Feb 25 2014

Implementing Your Manufacturing Operational Excellence Plan

Understanding the Journey

My first blog post of this manufacturing operational excellence series presented a few reasons why manufacturers have decided to pursue a strategy of improving their operational excellence. My second blog post discussed some of the tools available to accomplish this objective. This post suggests appropriate next steps to put your plan into action.

Business and manufacturing professionals are always looking for new ways for operations to support improvements to their company’s products, services, and bottom line. However, it’s also important to focus on optimizing limited human and capital resources to ensure operations can consistently perform with good results.

Whether coming from a large, global manufacturer or from a smaller, more regional organization, these are challenges on the top of nearly executives’ mind. What I have found in recent research and discussions with industry leaders is that these challenges can be effectively addressed by pursuing an operational excellence journey to elevate the performance of manufacturing operations. This strategy requires bold thinking, rapid reactions, and improvement actions, along with fully informed and engaged teams.

The 2013-2014 LNS Research Manufacturing Operations Management (MOM) survey provided considerable new data and insights on how to navigate the complex landscape of operational excellence challenges in order to provide unprecedented new gains in productivity, quality, responsiveness, risk mitigation, and economic value generation.

Harnessing the Potential of People

It should come as no surprise, but harnessing the potential of people is one of the greatest assets that companies can leverage for an effective operational excellence journey. Market-leading companies have organized around cross-functional teams to support this journey. As a best practice, when it comes down to actually putting your plan into action, you will achieve the greatest success if you proactively align and harmonize the goals, objectives, and Key Performance Indicator (KPI) metrics of your staff and management team with your corporate objectives. And, as part of accomplishing this goal, you will need better and faster data analysis and real-time visibility to plant and enterprise information so as to best support your “human capital” to drive the right behaviors from teams and individuals.

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Process Improvement Programs

As continuous improvements are made along the road of an operational excellence journey, it’s important that these incremental improvements are sustainable by making them part of future processes and procedures. Without this capability, your journey to improved operational excellence will be cut short and never truly accomplish the desired objectives. In other words, if you can’t count on your improvements to stay in place, there is no way to evolve to new levels of operational performance. In order to accomplish this on a systematic basis, market leaders are accelerating their pace toward operational excellence through formal manufacturing programs and training.

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As we can see, 73% of companies have some type of formal manufacturing improvement program already in place.

The top programs planned or in place are Lean Manufacturing at 29%, ISO 9000/9001 at 25%, holistic Operational Excellence at 23%, and Six Sigma at 22%. All of these programs offer structured methodologies, training, certification, and they support company-wide engagement and collaboration. A great place to start your operational excellence journey is to begin using these methodologies in conjunction with a small subset of processes that are most in need of improvement.

Accelerating Success with Supporting Technology

It makes no sense to implement technology without first understanding the supporting role of technology to support the people and process aspects described earlier. However, it is undeniable that technology can play a pivotal role in helping companies accelerate and sustain their operational excellence position.

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Most companies are accelerating their initiatives by institutionalizing best practice processes into software. In fact, over 60% have already implemented or are planning to implement processes supported by software technology. When we look at the process and software capabilities that are either in place or planned across a broad set of industries, we can see that there are more companies that have the ability to manage single plants with both processes and software (45%) than at the line of business (38%) or enterprise level (31%).

Conclusion

This Manufacturing Transformation blog series has taken a close look at why manufacturers might take an operational excellence journey – a strategy that might take years to implement, execute and master. While the time and resources might be significant, the rewards can be equally substantial. By deploying the right tools and incenting the right people to do the right actions, the right rewards can be achieved – possibly making the difference between your being a market leader or a laggard. In the end, you have to make a choice as to what type of organization you want to lead and be part of. If your goal is to be the leader, then now might be the time to get your hiking boots out, because you have an exciting, rewarding and often challenging hike ahead of you!

Permanent link to this article: http://www.apriso.com/blog/2014/02/implementing-your-manufacturing-operational-excellence-plan/

Feb 20 2014

Five Ways to Keep Your Automated Notification System True

false_positive_manufacturingIncreasing levels of automated notifications are now the industry standard for manufacturers, facilities maintenance and municipalities.  With accelerated notification times based on a continuous sophistication of what can be monitored and communicated via alerts, there comes a new challenge – how can you be sure your systems are picking up the right data before actions are taken?

