Manufacturing Project Profitability
In three separate one-half day conversations at your manufacturing facility this course will provide simple, readily implementable tools and techniques to enable plant operators, finance, sales, and purchasing teams to evaluate project or SKU profitability by measuring gross margin per hour. The course will apply principles and tools to your specific plant project. The process and practical case study/experience provided by the instructor will enhance throughput and help to eliminate communication silos.
This course is provided by request and scheduled individually with the participant. When registering, you will be asked to provide a tentative date and complete a short survey. Program staff will follow up to finalize your time and ensure you can benefit from the course based on your survey response.Dates + Registration
Who Should Attend?
This course is aimed at plant managers, operations managers, purchasing, sales, and finance managers attending together for each half day session.
- Evaluate projects and product lines by gross margin per hour with surprising results leading to bid confidence and better decisions about which projects to pursue for plant profitability and which projects to turn away
- Evaluate and establish reasons for downtime with accompanying metrics
- Motivate cross-functional personnel to eliminate conflict and communication silos and the "domino effect" by collaborating to pursue the right projects and plant materials for superior throughput and on-time performance
- Identify and apply root causes to operational bottlenecks and raw material quality to enhance profit per hour and overall project profitability
- Ensure “win-win” customer conversations
- Assess outcome of live project and present to group in A3 format (problem, ideal outcome, actual outcome) 6 weeks after the course finishes
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DAY 1: 8 a.m.-Noon
- Discussion: Identifying the problem with plant product/project productivity
- Live Case: Revealing how profit per hour enhances project profitability in manufacturing operations
- Identifying project/order “Cash Cows, Rising Stars, and Dogs" by quantifying gross margin per hour and strategic intent
- The Metrics: How to measure gross margin (profit) per hour
- Bottlenecks and Constraints: Steps to enhancing throughput
- Break the Silos: Destroying the cross-functional domino effect
- Using the Tool: Identifying and entering your plant project variables
- Overall Equipment Efficiency: Revealing results
- Taking Action: Preparing your plant project to measure gross margin per hour as homework among your team with provided tool.
- IMPLEMENTATION SCHEDULE: SET THE DATE
DAY 2: 8 a.m.-Noon
- Implement Gross Margin per Hour : Coach Curt Petrich will assist with Day 1 implementation
- Staff will continue for four weeks documenting one hour(or ½ hour) intervals toward six key variables:
- Plant Operating
- Planned Shutdown
- First Time Quality Miss
DAY 3: 8 a.m.-Noon | A3 Presentation summarizing progress and discussion
The purpose of this day is to bring concepts learned in class to life and learn from each other. Each organization will give a 15 minute presentation following the format below.
- Practical principles to approach and resolve conflict and negotiate to positive outcome with vendors, customers, employees. Bring your conflict scenario.
- Position Beyond Price: De-commoditize your product to create value
- Changing the Conversation with the Customer: The “win-win” approach
The purpose of this day is to present results from our project implementation.
- Current situation
- Definition of ideal outcome
- Actions to achieve ideal outcome
The course will apply principles and tools to a live plant project, so please arrive with:
- Sample sales order/project sheet, including COGS and shrink
- Estimated hours to produce a sample order
- Direct cost for the sample order
- Typical “bottlenecks” for discussion
Suggested reading: The Goal: A Process of Ongoing Improvement by Goldratt, Eliyahu M.; Cox, Jeff; Whitford, David
Curt Petrich - Partner, HCI International
As a former vice president of international sales and genetics, and vice president of operations for the raw material segment of a leading global food processing and packaging company operating over 30 plants with 1800 employees worldwide, Curt changed the way plant operators, purchasing, and sales personnel, evaluate project/customer profitability with stunning results. Watch as he reveals his formula, metrics, reports, and communication strategy for manufacturing success across products, functions, vendors, and customers. Curt will be joined by industry experts who will discuss plant challenges and expertise pertinent to the class.
I thought the manufacturing productivity course was great. I had been bringing up this exact topic for some time here. I hope it got operations and accounting thinking in terms of better metrics and profitability analysis.”
- Brian K. Andrew, VP of Sales and Marketing, Dakota Specialty Milling
Thinking in profit per hour helps align objectives for the organization. This is critical, because different productivity initiatives often have different goals, which can conflict with one another. It generates a quantitative—and thus definitive—answer to the question of which measures should be organizational priorities.
- Markus Hammer, senior expert and Ken Somers, master expert at McKinsey