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 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.

Scheduling by Formula – Why Bother?

I was at a client the other day and heard an interesting discussion.
The production scheduler was discussing an issue with the production manager about how the scheduler was scheduling production. The production manager was making the case that the scheduler was killing the production efficiency by changing products as often as he was. Production would like to run long runs of the same formula to avoid costly changeovers. Instead he was contending that the scheduler was requesting partial batches and forcing more clean ups than needed.
The scheduler was arguing that he was changing products to keep inventories low. His position was that low inventories was in the best interest of the company and the only way to accomplish that was to run short runs and for only the quantity needed.
So who was right?
My two cents is that a company needs to balance the needs of the customer (on time product often achieved by holding FG inventory) and reduction of working capital (keeping inventories as low as possible). But how can you do that in a formula based manufacturing facility?
The easiest way to achieve this balance is to look for opportunities to produce finished goods that share the same formula. In some facilities producing bulk formula is a possibility and then fill to order. From this bulk multiple finished goods can be produced off of the same blending/mixing batch of a formula. The result is to reduce the number of mixes of the formula which reduces the number of times a change over occurs in blending.
In other facilities multiple finished goods can be filled directly from the mixing tank without much bottling like changes.
It is important for a formula manufacturer's scheduling tool to be able to combine finished good SKU's by formula and then by filling line. This allows a scheduler to better see the opportunities to run like products at the same time. Thank goodness for me the application they are implementing (Vicinity) has this capability out of the box. This is not characteristic of products designed for assembly or discrete manufacturing.
So how did this end?
The scheduler looked out into the future at sales orders and forecasts and allowed the production manager to make some product that would be needed in upcoming weeks. At the same time the production manager grouped the formulas in a specific sequence to reduce his change over time.
Both came to me and asked that we move up the implementation of Vicinity scheduling. Not a bad day for me that is certain.

Scheduling – How low will you go?

Every formula manufacturer performs some level of scheduling. Without a schedule or a plan no plant could function for very long and based on my experience most of the schedules are manual in nature. As a company grows past the $10 million in sales mark the manual processes may become burdensome and become a drag on the manufacturing process.
Unfortunately few small formula based manufacturing firms have the resources or knowledge about their scheduling options. I will try to provide a basic primer to begin the education.
Generally you can break the scheduling process into two primary components

• Production Schedule
• Shop Floor schedule
  
  

The production schedule identifies what products we will be making, the qty to be made and the start and end dates for the scheduled item. It does not attempt to assign resources such as machines or people. It is typically the result of ensuring capacity and material availability. Think of it as the overview of what a company will be making and when it will be completed and will often show data 1-2 weeks out from today.


The shop floor schedule is much more detailed and identifies what resources we will be using, the precise order the items will be made and dependencies required in running this item. It is very detailed and is often more detailed than users outside production need to review. This is the document that the shift supervisor works from and directs the line supervisors and is often limited to 1-5 days out from today.


Both are required to get the raw materials converted to finished goods in an orderly fashion. Additionally most (if not all) companies perform these tasks. The questions to consider are

• How efficient is your schedule?
• Could you produce more with the same resources?
• How much time are you spending to prepare the schedule?

To a very large degree scheduling for a significant number of small to mid-sized formula manufacturers ($1-100 million in sales) is done in Microsoft Excel or similar tool. The data for the schedule is manually obtained from printed or electronic sales orders, inventory counts and best guesses of future orders based on history or a best guess. That manual process is the norm and not the exception.
Is that a bad thing? No.
It depends on the complexity of your business and how efficiently you are trying to run.
If you always make the same products, at the same quantity and in the same order – that is not a big issue. But as lot sizes continue to shrink, breadth of products offered continues to widen and lead times are reduced then a non-integrated "back of an envelope" approach may not work anymore.
When you decide to introduce electronic tools for scheduling you need to be very careful in selecting the tool. I my experience the tool should read open sales orders, forecasts, and quantity on hand. This data can be read periodically in a batch process if needed. There needs to be a greater relationship with the production system. For formula manufacturers you need your scheduling tool to understand the formula and required resources (machines, people and tools). This data is often more detailed than the ERP data and therefore more difficult to integrate.
With that information I would suggest discussing scheduling tools with your manufacturing application. If they do not have integrations to scheduling systems your options become limited but not impossible. At this stage you may choose a custom integration or considering a new production system. If this is your case the cost of adding an integrated schedule becomes pretty expensive.
If your production system does have integrations to one or more scheduling tools then pick the one that best integrates to your ERP system and is not too complex for your personnel to use.
One thing to remember – every scheduling implementation is unique to your own business. There is no such thing as a plug and play implementation of scheduling. It will take time and effort by your company. Therefore you should be certain that there is a high level of benefit before adding this tool. Electronic scheduling is not cheap. Often times integrated scheduling tools can equal or exceed the cost of your production system.
If the benefits are real and you have the rest of your production and ERP system under control then adding electronic scheduling tools may be the right next step for you. But whatever you do – keep your manual system as the primary system until the new system has made the manual one obsolete. After all – the manual system has gotten you to this point.