By removing the human element to check “Is this right?” your automated systems can send texts, emails or calls to many different people, including end users, co-workers and even your boss. How certain are you that the chance of a false positive has been addressed? Not safeguarding your notification system could leave you embarrassed at a minimum or cause damage or create a safety issue that didn’t need to occur.

 

  1. Start Clean - System upgrades and add-ons (and drop-offs) and custom fixes leave remnants that can cause problems in your SCADA or other IT system. Ensure your data is unblemished, your extraction methodology is sound and that your intelligence is right on by dropping legacy files, complicated ordering systems and redirects. It might take an investment of time or resources, but a clean system solidifies the entire process, including your notification program.
  2. Properly Install - Your staff may know your system inside and out, but you may not be able to prepare for the troubleshooting that can occur during the installation or upgrade of a new product. When selecting a vendor to work with, such as WIN-911, be sure they have relationships with system integrators who are experienced in integrating with the major SCADA systems on the market. Their experience is well worth the investment, since in-house personnel may not be able to spot considerations that seasoned integrators have seen a hundred times.
  3. Push the Test Conditions - Once a system is installed, it is common practice to create a false alert and track that it is received, acknowledged or escalated properly. But be sure to understand how your SCADA system will handle multiple issues of varying urgency resulting in simultaneous and multiple tiers of notifications, acknowledgements and decision matrices and the system determines what needs to be escalated or addressed. An experienced integrator will know how to push your system to extreme conditions to fully test it without compromising it. They will also run a thorough testing protocol to be sure any custom settings aren’t triggering a trouble spot elsewhere in your system.
  4. Check and recheck after significant events - If your plant, office or facility has experienced a power surge, has been hacked, or has had a recent virus attack or a change in environmental conditions (fire, flood), it’s time to check your notification system.  Reapplying your backup files and settings before trouble occurs is a safe practice to keep your system from reading false positives and sending notifications.
  5. Redundancy - In the end, reliance on a single procedure might be risky. A best practice, when monitoring, protecting, and notifying appropriate personnel if an issue arises in a plant or system, is to run a redundant system in a separate location. That way, should one system develop a glitch, the second one can kick in to keep the notifications protocol from becoming compromised.

 

Overall, good housekeeping practices and looking to professionals is the best way to keep your notification system true. Directing the human element to ask “Is this right?” during key points – installation, configuration, testing and monitoring of the system – allow  you to ask the right questions at the right time instead of having to ask “What went wrong?”

Permanent link to this article: http://www.apriso.com/blog/2014/02/five-ways-to-keep-your-automated-notification-system-true/

Feb 18 2014

Similarities of Being a CEO and Implementing a Manufacturing IT Project

CEO_manufacturing_ITI just read an interesting white paper “In the Firing Line: The impact of project and portfolio performance on the CEO” where it was pointed out how accountable CEOs are for performance. This should hardly come as a surprise. What is interesting is how that spotlight is now getting stronger, as evidenced by higher turnover rates. According to a study conducted by Booz & Company, the average tenure of a holding company CEO was 6.6 years in 2010 compared to 8.1 years in 2000. According to the white paper, nowhere is this more pronounced than in project-intensive industries, where the ability to deliver complex, lengthy projects representing huge capital investments defines success. This is why the number one reason for executive downfall is “failure to execute.”

The manufacturing industry has many similarities to the world of a CEO. Pressure to deliver the right product for the right cost to the right market has never been more intense. And, despite an expectation to cut costs, the market will not tolerate any reduction in quality, nor will it buy from a manufacturer that can’t consistently deliver a level of finished goods and aftermarket support that is in alignment with an ever increasing level of customer expectations.

Guess what: it isn’t getting any easier. Instead, performance metrics have been reset and new expectations have now been set for new levels of efficiency.

Be the CEO of Your Manufacturing IT Project

I thought it might be interesting to compare the findings from this white paper and apply them to the world of manufacturing IT, in search of any new insights on how you might improve your own manufacturing operations performance.

