The watchword for measuring success in any business or organization is “efficiency”.
In manufacturing, achieving target levels of productivity can mean the difference between success and failure. Having the insights of data inputs and ongoing analysis of productivity metrics is essential to reaching ever-great levels of efficiency.
This is just one of hundreds of benefits of having a customized MRP solution within your organization collecting data and providing stakeholders with the ability to effect change to attain better results. After all, just knowing instinctively that inefficiencies exist on a shop floor, within a production line or lurking in a supply chain is useless. One must be armed with the knowledge necessary to identify and correct them.
In this sense, everyone working in a manufacturing environment should consider themselves Efficiency Detectives – essentially, gumshoes looking for clues to root out sources of inefficiencies responsible for causing waste, hindering productivity, and negatively impacting quality-value goals. Being able to stop wasteful practices, repetitive steps, or any activity which causes unnecessary effort, empowers all those involved in the manufacturing process to play a role in continuous improvement.
Better processes = faster turnover
In seeking to implement a Lean approach and the continuous improvement benefits which it delivers, a detailed analysis must be performed. This is a thorough evaluation of the people, facilities, machinery, and procedures which touch the production processes. As we discussed in our previous article ‘How Lean Enforces More Efficient Equipment Utilization’, one of the primary goals of Lean in manufacturing is ensuring optimal use of equipment throughout the production process.
Performing the analysis sets the stage for efficiency improvement. This begins with knowing how processes are currently being accomplished in relation to each piece of equipment throughout the production line. Typically, we start with analyzing usage trends of all equipment in play. To do so effectively, these elements must be considered:
- Products being produced
- Variations in products
- Customer demand
- Production timelines
- Rate per unit, referred to as takt time
Takt time is the time required to complete a product to meet customer demand and is expressed with this formula:
Total Available Production Time
Takt Time = —————————————————–
Average Customer Demand
The importance of doing this so thoroughly is to ensure the organization can decrease overall process time and limit overprocessing as well as other wastes. Once done optimally, it ensures the company can meet customer orders that have been received and which have triggered production as timely as possible. But, before pushing ahead with an end-to-end reengineering of the processes inherent in production, we should seek out any non-value added (NVA) time which exists while the current process are in use. To illustrate the point, let’s look at a typical manufacturing facility and how inefficient equipment utilization hinders their production cycle.
A case study in inefficiency:
In visiting a manufacturer of electrical switches, lighting fixtures, wiring and control systems, we are immediately aware that this is a business employing a large workforce. They were tasked with producing a wide range of products on an assembly line, that must respond to highly fluid production goals across the entire catalog of products.
The focal point of the facility is a production line featuring a significant number of machines with interchangeable molds. Throughout the day, line workers must rapidly pull molds from the equipment and attach the next mold in the scheduled production run. This seems efficient because it means every machine can produce a vast array of products by altering the mold as often as necessary. Every component is different and is assembled to create grounded outlets, light switches, wall plates, lamp base shells, etc.
In our analysis of the processes in play, we must bring to light a variety of formulas to capture these metrics in a meaningful way. This is where the use of takt time, cycle time, and lead time is applied to accurately measure the efficiency of the process. Calculating this also informs us as to what each process must yield to meet customer demand for the orders placed.
Not unexpectedly, the challenge this manufacturer faced was centered on when and how often the molds were being switched out from each machine. Inefficiencies stemmed from a variety of inconsistencies which had been allowed to creep into these variables. For instance, on one machine someone may have been using a mold for a light switch. Once the production cycle had been completed, another mold would be installed to fill an order for another product, such as a wall plate. This required that the employee go through an involved number of steps to prep the machine before the next cycle could begin:
- Clean up the work area
- Return the mold to the rack
- Heat up the new mold
- Engage in some degree of prototyping
All of this must occur before the production of the next product type can begin. As you would expect, production costs and the volume of output were negatively impacted due to the amount of downtime or waste inherent in each of these steps. Other inefficiencies were documented when production run scheduling would be altered on-the-fly to give a higher priority to a specific order. This might not have been as detrimental to productivity as shown in the data but for the fact that the processes and use of machines were not adapted to efficiently meet this objective.
Due to this inflexibility baked into the systems in place, these inefficiencies in the production line were exacerbated and adversely affected every aspect of the manufacturing environment.
For starters, having to constantly change molds within the machines added tremendous time and cost to the process, However, the net effort didn’t even result in a single finished unit. Because this was a discrete manufacturing environment, components were mostly inventoried for later use in the final assembly process. Therefore, having this just-in-time mentality despite an absence of need to meet tight production deadlines created avoidable waste.
In addition to unproductive employee time, this wastefulness extended to the use of electricity, cleaning materials, and inefficient production cycles and process time. When the cost metrics were tabulated and analyzed, we provided a report to management which detailed in hard numbers the amount of money being wasted. Our evaluation also documented how these inefficiencies were amplified in making it more difficult to fulfil orders on a timely basis and achieve optimal customer satisfaction.
The coping mechanism management used to avoid addressing obvious flaws in their manufacturing processes was to accept these deficiencies and not consider the potential gains that could be achieved if a reorganization of their processes was implemented. When presented with our recommendations which include a customized suite of MRP modules based on the Attivo All-In-One platform, they eagerly moved ahead with our recommendations.
Today, the production line is operating at a higher capacity and at an efficiency rate several hundred percent above their historical levels. In prepping machines for a run, shop floor personnel use specific machines which can only be used for certain products. Now that molds don’t have to be constantly switched out, the time previously wasted cleaning the work area, placing molds in inventory, installing new molds, and heating them for each run have all been eliminated from the manufacturing processes. Prototyping is now done once at the start of each shift and until a run is finished, not performed again.
Also, when a priority needs to be applied to a specific component, higher production is now supported by switching over two or more machines which are dedicated solely to using the molds for that product. If you’d like to find out more about this and other production line challenges solved by Attivo All-In-One, powered by SAP Business One, schedule a time with one of our consultants for an in-depth overview of how we help manufacturers, distributors, and service businesses of all kinds.