so that any bottlenecks or other problems can be identified quickly.

Scheduling optimisation — Using mathematical algorithms to find the best possible schedule for a given set of requirements.

(for automation visit FactoryIQ: What is a Manufacturing Execution System)

Operational Excellence in Logistics

Logistics is the management of the flow of goods between the point of origin and the point of consumption in order to meet customer needs. In terms of logistics, a product is a good or service with some utility to the customer. The term logistics comes from the Greek word logistikos, which means “skilled in calculating.”

Logistics involves the integration and synchronisation of all aspects of supply chain management. It includes planning, procurement, inventory control, production planning and control, distribution, packaging, order processing and shipping as well as associated financial services such as bill payment and revenue management.

Logistics is important because it is often an overlooked aspect in a company’s overall success, but it can also be an important part of any business model. A company that has effective logistics operations will be able to provide customers with products that they want at a price they are willing to pay while still making a profit. This allows a company to compete with other companies that may have lower prices or higher quality products but less efficient logistics operations.

Inventory Management

Inventory management is a system of control that determines the optimal location and quantity of inventory needed to minimise the cost of carrying that inventory. Inventory management is often used in conjunction with a Just-In-Time (JIT) or lean manufacturing system, which relies on careful monitoring of inventory levels to ensure that production lines are never interrupted by parts shortages.

Inventory management is usually accomplished through a computerised system, typically using barcode scanning technology to track individual items as they are received from suppliers and shipped out to customers. Inventory management also typically includes some form of point-of-sale (POS) software or hardware, which allows retailers to track sales and determine when sales goals have been met for each item sold.

The goal of inventory management is to reduce excess inventory while still meeting customer demand. These include:

Reducing Inventory Costs: Excess inventory can tie up valuable capital resources and increase carrying costs (i.e., storage space, insurance).

Minimising Out-of-Stock Situations: If a company has too little inventory on hand, it may not be able to meet customer needs. In addition, customers may perceive this as poor service or lack of concern for their needs.

Maximising Profitability: By keeping optimal levels of inventory on hand at all times, companies can reduce costly markdowns or write-offs due to excess stock in slow-moving items.

Process Stability

Process stability is the ability of a process to produce consistent product quality and quantity, on a day-to-day basis. It is a measure of how well the process delivers on its promise to produce the same product each time it is run. A stable process is one that can be relied upon to consistently provide high-quality, low-cost products.

Process stability is important because it affects both customer satisfaction and profitability. If customers are not satisfied with their product or service, they may find another supplier or stop buying altogether. If production costs increase unpredictably, profits will suffer as well.

Process stability also affects productivity levels and capacity planning, making it an important consideration for any manufacturing operation. Lean and Six Sigma methodologies say a big part here.

Process Foundations

A manufacturing operation is a system that transforms the materials and energy resources of the environment into finished goods and services. Manufacturing operations are divided into three main areas: processes, support functions and information technology (IT). Each of these areas has an impact on how efficient and effective your production system can be.


Processes include all activities that transform raw materials into finished goods or services. The processes themselves may be physical or organizational in nature. Physical processes include material handling, assembly, machining, painting, testing, and packaging. Organisational processes include planning, scheduling, forecasting, and controlling.

Support Functions

Support functions provide products or services to internal or external customers but do not directly produce finished goods or services. They include purchasing; quality; maintenance; engineering; human resources; finance/accounting; EH&S; supply chain management/logistics; information technology (IT); marketing, sales and many more (the complete value chain!).

Information Technology (IT)

Information technology is required to support many of these activities including: process control systems for manufacturing operations such as machine tool controls and robotics; ERP / MRP.

Takeaway: Operations Systems Design enables organisations to optimize the alignment of their processes, resources, people, and information systems.

PS: If you need support with Operations Systems Design or Lean Implementation please do get in contact.

Processes, Growth and Scalability.

I’ve had a number of discussions this past few weeks regarding GROWTH and SCALABILITY.