One of the primary objectives for a CEO is that of establishing and maintaining accountability across the organization as a basis for outstanding performance. This is often easier said than done. According to the paper, here are three activities to help achieve this objective:

  1. Provision a clear set of strategic objectives to the organization
  2. Identify and measure suitable metrics
  3. Introduce regular progress reviews

What you need to be a successful CEO is a clear vision of what your expected benefits will be of the projects you tackle. With this vision, any changes must be carefully considered and documented, to ensure your project performance remains on track. Then, you need visibility to measure performance against objectives followed by a regular review process to ensure your project continues through to successful completion.

The above project management process exactly mirrors the best practice to implementing a new manufacturing operations management IT system. And, just like the projects a CEO is likely to be tasked with leading, installing a new manufacturing IT system is faced with similar hurdles.

All projects are carried out under constraints – traditionally cost, quality, time and scope. Projects can finish late, over budget or not within originally promised specifications. The problem with projects running late is not only the typical cost overruns associated with such activity, but that the benefits are delayed too – lost revenue can never be recaptured.

After reading the paper, it became abundantly clear that being a CEO is very similar to running a manufacturing IT project. Each activity carries with it similar risks to performance and a failure to deliver can present the ultimate cost – losing your job. With this in mind, it should be clear the importance of establishing the right visibility into your operations so as to extract the right intelligence to manage your project successfully through completion. Hold regular progress review meetings, and be sure to keep the same vision intact from when your initial project objectives were set through completion.

For those of you that achieved a successful track record of implementing IT system projects, perhaps you might want to consider a promotion to CEO – as clearly your skillset could be used in another capacity!

Permanent link to this article: http://www.apriso.com/blog/2014/02/similarities-of-being-a-ceo-and-implementing-a-manufacturing-it-project/

Feb 11 2014

It’s Time for a Lean Manufacturing Makeover

time_for_lean_makeoverManufacturing has changed a lot since the 1950s when Toyota Motor Company of Japan introduced the concept of implementing an integrated process to more efficiently manage equipment, materials and its workforce throughout the production cycle. Over time, this technique allowed Toyota to deliver more reliable, higher-quality products faster — and at a lower cost — than other mass produced automakers. By the time we entered the 1980s and 1990s, the practice of eliminating waste to create customer value with fewer resources had caught on in the U.S. and other countries.

Fast-forward to 2014: While the concept and best practices of the Lean production system remain intact, the implementation on the plant floor faces a major facelift. That’s simply because the entire manufacturing dynamic has transformed to include new technology, new global competition, new government regulations, and a hyper-connected world of intelligent devices and social networks that enable seamless communication between companies and their customers.

Times have changed. And, in order to remain an agile manufacturer, Lean methodologies must adapt and change too. Otherwise, organizations will remain stuck in the 1950s while the competition soars into 21st century manufacturing.

Before rushing into a new Lean manufacturing model, however, it’s a worthwhile exercise to take a step back to identify what’s different and the direct impact it has on lean processes.

 

  1. Technology is a good thing – early pioneers of Lean systems pursued strategies of removing IT from production processes, viewing this technology as an additional step which could be “leaned” out of processes to remove waste. This philosophy was probably reasonable in the 1970s when technology was in its early, nascent stages; today, however, is a completely different situation with a level of complexity that necessitates reliance on IT systems to remove the waste of manual processes.
  2. Leveraging the right technology – Manufacturing Execution Systems (MES), Manufacturing Operations Management (MOM) and Enterprise Manufacturing Intelligence (MI) have become instrumental in the quest to add efficiency into scheduling production, tracking inventory, synchronizing material flows and increasing visibility across the supply chain. The Just-in-Time mentality to deliver product is now being transplanted by a need to be more predictive and insightful. Manufactures need to know what customers want—and for that, they are turning to Big Data and predictive analytics. While Big Data deals with different data sets that don’t always seem relevant to the plant floor, everything in the from the supply chain, plant floor, enterprise, and beyond must be interconnected in today’s day and age. Therefore, it’s time to analyze the impact of every data stream on the production of goods.
  3. Global competition – Cost pressure and the need to locate closer to end users has only accelerated the push to go global; as a result, the need to understand foreign cultures and designing new products and services for them has never been more acute. Lean must now be agile to support continuous innovation while comprehending the complexity associated with an ever-changing, fast-paced global world. All of these elements require a fresh look at Lean manufacturing practices.
  4. Government regulations – New regulations emerge in specific industries all of the time, forcing companies to reexamine processes. The Food Safety Act, for example, is a sweeping reform of food safety laws. That means, back to the drawing board for many companies—especially those companies that are still paper-based. Time to digitize processes and reevaluate how quality practices are implemented, tracked, and audited.
  5. Hyper-connected communication – The new customer service interface is social media—especially from a mobile device. This means someone can post a comment or photo about your product anytime, anywhere. And, they expect an immediate response. Manufacturers must somehow capture the information—down to every last tweet—and sift through it to identify trends that can be pushed back into the research, development, and production cycles.

