May 27, 2020
Quality Transformation with Enact - 3: Increasing Efficiency, Reducing Costs, and Improving Agility
This is part three of our continuing blog series about transforming your quality operations in order to thrive in the high stakes world of manufacturing—the high stakes of competing in increasingly dynamic and competitive global markets.
In part one
we focused on what we call dysfunctional data
—data that are either incomplete
, or inefficient—
what we consider to be the underlying cause behind most performance and quality issues in manufacturing today.
In part two
we discussed how manufacturers can move away from dysfunctional data towards what we call actionable intelligence
by using the transformative powers of Enact®,
InfinityQS’ award-winning, cloud-native Quality Intelligence platform. Actionable intelligence, as we noted in blog two, is comprised of data that are the exact opposite of dysfunctional—complete, consistent, unified, and efficient.
Here, in part three, we’ll focus on how Enact can help you increase efficiency, reduce costs, and improve agility. It all starts with the visibility that brings you informed decision-making capabilities.
By utilizing a tool like Enact, you can achieve much greater levels of real-time operational visibility. And with that increased visibility, you can see past all the gaps or blind spots within production and quality operations. Put simply, your decision making becomes informed
decision making—based on accurate, reliable data.
Informed decision making is key to keeping up with increasing competition and tougher operational challenges which are prevalent in today’s manufacturing world. Why? Because informed decisions lead to substantial improvements in your manufacturing processes across the dimensions of cost, value, and risk.
Loud and Clear
In today’s world, the voice of the consumer is becoming louder; technology has made the consumer more vocal, more influential and more mobile. And, therefore, the balance of power is shifting from the brand to the consumer. When we take a broad view of innovations in global logistics, online commerce, social media, and advertising, it becomes obvious that the consumer’s voice is breaking down the traditional rules of markets and competition.
The results for manufacturers are volatile and unstable markets and increasingly tough competition. The world, it seems, is truly getting smaller and more fast-paced.
The voice of the consumer echoes across manufacturing: “We want better quality goods, we want them faster, and we want them cheaper.” Manufacturers can’t help but hear it and they must respond.
We believe that the best way to respond to challenges and opportunities is to optimize your manufacturing processes
. What I mean by that is optimizing your manufacturing processes across the dimensions of cost, value, and risk.
Cost, Value, and Risk
encompasses the entire cost base of your manufacturing operations, such as from raw material or component inputs all the way to packaging; supply chain logistics to distribution costs; the cost of energy and natural resources; the cost of plant, machinery, and equipment; the cost of maintenance and repair, and so on and so forth. Your cost base is largely influenced by factors such as waste, rework, efficiency, productivity, and yield.
When we speak of value
, we’re not just referring to the quality of your products, but also the value of your manufacturing operations—such as the ability to become increasingly agile and responsive, supporting product innovation, and even driving market innovation.
And when we speak of risk
, it’s about mitigating operational and strategic
risks. Operational risk points to issues that occur daily or weekly within your manufacturing operations, such as quality or production issues or machine breakdowns. And when we mention strategic risk, we’re referring to the occurrence of major quality events (like food safety) that may impact the organization’s brand or reputation, or the inability to respond quickly or effectively to competitors’ tactics or market opportunities…things of that nature.
Not only do we need to minimize
value and mitigate
risk, but we must also strike the right balance between them. For example, we can keep on cutting costs up until a point where quality is impacted and thus when the consequential risks increase. Or we can continually increase the quality of the product to a point in which they become uneconomical in the markets that they serve. Or we can become so averse to risk that the organization becomes rigid and inflexible. Therefore, we need to finely balance these dimensions in the most optimal way possible. And that is what I refer to as manufacturing optimization.
