Tag: Material Handling

The Art of Solving Material Handling Problems

How do you solve material handling problems in your business? Often the people charged with solving a problem on the floor or in the plant have no experience actually performing the tasks that are involved. The biggest hindrance to problem solving in business or industry can be management’s tendency to rely strictly on reports and charts. Sometimes you just have to get your hands dirty. 

As they say, there’s no substitute for experience. For instance, say you want to improve order picking productivity. In most operations, pickers spend 60% of their time walking. Obviously, measures that will reduce walking time will increase productivity. On paper transport routes can be planned, inventory placement can be allocated, cart loads can be configured and assembly points can be designated to presumably increase worker efficiency. On paper everything can look great, but on the floor reality can sabotage the best laid plans.

We’re not saying planning isn’t important. Of course it is. But it should be considered a starting point, not an end product. Before final implementation, you should take your plans for a test drive. Give ideology and reality a chance to meet. You’ll usually find that when put into practice paper plans need some serious tweaking to ensure that they achieve the desired results.

In our order picking example, picking items may not actually be located where expected due to warehouse concerns or overstock issues. In the picking area, items may not be optimally located. Picking bins may require workers to reach or stretch unnaturally, risking potential injury and decreasing productivity. Individual productivity can vary greatly between workers, particularly between seasoned and new employees. Picking items may not be transported to pick areas at an optimal rate. Transport surfaces can present their own challenges. Rough or sloped surfaces can decrease efficient transport. Batch sizes may not be optimally configured. Large batches or items may require transport on multiple carts. Reconfiguration to optimize cart loads can increase efficiency and productivity. While these issues may not be obvious on paper, they are obvious in practice and present considerable obstacles to efficiency and productivity.

Next time you work to solve a material handling problem in your business, spend some time walking in the shoes of your workers before you implement a final solution. It’s a sure way to guarantee success.

Recession Over but We’re Not Out of Woods Yet

Today’s headline blared: “Recession officially ends, with trepidation.” Ain’t that the truth! In officially declaring the recession over, the U.S. Commerce Department cited a 3.5% growth in the economy. Encouraging, certainly. Something to cheer about? Apparently Wall Street thought so as the Dow Jones Industrial average shot up nearly 200 points. But the guy or gal on the street? Maybe not so much. The effect seems more psychological than actual. Economists caution that much of the 3.5% increase in gross domestic product was fueled by the government’s Cash for Clunkers program and first-time homebuyers tax credit. Whether those programs have created an unnatural spike in economic growth that can’t be maintained or the economy really is finally throwing off the chill of recession, only time will tell. But until unemployment decreases, most analysts agree we’re not out of the woods yet.

Getting people back to work is the real challenge now. People aren’t going to start buying again — the necessary trigger for real economic improvement — until they have jobs and can stop worrying about keeping food on the table and a roof over their heads. And the jobs won’t be there until American businesses feel comfortable financially. A bit of a vicious circle: consumer purchasing fuels businesses which fuel jobs. Traditionally, small businesses provide the greatest potential for U.S. job growth; so it was interesting to read the results of the American Express OPEN Small Business Monitor bi-annual survey in Manufacturing & Technology eJournal.

Here are some of the survey highlights:

  • 51% of manufacturers have a positive outlook, about the same as last year (52%)
  • 61% are experiencing serious cash flow difficulties, compared to 47% a year ago
  • only 22% plan to hire additional employees, down from 30% six months ago 
  • only 36% are planning capital investments, down from 59% in 2008
  • 68% think U.S. economic woes are far from over

DJ Products would like to know what you think and how your business is coping with the recession.

Part 1: Why Businesses Fail

Almost daily I read about the failure of one business or another in the business section of my local newspaper. The economy is down, credit is tight and fuel prices are through the roof. Naturally these conditions place an additional strain on businesses. But generally when a business fails there were already underlying fissures in its structural foundation that caused it to crack and break under the pressure.

Businesses fail for many reasons, the most likely being one or a combination of the following:

  • Lack of a business plan or failure to update the business plan to account for changes in the industry, economy and society. Business is not static. You should review your business plan annually and adjust it to take advantage of changing markets, new products and technologies, financial incentives, and customer preferences.
  • Lack of current financial data or failure to fully understand financial reports. Finance is the language of business. You don’t have to be able to write it (that’s why you have an accountant or CFO, but you do have to be able to correctly read and understand financial statements.
  • Lack of capital. If you’re starting a business, minimum start-up capital should be enough to cover your first six months of operation. However, once you’re up and running, don’t confuse capital with operating funds or cash flow. Growth capital should be used to grow, improve and expand your business. You should generate enough monthly income to provide a healthy cash flow and cover operating expenses. If your business is in trouble, borrowing more money isn’t the answer. If you can’t service your current debt load, you won’t be able to service an increased debt load.