 

Lean manufacturing is still a very relevant business practice. But, like everything else in manufacturing, the process must progress to keep pace with the organizational shifts happening all around it. Perhaps that means new conversations will have to take place between CIOs and manufacturing executives. Or, that traditionally accepted best manufacturing practices have to get better. Either way, Lean is not going away, it’s just in a new phase of innovation and transformation.

What will your Lean strategy look like in the future?

Permanent link to this article: http://www.apriso.com/blog/2014/02/lean-manufacturing-makeover/

Feb 06 2014

Welcome to the 4th Industrial Revolution!

4th_industrial_revolutionManufacturing processes have certainly matured significantly since the early days of steam engines, now referred to as the first industrial revolution. Next came the days of Henry Ford’s assembly line, and production of the Model T at volumes never thought possible – representing the second industrial revolution. In the 1970s, computers revolutionized the workplace by performing calculations and tracking measurements and processes that were simply unimaginable 100 years ago.  Clearly, computers and technology have continued to transform production processes.

Today, there is something spectacular that is starting to take hold. So, of course, there is now a race to come up with “the” name to call it. Some have called it a world where we will live with an “Internet of Things” or “IoT.” Others consider the term “smart devices” to really capture the essence of the transformation. In Europe, the phrase “Industry 4.0” is catching on. Regardless of what you call it, this is clearly a concept that is here to stay, having been already introduced on this blog in May of last year, with this post on the Industrial Internet. Personally, I believe the best description is to simply call it the 4th Industrial Revolution.

The 4th Industrial Revolution is a giant leap for manufacturing innovation, characterized by “smart devices” that can actually take control of machines on the shop floor by communicating autonomously “device-to-device” to manage manufacturing operations and distribution.

This type of scenario could create a significant level of manufacturing agility that would make it possible to connect customer needs with a company’s ability to deliver a product – virtually on demand.  Consumers can now influence design and control production. Manufacturers are now better able to adapt quickly to specific consumer demands.  Add in new technology that creates an unprecedented feedback loop between companies and their customers in which products could actually be designed – or highly influenced – by the end-user, and you have the makings for a revolution in how products are designed and produced.

This 4th industrial revolution has already begun to transform products, consumer expectations and how companies manage production in this environment.  Dassault Systèmes recently published and shared a slideshow highlighting 10 interesting trends on how this movement is developing, how it will impact our world, and where it’s going in the years ahead. Below is a summary of the predictions, including some items that are already a reality, but will only continue to proliferate into a larger part of our lives – see the complete presentation here: “Enter into the 4th Industrial Revolution.”

 

  1. The consumer experience – Insights into consumer tastes, fueled by big data, will drive new product introductions that give customers a level of influence never seen before.
  2. Mass customization – Let’s just say you can now have your car in any color, including black, if you so desire.
  3. Glocalization – The phrase “Think Global, Act Local” has never carried more weight than it does today.
  4. Internet of Things – ABI Research estimates that by 2020, 30 billion devices – from a jet liner to a sewing needle – will be connected to the internet.
  5. Remote control – Mobility today makes it possible for plant managers to monitor and manage production from a mobile device.
  6. 3D printing – Production technology capable of making “on demand” products will revolutionize manufacturing.
  7. Smart objects – Soon we’ll see smart devices driving smart enterprises – each that can communicate directly with users to create an experience never before seen.
  8. Re-shoring manufacturing – We are already seeing a new decision model emerge whereby the decision to offshore must now include new factors.
  9. Regulation compliance – With global production comes the need for global compliance; greater collaboration and sharing of data will be needed to help streamline a potentially disruptive impediment to continued global production expansion.
  10. Sustainability is everywhere – More efficient processes and responsiveness will not only improve product demand and time-to-market, but will also drive new levels of sustainability by reducing waste during the production process and throughout the supply chain.

