Despite bumps in the Chinese economy and global stock markets, the Federal Reserve reported that manufacturing output in the United States grew 0.5% in January 2016, rising 1.2% over the same time last year. Meanwhile, a survey by the Institute for Supply Management (ISM) indicated that new orders and production grew in January 2016.
With a cautiously optimistic eye on 2016, manufacturers and parts suppliers are looking to capitalize on new opportunities while wrestling with issues related to capacity, investment—and yes, even talent development—to wring more productivity out of their operations.
Among manufacturing executives we’ve met, several topics consistently emerge as critical to driving growth and profitability. Operationally, they are focused on optimizing equipment utilization and maximizing uptime. Also critical is competing through their ability to provide customers with exemplary service. Last, they’re working to manage and empower different generations within their workforce. Following are some of the best practices that we’ve taken away from those discussions.
Optimize your equipment utilization
With demand growing in many markets, finding the hidden capacity in a plant is critical to minimizing the need for significant capital investment and confidently dealing with customer requests for quotes.
Today, many manufacturers rely on juggling spreadsheet models to schedule production. A more effective approach is employing software designed for scheduling production in real time against finite (real) capacity constraints. This lets you run what-if scenarios to fit shifting demands while taking into account tooling and downtime for scheduled maintenance. In addition to fitting demand into every bit of processing time available, you also gain solid insights into available capacity for additional business.
Software functionality for finite capacity planning complements lean initiatives to create breathing room in floor schedules, and it can result in some very tangible returns.
For example, one medical device components maker reported that scheduling improvements led to a 50% reduction in scrap material and $36,000 annual savings in overtime costs.
Maximize visibility into processes
Assuring quality and retaining traceability of materials and processes can be critical if ever needed to quickly respond to inquiries by customers or government agencies. Increasingly, sensors and electronics are becoming viable tools for achieving these goals as the products become “smarter” and costs trend down. Manufacturers of all sizes now have access to affordable devices, which can be added to both new and older, tried-and-true equipment to automate shop floor monitoring.
With monitoring comes the ability to implement integrated mistake-proofing of work-order setup. Doing so to verify correct materials, packaging, and label format prior to each production run assures compliance with customer requirements. This simple concept can minimize disruptions to production and cost.
Finally, integrating automated production data capture with statistical process control (SPC) tools operating in real time, lets you receive alerts when processes start to trend out of control before they become serious problems.
In fact, one electronics and aerospace supplier reduced its time to react to manufacturing issues by 75%. Relying on prediction and prevention instead of reaction will give you a lights-out quality system, a sign of a healthy manufacturing system with strong up-time availability.
Differentiate through strong customer service
Consistent, timely delivery of high quality products is one dimension of the customer relationship. However, customers also look at the services accompanying those products. They put a premium on suppliers who serve as partners and can effectively mesh with their supply chain processes—from product lifecycle documentation and labeling to compliance and certifications reporting.
To be an effective partner, start your product lifecycle management at the beginning of a new project. Capture requirements and engineering records in a smart document management system, preferably one with change control logic and automated workflows for review and electronic approvals. By relating all up-to-date design information together in a comprehensive system from the beginning—instead of relying on multiple network file folders and emails—you can accelerate your time to market and assure that you are launch-ready.
Enable a common understanding
You can further reduce the risk of misunderstandings by storing one copy of original files in a common, controlled library. Then use a smart enterprise system to reference or link the originals to multiple master records, in context: product definitions, design drawings, change orders, reports, and supplier purchase orders. In this way, all stakeholders—suppliers, employees, and customers—can access a single version of the truth, quickly and efficiently.
Concurrently, put a comprehensive system in place to capture field issues, warranty claims, complaints, and related corrective action/preventative action (CAPA) reports, and integrate them with your enterprise resource planning (ERP) system. This information can be invaluable in allowing you to quickly and accurately respond to an inquiry or recall notice.
Renew the business through knowledge transfer
Customers are key, but it’s equally important to nurture the team that will make or break your business. Many manufacturers report a growing gap in knowledge within their companies. Experienced baby boomers on staff are probably thinking about, if not planning, their retirements. Meanwhile half of employees and job seekers are now 20- to 35-year-old “millennials” who bring different work styles, communications and priorities.
Now is the time to capture important knowledge about your business—essentially your corporate DNA. Otherwise, a senior employee’s two-week notice or sudden illness can leave your business scrambling. Holding company intelligence in a comprehensive document management system with change controls lets you consistently vet important work instructions, files and records while providing access to all of your team members. This will help prevent misunderstandings and mistakes.
Housing up-to-date “how we correctly do things here” instructions in a logical, easy-to-access system will improve your training results for both new employees and existing ones migrating to a new group. Using the same document system to create single versions of the truth for processes and projects will reduce doubt and frustration and save time for current and future team members.
Use technology to attract and retain employees
Many manufacturers are straining to attract skilled talent to their teams. You can make your work environment more appealing to younger tech-savvy employees with modern technology. Allowing or even encouraging millennials to use smartphones to quickly research topics and then collaborate may spur new creative solutions, rather than serving as the wasteful distraction that some older team members may fear.
Additionally, product structure and lifecycle databases in the ERP system should take advantage of data residing in your engineering design tools. Many modern ERP systems integrate product information with the bill of material (BOM) structure from computer-aided design (CAD) systems used by your design team. This can help minimize redundant work that frustrates all employees. At the same time, it provides your team with a seamless flow of key parameters from CAD into ERP as you prepare for testing, validation and launch—allowing them to work smarter, not harder.
Capitalize on cross-generational teams
Beyond technology, be intentional about structuring your teams. Expose new, typically younger employees to important knowledge by partnering them with senior team members; millennials are accustomed to accomplishing projects together. At the same time, encourage more experienced employees to mentor younger ones. This also exposes long-term team members to the creativity, enthusiasm, and fresh-eyes that the young generation brings.
Last, invest in role definition, training for job enrichment, and career planning including opportunities to take responsibility for meaningful projects with support from experienced colleagues. This will help you to retain valuable team members of all ages.
Employing these strategies to optimize profits and demonstrate your company’s commitment to being an exemplary partner will serve to inspire confidence in your company as the go-to solution provider in your market.
Steve Bieszczat is chief marketing office of IQMS and Ed Potoczak is an industry manager.