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 whatโs 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.