To be continued

Manufacturing Rebound Glimmers on the Horizon

With the dawn of a new political era in Washington, U.S. industry experts are cautiously predicting that manufacturing’s darkest days are over and that a rebound can be expected within the next six months. Analysts seem to agree that the Institute for Supply Management Index (ISM) finally bottomed out and will now begin to grow.

“Much depends on some proposed government actions and the reaction of the financial community,” Chris Kuehl, an economic analyst for the Fabricators and Manufacturers Association, told writer Joe Cogliano in the January 6, 2009 edition of Manufacturing & Technology eJournal, “but assuming that the credit crisis continues to diminish there will be some recovery in certain sectors.”

In anticipation of President Obama’s promised economic initiatives to create jobs, rebuild infrastructure and move to alternative fuels, Kuehl expects businesses that supply construction material and machinery and those in energy development to lead the recovery. He said that media saturation about the dire straights of the automotive and construction industries has obscured any good news about the state of U.S. manufacturing. He noted that medical manufacturing has actually grown during the recession and that the aerospace industry has held firm. 

A double digit production decline in the 4th quarter of 2008 is expected to be manufacturing’s low point. The National Association of Manufacturers (NAM) predicts a continued but gradually decreasing decline across most industry sectors for the first three quarters of 2009 before the advent of slowly rising numbers. NAM expects the final months of 2009 to bring a 1.4% increase in manufacturing rates.

Experts agree that while economic downturns take a toll on industry, they also serve to cull out weak, mismanaged and antiquated companies. Those that survive are stronger, more efficient, more resource conscious and more productive. On a larger scale, benefits of the economic crisis include a new era of better risk and credit management by both lenders and borrowers, new avenues of industrial growth, and deeper understanding and a necessary re-evaluation of global trading relationships and their impact on U.S. economy.

“The challenge for all of us is to determine if this is a ‘disaster’ or an ‘opportunity,'” Norbert Ore, Chair of the Institute for Supply Management’s Manufacturing Business Survey Committee told Manufacturing & Technology eJournal. “If we choose disaster, we will be paralyzed during a period of great change, and we will assume that there is little hope of prosperity for ourselves and our organizations. If we choose opportunity, we can view this as the time to face challenges head on and find more productive ways to create value for ourselves and society.”

Six Sigma + Ergonomics = Productivity Gains

Implementation of a comprehensive ergonomics program is often initiated by a business for the obvious safety and financial benefits realized in reduced workplace injuries and their attendant costs. What many business owners fail to realize are the significant productivity gains possible when ergonomic practices and ergonomically-designed equipment are adopted. Businesses that practice Six Sigma have been quick to see the potential for sustained productivity gains when ergonomics are integrated into workplace practices.

Utilization of the 5-step Six Sigma process can help a business build a successful and sustainable ergonomics program that will not only produce impressive immediate production gains, but sustain and continue to improve those results over the long-term. Six Sigma practitioners have found that adoption of ergonomic practices and use of ergonomic equipment optimizes worker performance, reduces production cycle time, increases cost competitiveness, and empowers workers. The end result is increased production, improved product quality, a happier workforce committed to improvement, and a satisfyingly positive impact on your bottom line.

Six Sigma’s disciplined, process-oriented approach to problem solving involves five steps that are easily applied to development of a comprehensive ergonomics program:

Define. It’s important to know what you’re working toward, so the Six Sigma process begins by establishing the goals to be achieved. Clearly define the problems to be addressed by reviewing injury, illness and workers’ compensation claim data for commonalities. Production bottlenecks, quality issues, rework costs, and warranty costs are other problem indicators. Don’t neglect the important area of staff morale. High absenteeism is indicative of low morale. After defining problem areas, establish specific goals for improvement in each area. You’ll also need to determine tracking metrics and establish support and educational resources.

Measure. In order to correctly measure improvement, you need to pinpoint your starting point. Collect information about your workers and their abilities. Define the parameters and potential risk of each task, paying particular attention to potential stressors, including site lines, posture, reach required, force expended, repetition, vibration, noise levels, work environment temperature, etc. Collect data about the individual steps required to perform each task.

