How much can i do?

One of the clarity, most of the small, emerging organizations CEO / Business head should have is " How much sales turnover I can make? 

From a long term perspective, with existing and new market potential, the answer could be that sales turnover is infinite. 

However, realistic clarity is that with given the facility, infrastructure, installed equipment, with existing resources like working capital and people, how much sales turnover I can make?

Why the business head need have clarity?

• The sales turnover potential with given facilities will give the potential to be tapped.
• The clarity will provide the gap in existing performance and potential sale turnover
• Helps to drive the team towards achieving the potential target with conviction

How does the business head estimate the potential?

Data collection and analysis on the following aspects will help you to arrive at your potential capacity. 

1. The capacity of  all machines based on cycle time and existing Utilisation & efficiency
2. Understanding the constraint machine and its capacity  
3. Exact working capital required for an existing volume 
4. Function-wise human resources details and capacity 

The data may vary depends on the product mix and cost structure. Hence, the CEO or Business head must periodically ask this question and needs to understand his real capacity and existing status!

How to identify the opportunities at BIG PICTURE perspective

       In an organization, throughout the value chain, there are numerous opportunities for value improvement or waste elimination/reduction. Since the resource availability and time is being a constraint, it is wise to focus on the critical or constraint facilities to improve so that overall value enhancement will be improved

    Most of the organizations are tuned to do improvements, but in localized areas or in an assorted manner which results in an INCREMENTAL improvement in the value chain.

When the team from different cross functions identify the macro-level opportunities to improve the roadmap, it gives focus and direction to the entire team to work upon. In this way, team engagement will also be improved.

There are two methods by  which we can identify the constraint or opportunities at the organization level

1. By past data and experience
2. Applying Value Stream Mapping

     1.By past data and experience:

With past experience and data, the team can identify the constraint facilities with the following criteria
• The facility which is giving the lowest output and affecting the plant output
• The facility which is producing a higher percentage of total revenue
• The facility which is utilized very low and affecting the entire flow
• The facility which is producing inconsistency quality output and affects the lead time

2. Applying Value Stream Mapping :

Value stream mapping is a visualization tool derived from the Toyota production system of lean manufacturing.

Using VSM methodology, when we map the activities end to end, we can identify the waste in the system.