One recurring theme is regarding processes, and when I mention that processes should be standardised, I get the normal “we’re growing and that one size standardisation doesn’t fit and this is a back-office environment

Process Standardisation

Let me explain, every business is individual and has its unique way of doing things, but that unique way can still be standardised. Having a room full of 20 Service Call Associates operating in their own way results in 20 different outputs and potential chaos.

If you were to standardise the process (optimised, least way way of doing things) written procedures, your 20 Associates now operate in the same way and give a repeatable, stable output.

This standard way, considers;

  • Tasks and activities
  • Decision points
  • Cycle times
  • Work in process
  • Flow time
  • Sequence
  • Loops
  • Travel / distance

Standardisation and Growth

A business has 555 calls coming into its service centre, it’s normal work hours/week are 37 hours (excluding breaks, etc).

Our TAKT Time

37 x 60 = 2220 mins/week

2220 / 555 = 4 mins TAKT

Let’s say our Standardised Process has a manual cycle time equalling 24mins

Therefore, our number of employees to match demand and capacity is

Total Manual Cycle Time/TAKT which is 24 / 4 = 6 Associates


our calls increase to 740/week so our TAKT = 3 mins

As our process is standardised this SCALABILITY is relatively easy to accommodate

24 / 3 = 8 Associates required


PS: these standard processes are TRANSFERABLE, think McDonalds.

Many thanks for viewing my post and would you please share it with anyone you feel would benefit from the advice provided. 

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Why you should do this when looking at Business Performance

Raising Performance is always a challenge (many a sleepless night) but it’s not just about getting it right in your manufacturing processes, it’s about looking at your business as a whole.

Recently, we were asked to support a £40m turnover company with an objective to reduce costs.

Now, although Reducing Costs (and in particular eliminating waste) is an excellent focus, you can sometime lose sight of what other advantages/opportunities there may be, new market opportunities, sales optimisation, finance, etc.

During our detailed business diagnostic, it became apparent that there were some fantastic opportunities to be realised with particular projects on Increasing Growth and Efficiency Savings.

With TCMUK’s Business Practitioners coaching and mentoring our customers internal team, a total of £700K+ efficiency savings, £1M in cash flow improvement and a 17% growth opportunity have been realised so far within the business, with further projects being highlighted for implementation over the next 2/3 years.

So remember, step back and look at the whole business not just the usual suspects (this goes for any size organisation) and you’ll be confident (and hopefully sleeping) knowing you are focused on the right things.

And don’t forget, if getting results like this is on your agenda and you’re looking for some sector expertise, call on 0330 311 2820

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The Process is the Problem and the Solution

Reality is invariably different from perception; few processes work the way we think they do. You will probably use a dozen business processes each day. For example:

  • Writing a report
  • Manufacturing a product
  • Managing a new client

You’ve likely come across the results of an inefficient process too,

  • Unhappy customers
  • Missed deadlines
  • Invoicing mistakes
  • Poor quality

That’s why it is so important to improve processes when they are not working well.

Now in the age of Technology Innovations we tend to throw IT systems in the work stream to improve the process, despite that often correct assumption, caution needs to be taken when implementing IT solutions. A common saying “shit in shit out” always springs to mind.

Our focus should always be to systemise processes, but remember the process is the solution and also the problem.

Process Analysis

Put it this way, in understanding a process recently, over 40% of production management time was chasing parts, that ripple effect is massive, (throwing a stone on one side of an ocean can cause a tidal wave on the other). Now in understanding the process we found that certain bits of information were being omitted. The business process is flawed. If we design the IT system without first understanding and optimising the process, the IT system we implement will be flawed as well.

It might make things easier, but long term, you’re never going to get the best results, because the underlying process isn’t up to scratch.

Based on our experience/research you can expect a 25%+ improvement within a process by focusing on optimisation.

So, fix your processes, then systemise them, because doing it the other way around will almost always cause headaches.

Process Improvement and Optimisation

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Recently I was asked by an MD if I could support in a situation that was causing them a lot of stress and pain with a customer, customers who’d have them…;0) but in this case get the issue sorted = increased sales volume.