 

I hope you enjoyed this glimpse into what the fourth industrial revolution might have in store for us. We’ll continue to explore what the impact might be of this force, so look out for future posts on how this revolution might specifically impact manufacturing operations management processes.

 

Gordon can be found on Google+.

Permanent link to this article: http://www.apriso.com/blog/2014/02/welcome-to-the-4th-industrial-revolution/

Jan 28 2014

Achieving Operational Agility: Critical Tools for Manufacturers

manufacturing_toolboxToday, manufacturing organizations face some unprecedented operational challenges. Customer expectations of quality and delivery are greater than ever, regulatory burdens weightier, and manufacturing and production system landscapes are growing in complexity and subject to even more disparate systems and data sources. And this is just the start.

To contend with these types of challenges, leading manufacturers have had to reexamine their organizational methodologies and toolsets when evolving continuous improvement initiatives. And, leading companies have recognized a need to accelerate their Operational Excellence progress towards optimizing operational goals in order to ensure their competitiveness.

In my first post of this blog series, we established that the ability to remain agile to changing market demands was a key objective of manufacturers today and the focus of many manufacturers’ Operational Excellence journey. We also gave an overview of the current capabilities of the marketplace—that a growing number of companies are implementing dynamic processes and supporting software to contend with today’s challenges around operational agility.

But which processes and software are leaders adopting that are driving the most value today?

Formalized Processes for Continuous Improvement

Our 2013-2014 Manufacturing Operations Management (MOM) survey asked manufacturing executives and decision makers about the formal manufacturing programs and processes they are implementing as part of their Operational Excellence journeys.

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This chart shows the rates for manufacturing programs that are currently implemented, or are planned to be implemented within a year. As you can see, Lean and ISO 9000/9001 programs lead the way with rates of 29% and 25%, respectively. Overall, 73% of companies surveyed had some formal continuous improvement program in place or planned within a year, and most have a combination of more than one.

These programs provide proven methodologies for supporting the realities of balancing consistent operations with the realities of day-to-day manufacturing schedule dynamics while anticipating demand fluctuations. Without standardized, cross-functional programs, companies are often forced to operate in a highly reactive “firefighting mode” with minimal preparation, if any, for these growing dynamics.

While structured continuous improvement programs such as these provide an important foundation, they need to be supported by accurate data collection and analysis capabilities, and this is where supporting software technology enters the picture.

Which Software Applications are Companies Adopting on Their Operational Excellence Journeys?

Our research shows that historically most companies have been using ERP software to manage overall enterprise operations, and that many are choosing to deploy MOM software applications to support more agile operations that are needed today.

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The chart above shows adoption rates for the top MOM software applications today. Each of these applications plays a key role in enabling agile manufacturing operations:

 

  • Quality Management Software: Without effective quality management, manufacturing organizations lack the ability to ensure product consistency while simultaneously handling the inevitable changes in supply and demand. Quality Management Software keeps product variability in check and helps companies avoid being in an out-of-control, “firefighting” mode.
  • Planning, Scheduling & Dispatching Software: Manufacturing operations are always dynamic and subject to changes, whether it’s a customer order schedule, a supplier delivery, unplanned equipment downtime, or other issue. This software facilitates agility by greatly shortening the response rate in rescheduling and planning around these manufacturing dynamics.
  • Manufacturing Execution System (MES): MES is crucial in enforcing and tracking established manufacturing practices to ensure consistent and reliable production. An effective MES solution that allows for harmonized processes and workflows across sites to be rapidly adapted to the changing needs of plant operations is a key step in ensuring current and future agility.

 

It’s clear from looking at the growing rates of standardized process adoption and MOM software implementations that manufacturers are increasingly turning to these tools to bolster their continuous improvement initiatives and improve agility.

In the next post of this series, we’ll examine how companies are rolling out these processes and technologies across plants, lines of business, and enterprise-wide, and look into how these capabilities are directly translating to better agility for manufacturing.

