It is by far the most unrecognized asset in process manufacturing organizations. Yet it represents the single biggest opportunity for performance improvement today.
In fact, it has enabled many manufacturers to dramatically increase production efficiency, improve service levels and boost profitability virtually overnight.
It’s not a new technology. It’s not a new set of statistical tools or a new continuous improvement methodology.
It’s people. The hourly workers on the factory floor. The operators and supervisors whose knowledge, skills and experience are being severely underused.
Right idea, wrong approach
During the last decade, American manufacturers in the viciously competitive food and beverage and consumer packaged goods (CPG) sectors have employed a plethora of performance-improvement strategies in efforts to strengthen business performance.
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Initiatives such as ERP, supply-chain management and continuous improvement have been incredibly effective, enabling great advances in efficiency. But the emphasis on tracking, measurement and automation has all but removed the operators from the decision-making process, leading to much of the worker apathy, dissent and cynicism we see today.
Data-collection technology, including data historians and manufacturing execution systems (MES), have been particularly damaging in terms of both shop floor morale and wasted effort. That’s because, although beneficial in some ways, MES is designed around the wrong goal. It’s not focused on the real cause of improved production: People.
Why MES continues to fail
An MES excels at collecting and generating an enormous amount of data, with an eye on improving overall equipment efficiency (OEE). Yet OEE measurements, by themselves, provide little insight into what is needed to improve performance.
According to IT industry research leader Gartner, OEE creates a perception that plant performance is primarily a factor of how well the machinery is running: “Although superficially this is true, the reasons that machines run well all come down to the knowledge workers who make them run: the shop floor staff.”
Real-time MOM: Why it works
Additionally, MES data is almost always delivered after the fact, once it’s too late to take corrective action. And an MES is not designed to interact with shop floor personnel. Instead, it forces operators and supervisors to spend hours filling out paperwork that details the reasons for stoppages, scrap and maintenance issues.
In a fast-paced production environment, this is a futile task. The chances that someone will remember every detail about the last eight hours are slim, which means that only a fraction of the data is ever captured. And by the time the analysis gets back to the shop floor, it’s too late for anyone to take corrective measures anyway. The result is piles and piles of misleading data that no one can act on, forcing the company to go back to managing production operations in the dark.
To add insult to injury, a major market research firm recently reported that the average MES implementation requires no less than a $1 million investment. That’s a hefty price tag considering that, on average, 70 percent of MES implementations fail to yield their intended return on investment.
It’s the people, stupid!
Fortunately, the pendulum is swinging back the other way. After years of frenzied activity focused on data collection and OEE, process manufacturers are now realizing that the real answer may, after all, lie with the workforce. Organizations have begun tapping into the knowledge, skills and experience of the factory workers and enabling them take ownership of the improvement process.
However, to make a significant contribution, the shop floor needs better visibility into production. It needs real-time, relevant information it can use to shine a light on production performance and prevent problems from occurring in the first place.
In essence, the shop floor needs a people-based information management system.
Transparency in real time
Unlike most traditional factory floor systems — which are designed merely to collect production data and not to interact with shop floor personnel — manufacturing operations management (MOM) systems are practical, people-based systems designed around the way operators work.
By uniting the disciplines of scheduling, operations, quality and maintenance into one common platform, MOM provides operators and supervisors with the real-time, actionable information they need to take the right actions at the right times.
Sturdy, kiosk-style terminals are placed throughout the process lines at suitable points for crew access. Each provides a highly intuitive, consumer-oriented interface that helps shine a light on workflow and performance, enabling shop floor personnel to easily and quickly pinpoint problems and their causes.
Unlike traditional data collection systems, MOM systems provide the shop floor with information on how production lines are performing at that very moment. They are also designed around the specific needs of the shop floor, replacing endless and de-motivating paperwork with one simple, intuitive system.
Rather than creating dissent and mistrust, MOM systems almost always generate a feeling of possibility and ownership. In fact, for many operators and supervisors, turning on the switch on an MOM system is the “eureka” moment — the point when they realize that they can now have a direct impact on production efficiency improvements.
It’s the point when they intentionally take appropriate and timely action on issues that are within their immediate sphere of influence. Not because they are being coerced into taking action, but because people can’t help but use common sense when they’re faced with obvious things they ought to do.
From a maintenance perspective, for instance, MOM systems allow a company to significantly reduce downtime by shedding the light on how much of its downtime was a result of waiting for maintenance, how much of it occurred while work was in progress and how long it took to get the line up and running again after the issue was fixed.
In other words, MOM is all about making everyone accountable.
Best practices in a “can”
Another benefit of MOM systems is fast time-to-value. A number of solutions are designed to be implemented quickly, often in six weeks or less, and come prepackaged with industry-specific functionality and best practices that deliver value right out of the box. In fact, it’s not uncommon to see performance improvements of 10 points or higher within just days of going live on an MOM system.
And with a price often less than half that of an MES, MOM becomes a viable solution for any CPG manufacturer or food processor, not just for sophisticated early adopters or large global conglomerates.
MOM in action
Six weeks after going live on an MOM system, Nellson Nutraceutical, a contract manufacturer of protein powders for the athletic industry, had already seen its maintenance response time drop from an average of 38 minutes to a mere 14 minutes — a stunning 63 percent reduction.
Today, as soon as there’s a problem on the line, Nellson’s operators try to resolve it. If they aren’t able to do so, they click a button on a touch-screen terminal, which automatically notifies the appropriate maintenance technician. At that point, a clock begins tracking response time.
The moment the technician gets to the incident, he goes to the operator’s terminal and clicks a button that records his arrival. The system then begins another countdown, stopping once the issue is resolved.
For Nellson, the improved maintenance response time has led to a drastic reduction in unplanned downtime. This has accomplished an almost immediate 22% increase in OEE, according to Mike Winn, director of manufacturing SLC at Nellson Nutraceutical's Powder Division, and has alleviated tension between maintenance and production.
“We hadn’t even done anything to try and drive run-rates during these first six weeks,” Winn said. “Maintenance and production simply came together on its own. They recognized that everything was being tracked, so accountability went up immediately.”
He continues, “Ironically, this improvement was entirely a people thing. It didn’t come from a change-management program or a data-collection initiative. But it wouldn’t have happened without a system that enabled this level of transparency.”
The natural tendency to act
People aren’t stupid. When faced with a problem on the line, operators don’t need permission to take corrective action. They don’t need to be Six Sigma black belts. They don’t need piles of outdated reports. They just need to be left alone to take the action they know will work, and the problem will be fixed.
It all starts with developing a deeper respect for the shop floor — and providing those employees with a people-centric system that enables them to make a real difference in production performance.
Mark Sutcliffe is the general manager of CDC Factory for CDC Software. For more information, visit www.cdcsoftware.com.