๐—•๐˜‚๐˜€๐˜๐—ถ๐—ป๐—ด ๐— ๐˜†๐˜๐—ต๐˜€ ๐—ผ๐—ณ ๐— ๐—ฎ๐—ป๐˜‚๐—ณ๐—ฎ๐—ฐ๐˜๐˜‚๐—ฟ๐—ถ๐—ปg – Just Keep The Machines Running

Myth: The only way to make money is keep the machines running. “Just do whatever it takes.โ€

Ever heard anyone say that?

Reality: Machines only make money when what they make is sold – at a profit.

Risk: Unit costs stay down, OEE stays up, but running batches bigger than customer demand risks:

ยท        embedding cash in inventory of whatโ€™s not needed to fulfill customer orders

ยท        filling warehouses instead

ยท        higher overall costs

ยท        lower profitability

ยท        less cash-flow

ยท        using machine capacity to produce what is not needed instead of what is

Did you ever come across this bind between Unit Costs vs. Total Costs and Capacity?

Bust the Myth: Run quantities of each component, strictly to demand to replenish a strategic inventory reserve. The quantity to run is calculated as just enough to recover the time lost to set-up the machine that will run it.

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