Accelerate Your Operational Excellence Journey – Attend the LNS Research Webcast

We’ll be drilling much deeper into operational agility and other ways to  accelerate Operational Excellence journeys through the alignment of people, process, and supporting technology resources in the upcoming LNS Research webcast: “Accelerating Operational Excellence for Global and Regional Manufacturers,” on January 29, 2014, 11:00 am EST.

 

Mark can be found on Google+.

Permanent link to this article: http://www.apriso.com/blog/2014/01/achieving-operational-agility-critical-tools-for-manufacturers/

Jan 23 2014

Leverage People, Processes & Technology to Achieve Operational Excellence

Each Operational Excellence initiative requires the optimization of a company’s key resources – people, processes, and technology – working in harmony to achieve your business objectives. Not only is this concept intuitive, it is actually backed up by research. Below is a brief summary of what the Infographic that follows provides greater detail.

People

Leading companies are putting organizational strength behind their Operational Excellence Initiatives. Research support that the sharing of common goals, objectives, data, information and KPIs across teams is a best practice to improve operational excellence.

Processes

Market leaders are accelerating their pace toward Operational Excellence through formal manufacturing programs and training. Simply putting in place a format program and process on how to teach, standardize and continuously improve your operational processes is a great step to be in alignment with the market leader. Research indicates 73% of those interviewed have formal programs in place.

Technology

Companies are supporting people and processes with integrated systems and real-time information visibility. If you have the systems and processes in place to to deliver KPIs to all personnel, in real-time, then you are a leader, and comprise only 15% of those interviewed. If you have this capability planned for next year, then you are part of 18% of those interviewed.

 

Here is an Infographic with more supporting details:

 

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Mark can be found on Google+.

Permanent link to this article: http://www.apriso.com/blog/2014/01/leverage-people-processes-technology-to-achieve-operational-excellence/

Jan 21 2014

6 Ways to get Smart and Cut Manufacturing Costs

top_6_ways_to_cut_manufacturing_costsWhen it comes to “modern” manufacturing intelligence, a lot has changed in recent years. Manufacturing issues have only grown more complex, while the new technologies that have evolved to meet these challenges now require new knowledge to understand, implement and leverage effectively. Companies now find themselves under pressure for more rapid product introductions, adaptation to local market conditions and continuous improvement to optimize costs, quality and efficiency.

As a result, manufacturing executives need unprecedented visibility and control over the entire production process while creating cost efficiencies at the same time. The objective to improving visibility is primarily to gain information faster, which can then be converted into intelligence and better decision support. The suggestion to get “smarter” with how we operate starts with a quest for “ultimate” visibility.

With this in mind, let’s take a look at some common measures and visibility benefits that are now possible with a “modern” manufacturing intelligence solution, which can help executives better manage their manufacturing assets in a way that meets customer demand and might actually also help a company to save some money.

I would propose that the time-tested DuPont model is still a viable approach to break down the Return-on-Asset (ROA) equation into component parts to optimize capital investment and measure your manufacturing operations management performance. Specifically, the components include increasing revenue for more asset turns, reducing costs for more payback, and lowering the asset base for higher productivity. Better decision making – and the tools that support it – offer the potential to improve in each of these areas, so can justify investment in the technology that supports it.

Consider taking a closer look at the following areas to drive better efficiency in manufacturing operations.

 

  1. Process optimization. Before talking about cost, you need to look at your entire process. Focusing on the process rather on the product or product-related cost might be the initial important departure from your current (usual) practice. Getting all great details of the (even not-yet optimized) process characteristics – prior to any improvement attempt might force you to draw a bigger picture than you are used to. This helps to manage the whole and not a part, avoiding partial process optimization or improving a process part but (unintentional) damaging another (maybe down-stream) part and sometimes making output even much worse.
  2. Workforce optimization. By taking a demand-calibrated versus a capacity utilization approach to production decisions, companies can better balance workforce requirements and optimize labor costs. Reduced overtime expense can be a major source of savings.
  3. Energy consumption. For many manufacturers, energy represents the first or second highest (with labor being the highest) cost element. By making demand-driven decisions, companies can choose to run slower to save energy without sacrificing customer service or output. Real-time, accurate visibility into the operating conditions is critical.
  4. Lower cost of Quality. With better access to enterprise quality intelligence, as a component of overall manufacturing intelligence, companies can improve root cause analysis, take corrective actions more quickly, and even proactively prevent spills or quarantines from occurring in the first place.
  5. Lower cost of regulatory compliance. As a continuation of improving quality and real-time visibility to how quality processes are executed and managed, it follows that the benefits not only reduce the cost of compliance, but also help to avoid production mistakes in the first place, which can cost a fortune to correct.
  6. Inventory carrying costs.  Storing product inventory for a long period of time comes at a cost. Manufacturers need to consider the cost of storage, any necessary insurance, maintenance and other factors.  Whenever possible, manufacturers will benefit from nimble and responsive manufacturing operations to avoid overproduction and the resulting excess storage costs and risk.  By calibrating operating cadence to customer demand, companies can avoid “out-of-stock” occurrences without storing excess inventory.

