Overcoming Your Operational Plateau

There is a shift occurring in manufacturing that is creating a groundswell of change.  Manufacturers have hit a wall when it comes to operational efficiency. They have made all the obvious changes to their manufacturing production and squeezed the last incremental improvements out of their systems.

According to the World Bank, global labor productivity in terms of work to GDP has been declining for decades, signifying that the Lean and ERP productivity efforts had maxed out on their gains. That is because these methods have been used primarily to increase the speed of their manufacturing processes and, for some organizations, they have become so fast, the rest of the business can’t keep up with product lines. Now is the time for manufacturers to go beyond line productivity and efficiency efforts, and build a foundation for strategic insights that will bring forward the future of the operations. 

When it comes to overcoming operational plateaus, there are three important things to consider. The first, and most obvious is this: you can’t further optimize your plant until your processes are visible and under control. Manufacturers have long had tools to help operators gain visibility. Today, equipment and plant sensors have given way to more sophisticated systems that look beyond the performance of the equipment itself.

Manufacturing execution systems, or MES, have entered the market to bridge the gap between automation systems and ERP, giving considerably more visibility to things like Overall Equipment Effectiveness (OEE), quality, labor, and work-in-process by tracking, tracing, and conducting analysis  on products, processes, and across plants. Yet, an Arc Forum survey found that MES adoption lags despite a positive correlation of maturity in MES digital transformation with increased performance.

Not having a MES is a serious misstep for manufacturers, especially those struggling with an operational plateau, because the new visibility afforded by MES carries significant benefits for increased efficiency and reduced costs that can be achievable in a short period of time. Visibility into product data management, production flow, and inventory management, schedule execution and product genealogy, order execution, quality, efficiency, and root cause analysis leads to benefits such as reductions in order lead time, decreased labor costs, as well as time and cost savings from elimination of paperwork and data entry, reduction of work in process inventory, and increase in machine utilization. And, MES can help manufacturers do all of this without needing significant setup or customization.

The second consideration around breaking operational plateaus involves including all areas of your business in the effort to obtain efficiency gains. Operators have been using tools to ensure the line is operating at peak performance and they can quickly identify faulty pieces of equipment, but other areas of the business may not have had the benefit of this level of visibility into their data. Chances are, they use their own tools.

For example, the supervisor needs information to optimize product data or recipe change orders, production changeovers, machine and operator efficiency, and safety incident management. The supply chain manager needs to optimize to revenue targets and year to year growth while reducing costs. Operations managers focus on increasing monthly and quarterly manufacturing efficiency and reducing non-value added steps in manufacturing. It is logical to surmise that they use data to manage these things, yet Gartner reports that more than 70% of factory-generated data is unused. Any visit to a manufacturing facility will reveal continued use of paper and manual processes. Changing this paradigm is exactly what can give manufacturing operations an edge. Today’s technology makes it easy to give each person access to the information they need to do their job. Coordinating the plant, people, and processes around the usage of data to drive operational efficiency in every area of the business is a powerful cultural shift that can make significant inroads against operational plateaus. And with this shift comes more benefits.

The third consideration is the one that has the most potential impact for your business. Once you have made processes visible and created a culture of capturing and using data across the business, you have enabled a structure that can highlight what the human eyes cannot see.  Today’s powerful analytics have the ability to look across your enterprise data, predict failures, identify root causes, and analyze the interplay of various processes on efficiency. While manufactures have long been concerned about infrastructure costs and security related to big data, creating a big data environment in the cloud enables manufacturers to cost-effectively and reliably transform their enterprise-wide data into a usable format for cross plant analysis and analytics. Use of the cloud for manufacturing data often leads to reduced infrastructure costs and increased security alongside unprecedented visibility and actionability for the manufacturer. 

This type of global visibility lends a structured view into manufacturing data from products, processes, and plants integrated with ERP data and asset data to run analytics and optimize production performance in ways never before possible and is the critical lever that will break the operational plateau.

 Manufacturers can overcome stagnated operations by leveraging a digital approach, one that is more aligned with the level of technology used in other industries. It used to be that there was a barrier for adopting technology tools, but with today’s powerful solutions, like GE Digital's Proficy Smart Factory MES, Proficy Manufacturing Data Cloud, and Proficy Orchestration Hub, manufacturers can leverage out-of-the-box capabilities for all areas of business, the time is now to take advantage of the gains doing so will bring. Taking steps to establish a digital culture across the enterprise that leverages MES tools and today’s cloud technology to gain enterprise insight is the formula for doing it.

To learn more about how MES can help you overcome your operational plateau and gain higher efficiency from your operations, visit our Proficy Smart Factory (MES) page.