Throughout my travels, I have had the pleasure of visiting many different factories, some good, and some very untidy.
For busy factories and their staff, the priority is to get more windows out the door and tidying up isn’t. This can include storing items that are not required for forecasted work. For example, a trolley full of integrated glass units (IGUs) that were supplied incorrectly, a rack of extrusions full of metal that is leftover from re-work, and offcuts of metal being saved ‘just in case’.
What isn’t apparent in these cases, is how much an untidy factory floor costs a business? Not only in time trying to find that tool, that is hidden behind the trolley of IGUs, leaning up against something, but how much it costs in dollars having space that is unproductive.
Let’s work out how much a square meter costs you…
Every square meter of your factory floor costs money. This simple exercise will help explain this:
1. Measure out the usable factory floor space.
This is the area of your factory excluding office space and other amenities.
For example, a 500-square meter factory may only have 393 square meters of usable space.
2. Add up all monthly costs to run your business.
This includes lease payments, wages, insurances, and utilities. Things you pay just to keep the doors open.
In this example: The total monthly costs (or break-even point) is $75,000.
3. Now divide your cost by your square meters.
This is a great indication of how much each square meter costs you a month.
For this example, every unused square meter costs you $190.84 per square meter/month or $2290.08 per year.
4. Cost of keeping scrap metal
How much does that bin of scrap metal cost you? Are you really going to need that re-work metal you are keeping ‘just in case’? Or is it costing you more in factory space than its value in scrap?
There will always be a blend of productive and non-productive floor space, but this exercise highlights how important it is to decrease your non-productive floor space.
What changes will you be making in your factory to ensure it is tidy? We would love to hear your ideas and thoughts.
