As Economy Recovers for Manufacturers, There’s No Time for Downtime
As the manufacturing sector continues to recover, the focus of operations is changing. The economic upturn has brought an end to low volume and harsh rationalization. Volume has suddenly shot up for many manufacturers, and now they face a problem much different from cost cutting: How to meet increasing demand after a long period of resource slashing and little or no investment in productivity?
Historically, businesses did one of two things to meet new demand: build capacity with capital investment or outsource. But there is a third option that is far less cost-prohibitive and more sustainable: meet demand with better utilization of assets on hand. This involves eliminating loss—random and chronic—to free up resources and capacity. To do this, manufacturers need accurate, real-time manufacturing information so they can uncover and prioritize production problems and create new capacity using the same resources they already have.
A recent Epicor whitepaper lays out a four-step process to boost capacity:
- Stop unplanned and operational downtime. In a world where reliability is key and unplanned downtime can cost thousands of dollars per minute, reducing unplanned and operational downtime can yield great results. In addition to financial savings, reducing changeover time and operational downtime leads to proportional increases in manufacturing capacity. Best practices implemented on a single line can often be transferred to similar lines, multiplying the impact and creating even more needed capacity.
- Wipe out minor stops. Minor stops are short hesitations and stops that are usually less than five minutes. They are short enough to be “unnoticed,” but long enough to have a significant impact on line performance and capacity. Minor stops can add up to significant loss, especially if you don’t have visibility into the frequency, duration, and reasons for them.
- Eliminate production variability and quality loss. Quality loss and rejected product has a double impact: material and labor. A standard overall equipment effectiveness (OEE) calculation includes a production reject as a lost opportunity for production, which impacts capacity. Therefore, when calculating OEE, consider the cost of both material and labor.
- Establish improvement priorities in a financial context. Not all downtime is equal. Applying cost information to downtime analysis may reveal a new perspective: the cost of downtime. A cost-of-downtime analysis can be used to establish priorities with a financial context. Moreover, a probability of success analysis across loss categories will prepare operations professionals to prioritize efforts and achieve sustainable improvements.
Bottom line: the best way to create capacity is to scrutinize line performance with manufacturing intelligence applications that monitor and analyze manufacturing processes accurately, and in real time. These applications provide crucial information to help find the capacity needed, without costly investments for new machinery, additional labor, or contract manufacturing.
Posted by Diane Murray, Manager, Product Marketing