Efficiency and Productivity
So, optimizing your manufacturing processes requires you to look closely at efficiency and productivity. We often use these words interchangeably, but they really mean two different things. Efficiency
is achieving a given level of output or performance, but with fewer inputs. If we have a certain amount of product that we need to get out the door every week, we endeavor to reduce the amount of labor that’s involved in that production, reduce the amount of raw materials used, and reduce the amount of energy or other resources that we use—then we are increasing the efficiency of those manufacturing operations, while maintaining the level of output we desire. And, generally, if we can increase efficiency, we simultaneously reduce costs.
is the flip side of that coin. Productivity enables us to achieve a greater level of output or performance using the same level of inputs—labor, materials, and other resources. By increasing the amount of output that we attain from using those same inputs, we generate more revenue and ultimately increase cost savings to the business.
Increases in efficiency and productivity not only reduce costs (which tends to be our main focus), but they increase the overall value of manufacturing operations and help to mitigate risks as we have previously outlined. This may be obvious stuff for most of us. But how do we get to those new levels of efficiency and productivity that most of us continually strive to achieve?
The key ingredient is operational visibility. For example, we can identify processes that are performing well (or optimally), use them as benchmarks, and compare them to other processes not performing as well. On the flip side, we can identify process that are underperforming and prioritize addressing their underlying or root causes. If we can do that, if we can bring the level of processes up across manufacturing operations, then our efficiency and our productivity both increase as a result.
My colleague, Doug Fair, InfinityQS COO, says in his blog about a paradigm shift
in the way we approach manufacturing quality, that when you’ve deployed your quality team to attack a certain problem, to make some enhancement to your operations, they come back with lessons learned. “That information can be shared with the entire company to create a best practice
. If you have best practices across your entire company, then chances are product inconsistency diminishes, perhaps even becomes a thing of the past.” That is a goal worth striving for.
It is an ongoing iterative cycle of continuous improvement, but with a fundamental element to it—that it is done proactively and with access to real-time, enterprise-wide operational data.
Let’s face it, the lion’s share of manufacturers collects plenty of data, but then—unfortunately—don’t do anything with it until something has happened
. That’s reactive
What we propose with Enact is for you to become a proactive
operation. We might do all the things that we want to do to increase efficiency and productivity, but if a lot of time lapses between identifying where we've got performance bottlenecks or quality problems to when we actually correct an issue, then inevitably (due to the very nature of it) in that elapsed time there's been a lot of inefficiency
or less-productive output.
So, the more quickly we can identify an issue and respond to it—or even predict where an issue might occur—and put remedial action in place, then the better our chances to increase efficiency and ultimately reduce costs across the manufacturing operations.
What About Operators?
Sometimes, when the discussion turns towards a manufacturing company becoming more proactive, the operator side of the equation is often overlooked. We know that these important employees are often-times overworked and time-starved.
Manufacturers can have high levels of automation in place within the actual manufacturing process itself—with things like automated production lines, filling lines, packaging lines, and mixing processes—but when those automated pieces are flanked by very manual
processes in which human operators manually monitor machine parameters, perform quality checks, or carry out quality-related or administrative tasks, then efficiency and productivity improvements (no matter how you’d like to measure them) are held back.
If operators are spending all their time monitoring processes that are running within specifications and without any problems, or when they happen to take their eye off the ball to perform one of their myriad other tasks, they're not going to be aware when an abnormal trend or event occurs—that's inefficient.
We therefore need to bring operators into the efficiency and productivity equation. But not just by automating some of their repetitive and mundane tasks (which is important) but also giving them the tools to enable them to be more effective in performing their roles. It’s another topic altogether and not one I will go into in any further detail in this blog, but increasingly, operators are becoming more ”tech-savvy” and “information-aware.” The operators of the future will become knowledge workers and will need to access digital platforms to leverage that skill.
…and Supervisors and Managers?
The same applies to them. If we spend a lot of time either at the operator, supervisor, manager, or even executive level manually collecting data, preparing that data for reporting analysis, and then distributing that data, that's highly inefficient. It's highly inefficient in the sense that it takes significant man-hours to be able to do that. Mostly because it’s still being done with paper and pencil and spreadsheets.
