Improving Operational Efficiency: Part 4

Labor Resource Planning

Every organization is constrained by the resources available to them. Utilizing those resources effectively is a key to success. 

Manufacturing is constrained by labor, raw material availability and equipment scheduling. The ability to optimize any one of these can make a big difference in helping your company’s bottom line. Labor is often overlooked in the planning process but a key element.

Gaining insight into how much labor is needed to complete a job, enables your scheduler to match labor resources to production requirements efficiently. 

  

Key questions to monitoring labor include: 

• Do have enough people to complete a job in a timely manner? 
• What adjustments need to be made to avoid unnecessary overhead?
• Can I extend, delay or consolidate work to avoid overtime?
• Do I have any upcoming bottlenecks? Can I move jobs from high volume days to level the workload and avoid a conflict that could strain limited resources?
• Can I reduce the cost of Training new workers?
• Can I reduce the complications caused by over staffing a project, such as excessive layers of communication?

Vicinity helps process manufacturers get the most out of their labor resources.  Vicinity records labor standards by formula. By setting a standard requirement Vicinity can calculate how many labor hours will be needed to execute the schedule and identify resource bottlenecks. This allows the scheduler to match the labor force to meet production demand reducing surges and lulls in production time. Bringing the labor requirements into the scheduling process will save your scheduler time and your company money with a very quick return.

Improving Operational Efficiency: Part 3

Tracking Batch Yields 

Measuring yield loss (input vs. output) is critical to improving operational efficiency for formula-based manufacturers.

When process manufacturers calculate and review yield by batch or formula the result is identification of below-normal yields.  Once corrective action is taken the pattern is broken and profits increase.

Increasing batch yields by 1-2% can result in a significant reduction in raw material cost and plant overhead. The results in overall production efficiency and saves money.
As manufacturers we spend a great deal of time analyzing our raw material costs but little time on batch yields.  An increase of 1% yield can be equivalent to 5-10% or more reduction in raw material costs.  So why would a company not monitor this powerful profit lever?

How do I get started?

The process is quite simple.

• Target a formula that has a significant volume.
• Look at the yields by batch for this formula over the pasts 6 months. Do you see a trend? Do you see variation? If either is true you have found a potential target.
• Spend a little time with production and R&D to see if you can identify the source of the variation or change for that formula.
• Watch the batch carefully the next time it is produced. What is causing the change or variation? The answer is probably staring you right in the face.
• Are there other products that share the same characteristics and are of high volume?  You have now found your next candidate.
• Repeat this process for the top 10 selling products. 

Before long your yields will increase and drive higher profits.  All with very little marginal effort.

By utilizing and ERP solution such as Vicinity software with Microsoft Dynamics a manufacturer can easy track and manage yield loss. Vicinity has a standard query that allows a user to view yields by formula/batch for any period of time. This data can be viewed in Vicinity or easily exported to Excel or statistical packages. Additionally,Vicinity has the ability to notify key personnel when a batch is out of a tolerable yield range. Corrective action can be taken immediately.

Using Vicinity, batch yields  can be reviewed by batch or formula through time. This lets process manufacturers identify those formulas requiring more raw material than anticipated to produce finish goods. The savings in raw material costs alone is significant, and the risk of missed shipments is reduced.

Improving Operational Efficiency: Part 2

Scheduling by Formula

A common challenge for process manufacturers is production scheduling. If only the production schedule could group products that use the same formula, manufacturers would gain efficiencies by creating longer runs.

In batch manufacturing multiple finished products can be made from the same formula. A scheduler may make cookies that go in a 50 cookie tin verses a box of 100 cookies.  Both products share the same formula but each have different packaging. The scheduler may have a requirement for tins this week and drums the following week.

What’s a scheduler to do?

When a scheduler has visibility into finished good demand and can view the demand by common formula the scheduler is able to create larger batches by combining demand for multiple container sizes. Creating a larger batch size by scheduling production by formula can increase operational efficiency. Scheduling by formula allows the production team to minimize clean ups and downtime. And machine downtime equals lower operational productivity.

See the Vicinity planning workbench in action.

What Vicinity brings to the table is the ability to see demand out into the future with forecasting and planning tools. Vicinity software gives users the ability to group the production schedule by formula allowing the scheduler the ability to view the production schedule over time so that like items may be grouped together. Many items can be produced from the same batch ticket or production run, if they share the same formula. The result is improved production efficiency and profits.

Improving Operational Efficiency: Part 1

Utilizing visual scheduling to reduce machine downtime.

How well raw material flows through the factory has a direct impact on costs, inventory levels and

reliability and responsiveness to your customers. 

The good news is that you don't need a crystal ball to improve your operational efficiency. 

Having the tools like Vicinity software to leverage production analytics to improve operational effectiveness by reducing machine downtime, changeovers, and cleans is critical.

Every company has limited production resources. Whether you run one, two or three shifts you have a finite amount of time to make your products.

What you do with your production time can directly affect profitability of your company.  

Every minute that your facility is not converting materials to saleable product is lost time that will never be recaptured. Much like a plane – if it takes off with a seat empty it will never get that revenue back.

So how can you make sure you are running to your maximum capacity?

Envision seeing your schedule on a Gantt chart or an outlook calendar.  When you can visualize your production starting and stopping you can easily see the gaps in your schedule.  If a machine is not scheduled it may be underutilized.

In today’s age there is no reason to wade through lengthy reports or lists of production batches.  View it on a calendar and the down times will become obvious.

At Vicinity Manufacturing we allow the user to display the production schedule on a calendar familiar to most users. We use an office look and feel to view, filter and manage the calendar.  Changing the production schedule is as easy as rescheduling an appointment.

Vicinity visual production calendar.

So take a look at how you are doing things today.  Can your production schedule be viewed and edited in a calendar?  You will be amazed at the insight you get.

If you would like to discuss this further feel free to reach out to Vicinity Manufacturing.  We are happy to help.