 

Identifying and putting in place common production measures like these will help manufacturing executives attack costs network wide and create a mechanism for prioritizing continuous improvement projects while continuing to meet customer demand.

These 6 areas form the solid foundation for manufacturing excellence. They also determine the dimensions and detailed scope of the imperative operational visibility, which will be the main subject of my next blog post!

Permanent link to this article: http://www.apriso.com/blog/2014/01/6-ways-to-get-smart-and-cut-manufacturing-costs/

Jan 15 2014

In Pursuit of the Transparent Manufacturing Plant

hot_pursuit_transparent_manufacturing_plantOn a quest to reach the pinnacle of quality control, manufacturers in the automotive, industrial equipment and other industries are collecting and crunching massive amounts of information to best understand and “see” exactly what is happening on the plant floor. Serving as their eyes in this scenario is manufacturing intelligence software coupled with big data. Together, these technologies can provide a detailed view of everything in the work cell—right down to the nuts and bolts, wheels and drivetrains.

More and more, manufacturers are seeking granular visibility, as outlined in this Wall Street Journal article, which highlights how Raytheon and Harley-Davidson are using MES software and automated data collection techniques to track everything from the humidity in the room to the turn of a screw. Randy Stevenson, a missile-systems executive at Raytheon, is quoted in the WSJ article as saying, “If a screw is supposed to be turned 13 times after it is inserted but is instead turned only 12 times, an error message flashes and production of the missile or component halts.” Improvising with a defective screw or the wrong size screw isn’t an option, he says. “It’s either right or it’s not.”

Whether it’s a missile, a motorcycle, or a milk carton, quality is of the utmost importance. And, there are a “factory of things” out there, that, no matter how minor they seem in the making of a product, could potentially cause major problems somewhere in the product lifecycle if not proactively and accurately monitored and controlled. That’s why Harley-Davidson keeps a continuous record of the tiniest production details right down to the speed of the fans in the painting booth. Now everything – including the paint job – is considered an exact science. There is no room for artistic leeway.

Seeing Through a Sea of Data

Where to find the data and how to measure it, however, is a bit like chasing a wave when it comes to global manufacturing operations.  Data is seldom static and seems to always be on the move – from the instrument to the controller to the switch to the server – there is always data that is changing and flowing through the network.

In a recent AutomationWorld column, Gary Mintchell explores the impact of data within the test and measurement world, noting that there are traditionally four variables of data:

  1. Volume
  2. Velocity
  3. Variety
  4. Value

Recently, the term “Visibility” has been added to the mix, as a 5th “V.” That’s because manufacturers need to move beyond simply tracking how much and what kind of data they have, but need to start focusing more on how they are actually seeing the data – and how current is it – in order to start analyzing the results.

New big data solutions, born from partnerships between Manufacturing Execution Systems (MES), Manufacturing Intelligence (MI), and Big Data vendors are capturing information from the many “things” scattered inside and outside of the plant. Mintchell calls this emerging trend “big analog data,” with the focus being on the ability to process terabytes of streaming data originating from thousands of real-time sources.

When it comes to the future of predictive analytics and quality control, it is no longer about measuring specific key performance indicators (KPIs). Rather, it is about measuring everything in order to create complete transparency across global production facilities as well as throughout the supply chain and distribution pipelines.

Ultimately, plant manager and CEOs alike should always have an answer to the question, “What do you see?”

