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With the uncertainty of market demand in the current economic climate the prevailing wisdom appears to be “hang on to your cash and wait and see”. Yet today how many manufacturers can say their plant is running at the maximum of its potential, what SAP has coined "the perfect plant"? Are the gremlins truly gone forever and has the pot of gold been found? What will have the most positive impact on the bottom line over the next six months?
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The Secret to Overcoming Performance Losses
Most manufacturers have in place a performance improvement strategy and a team of individuals that are focused on hunting down and eliminating the waste that steals from the limited time available to produced sellable goods. Where this is most successful is where the initiative is driven from senior management and forms part of the business culture and strategy. The strategies vary from in-house methods using a mixture of approaches such as root cause analysis, kaizen blitz and asset care management to more formal programs such as Total Productive Management (TPM), Six Sigma, Theory of Constraints and Lean manufacturing. So what can be done today that will make significant change and why with all the existing focus are many manufacturers still looking for the “hidden gold” they know is hiding on the plant floor? It seems unlikely that major improvements can be made in the short term, especially when the business has been running for so many years, and yet World Class companies are seeing results in the order of 20% improvement in production performance and a return of investment within 6 months.
The secret lies in effective use of the already existing improvement team by enabling them to better understand the losses that occur, evaluate the impact and determine the root cause for prevention of future losses. Before the use of GPS aeroplane navigators used physical land features during the day and the stars at night to direct the pilot. On cloudy nights it was not unusual for a strong side wind to blow the plane off course which meant extra fuel reserves where carried to allow for the extra flying incurred (waste). Without a means to take accurate measurements and keep the plane on course pilots were required to “fly by the seat of their pants”.
What is Required?
What is required by manufacturers is a means to accurately record all events on the plant floor that impact on performance, this improved visibility allows all of the crew to better navigate and keep production on track to increased performance. Paper based solutions are challenged by short stops, capturing operator input and providing analysis tools to mention a few shortcomings. The result is that the true impact of short stops is not understood, the wealth of information operators can provide is lost and ultimately root cause analysis and problem solving is delayed.
One of the metrics used by management to determine the impact of improvement initiatives is Overall Equipment Effectiveness (OEE), others metrics may include material yields and bulk material (power, water) consumption per volume of goods produced. Today many plants have automation solutions that include sensors which interface to the physical plant. This information is available to a limited audience on the shop floor and does not capture the context required for performance measurement such as duration and categorisation of a downtime event. It does however provide the source of real-time data required by a Real-Time Performance Management (RPM – See TrakSYS) solution and in combination with manual inputs from operational staff drives the GPS your manufacturing business needs. Future articles will discuss what is need for a effective RPM solution but it must be noted that it is not as trivial as capturing the stopping and starting of machines and presenting the Pareto charts and OEE trends although this may appear as a step forward for many users. If a solution is to continue providing value it must broadly address the challenge of production efficiency and provide the suite of tools required.
Conclusion
So back to the original question; “Accept the losses caused by less than optimal production performance or invest in a RPM solution today?” This is not a question that can be answered the same for everyone as the circumstances differ, but for most the answer must be to at least investigate the potential for return on investment and evaluate the solutions available today. Do a small implementation and see the results that are possible. Remember every day that goes by equals potential profits lost that can never be recovered.
What Next?
Watch a 3-minute Overview from Parsec, the worldwide leader in real-time performance management solutions. 
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