Factories spend too much time on non-value-added tasks, keeping operations busy but stalling growth. It’s an inefficiency that manufacturers and the economy can no longer afford.
On the surface, manufacturing seems simple. Take raw materials, some machines, heaps of data and teams of people, and deliver on-time, right-first-time products. In reality, it’s far more complex. The real challenge isn’t producing quality goods but doing so efficiently and profitably.
Paul Molloy, Director at improvement consultancy Fluere, has spent 30 years helping businesses achieve this through Lean Six Sigma and process optimisation. Speaking at Made in Group’s latest Monthly Meet-Up, he shared his no-nonsense guide to cutting waste, boosting efficiency and driving growth.
“Every business owner must ask: Is our productivity, growth and profitability improving year on year? If not, why not,” Paul said.
Five Success Factors for Business Improvement
Paul’s proven approach is built on five key principles:
- Identify High-Impact Areas – Focus improvements where they’ll make the biggest difference.
- Build Problem-Solving Capability – Train employees to solve problems effectively.
- Apply the Right Improvement Techniques – Use the 80:20 rule to identify the methods that will deliver the highest impact.
- Create the Right Infrastructure for Change – Ensure leadership and systems support continuous improvement.
- Sustain Momentum – Embed improvements into daily operations so they stick.
“If any of these are missing, the likelihood of success drops,” Paul noted. “But the approach is flexible and can be tailored to meet the needs of any business, regardless of shape or size. The caveat is that you’re willing to carve out time to work on the business, not just in the business.”
The Three Types of Work in Your Factory
According to Paul, every factory task falls into one of three categories:
Customer Value-Adding Work – Activities that customers are willing to pay for.
Business Value-Adding Work – Essential but non-revenue-generating tasks like compliance and training.
Non-Value-Adding Work – Everything else, which adds no value to either customer or business.
A typical process will blend all three of these categories. Shockingly, the amount of time spent on value-adding tasks is just 5% to 15%. The rest is wasted on delays, waiting for materials, inefficient setups and double handling goods.
The challenge for manufacturers is to shift the balance toward productive, value-adding activities.
Efficiency vs. Productivity
Think about your daily commute. Do you drive at a constant speed from your driveway to your workplace, or do you hit traffic? Your products face the same delays moving through your factory.
Balancing workflow, removing bottlenecks, and synchronising processes can massively impact output without adding resources. But many confuse efficiency with productivity, Paul noted.
Efficiency = Producing the same amount (output, revenue) with fewer resources
Productivity = Producing more with the same (resources, cost-base)
Both can improve profitability, but their impact is very different. A £10m manufacturing operation that increases efficiency by 20% might cut labour costs but see only a 3% profit gain. In contrast, a 20% boost in productivity could triple that to 9% by driving revenue growth rather than just cutting costs.
“Your labour and overheads stay the same, your material costs rise proportionally because you’re producing 20% more, but the overall impact on profitability is huge,” Paul said. “The right strategy depends on your business. You might need to cut costs to stay competitive or use improved efficiency to scale up.”
Lessons From the Discussion Group
After Paul’s talk, he joined Made Members to explore the topic further. Learning that only 5% to 15% of total production time adds bottom-line value, attendees were keen to hear practical solutions for tackling this inefficiency.
Paul emphasised using value steam mapping to measure how much time a product actually spends in production versus waiting. For tracking non-productive time like clean downs, changeovers and shift changes, he recommended two simple methods:
Video-record production tasks to get an accurate picture of true cycle times
Track product movement through the factory to pinpoint delays. Few manufacturers track lead-times for individual parts, yet even basic start- and stop-logs for operations can reveal inefficiencies.
Another overlooked issue is excessive work-in-progress (WIP). Large WIP queues slow production and create costly, unnecessary delays. Measuring WIP levels and their impact on throughput can uncover major savings and address process bottlenecks.
Embedding a Continuous Improvement Culture
Sustaining momentum after initial improvements is a common challenge. Paul’s team takes a structured approach, conducting operational reviews to identify key areas for long-term improvement. Instead of one-off quick wins, they focus on achievable goals within two- to four-week timeframes that help businesses embed a continuous improvement culture.
Resistance from workers can be another roadblock to efficiency improvements. Education is critical, Paul said. Rather than asking for suggestions, businesses should first train employees on key efficiency principles. Once they understand these concepts, they can contribute ideas that align with broader improvement goals.
In closing, the group agreed that building a high-performance culture relies on having a deep understanding of how products move through the factory, a commitment to continuous improvement, and an engaged workforce that sees the value in working smarter.
By focusing on these fundamentals, manufacturers can uncover hidden inefficiencies and drive sustainable growth.
Join our Next Monthly Industry Meetup!
The opportunity to openly discuss challenges, opportunities and solutions is what makes the Made in Group’s Monthly Industry Meetups so invaluable.
During these captivating virtual events, industry experts, thought leaders, and professionals gather to share knowledge, insights and best practices. The goal is to foster collaboration, inspire innovation, and drive growth within the manufacturing community.
Each month, we feature three engaging talks from Made Members, focusing on best practices around key themes that shape the future of manufacturing, including Global Trade, People & Skills, Future Factories, and Sustainability.
Interactive Discussion Groups follow the presentations. These virtual roundtables enable Members to exchange ideas and gain further insights on their chosen topic.
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*Header image by Michal Jarmoluk from Pixabay