The Customer was increasingly getting frustrated, but not with the actual product (the product, new material and manufacturing process were performing superbly).


For some customers (most to be fair) traceability is a key item which needs to be controlled, like anything both parties had their view, which generally fall into these two options

a) What you THINK it is…
b) And what it SHOULD be…

Documentation Process Map

It’s not very often we look at “what it ACTUALLY is”, one of my sayings is “we don’t see things as they are, we see things as we are and perception is invariably different from reality, few processes work the way we think they do”

So manage by fact, collect the data, highlight the outcomes and opportunities and put it right.

Hasten to add that’s exactly what we did, a SIPOC (Suppliers, Inputs, Process, Outputs, Customer) was completed along with documenting the current situation, analysing the data, removing the waste and optimising the process. Standard Work was created for the new operation with all parties trained to the new standard.

Now we have a happy relaxed(ish) stress-free GM and more importantly a Happy Customer willing to increase the volumes to the business, WIN WIN!

Business Focus:-

  • Customer Satisfaction
  • Do so profitably (but Customer Satisfaction is always at the fore)

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It’s getting to that time of year again for some of us, when we start to look at our half year performance or even looking to the operational budgets for the year to come.

The economic outlook is being driven by uncertainty (some of it in my opinion is the media plus others talking us into it, you’ve only got to look at the articles in the News to see it’s not all doom and gloom), we have to think positively in order to be successful.

I read an article recently from The Magic of Thinking Big, by David J. Schwartz. (here’s an extract)

Belief and wishful thinking are quite different. Wishful thinking will never spur you to action and as a result, your wishful thought will forever remain a wish. However, when you truly believe you can do it, the how to do it will reveal itself.

Strong belief in something allows your mind to figure out ways to accomplish what you believe. Belief is the driving force behind all great successes. For example, Edison wouldn’t have continued to try and try unless he really believed he could make the electric light bulb. Schwartz discovered that belief in success is the one universal, basic and essential characteristic behind all successful people.

The size of your success is determined by the size of your belief.

The distinguishing difference between a person who is going places and the individual who is struggling is the latter person’s habit of excuses. And one of the biggest hindrances to success is fear, and what do we always see in the papers, news, etc., FEAR!

Thinking dictates action! (David J. Schwartz)

I have witnessed colleagues thinking they are inferior to another and ultimately act like that as well. As David has pointed out, thinking dictates action.

Successful people think big and think creatively.

Creative thinking is nothing more than finding new and improved ways in what you need to achieve. Success is dependent upon using creative thinking to discover these improved ways; and as with most things, it can be learnt.

So whilst looking at your half year performance, your Operational Budgets, and or your Strategy for the coming months, think positively, think big, think what it is you need to achieve and find new ways to do things, learn from others. But definitely don’t FEAR it.

Worth a read: The Magic of Thinking Big, by David J. Schwartz.

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Problem Definition for Beginners

Back in 2006/7 I worked for Goodrich Aerospace as Group Continuous Improvement Manager, within my team I had a gentleman named Tim Holmes. Now Tim is one of those gentleman once met never forgotten, all for good reasons. His passion, intellect is second to none.

We had done a presentation on Standard Work to the Senior Leadership team and after the meeting Tim, Rob (Quality Manager) and myself got to talking. We knew Tim was a poet so we tasked him with creating a poem on Problem Definition something we could use in all of the conference rooms, training rooms, etc.

This was the result. Something I use regularly.