Permanent link to this article: http://www.apriso.com/blog/2014/01/in-pursuit-of-the-transparent-manufacturing-plant/

Jan 10 2014

Every Company’s Operational Excellence Journey Is Different

Similarities in Operational Excellence Journeys

Manufacturing organizations today need to contend with unprecedented levels of competition—the result of complex global supply chains and global competition, increasing customer demands, international regulatory issues, and the speed of new product introduction cycles. As a consequence, leading companies are being forced to accelerate their journeys toward their visions of optimized operations and realizing ongoing production improvements.

The individual strategic objectives and challenges that companies experience can vary significantly, but the initial steps in facing them do not. This is because every pursuit of Operational Excellence—effectively optimizing people, process, and supporting technology resources—first requires the adoption of a Continuous Improvement mindset, including any needed cultural adjustments fostering increased collaboration across contributing departments within the business. Any problems that need to be addressed require a team effort, with all relevant stakeholders educated on the initiatives at hand.

Furthermore, all Operational Excellence initiatives also require a target, combination of metrics, or other process maturity yardstick of some kind to evaluate progress and move goals forward. And once these people and process related initiatives have begun, Operational Excellence journeys are then typically accelerated and sustained using the appropriate supporting technology.

Put simply, every Operational Excellence initiative shares critical similarities and starting points, including:

  • Coordination across people, process and technology
  • Continuous improvement approach and mentality
  • Measurement and targets to drive action and results
  • Increased levels of team collaboration
  • Sustained and accelerated by technology

However, this is where similarities typically end. A company’s strategic objectives, challenges, and Key Performance Indicators (KPIs) are highly dependent on industry, specific business situation, and where it currently finds itself along its unique Operational Excellence journey.

Operational Responsiveness and Agility are an Important Part of Many Operational Excellence Journeys

In our most recent Manufacturing Operations Management survey, over 250 respondents were asked to choose their top 3 strategic objectives for their manufacturing operations. The survey demographic spanned a broad range of manufacturing industries, including 37.1% from discrete manufacturing, 17.0% from process manufacturing, 15.2% food & beverage/consumer packaged goods, 11.4% from life sciences, and 19.3% from all other industries. These respondents had several objectives to choose from, and below are the top five. Second only to ensuring product quality consistency was the ability to be responsive to customer demands, with 56% of responses.

 

Top 5 Strategic Objectives of Manufacturers

Given that responding to customer demands is such a high priority for so many companies, it is not surprising that a growing number of companies today are focused on adopting the right dynamic process and technology capabilities that can enable agile response to customer demands and changes in the marketplace.

According to the survey, 26% of respondents currently have both dynamic processes and supporting software in place to respond to these challenges, with an additional 10% planning to do so in the next year. Seventeen percent of respondents have the foundational processes in place, with another 10% planning to implement them in the next year. Overall, a total of 63% of respondents are either currently possess these process and software capabilities or are actively working to implement them to enable or increase operations agility. This is an important indication of how manufacturing industries are rising to meet this challenge.

 

Research Findings: Ability to Rapidly Respond to Changes in Supply and Demand 

Operational Excellence Journey Differences

It is clear that not every company approaches Operational Excellence with the same needs or goals, and this manifests itself into important differences, including:

  • Areas of focus that vary by industry and specific business situation
  • Different associated goals, objectives, and KPI targets
  • Best processes and programs to utilize in order to meet the goals and objectives
  • Organizational capabilities and available talent
  • Technology strategy dependent on existing technology infrastructure and future needs

However, once a company chooses to focus on a particular critical area for improvement like customer responsiveness and the corresponding need for production agility, it is important that the initiative is supported with the necessary people, process, and technology capabilities and resources.

In my next blog post of this series, we will examine some of the “tools of the trade” to help you achieve operational excellence, as it relates to greater agility and responsiveness, the process approaches, the technology solutions companies are leveraging, and how companies are driving improvements in customer responsiveness related KPI’s.

We will also further discuss many of these critical people, process, and technology issues in the upcoming LNS Research webcast: “How to Accelerate Your Operational Excellence Journey,” scheduled to be broadcast on January 29, 2014.

Interested to learn more? Here is a link to a manufacturing operations management infographic containing more findings from the research just completed on this topic.

 

Mark can be found on Google+.

Permanent link to this article: http://www.apriso.com/blog/2014/01/every-companys-operational-excellence-journey-is-different/

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