APEX Insights
Is Your Velocity Throttling Your Performance?
How Velocity Impacts Performance?

Velocity is the rate of throughput per unit of time. Velocity affects lead times to customers, capacity, productivity, and ultimately profitability. The higher the velocity the faster the flow of money. Consider the following:

  • Is increasing velocity a priority within your organization? If not, it should be because it can become a source of competitive advantage for you or your competitor.

  • Does your team not see the potential to improve velocity? Perhaps, you need to upgrade or augment your team. A fresh perspective can provide insight.

  • If increasing velocity is a priority, how much has your velocity increased? Sometimes additions to your team or augmenting your team can be just what you need to accelerate the improvement.

Are you not sure where to start? Read below for insights.
Velocity Improvement Considerations

Leverage Technology - Utilize data to increase visibility into the supply chain including information about customers, demand, inventory, suppliers, internal capacity, and production. Information will be needed to identify and capitalize on opportunities.

Know Your Constraint(s) - Subordinate other processes to the constraint(s). Protect the constraint(s) by minimizing changeovers, strategic inventory, spare parts, etc.

Optimize Constraint Processes - Identify process parameters. Use fractional factorial designed experiments to optimize the process for maximum velocity. Look for process technology that might provide a velocity breakthrough.

Reduce Work in Process - Excess work in process increases lead time and negatively impacts velocity. Optimize work in process by exiting or outsourcing products that do not fit your business.

Daily Management - Utilize real time production monitoring and a structured fast response process for solving problems. Leaders should know where they are to plan in real time on each machine or at each process completion point and react accordingly with the operational support teams.

Supplier Interface - Understand supplier capacity, inventory, job status, and shipment status in real time. Utilize EDI, portals, and web API’s. Use the telephone for critical communication rather than sending an email. Develop a personal relationship with your supply base. The squeaky wheel gets the grease. 

Customer Interface - Know your customer better than they know themselves. Constantly deploy resources to understand customer demand beyond published requirements and EDI orders. Knowing what is happening at the point of sale will provide the information needed to validate EDI demand (that can increase dramatically or vanish overnight). 

Production Scheduling - Schedule your operation to maximize throughput while allowing for some flexibility to manage variability in supply, demand, or throughput. Scheduling should be a process guarded by rules:

  • minimum order quantities
  • minimum run times or batch sizes
  • consistent daily/weekly changeovers
  • and defined frozen periods to not disrupt production planning. 



Why does increasing velocity matter? You will either be a Victim or a Victor in your competitive space. Higher velocity will enable you to be the Victor.


Why should you act Now? The payback on increasing velocity is more than 10x.


Call to Action:

  1. Analyze how technology and data can provide you with visibility into the supply chain
  2. Assess your efforts at improving velocity
  3. Quantify the benefit of increasing your velocity
  4. Call upon APEX if you want help improving Velocity, EBITDA, and Cash Flow


If you want to explore this further on a videocall, the Calendly link below allows you to pick a convenient time. Or just call me at 713 208 6265 to find a time.

APEX Management Partners, LLC works with its clients to escalate profitable growth and improve operating performance. When your team struggles, think of APEX.

Will you commit to increasing velocity?
Yes
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Steve Thornton
mobile: 713 208 6265