Business Lag Time is Costing You Big Time (Part 2)

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Cost of Communications Pain

The cumulative cost of the status quo due to productivity losses resulting from communications barriers was estimated to be $26,041 per knowledge worker per year. This was calculated by factoring the time spent dealing with each pain point with the compensation rate for knowledge workers in each of the countries and verticals surveyed. In other words, it didn’t at all factor in the massive costs of scrap, labor or machine utilization, increases in inventory, incorrect or redone setups, etc.

Outdated business processes and latency can cost your company big time. These negative impacts of latency will cost your organization efficiency, opportunities, profits, customers, and much more.

Let’s take a real live example. One of our clients found an extra 25 hours (per day!!) that machines were running by providing all their machine operators with an instant Corrective Action Reports (CARs) vs. having those same 100 machine operators spend on average 15 minutes per day per operator searching through file cabinets for the CARs. Better yet, the same client also dramatically reduced the number of identical mistakes made during setup, saving countless parts from being scrapped. That effort created even more productive machine time.

In many cases removing latency corrects multiple actions resulting in exponential gains across the organization.  Fixing the latency associated with inefficient internal business processes is far less costly than dealing with the cost and frustration, not to mention is wasting your company’s valuable time, effort, and money.

Fighting the War on Latency

For us, printed paperwork is not flexible enough to handle our changing needs. Shop-Trak and Doc-Trak combine to provide us the most current information at the moment it is needed, without the paperwork.

Chris Gonzales
Fluid Components International

One company attacking latency in their organization is Fluid Components International (FCI) of San Marcos, CA. FCI is registered as an ISO-9001 and AS-9100 certified manufacturer making flow and level measurement applications for industrial process and plant applications using thermal dispersion flow measurement technologies. Their products are used in many industries such as:

  • Food & Beverage
  • Mining
  • Steel
  • Pulp & Paper
  • Aerospace
  • Green Energy, and many more.

The Lake Companies has the privilege of working with FCI offering them Shop-Trak and Doc-Trak business improving software solutions designed, among other things, to eliminate latency.

FCI Systems Analyst and ERP Specialist, Chris Gonzales, worked with The Lake Companies in implementing Shop-Trak and Doc-Trak. He said, We have hundreds of in-process jobs out on the shop floor with changes happening at various operations constantly. Our problem with printed job paperwork is that it’s typically generated at one moment in time. For us, printed paperwork is not flexible enough to handle our changing needs. Shop-Trak and Doc-Trak combine to provide us the most current information at the moment it is needed, without the paperwork.

So how does that translate to time, effort, and monetary savings?

Gonzales explained, Everyone wants to work in Shop-Trak. The visibility and status information is much nicer [than in our standard SyteLine] and the information provided allows them to make decisions much more easily than we have ever had before.

Greg Lake, President of The Lake Companies, offered his take on the success of FCI, saying, It’s worth considering that FCI has zero-latency down to a science. They’ve used technology to reduce costs, streamline and automate manufacturing practices. This has resulted in eliminating delays so information is available immediately to make better decisions.

Addressing business processes and communication inefficiencies should be a high priority for small and mid-sized manufacturers. Failure to do so will lead to increased operating costs, unsatisfied customers, and impaired competitive advantage. Companies cannot afford to ignore latency and the drag it has on their organization.

For more information on adopting a zero-latency strategy and eliminating information delays, we highly recommend checking out our video blog series episodes 13-15, beginning with Performing at Absolute Efficiency exclusively on Forever Green TV.

Previously…

Did you miss part 1 of this story where we discussed how latency increases the cost of doing business?