There is a shift occurring in CPG manufacturing that is creating a groundswell of change. Perhaps you feel that Estee Lauder has hit a wall when it comes to operational efficiency. All the obvious changes to your manufacturing production have been made and the last incremental improvements have been squeezed out your systems.
You aren’t alone. Average annual total productivity growth was 2.7% in the five years leading up to the global financial crisis, but it was only 0.7% in the past five years. Lean and ERP productivity efforts at food production plants have maxed out gains. The methods to increase the speed of manufacturing processes have become so fast, the rest of the business can’t keep up with production lines. Now is the time for Estee Lauder to go beyond line productivity and efficiency efforts, and build a foundation for strategic insights that will bring forward the future of the operations.
Why MES matters on the CPG manufacturing plant floor
When it comes to overcoming these operational plateaus, there are three important things to consider. The first, and most obvious is that you can’t further optimize your plant until your processes are visible and under control. Estee Lauder has long had tools to help operators gain visibility, but it may not be sufficient for today’s operational imperatives. 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), operational efficiencies, increased production and throughput, product quality, labor, and work-in-process by tracking, tracing, and conducting analysis. Yet, only 20% of plants utilize a MES system. Using an MES system can be a true competitive advantage for food production at Estee Lauder.
Not having a MES is a serious misstep for CPG manufacturers, especially those struggling with an operational plateau. Visibility into batch and product flow and inventory management, schedule execution, traceability, 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 Estee Lauder 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.
For example, the supervisor needs information to optimize product flow, machine and operator efficiency, and manage safety incidents. 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 would make it easy to give each person at Estee Lauder 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.
TThe third consideration is the one that has the most potential impact for your Estee Lauder facility. 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 manufacturers have long been concerned about infrastructure costs and security related to big data, creating a big data environment in the cloud enables Estee Lauder to cost-effectively and reliably transform enterprise-wide data into a usable format for cross plant analysis and analytics.
Powering a new era of CPG manufacturing for Estee Lauder with IIoT
Global visibility powered by MES lends a structured view into manufacturing data, 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.
Estee Lauder 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 Predix Manufacturing Execution Systems (Predix MES) and Predix Manufacturing Data Cloud (Predix MDC), 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.
The Productivity Imperative: Global Economic Outlook 2018–2022, Global Business Policy Council (GBPC) Research Report.