Analyze. Analyze the data collected to discover the root cause of each problem. Evaluate and identify risks associated with each task. Don’t neglect to talk to the workers who actually perform each task. They can provide astute insight into what works, what doesn’t and how to improve the situation. Before implementation, carefully evaluate potential process improvements, equipment and tools for their ability to solve the problem as well as risk potential. Determine and prioritize improvements to be introduced into the workplace.

To be continued Friday

Part 2: Why Businesses Fail

The economic slowdown, tight credit and high fuel costs are placing a sometimes fatal strain on businesses. This week we’re taking a look at why businesses fail. Those who learn from the unfortunate mistakes of others are more likely to succeed.  

Continuing our list from Monday of the most likely reasons businesses fail:

  • Inadequate sales. Inaccurate market analysis can lead to inadequate or inappropriate marketing/sales efforts. A business’ potential market share equals the total market potential for your product or service divided by the total number of competitors in your market area. When sales volume exceeds normal market share, you achieve market dominance and move beyond the break-even point into profit. Naturally, this is every businessman’s goal. While sales are the key barometer of business success, base business decisions on weekly and monthly averages, not daily volume. It’s business trends that drive future sales so concentrate on longer-term market analysis. 
  • High expenses. Failure to properly anticipate and budget potential expenses, failure to adequately control expenses and/or failure to constantly review and update purchasing/service contracts are all common money pits. Expenses should ever exceed income. Never consider any expense as fixed; every expense is negotiable. Be prudent in your purchasing policies. Stockpiling supplies, buying additional product already in stock and failing to decrease order quantities as demand decreases are common mistakes. Limit buying to what you need, what you’re using and what will increase sales.
  • Poor credit policies. Credit keeps business clicking along, but over-extended credit can lead to bankruptcy, particularly in today’s economy. Maintain good credit policies in your own borrowing and be clear about credit policies to customers. Clearly communicate credit policies to customers before finalizing a sale and don’t continue to offer credit to slow-paying customers. You could be left holding the bag.

To be continued

Proactive Problem Solving Reduces Workplace Injuries

Reducing workplace injuries is every responsible business owner’s goal. Not only do you value your employees’ health and safety, but the cost of ignoring workplace safety — high medical, insurance, workers’ compensation and lost man-hour costs — can be staggering. It pays to be proactive in looking for potential injury-causing problems and coming up with ergonomic solutions that improve the fit between the work and the worker.

Developing a proactive plan to reduce workplace injuries is a four-step process:

  1. Observe and question
  2. Set priorities
  3. Implement improvements
  4. Follow up

1. Observe and question.

Look for clues to possible problem areas in available statistical data. Check injury reports for patterns that indicate higher injury rates for certain tasks or in certain areas. OSHA logs, worker reports and complaints, absence rates, and workers’ compensation reports are good starting points. Ask if your workers’ compensation insurance carrier provides workplace assessment surveys as part of their risk-management services.  

Look at production reports for bottleneck areas. Check quality control reports for poor quality product or service. Problems can indicate areas where workers are having difficulty completing tasks effectively under current conditions. The root cause of such problems is often poorly designed equipment or task procedures.

Spend some time following the entire process of your business from start to finish. Pay particular attention to areas highlighted by the data review. Observe the way workers do their jobs. Watch for risk factors such as awkward postures, repetitive motions, forceful exertions, pressure points or extended periods spent in the same position. Watch for signs of worker discomfort or pain such as self-restricting movements, efforts not to move certain body parts or massaging hands, arms, legs, necks or backs. Pay attention to unnecessary handling and duplication of material or product movement.

Look for ways in which workers have modified standard procedures to make it easier to do their work, including modifications to tools, equipment, workstations or task performance. Talk to managers but also talk to the workers who actually perform the tasks. Ask workers how they would change the work process, operations, tools or equipment to make their jobs less physically demanding and more efficient. You’ll get a clear idea of what isn’t working and may get some excellent suggestions for improvement.

Continued next time

Part 3: Why Businesses Fail

The business section of the newspaper seems to carry daily notices of failing businesses. Despite tighter requirements, bankruptcies are up. Businesses are succumbing to a combination of the economic slowdown, tighter credit and high fuel costs. Today we continue our series on why businesses fail (see our July 14 and 16 posts).

