| ManEx Minute - 21 - Performance Tracking |
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"It is wiser to find out than suppose."
-Mark Twain
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April, 15 2009
Issue 21
Dear David,
We have released our new website. It has a much better layout and makes it easier to access the information you need. One of the new features is the full case archive from these newsletters. You can check it out here. As soon as the newsletter is published, the case and solutions will be available on this site. This will also make it easier to reference past cases and solutions.
This issue focuses on performance tracking. Although material makes up the majority of the COGS in this industry, labor is a significant factor in profitability. If a company doesn't track labor performance, how can they know if they are making money or need to make improvements?
In our most recent survey, only 18% of you do not track actual time on a job. However, 54% do all tracking on paper. Perhaps this is why over 36% don't know if or how much of a variation each job has between expected and actual labor.
This case study should help identify methods for tracking and comparing production times with expectations.
As always, we look forward to your participation and feedback as you gain new insights and become a more effective provider of Electronic Manufacturing Services.
Sincerely,
David Sharp
ManEx, Inc.
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 Business Case - Production Control |
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Performance Tracking
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North Eastern Company (NE Company)* finished their first quarter with a moderate increase in shipped orders. Management was pleased to see this improvement. However, their profit margin was smaller than they expected.
Upon further investigation, they confirmed that materials were within acceptable limits and should not have adversely affected their profit margin. They suspected that labor may have affected their bottom line, but had to wait for the numbers to be compiled and analyzed.
How can NE Company efficiently track time spent per employee on each job? What tools can they use to report on the performance? How can they compare the actual results with expected results? If they identify a discrepancy, what is the best course of action?
*Name has been changed
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Business Case Solutions
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The choice between adding intelligence to Work Order Numbers and letting the system maintain the numbers may not be as obvious as it first appears. Companies must weigh the "costs" of each method and determine if they are greater than the benefits and savings created.
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ManEx Case Solution
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ManEx will allow users to control Work Order Numbers both manually and automatically. Users are able to switch back and forth between the methods as needed.
Read the full ManEx Case Solution >>
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Performance Tracking
"We only [track production performance] occasionally on jobs that we think we are losing money based on feedback from production or if we bill time and material on certain rework type of jobs."
- Peter, WA
"[Our] variance is typically tight as we use past history performance as a target on repeat orders. However new orders, with no available tracking history, can look much different."
- Nick, OH
"When we first implemented [performance tracking], we actually re-quoted everything and even dropped non-profitable customers.
By simplifying data collection we can increase the amount of data that we actually collect.
The scanner operation has to be simple, and quick, and provide intelligent feedback to the scanner. It must be divorced from the GUI.
It must be able to track multi-tasked activities and be smart enough to know when to log off an activity by the activity that was started.
Time tracking and time and attendance must be integrated."
-Bob, UT
"That information is then entered into a third party system. That system does the comparison of times and shows us where we lost/gain.
The biggest issue we see is the times are not always accurate. The employee may fudge the time or completely forget to record it and guess later on. The other issue is it is labor intensive to enter all of these results in the third party system."
-Todd, MI
"We are currently embarking on a project to review our overall system used for quoting and time tracking. We have three goals in mind: consistency, accuracy, and the ability to easily track variances.
Over the last year we have methodically squashed homegrown systems and found ways to fulfill the requirements by integrating into ManEx or our Aegis system. Quoting and time tracking are the last hurdles."
-Tom, WA
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Please share your ideas and insights on a topic below. Use the questions to direct your response. You can submit your thoughts to mym@manex.com by clicking the topic title. Where appropriate and space permitting, we will post responses in a future newsletter so all may benefit.
Part Cross Reference
When and why do you have multiple instances of the same part in your item master?
If you duplicate a part, how do you tie it to the original?
How often do you need to cross between parts?
How long does it take to identify a matching or related part in your item master?
What is your biggest issue with crossing parts?
Minimum Purchases and Residual Inventory
How do you plan for residual inventory?
Do you charge the customer for the full reel?
Who owns the residual inventory at your facility?
How long does residual inventory stay on your shelves?
What is your biggest issue with residual inventory?
To suggest a new topic please send an email to mym@manex.com.
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©2008 All Rights Reserved.
ManEx Minute is a bi-weekly email distributed by ManEx, Inc. |
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| Article ID: 3297 |