Problem Definition for Beginners

They say a well-defined problem is half way solved,
So if I want to fix an issue I get the right tool involved.
If I’ve got a problem that isn’t well defined
With lots of complex issues that keep racing round my mind
Or when there’s loads of data but I cannot find the proof
I know that there’s a solution there, but I just can’t see the truth.
Whenever I’m finding it difficult to focus my attention,
Or if I need help to understand and gain some comprehension,
I reach for a tool that’s simple to use and helps avoid contention
I break the problem into easy steps and ask myself 6 questions.
What precisely is it that’s wrong? is the first thing you should ask
I try to be exact here as it helps me in my task.
Where is the next one, as in where was it found?
This will help locate the issue and fix it to the ground.
Next up its When – as in what time of day,
I’ll also add the month & year to help me on my way.
Who is question number four, I need to know who found it?
Then I’ll know when I ‘go look see’ or need to talk around it.
The next question is five and the detail is Which? by way of demonstration
I’d like a specific requirement here, ideally a specification
Now finally I ask a How… to quantify the problem.
How many are wrong? Or even How was it found? And now I’m ready solve em.
This process will lend itself to any problem raised,
It will help us relieve that awful stress from out of our days.
‘Cause when you’ve got the all details, once your problems’ defined.
The picture should be much more clear, the solutions more easy to find;
Just work though the detail use logic… then pause,
For sooner or later you’ll find the root cause.
You see the answers to our troubles are never beyond our cognition,
They’re halfway over a little hill called Problem Definition

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Re-Thinking Being Lean?????

I’ve recently read articles on Lean Manufacturing and in particular how certain businesses have been re-thinking the implementation of Lean.

Now for a bit of background on the articles. All of the business Leaders that started the implementation had been replaced and within 6 months of them being replaced the new Leader had decided to drop the programme. Now most of the stakeholder’s state that their objective is to address the challenges to delivering high-value to the customer, mmmmmm I wonder? By agreeing to drop a programme of business improvement?

Yes, lean takes time, yes lean utilises the front-line workers, yes you have to manage it and believe in it, but Lean is a long term strategy, a set of principles on how you do business, your business DNA. I wonder sometimes with the drive for instant results in a short space of time, particularly from stakeholders, the impatience for money, dividends, investors ultimately see the Leader that introduced the programme removed. This leads me to believe that stakeholders/leaders are either, ignorant, arrogant, none the wiser or have their own interest at heart, on what long term strategy and Implementation actually and physically means. I have been told about the removal of 11 Operations Managers over a 18 month period due to perceived lack of results, you cannot be that wrong in your recruitment process (or perhaps you can but that’s a separate discussion), so leads me to believe it’s the level above that’s the issue.

Now don’t get me wrong, if your haemorrhaging money within operations due to scrap or process variation don’t go and implement a 5S programme. Instead stop the haemorrhaging by attacking the root causes for variation and scrap, get controllable and predictable outputs. 5S may be part of the implementation but it’s not the saviour.

I worked in a number of businesses in my career and still see the same issues regarding short term results oriented thinking that has cost millions (and yes I mean millions in some cases). When I actually know that had the Lean Initiative programme, Operational Excellence, etc. been executed and maintained when it started, those losses wouldn’t have appeared and would have been quite the opposite.

Cost cutting is often a major reason for ditching the latest programme, and Leaders think that through the force of their personality or financial acumen that they are going to be able to fix the business without the aid of every employee in the business, how foolish are they??????

Any Improvement Programme is not going to be easy, but the benefits are massive for everyone, it takes time but ‘time’ is not a reason not to try.

What did make me smile was one of the businesses new Leaders justified the termination of the programme due to that fact that the frontline workers were involved, but in involving them had potentially reduced turnover times by 6.5 mins which equated into £410000/year of increased revenue.

Lean Manufacturing, business Improvement, whatever you call it, is not a short term strategy, but that’s not a reason not to pursue it.

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Sales: Just who is undermining performance?

Sales – the good guys or good for nothing? I guess it depends on your perspective, I have certainly heard both views, and whilst in Sales been the target of those and worse comments too. Personally during my tenure in the function and since, whilst I have come across the odd “rogue trader” more interested in his/her expense account than the success of his/her company, almost without exception I have found sales people to be dedicated, motivated individuals, driven almost without exception to succeed. What I have also found time and time again is sales organisations and processes that were well and truly broken with the Sales people taking the blame for a systematic failure in a company’s processes.