As Doug Fair said in his SPC learning blog series
, manual data collection is potentially fraught with errors and inaccuracies. Yet, it’s everywhere. “Surprisingly, it is more the rule than the exception. This is true even though modern manufacturing plants almost always incorporate some level of data automation.” He goes on to enumerate ways in which manual data collection can introduce errors into your system:
- Data might be misread from the paper
- Numbers could be accidentally transposed
- Data written on paper may be illegible or misinterpreted
- The paper might be lost altogether or damaged
- If transferring data from paper to an electronic system, numbers might be misread or entered incorrectly
Spreadsheets? Same thing, according to Doug. “Not only are spreadsheets unwieldy and challenging for operators and inspectors to work with, they are also very difficult to manage and organize. Plus, when the time comes for monthly reporting, get ready for a headache.” Not surprisingly, he urges manufacturers to ditch the paper and pencil…and the spreadsheets. “Whether using spreadsheets or paper-based quality systems to gather data, the critical information companies need to better manage their plants is inaccessible and unable to be leveraged for improvement.”
So, clearly, if you manually collect data with paper and pencil, you are asking for trouble. The whole reporting and analytics process can therefore be very inefficient as well.
So, what do we mean by “agility?” Well, we simply mean the ability for your manufacturing operations to change or adapt to different requirements. And those requirements can come from different places. It may be that they come from the business planning side of things—meaning we might need to be fairly nimble in changing the mix or the specifications of products that we're producing.
It may be that we need to more quickly respond to market dynamics. We've seen that specifically with the current health crisis: all of a sudden there was either a ramp-up in demand in certain sectors like food and beverage, consumer packaged goods, healthcare, medical supplies, etc., or some products were simply deemed inessential and no longer needed to be produced.
How quickly can your production process be adapted to different products, perhaps even smaller runs? The more agile we are, the more able we are to respond to those needs and potentially exploit those opportunities in the market. Typically, not being agile can have an impact on cost—for example, revenue associated with missed opportunities, or lower client satisfaction because we weren't able to respond adequately to a change in demand or get products out the door when we needed to. Obviously, being agile is very important.
I think most manufacturers accept the fact that IT solutions add a lot of value to addressing some of these issues on the shop floor. But we still rely on on-premises, legacy, or monolithic applications that are very costly to purchase, to implement, and to maintain. The best way to become more agile is to switch to a more cost-effective and flexible Software-as-a-Service (SaaS) solution.
Switching to a SaaS solution allows us to achieve the things we want to achieve in terms of cost efficiency, productivity, and agility.
Thoughts on Automation in Closing
Efficiency and productivity, clearly, aren’t new words within manufacturing. Efficiency has been the bedrock of what manufacturing has tried to achieve for a long time. But manufacturing has typically tried to move forward through automation
. So, we've gone from very manual production processes to very highly automated ones. But automation doesn't necessarily mean optimized
. Automation can still retain a lot of variability and uncertainty.
Automated or not, processes can have problems, break down, and be quite volatile. Just because a process is automated does not mean it’s inherently efficient or agile. What’s been missing until now is the discussion around automating what I would call the ancillary processes around the main production processes: things like data collection, analysis, and decision making. Manufacturers are increasingly going to look to find steps forward in performance improvements. The low-hanging fruit of automation has been picked. We’re going to find the improvements we’re looking for—in efficiency, productivity, cost, and agility—in those ancillary processes. Enact is the perfect tool to help with that…to help bring manufacturing to the next level in its evolution.
In the next article, we’ll look at delivering strategic improvements, driving enterprise consistency, and protecting your brand…with Enact.
Read the other articles in this blog series:
Take advantage of the technology at your fingertips today: contact one of our account managers (1.800.772.7978 or via our website
) for more information.
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