Scaling Up Manufacturing and Engineering Operations to Support Business Growth

As a business grows, it tends to outgrow its operations. The work on the sales and marketing side of the business outpaces the ability of the engineering and manufacturing organizations to meet the new customer demands. Even if there is a plan for product evolution, it is difficult to manage the timing and changes on the manufacturing side and the product support required within the engineering organization.

Duplicating what you have as you grow eventually fails. Design your processes for the capacity and capability you intend to deliver.

When production demand grows from a few to dozens to hundreds to thousands, manufacturing requires different methods to maintain quality, delivery, and profitability. It is often not as simple as progressively adding more people or more equipment. The greater volume requires new technology and new controls. These changes drive product design changes as well as production and procurement changes. Entirely new systems drive the fulfillment side of the business.

For enterprise-wide scaling up advice, check out Verne Harnish’s work at www.gazelles.com. Preparing your business to grow repeatedly by leaps and bounds requires intentional efforts across your people, your strategy, your business execution, and cash flow management. Mr. Harnish and his team lay out a systematic approach to working through these four elements to support each jump from your current situation to your new 2X-10X state.

When designing the next stage of your operation, follow Stephen Covey’s advice:

“Begin with the end in mind.” Stephen Covey

Your Next Target™ example

Next Target’s approach is to develop with you an assessment across eight measures of operational excellence. Wherever the gap is most painful is where we start. Next Target applies a systematic approach to understand the current situation, identify the root cause for the condition, develop a countermeasure, and implement and assess the impact of the solution. This allows your organization to participate in developing the solution and carrying it forward to support your next leap.

A manufacturer of handheld instruments launched a new product line of refrigerator-sized cabinets. The change required a completely new way of thinking about part storage, product assembly, and shipping. They needed a lot more space! They typically shipped their instruments in 2-5 days of the receipt of the order. Their standard lead time for the cabinets was 4 weeks. Their customers did not appreciate this longer lead time. The slower turnover created challenges for the operation including sub-assembly construction and storage.

Initial Assessment

After Improvements

In an ideal situation, the operation would perform at a top rating across all measures of operational excellence. All legs of the spider diagram would fall on the green line. In this case, the initial assessment process allowed the manufacturer to see where the current condition was falling short of expectations – lead time was far too long, standardized work in assembly was weak, and quality was problematic. The biggest issue affecting all three of these areas was managing the flow of materials into production and then the assembly process prior to delivery. The goal set by leadership was to decrease lead time by 75% while doubling production volume.

Building to demand helped to eliminate overburden and overproduction in the assembly cell. This also reduced and leveled the demand for key suppliers making it easier for them to keep up with requirements. They eliminated most subassemblies. Less work in process allowed standardization of the assembly steps.

The result was a product delivered in less than one week, if material was available. The company came through for customers who needed immediate product delivery. Internally, inventory dropped by half and relations with suppliers improved.