Friday, September 25, 2015

New Laws, Safer Foods

Since 2011, when President Obama signed the Food Safety Modernization Act into law, both the
food industry and the world waited for a glimpse of the final regulations. Following numerous revisions and delays throughout the years, the FDA released the first two of seven proposed rules this month. The last five should be finalized and released by the end of 2016.

WHAT THE FOOD SAFETY MODERNIZATION ACT MEANS FOR YOU
Less Food Recalls
First, food processors will be required to have plans in place to improve sanitation procedures and recognize hazards in the food production process.  These plans will greatly reduce or eliminate the chance of a food recall. Reacting to recalls will be a memory of the past as a heavy focus will be on avoiding them in the first place. Michael Taylor, FDA deputy commissioner, stated “The food safety problems we face have one thing in common-they are largely preventable.”  Destroying bacteria and properly handling allergens will be at the forefront of most new food safety systems.

Food Safety & Animals
Not only will humans experience safer food, but so will our pets as stated in the Preventative Controls for Animal Food rule. If processes are in place to eliminate harmful bacteria in pet food, then those who handle that food will also be safer. The FDA expects fewer illnesses in humans and fewer animal deaths to be a result of this.

Healthier Eating
Eating healthier will go hand in hand with eating safer food. Farms, unlike food processing facilities, are open system environments and are susceptible to different hazards. While growing conditions and methods may vary from region to region, similar dangers may remain. Worker hygiene, water standards, compost quality, and overall sanitation conditions affect any crop going to market. It is anticipated that this particular proposed rule would prevent hundreds of thousands of illnesses each year.

A Closer Eye on Imports
The United States imports about 15% of our food supply. This includes 80% of seafood, nearly 50% of fresh fruit, and 20% of our fresh vegetables. Once finalized, the Foreign Supplier Verification Program (FSVP) will strictly regulate the safety of food imports. According to Senior Policy Advisor, Brian Pendleton, “The FSVP rule, when finalized, will require importers to assume greater responsibility to verify that the foods they import into the US meet the same safety standards required of domestic producers.”

THE BOTTOM LINE
Once the Food Safety Modernization acted is fully implemented, consumers will feel more confident about the safety of the food they consume. As food processors change their focus from recalling tainted products to preventing outbreaks in the first place, results will be quickly seen. The number of hazards encountered in the food system will be identified and controlled.


Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org.

Friday, September 18, 2015

Inventory Management: Striking the Right Balance


inventory management: striking the right balance
“That order will be delivered within the next day. It will be picked and shipped as soon as I hit ENTER. Thank you so much for making us your number one supplier. We value your business”. Once the ENTER key is pressed, will the inventory be available to fulfill the order? Does the computerized inventory system actually show what is available in the warehouse? Nervously, you strike the key praying the promise of next day delivery is met.
Inventory management is vital to the operation and success of any organization. Simply stated, inventory management ensures items are in stock to meet customer needs. A more complicated view considers the intricate balance between keeping too much and not enough inventory available for shipment. Pros and cons exist for both arguments. 
Too Much Inventory:

  • Illiquidity-Inventory is less liquid and is difficult to convert to cash for many reasons. Tying up too much money in inventory hurts cash flow. Banks will typically only lend about 50% of the value of the inventory.
  • Markdowns-Overstock could lead to selling product at greatly reduced prices just to make space for newer materials.
  • Obsolescence-Inventory may need to be reduced in value or worse, become worthless as newer products are brought to the market. This is especially true in technology-focused industries.  
  • Carrying Costs-Inventory has carrying costs. Interest on bank loans, insurance, warehousing expense, etc. can literally eat away the profits of a company.
Too Little Inventory:

  • Missed Sales-A company cannot sell what is not available.
  • Missed Favorable Purchase Prices-This occurs when an unanticipated increase in price occurs or there is an opportunity to buy in bulk. Buying materials at the lower price is often advantageous unless you end up in an overstock situation.  
  • Lost Customer Loyalty-Customers will go to the competition when their needs are not met.
 
Attaining Sound Inventory Management
The goal is carrying as little inventory as possible without encountering a shortage. Sound inventory management helps manufacturers eliminate shortages by determining the optimal point of reorder known as the economic order quantity. Implementing an automated inventory tracking system, often referred to as a manufacturing response planner (MRP) helps to eliminate shortages and can even be a competitive weapon.
Larger retail outlets will often ask if their inventory procurement systems can talk directly to your computer system. Unfortunately, the old adage of ‘garbage in garbage out’ applies to inventory data as well. Personnel that do not take inventory management systems seriously can often destroy the integrity of the inventory data and completely disrupt operations.
A good inventory system considers many things when determining the appropriate level of inventory. Some of the most important ones are:
  1. Current Demand
  2. Anticipated Demand
  3. Economic Health
  4. Cost of Materials/Labor
  5. Confirmed Sales Orders
  6. Anticipated Cost of Materials/Labor
  7. Seasonal Factors
  8. Physical Inventory Adjustments
  9. Inflation
MMTC can help you improve efficiencies and operations as they related to your inventory. For more information, call 888.414.6682 or email inquiry@mmtc.org.
 
Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org.

Friday, September 11, 2015

GET AHEAD OF THE COMPETITION: Changes to Look for With ISO 9001:2015

ISO standards help make the world safer and more efficient. The sparked interest in the new ISO 9001:2015 revision is significant, given that the draft has notable changes vs. the current 2008 version. The task of understanding the revised standard’s effect to your organization and how to prepare for the transition can be overwhelming, yet a few simple “What to know tips” can help you save time down the road.

