- August 23, 2016
By Thomas R. Cutler and John Maher
In today‚Äôs complex manufacturing environments, the physical processes of manufacturing involve so many moving parts; just digitizing respective components will yield demand-driven results. It is a start toward Best-in-Class lean manufacturing.
By Thomas R. Cutler and John Maher
Wenger Manufacturing, based in Sabetha, KS, now uses a synchronized, demand-driven production planning, scheduling and execution platform that connects to their ERP system and the real world results are remarkable. Increased on-time delivery went from 40% to 95% or greater, and in just the first few months the company experienced a WIP (work in process) reduction of 15% in the first few months, and reduced stock outs of stocked parts by 25%.
The WIP results are especially important because work in process inventories are a company's partially finished goods waiting for completion and eventual sale, or the value of these items. These items are either just being fabricated or waiting for further processing in a queue or a buffer storage.
This capital equipment manufacturer returned to profitability for the first time in three years by gaining visibility to their flow and acting on these signals to meet customer demand. They also achieved the “grand prize” of sustainable manufacturing success—user buy-in.
Aberdeen Research report, Three Steps to Make Your Manufacturing Systems Intelligent and to Distribute that Knowledge with the Greatest Efficiency, noted, “Organizations that can centralize and consolidate their systems are more equipped to unlock the value of their data and, as a result, get buy-in from their users. When approached effectively, manufacturing data can help companies grow and support the vision for a more knowledgeable, effective organization.”
Another manufacturer used their improved connectivity to achieve record capacity and improve customer lead time from three weeks to five days. New manufacturing software delivered clarity about constraints to improve flow.
The connectivity that drove those changes on the floor also helped them accelerate throughput and improve delivery time. They achieved additional workforce utilization as well, effectively creating new ways for employees to positively contribute, profitably change, and embrace the central idea of lean manufacturing, continuous improvement.
Manufacturing Intelligence for the Demand-Driven Factory
Demand-driven manufacturers succeed when they use technology to gain capacity and solve customers’ most pressing business issues. The convergence of manufacturing and technology is defined as the demand driven factory of the future. © 2016 Synchrono
With clear objectives monitored by KPIs (Key Performance Indicators) everyone from managers to shop floor personnel becomes empowered to improve both individual performance, as well as the entire plant operation. After gaining real-time visibility into what is actually happening out on the floor and the extended supply chain, the known real world metrics lead to improving actionable behavior. In many cases compensation also becomes tied to these objectives.
Manufacturing Intelligence Drives Enhance Value
Aberdeen Research reported, “Manufacturers that effectively harness their MI (manufacturing intelligence) achieve meaningful results.” They used four key performance criteria to distinguish the Best-in-Class (top 20% of aggregate performers) from All Others (bottom 80%). The Best-in-Class achieved the following performance metrics:
- 96% Successful new product introduction, versus 82% for All Others
- +26% Increase in operating margin, versus corporate plan, versus +6% for All Others
- 94% Operating Equipment Efficiency (OEE), versus 81% for All Others
- 99% on-time complete shipping, versus 90% for All Others
In today’s complex manufacturing environments, the physical processes of manufacturing involve so many moving parts; just digitizing respective components will yield demand-driven results. It is a start toward Best-in-Class lean manufacturing.
About the Authors
Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc., (www.trcutlerinc.com) Cutler is the founder of the Manufacturing Media Consortium including more than 6000 journalists, editors, and economists writing about trends in manufacturing, industry, material handling, and process improvement. Cutler authors more than 500 feature articles annually regarding the manufacturing sector and is the most published freelance industrial journalist worldwide. Cutler can be contacted at [email protected]and can be followed on Twitter @ThomasRCutler.
John Maher Vice President of Product Strategy at Synchrono, Inc. (www.synchrono.com) Maher has more than twenty years of experience working in manufacturing environments and has been with Synchrono since the company’s inception. He holds subject matter expertise in ERP, MRP, APS, supply chain, manufacturing planning and scheduling systems and constraints management drives continuous refinement of the company’s Lean and constraints management-based software and services. He is responsible for providing strategic direction for the Synchrono product roadmap and oversees the technology and delivery functions within the organization. John earned his BBA in production/operations management from University of Wisconsin, Whitewater, and an MBA from the University of Minnesota, Carlson School of Management. He has APICS CPIM certification in production and inventory management and Jonah certification in Theory of Constraints from the Goldratt Institute. Can be followed on Twitter @Synchrono_News.Learn More
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