Warning: A Manufacturing Audit Helps You Discover Whether Poor Performance Is The Result Of Inappropriate Processes And Procedures, Or Of Failure To Follow Them.



Use your manufacturing audit as one of the bases for value assessment. As a starting point, do you have a formalized system directing your manufacturing process? Is it well documented, making it easy for people to follow?


Regardless of the answer, you have taken an important first step. If the answer was no to either or both questions, you need to fix it. Your manufacturing audit is working already. It has either brought one or more shortcomings to light, or it has reassured you that the documented systems are in place.


When the documented systems are in place, you next need to determine whether they are being followed. If not, is it because of lack of training? Are people aware that the systems exist, and have they been trained to use them? As you can see, this involves a process of elimination. And a corresponding process of fixing problems.


Once you are able to eliminate lack of awareness, and lack of training, the next step in your manufacturing audit process is to determine whether they are being applied. The best, most carefully documented manufacturing process in the world, is useless unless it is being applied.


If it is not being applied, why isn't it? And what is more important, what can you do to ensure that is is applied? There are several areas to examine. One dealing with management and leadership. Another dealing with your employee reward system. However, another that is frequently overlooked is the prospect that your manufacturing systems are inadequate, no longer relevant, or just plain don't work.


So, if this has lead you to conclude that your documented manufacturing systems and processes don't do what was intended, you have learned something else. You need to revise them, validate them, document them, and train the relevant people in their use.


What has all this got to do with selling your business? It has shown you that you will probably be leaving a lot of money on the table if you sell without fixing this. So you will have a choice to make. You can move forward to sell, knowing you will be leaving money on the table. Or, you can fix the problems, and increase enterprise value before you sell.


When your manufacturing audit can show prospective buyers that there is a good system in place, and that it is being followed, you will give them confidence. Confidence that when they take over, the manufacturing activity will continue to operate effectively, and with the current efficiency. That it is not dependent on your presence or intervention.


Buyers will pay more when given that kind of confidence. And the sale will be easier and give less stress.


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