I have been in and around manufacturing companies for nearly 25 years. Over that time we have seen an unprecedented need to compete in a global marketplace. Being able to control and reduce costs in a global marketplace isn’t about getting ahead, it is about surviving. When I think about the role or relationship of IT to manufacturing, I am reminded of the BASF commercial from the 1990’s: We don’t make the products, we make them better. IT needs to supply a platform for manufacturing to operate and other key information that is essential for improvement. While every company might not have all of these issues, here are the top five ways that IT can help manufacturing operations.
"Manufacturing teams need easy access to the data and reports to help understand how they are performing Consider All Customers"
Many of the customers of IT solutions are within the business and are part of the different business functions—accounting, purchasing, accounts receivable and manufacturing to name a few. The background, skills and ability to use computers can vary greatly, and so does training. What may be easy for you or an accountant might be very difficult for a production operator or a supervisor. New systems or system improvements need to be done with an understanding of who will use the system and their current understanding of technology, and be accompanied by appropriate training. I’ve known several companies that failed to prepare everyone for an SAP implementation. As a result, the joke among production personnel was that SAP stood for “Stop All Production,” and it caused production delays that persisted several weeks to a few months. SAP is a great program, but IT failed to adequately prepare everyone on the new system.
There is a tremendous amount of data being collected in business today. Manufacturing teams need easy access to the data and reports to help understand how they are performing, what they can do to get better, and gain insight into what other functional areas are doing that could impact production. By understanding what items are being ordered, we can make better decisions on what items should be in inventory and which should not, thereby reducing cost and improving fill rate and on-time delivery. By understanding when sales is running a promotion, adding a new channel or partner, we can plan ahead and avoid costly overtime. This is more than just about a simple report, it is also about how data is categorized and structured. We need to be able to look at product families, what items have the same or similar routings, and what products use a given raw material.
The majority of cost in a manufacturing company is production costs. Help us better understand our cost and where opportunity for improvement exists. Being able to capture data; having an understanding of our material costs by product and scrap rate at each step in the process; and being able to easily generate a Pareto of causes would enable manufacturing operations to focus on the biggest issues. The same is true with labor tracking. There are systems in place and they help HR generate payroll. But how accessible are they to operations? Can we easily get reports not only on hours and overtime, but understand if it was scheduled or unscheduled overtime? Do the increased hours correspond to an increase in output? How do the hours paid relate to the standard production hours? How do the costs in standard margin and actual margin relate? What products have the biggest margin gap? Is this gap because it was run on the wrong platform, it was run poorly or it was priced wrong?
Total System Reliability is not just about up time, although that is a part. The first part of Total System Reliability is having systems up and running that are able to support the manufacturing operations. The second part may seem obvious, but are the systems able to reliably record the manufacturing transaction? I have found that while systems are able to perform the transaction required, they falter and make sporadic errors in the real production environment. It is sometimes because of Wi-Fi or network congestion, or because of site internet connectivity to a hosted solution that the system doesn’t record the transaction correctly. As a result, supervisors and production managers confronted with this problem add steps to verify that the transaction was correctly recorded. Failure to have these transactions recorded correctly can result in incorrect inventory, material shortages and financial adjustments needing to be made—a significant waste of time by several different functional groups.
When manufacturing groups are looking at new technology, they are most often looking at a new machine and not at how IT can enhance or improve manufacturing operations. This presents a large opportunity for companies where IT and manufacturing partner. The Internet of Things promises to enhance the products that we buy, but is manufacturing ready to incorporate this technology into the products and process? Can technology make product, material and process trackability record keeping requirements easier for industries like aerospace, automotive, medical pharma, and food and beverage?
While this list seams basic, they represent unfulfilled needs in many manufacturing organizations.
See Also: Manufacturing Outlook