The Evolution of ISO 9001
In the original ISO 9001 of 1987, the Quality Management System (QMS) was basically considered and treated as independent of the business plan. The focus was on how organizations applied the various clauses to their business. When ISO 9001:2000 was published, the focus shifted. As it stands today, the QMS Quality Policy and Quality Objectives are aligned with and expected to support the business plan.

With ISO 9001:2015, the expectation changed again with the addition of another step in a continual evolution of the QMS. With the new standard, the QMS is expected to fully integrate into the business plan - becoming one and the same. Instead of the QMS being something the Quality department is expected to control, the control now rests with Top Management. This is also evidenced by the elimination of the position of the Management Representative.

If you are Top Management, you will need to not only fully understand ISO 9001:2015, you will also have to take ownership of the QMS and use it as an integral part of your business plan/model to operate your business. The more you understand ISO 9001:2015, the more this integration makes sense.

Risk-Based Thinking
One of the new phrases you will be hearing with ISO 9001:2015 is the concept of Risk Based Thinking (RBT). RBT is first mentioned in the introductory part of ISO 9001:2015 (part 0.3.3). It states: “Risk-based thinking is essential for achieving an effective quality management system.” It is explained in detail in Annex A-4. The ISO 9001:2008 section on Preventive Action has been removed and replaced with the concept of RBT. Understanding risks is brought up in several different places in the revised standard, emphasizing the need to look at risks as part of the normal planning and operation of processes.

Annex A-4 states: “…there is no requirement for formal methods for risk management or a documented risk management process.” This provided organizations the flexibility to address the risks in a manner that best suits the organization and allows for varying risks to be addressed in different ways. It is up to the organization to determine “whether or not to retain documented information as evidence of its determination of risks.”

As you proceed down the ISO 9001:2015 road, you need to consider what your risks and uncertainties are of your business and how you they will be addressed. More than likely you already perform some type of risk analysis on new jobs. Organizations will also need to decide what kind of evidence is required to demonstrate the risks were examined and reacted to appropriately.

Knowledge is Key
New for many in ISO 9001:2015 is the concept of Organizational Knowledge. Found in Clause 7.1.6, it states: “The organization shall determine the knowledge necessary for the operation of its processes and to achieve conformity of products and services.” That may sound a bit confusing, so we look to Annex A.7 for guidance. This requirement was introduced for two reasons:
  1. Safeguard the organization from knowledge loss. The annex points out two instances where this can occur. One is through staff turnover. Many of our more seasoned employees hold a lot of what is referred to as tribal knowledge. It is informal, experiential in nature and rarely recorded. How do we ensure that knowledge is not lost when that person leaves? The second way is through the failure to capture and retain knowledge. How many times have you looked for information from a past job or project that could be applied to something current, only it was unable to be found?
  2. Encouraging the organization to acquire knowledge. As individuals, and the organization itself, we gain knowledge through experience, training, mentoring, benchmarking and a host of other means. Currently, most companies do a poor job at capturing and sharing knowledge for the overall benefit of the organization.
Consider how knowledge is acquired, shared and stored within your organization. More than likely it is communicated in an informal and ad hoc way. ISO 9001:2015 can help eliminate that pain by helping formalize, share and store appropriate knowledge to move the company forward.

ISO 9001:2015 is on the minds of many Michigan manufacturers. Stay on top of ISO 9001:2015 by joining MMTC quality experts at the 2015 Proud to Manufacture in Michigan Conference from September 23-24. Hear more information about to what to expect with the revised standard in the months to come. MMTC also offers ISO 9001:2015 Transition courses to help organizations navigate the change. Visit mmtc.org for more information.


Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org



Friday, September 4, 2015

Improving Processes through Value Stream Mapping

Improving Processes through Value Stream Mapping
If you Google the phrase “Value Stream Mapping,” a very elaborate (and wordy) definition pops up on the screen. In order to understand the concept, we must simplify the definition. Value Stream Mapping looks at how things are currently executed in order to improve processes in the future. The actual mapping portion comes into play because a written ‘map’ is used to sequentially depict steps required to design, produce and provide a good or service. The map includes information related to labor and materials – not just production.

A Powerful Lean Tool
Value Stream Mapping has roots in lean management methodology. Lean principles increase production speed and identify waste. Eight areas of waste exist, but most waste is found when dealing with time, talent and production.

Value Stream Mapping is an important tool because it helps create lasting organizational change. Improvement events create value at one point in the process, but mapping connects all improvement activities. Mapping analysis depicts waste so an elimination plan can be created. A step not working towards adding value to the quality, price or customer need should be eliminated. After all, the customer IS buying value.

Visualization of Processes
Value Stream Mapping is conveyed through the use of symbols to visually depict the manufacturing process. These special symbols help identify waste in the manufacturing process. The symbols also vary by industry, but all serve the same purpose: To shows how “items” flow through the value stream. In manufacturing, labor and materials are the items. In design and development, designs are the items. Value Stream Mapping looks at all aspects of manufacturing – not just the final outcome.

The Six Basic Steps
1.     Identify the value streams. Group products sharing the same processes. These groupings are the value streams.
2.     Map the current state of affairs and how they are actually working. Do not look to the future during this step. Be honest with yourself.
3.     Measure the value stream by looking at such things as inventory, cycle time, changeover time, first pass yield and reliability. 
4.     Identify opportunities for improvement.
5.     Map the future state of how things will look after continuous improvement is implemented.
6.     Plan implementation and prioritize the projects that will move your organization from the current state to the future state.

Value Stream Mapping can be an effective tool in optimizing your manufacturing processes and business. Clearly, the process identifies opportunities for waste elimination and how to produce a quality, cost-effective product for your customers. For more information about MMTC’s Lean services or to speak with an MMTC Lean Expert, click here or contact us at 888.414.6682.



Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org