A few months ago Adam and I completed an assignment for a UK company, where the problem definition was something along the lines of “The ONLY problem is that the sales team are hopeless, they never go and see their customers” and on first inspection we found that indeed if the Sales team were out more than 1 day per week, then that was the exception.

However, having completed a process map, taking a typical opportunity through enquiry to order and delivery it soon became clear why this perception held – in fact the Sales team it appeared had taken it on themselves to manage the whole process, not only estimating the jobs, but project managing them through engineering, progress chasing through manufacture, even buying and organising site installation. What was worse was that everyone else including the management had let them and had abdicated all responsibility themselves, more than happy to point the finger at the Sales team when things went wrong. It was an absolute miracle that Sales ever went to see a customer at all, let alone grow the business. To be fair having had the scenario explained to them the senior management took on board our findings and re-engineered the organisation from top to bottom, allowing the sales team to let go of the internal processes, confident that they would be supported whilst out facing the customer.

When considering your organisation, remember – Sales people are employed to sell, and that it does not matter how good your operation is or how clever your design, without orders your business will die. Orders are the output of a process. A process that transforms prospects into orders.

If the process is optimised, it will be efficient, effective and create value for your customers and your business. If not, it will destroy value.

Richard Shaw – Business Practitioner

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One of the Least used Tools – Standardised Work

Standardised Work is one of the most powerful but least used tools within business, yet it is one of the foundations to Lean Manufacturing

From my experience “without standards we do not have continuous improvement only chaos”.

The declarations I have heard, “we don’t make cars”, “You see, we are different”, “We’re unique….this isn’t an assembly line!

My response to such statements is “everyone works a process that process can either be destroying or creating value added for the customer, which would you rather it be. Whether you’re building cars or delivering life-saving patient care, it takes a sequence of highly coordinated tasks and processes to deliver the end result. When this sequence of tasks is standardised, you’re on your way to fundamentally improving and eliminating significant sources of waste.

Standardised work is the simple understanding that every task that can be repeated requires a written instruction of the most efficient and effective way to complete it to the highest quality Standard. We then use the selected standard work process each time the task is performed ensuring that the same results are achieved, in the same amount of time, regardless of who completes the task.

Now, we must understand here that the first step is to document what the current best practice is, this may be not be delivering the outcome you require currently, but without first understanding, how will you control any changes and what improvements have had what effect? We can’t, it would be guess work!

Key Elements of Standard Work

  • TAKT
  • Process Capacity Table
  • Work Combination Table
  • Work Layout
  • Standard Operating Procedure

Standard Work Documents

Takt Time – “Takt” is a German word which refers to the pace or beat of a musical composition, the metronome. The calculation of Takt time gives us the rate of production for meeting customer demand

Work sequence – “The time for an employee to do a prescribed task and return to his original stance.” – Taiichi Ohno
Standard inventory – In manufacturing this refers to parts, but in other sectors it can refer to applications, data inputs or other resources necessary to perform the job.

Bear in mind the following

Involve employees in the process – they are the ones who determine the best practice for each task. This also helps ensure engagement and ultimately adherence to the standard work.

Focus on the details – it must be in-depth to be useful in reducing variation. No detail should be omitted. Even the little nuances need to be understood, these are improvements that can be engineered out. (I can remember a process I worked with where the Associate had to lean on one part for the other part to fit, a stack up of tolerances had occurred. This knack had to be written in the standard work until we could engineer it out, imagine the amount of lost time/production if others weren’t aware of this)

Use visuals – Images, photographs, diagrams and examples will help bring your standard work definition to life and increase the likelihood of consistent compliance. A picture is worth a 1000 words.

Make it accessible – The documentation must be accessible at the time and place that the work is to be performed.

Innovate – While you don’t want employees deviating from the standard work process, there must be a method to give consideration to changes when new conditions or new ideas warrant revision. A governance process will increase the likelihood that changes will be analysed and approved rather than being implemented ad-hoc.


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