Course Description

Running a manufacturing plant is not easy. There are hundreds of things that can happen each day. Events surrounding issues like wasted materials, efficiency, flexibility, overtime, lack of employee buy-in and health & safety can all have an adverse effect on the plant’s profitability.

Your ability to control costs, whether it’s through better handling of MRO (Maintenance, Repair & Operating supplies), more efficient utilization of equipment, or having a more effective workforce, all affect the ultimate success of your plant.

5 to 6 hours, participants will run a plant for three simulated years. In the process they will explore areas such as cash flow, production efficiency, the development of more efficient supplier relations, forecasting and increasing the efficiency of your manufacturing processes. You may also have your operations interrupted by activities such as waste, spiraling costs and plant health & safety issues. How you handle these events will determine how successful you will be in driving profitability within your plant.

Paticipants’r objective by the end of the third year is to be as efficient and as profitable as possible.

There are multiple areas where you can impact positive change and have an impact on both cash flow and operational excellence:

1.	Supplier relationships and purchasing control - Previously you had a longstanding contract with your supplier. That contract has now ended. How do you want to proceed with issuing purchase orders and receiving raw materials?
2.	Efficiency of manufacturing lines – How can you make your lines more efficient? Your options include: • building a new line. • converting your existing lines over to a more efficient line. Keep in mind you need to continue to manufacture product to meet your production orders (see forecast) while you make improvements to your manufacturing facilities. Consider the timing required to make this happen.
3.	Timing of your order deliveries Consider how you can speed up your cash flow as you deliver orders so you have the cash available as you need it.
4.	Running overtime or not – You can run overtime on your existing Efficiency 2 lines. But remember, there is a cost to running overtime – both production cost and equipment wear and tear.

Manufacturing Efficiency

In Cash Flow participants choose between Platform A and B and Efficiency Levels 1 and 2.

The less efficient the line, the longer it takes to produce your products. You may consider upgrading your Efficiency. Also, you need to remember that production costs and raw materials are considered constant costs. If you are going to make money in your operation, you need to have an efficient means to produce your product.

Manufacturing Flexibility

If Manufacturing Efficiency refers to how fast we can produce our products, then Manufacturing Flexibility refers to how many different products we can produce on the same line. There is financial investment associated with acquiring the know-how for flexible manufacturing which is recorded in overhead under Flexibility.

Flexible line – able to produce either Platform A or Platform B

Platform Changeover

Platform Changeover costs occur every time you switch a line from one platform over to another. For example, let’s say you switch line 1 from Platform A to Platform B. The retooling of the line requires the line to be out of production for one quarter and it costs 1 for the retooling. This is called Platform Changeover cost.

The payoff is an Action Planning step which will connect participant’s actions to their employers strategy and tactics. In effect creating employees that have learned to think and act like owners of the business.

Overtime

If you choose to run overtime on your Efficiency 2 lines, there is additional production cost to do that as well as added wear and tear on the equipment. To run overtime, you may place a carrier on each open section of the line. Each product must move through both positions on the line, one position per quarter.