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.

Going Green – Increase batch yields

Increase yields to consume fewer raw materials per finished goods produced

This is the second installment of how formula manufacturers can embrace the "Green Initiative".
Well this seems to be too obvious. Don't all manufacturers attempt to squeeze every drop of raw material from their process to increase production yields? And why is this Green?
You would be amazed at how few companies actually look at their yield analysis by formula over time. It is more common than not that a company looking back at production over the past 6 months will find certain formulas or processes that are resulting in less than ideal yields. This can go on for years without being detected. The financial impact is tremendous.
The problem is that the yield differences from batch to batch may be minor and subtle shifts may not be detected on a single batch. Each subsequent batch is often compared to the previous batch. If there is no significant one-time shift the change is often undetected.
Comparing batch yields over time – 6 months or greater – can show alarming results. A formula yield may shift 1-2% over time and not be noticed. This has the result of passing profits right through the finished good and not realized by your company.
So why is fixing this issue being Green?
The less you consume to make the same finished good helps do your part in reducing the consumption of valuable resources. It takes energy to make most products we consume. We have to dispose of the raw material packaging and we consume energy to transport the materials from the supplier to your facility.
By increasing your yields by 1-2% for your highest volume items can result in a significant reduction in the consumption of raw materials. The reduction helps our environment AND saves you money.
So how do you do this?
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. Once you have identified a formula spend a little time with production and R&D and see if you can identify the source of the variation or change. 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.
Vicinity by Vicinity Manufacturing (www.vicinitymanufacturing.com) has added 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 added capability to notify key personnel when a batch is out of a tolerable yield range. Corrective action can be taken immediately.
So get started. This one is easy. Increase your yields and do your part in helping the Green Initiative. Along the way you will be saving your company a lot of money. Both are good things.