Creating a culture of action and improving productivity
Political and social changes have had a significant impact on the demand for manufactured goods worldwide. The World Bank forecasts that global economic growth will achieve a moderate 2.7 per cent increase in 2017 and the pressure of rising costs is contributing to lower margins. In order to reduce these costs and improve margins, it is essential that businesses target productivity gains and improve efficiency among their workforce. Manufacturing is one sector where actionable insight is difficult to obtain to address these targets. It often gets overlooked, as businesses focus their efforts on other key areas of the supply chain.
A system-based approach
Manufacturing Execution Systems (MES) allow food and beverage manufacturers to effectively align their production with supply chain functionality. According to industry research, 53 per cent of best-in-class food and beverage companies have implemented MES. Aberdeen Group considers a manufacturer belongs to the best-in-class category based on the following metrics:
- 96 percent Overall Equipment Effectiveness (OEE)
- 95 percent On-Time & Complete Shipments
- 72 percent Successful New Product Introduction (NPI)
- +15 percent Operating Margin vs. Corporate Plan
Areas of incremental improvement that yield results include operating equipment more efficiently, better use of labour and a reduction in waste. However, how can your business determine the areas that require improvement?
A fully integrated MES allows manufacturers to accommodate the growing pains of emerging business expectations, as well as immediately apply the benefits of actionable data and intelligent presentation. This will increase performance and have a positive impact on the bottom line.
Analysing production performance
In an effort to optimise utilisation, while unlocking production capacity and competitiveness, an increasing number of manufacturers have engaged in continuous improvement initiatives. Programmes such as these can be challenging to execute without a system to provide the bedrock to drive change and operational excellence throughout the company. There are four areas which can make an immediate impact on day-to-day operations and which will enable a business to make smarter decisions. These are: visibility, immediacy, accountability and consistency.
Ensuring operational visibility
A lack of operational visibility makes it difficult to define and measure the effectiveness of a continuous improvement programme. When emerging issues go unnoticed, it makes it almost impossible to improve the accountability of shop floor staff. Inefficient processes also affect the flexibility and agility that is fundamental for success in the highly competitive global environment.
Ignore this for too long and the existing gulf between the successful market leaders and their competition can widen to a chasm. A lack of visibility means a company cannot respond to customers quickly enough to fully meet their needs. Full manufacturing visibility into production operations provides insight into inefficiencies and is the first key step in implementing a continuous improvement journey.
Is your information up to date?
Outdated information can also prove a significant obstacle. Manual systems and automated data collection tools provide valuable information. However, if this information is stale by the time it is flagged, how can you take effective corrective action? Immediate access to data is vital to make informed decisions. Without it, management can spend an excessive amount of time on non-value-added administrative tasks.
If you present the right information, at the right time, and to the right person, it enables adjustments to be made to production while operational. This will ensure the path towards a targeted goal is maintained before it becomes too late. Access to real-time data provides clear actionable intelligence to empower shop floor teams with the information they need to make informed decisions.
Engaging the shop floor
Shop floor ownership is fundamental to the success of any continuous improvement initiative. Machine operators have the greatest control over how those machines are used. The innate knowledge of the shop floor can often be overlooked without concrete evidence of the issues they confront daily. Implement a system that places a high emphasis on driving accountability within those teams and the shop floor becomes engaged. Motivation is enhanced when employees feel a true sense of ownership over their area of responsibility.
On the shop floor, employees are dealing in events and making decisions based on their experience and knowledge. Without a sustainable method for delivering continuous performance feedback, workers cannot be held accountable for performance issues. A centralised system records and time-stamps all activity on the production line. Such intelligent data will help workers identity problems and make corrections in the moment. MES raises knowledge — which then raises awareness supported by hard evidence — allowing shop floor workers to make better decisions, and allowing plant management to act upon the true picture of events being recorded on the shop floor.
Disseminating the ‘truth’
Continuous improvement activities and root cause analysis requires that data be collected in a structured and consistent manner. All too often, businesses try to align their improvement activities by combining data from many different sources when what is required is “one version of the truth.” Having such information empowers the alignment of improvement initiatives throughout the whole plant network.
By standardising and recording information in a common and consistent manner, an overview of the production environment can be realised, and continuous improvement facilitators can constantly measure, implement and track success. This is the axis of the shift to a culture of action, where improvement targets can be consistently reset as the gains are achieved.
Production efficiencies gained from MES can unlock the possibility of your business increasing output and profitability, which could then allow capital expenditures to be redirected in order to fund expansion. An integrated system that spans your entire enterprise provides the basis for quality, continuous improvement and efficient maintenance.
Adding in the human factor
People are the most important and valuable resource your company possesses. According to Gartner research, employee productivity and cultural adoption are becoming more important to those companies investing in MES, a recognition that the people on the floor are just as important as the software. The human element is what dictates true operational efficiency — that is, if it can be optimally integrated into production practices.
Employees are expected to be active in collecting information, raising and resolving problems, and recommending any improvements that could be made as a result. It’s unfortunate that all too often, their insight is not acted upon and the impact on factory floor morale is negative. When an employee feels that the tasks they are being asked to do have no positive impact on them and the way they work, you risk disengaging them from the entire process. This represents the worst use of people and belies any acknowledgement that may have been made that they are a company’s strongest asset.
After all, these are the people who have the benefit of years of experience; they understand the issues and it is of the utmost importance that their innate knowledge is collected as data, transformed into information and converted into the knowledge that a company needs to improve operational efficiency. In a factory, it is the people that know "their" machines best who are the people best positioned to inform management on work cycle improvements. With a strategically developed, workforce-focused MES approach, everyone within your company — from the factory floor through to mid- and senior-level management — can contribute their expertise to the benefit of production and, ultimately, your profitability.
Action is the Only Option
Maintaining the status quo on the shop floor is not an option. Action is necessary in order for you to stay competitive. Having visibility into manufacturing inefficiencies means your business can be more agile in production and continue to meet production demands and growth targets in a structured, manageable way. Once the stream of data flows into this sea of knowledge, your strategic decision-makers will be better placed to identify historical trends, build analysis and make changes for the better. Quality data and a quality system to capture it are the keys to driving a collective culture where your company never stops improving, every hour, every shift, and every day.
By Jack Payne, VP Product Management and Solutions Consulting at Aptean