Maintenance Delays: Postponing maintenance can negatively impact production efficiency. Insufficient funds can lead to postponed equipment upkeep, resulting in more frequent breakdowns, increase downtime, and reduced overall productivity.

Waste and Inefficiency: You may also be struggling to implement lean manufacturing principles due to financial constraints. This can result in higher levels of waste, inefficient use of resources, and ultimately higher production costs, undermining profitability.

Sound financial management and controls are critical to enhancing production efficiencies by planning strategic investments in maintenance and process improvement. Detailed planning and a robust three-way forecast, (Profit and Loss, Balance Sheet and Cash Flow), businesses can plan for, and allocate funds for equipment upkeep and lean manufacturing initiatives. In so doing, you minimise downtime and reduce waste, maximising productivity.

Tracking and reporting performance against plan, linking non-financial KPIs to the key financial performance indicators allows you to immediately spot adverse trends and inefficiencies in production output and hence the input processes. Regular performance reviews allow you and your production team to implement corrective actions quickly and efficiently to optimise resource allocation. By striving for continual, incremental improvements in production efficiency, your company will inevitably reduce costs and enhance the quality of goods and services sold.

Tracking production efficiency is key to a robust management pack includes the following, essential information that is sadly missing in many cases:

1. A forecast and an up-to-date report detailing performance versus forecast, showing where the business is ahead and behind target profitability, cash flow and depending on circumstances, the calculated value of the business.
   
   
2. Tracking key non-financial KPIs in production efficiency, such as Overall Equipment Effectiveness (OEE), cycle time, first pass yield, and downtime, is essential for optimising operational performance, reducing costs, and improving product quality. For a more detailed summary, go to / Maximising Production Efficiency
   
   
3. A summary status report from whoever is responsible for Production or Operations should include an overview of progress on key tasks and highlighting any current or potential issues that may impact the business’ supply chain that require management attention.

The impact is profound: with ever improving production efficiency, your company will enjoy continually improved financial performance, reducing the stress on management and production staff alike. The increased profitability increased efficiency delivers allows for further investments across the business, creating a virtuous cycle of improvement. Management and staff experience a better work-life balance, as operational pressures decrease, and proactive control and planning, rather than continual firefighting become the norm.