Tips to Follow From Fireworks Industry

 
 
By Rick Gallisa  |  Posted 2010-07-04
 
 
 

How to Master Production and Supply Chain Management: Tips from Fireworks Industry


Today, Americans celebrate independence from Great Britain by chucking 250 million pounds of fireworks into the air. Our childlike fancy for things that go boom, crackle and pop with the showmanship of bright colors and explosive drama masks the complexity behind the once-a-year celebration. This is a complexity not unlike challenges faced by many large manufacturers.

In fact, we can all take a few tips from the fireworks industry. This is an industry that has nearly doubled in size over the last decade. It's one that faces regulations by the United States Consumer Product Safety Commission and even state-by-state laws about which fireworks can be sold. To top it off, the entire industry sprouts up virtually overnight each year to sell most of their annual revenue in product in less than a month.

We talk about "flexibility" and how companies struggle to scale their infrastructure for rapid growth or decline, meet shifting market conditions or become "demand-driven." But here's an entire industry of companies that this year will support a billion dollar market in weeks, then suddenly vanish almost entirely. Nearly any manufacturer that sells physical goods is trying to reduce their supply chain costs. Here's an industry that last year shipped 45,000 pounds of explosives across an ocean for a single fireworks show in New York-a shipment monitored by an aircraft carrier.

The right inventory level

Fireworks companies have to manufacture year-round to save up for the Fourth of July and that means a lot of inventory that needs to be kept in a cool, dry place-which will expire if it's kept around too long or explode the entire factory if exposed to flame. In this case, belated shipments, spoiled inventory and excessive (or not enough) inventory are all a year-long project that's put to the test in an instant. One mistake could weigh heavily on an entire year's financials or even doom the company when suppliers aren't armed with the products they need at the only time of year they need them.

While your distribution model and purchase behavior may not be quite as extreme as that of the fireworks industry, you probably still have need for carefully managing production processes and supply chain activity on a global basis.

Quality control perfection

The United States Consumers Product Safety Commission estimates that approximately 7,000 people a year are treated in emergency rooms for fireworks-related injuries-yet almost none are from fireworks that explode early or in unpredictable directions. Regulations, consumers and fireworks shows expect 100 percent perfection-and for good reason. Meanwhile, fireworks companies are in a race to capitalize on every moment of the pre-festivities sales boom.

This level of quality control under tremendous pressure doesn't come naturally. It's embedded into the fabric of everything the fireworks industry does and it's a process enabled by technology.

Tips to Follow From Fireworks Industry


Tips to follow from fireworks industry

Manufacturers don't achieve this level of flexibility and quality by chance. It takes a lot of work and a sophisticated IT infrastructure that manages, analyzes, predicts and optimizes. Not many organizations have to cope with such a spike in annual demand, but many products do change significantly each year-especially in highly competitive industries such as automotive, consumer products and electronics. With this in mind, there are a few things we can all learn from the fireworks industry:

Tip No. 1: Attain quality systematically

Every business-from aspirin to fireworks companies-strives for perfection. Inconsistencies invariably lead to flaws. Customers expect the same product or service every visit. Achieving that quality is all about process. Using technology to measure, monitor and facilitate those processes such that they can be standardized across every plant is how we enforce consistency and quality.

Tip No. 2: Cut your losses

Defective products are usually caused by defective components. Don't throw out your fireworks because of a loose fuse or a car battery because of a poor battery acid mixture or an engine because of a misaligned piston. Implement processes that can identify problems early in the process and then contain the bad parts or components to minimize potential impact.

Tip No. 3: Live and breathe demand

Few industries experience the intensity in fluctuations of demand as the United States fireworks market. Traditionally, manufacturing industries were focused on maximizing the use of their plants to distribute the costs of machinery across a greater volume of products. However, as it turns out, oversupply, inventory and distribution costs trump the benefits of blindly producing as much product as possible. Production needs to match demand, and it needs to be managed efficiently across each of your plants.

In addition to celebrating patriotism and American ideals today, let's all pay homage to the hard workers, technologies and companies that brought a billion dollars of celebratory explosives into our hot hands. Let's celebrate explosive technology! Happy Fourth of July!

Rick Gallisa is an industry director at Apriso Corporation. Rick provides strategic direction to life sciences manufacturers who seek to become more demand-driven while removing costs and improving quality across multiplant operations. He can be reached at rick.gallisa@apriso.com.

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