The Superstar Protocol

Six Guiding Principles for Small Business Manufacturing Superstardom

A manufacturing superstar provides customers with rapid time to shipment while keeping inventory and WIP to a minimum. A manufacturing superstar experiences higher sales, market share, gross margins, cash flow, and return on inventory investment than less efficient competitors. Superstardom is achieved by using DBA Manufacturing software according to the “Superstar Protocol”, which consists of six guiding principles:

1. Rapid Time to Shipment

A manufacturing superstar provides customers with rapid time to shipment. Rapid time to shipment boosts sales and market share by increasing customer satisfaction, boosts cash flow by reducing order to cash timelines, and boosts gross margins by spreading fixed overhead costs over more volume. Time to shipment targets establish sales order required dates and are planned in advance using lead time allocations and order policies applied to sell items, subassemblies, and purchased items.

2. Lean Inventory

A manufacturing superstar combines rapid time to shipment with lean inventory. Lean inventory increases stock turnover, reduces overall inventory, prevents over-stocking, and minimizes the duration of shortages. Inventory is kept lean with dynamically calculated reorder points derived from a monthly demand rate or safety factor combined with planned supply days intervals. Jobs and POs are triggered to replenish stock whenever actual net demand within the item’s action window falls below its reorder point.

3. Just in Time Scheduling

A manufacturing superstar uses just in time scheduling to achieve rapid time to shipment with lean inventory. Just in time scheduling assures that materials are on hand when needed by jobs and keeps WIP lean to minimize the time it takes for jobs to get through the shop. Just in time scheduling provides the master plan for meeting time to shipment targets. Jobs and POs are triggered by actual demand “just in time” for alignment with higher-level job start dates and SO required dates. Jobs are released to live production when inbound materials are available and are rescheduled to reflect actual release dates.

4. Prioritized Production

A manufacturing superstar uses prioritized production to guide activities out on the shop floor. Prioritized production assures that all jobs meet their required dates so that sales orders get shipped on time. Each job in progress is given a calculated job priority based on remaining production time relative to the job’s required date. Job sequences are run in job priority order within work center queues to automatically expedite jobs running behind schedule. Workers enter material usage and sequence completions in real time to update work center queues and enable job tracking.

5. Efficient Costing

A manufacturing superstar uses efficient costing to assess gross margins and systemic efficiency. Efficient costing provides meaningful item-level inventory value and cost of goods sold without any disruption to workflow processes. Hourly shop rates for labor and overhead, which are calculated from actual costs and job hours, are applied to job labor transactions to absorb actual labor and overhead costs into WIP along with job material and subcontract service costs. Total job costs flow from WIP into item inventory value and flow out as cost of goods sold.

6. Total Participation

A manufacturing superstar enlists total participation in time to shipment planning and execution. Total participation from workers, managers, planners, buyers, and salespeople foster a culture of shared objectives, common purpose, group collaboration, and continuous improvement. Time to shipment targets and underlying settings are openly shared to establish common objectives. Planners and buyers constantly refine item settings for continuous improvement. Workers report material usage and job sequence completions in real time to update work center queues and enable job tracking.