Most business fail for a combination of reasons, including:

  • Poor collection practices. It’s not enough to make the sale; you have to collect the money. While this should be obvious, many businesses fail to initiate or maintain good collection practices. Just like sales, collections should be a daily task. The biggest mistake many businessmen make is to allow late accounts to go too long before starting the collection process. Many customers will take advantage of the traditional 30-, 60-,  90-day payment schedule. Try aging your accounts receivable by the 15th and month end or even weekly. The sooner you start collections, the better the chance of collecting and the faster your money turns over.
  • Lack of experience in basic business know-how. On-the-job experience is an effective teacher, but the lessons can be costly. Develop an ability to learn from the experiences of others. Education, keeping up with industry journals and publications and attending professional conferences and seminars can offset a lack of personal experience. Meeting with other businessmen through professional organizations or social/community service groups provides a valuable opportunity to discuss common business problems and issues.
  • Poor location. For retail businesses that depend upon walk-in or drive-by trade, poor location can be disastrous. Manufacturing and industrial concerns require easy access to freeways and other transportation routes for both delivery of raw materials and shipment of finished product. Convenience and visibility are key. 

    To be continued

Does Obama Have Muscle to Win Ergonomics Fight?

Like actor Mickey Rourke’s amazing return to the Hollywood ring in The Wrestler, labor is back; and President Obama is in its corner cheering its revival. After eight years struggling on the ropes during the Bush administration, labor has bounced back into the Washington ring and is gaining strength — and it’s bringing the ergonomics fight with it.

“I do not view the labor movement as part of the problem; to me it’s part of the solution,” President Obama was widely quoted as saying recently. During his campaign, Obama repeatedly promised American workers a safer, healthier work environment. Industry watchers have taken that to mean a return to and an expansion of the ergonomic standards initiated during the Clinton administration but quickly rescinded under Bush. With a Democratic-controlled Congress backing him up, Obama appears to have the muscle to force ergonomics back into the legislative ring.

By naming California Democratic Representative Hilda Solis as his new Labor Secretary, Obama appears to be saying to U.S. industry and the U.S. Chamber of Commerce, a long-time vocal foe of ergonomics legislation, “Bring it on!” Although she’s still running the confirmation gauntlet, Solis has received the recommendation of the Senate Health, Education, Labor and Pensions Committee and is expected to be confirmed, possibly as soon as tomorrow.

The daughter of immigrants and union workers, Solis has long ties to labor groups and has been a champion of ergonomics in the workplace since joining the House of Representatives in 2001. Her home state of California is the only state in the U.S. that mandates ergonomic standards that force employers to provide a safe and healthy work environment for their workers. Concerned about the cost of implementing ergonomic standards, those opposed to ergonomic legislation fear that California’s tough ergonomics rules will be used to create a national model.

That Obama would eventually grapple with ergonomics to improve labor conditions has been a given since his campaign days. But there’s been a lot of speculation in the industry and in Washington about how and when Obama would try to take down ergonomic opponents. By calling Solis into his corner, Obama seems to be getting ready to enter the ring. It will be interesting to listen to the President’s State of the Union speech tomorrow night. A direct statement about ergonomics or workplace safety could indicate that the fight is on!

Logistics Industry Down But Not Out

Considering the state of the economy, it’s not unexpected that the logistics industry is suffering along with everyone else. According to the recently released Global Contract Logistics 2009 report published by Transport Intelligence, the global contract logistics market grew at a rate of 5% in 2008, half the 10% growth experienced in each of the past few years. Of greatest concern was the noticeable drop in volume during the fourth quarter, generally considered the industry’s peak season.

“This downturn has been felt well into 2009, although there are signs that the fall in volumes may well have bottomed out by the end of the first quarter, the report suggests,” logistics industry analyst Ken Hurst noted in today’s posting on Works Management online.

Increasing, global reach provides the greatest opportunity for future success in the logistics industry, particularly when U.S. markets go stale. Developing markets in Latin America, Central and Eastern Europe and the Asian Pacific region offer the most opportunity for future growth, according to the Ti report. While the China market has cooled recently, Hurst expects it to rebound, saying, “… with GDP growth still in the high single digits, and a $585 billion stimulus package taking effect, underlying economic activity will continue to drive its [China’s] logistics sector.”

The report predicts five more years of volatile swings in the logistics industry worldwide with significant recovery not predicted until 2011. Rebuilding is expected to be agonizingly slow. According to Hurst’s post, “Ti believes that the market will grow at a compound annual rate of 2.4% between 2009 and 2012.” Stabilization of the industry will depend on the speed with which global sales increase. Until consumer confidence returns and drives up demand for goods, manufacturers and retailers will continue to keep supply costs lean. Because of its position at the tail end of the supply chain, the logistics industry may be one of the final economic sectors to achieve recovery. While contractual relationships will protect some logistics companies from the worst market volatility, “logistics providers will have to work hard at increasing their value proposition to clients if they are to avoid the worst excesses of the recession,” John Manners-Bell, Ti CEO told Hurst.