Manufacturers today are facing more complex business challenges than ever before. In order to stay competitive in a global marketplace manufacturers are under pressure to produce higher quality goods at faster response times and with lower costs. Mass customization, outsourcing, and leaner margins are also increasing competitive pressures. Labor and machine resources often continue to be underutilized, making it harder for manufacturers to keep pace with demand, and many businesses still have limited insight to the production costs they actually incur.
Without a 360-degree view of their business and the ability to pinpoint bottlenecks and pain points, manufacturers cannot be as efficient as they need to be to keep up in today’s marketplace.
On any given day production managers, shift supervisors and business managers are faced with numerous questions relating to manufacturing processes that ultimately impact their efficiency and their bottom line. For instance,
How are overtime costs impacting overall profitability on a per product basis?
It costs a set price to produce a product. If the usual production run time has to be extended for any reason, such as an unplanned machine downtime, how much profit is that downtime siphoning off each product created? When a manufacturer is dealing with a downed machine they are not producing products at the usual rate, which in turn impacts their inventory levels, which then influences how quickly they can process, fill and ship orders. When you lay on top of that slowdown in production the costs to fix that downed machine, the profit margin can shrink substantially, if not vanish altogether.
Business intelligence software can help manufacturers monitor machine downtime, including unplanned events, as well as track equipment maintenance history to better plan and manage future maintenance requirements.
What are the production efficiency rates by plant, product or shift?
A manufacturer needs to understand where the bottlenecks in their own production supply chain are. If a certain plant, product, or shift is slowing everything down manufacturers need to know so they can take the right steps to address it. For instance, is the 3rd shift at a plant understaffed by 25% compared to the other shifts? That might affect how quickly they can process and fill orders. If a manufacturer is aware of this, thanks to business intelligence, they know not to place big orders during that shift because they won’t be filled in time. This prevents any residual production issues.
What resources or operations take the longest and are the highest in cost?
In order to be efficient it’s critical that manufacturers know exactly what each point of the production process costs and how long it takes to complete. If your time table doesn’t account for a particular process that takes 5 hours, as opposed to other processes that may only take 2, the entire production process will always be backed up. This can impact your inventory levels, how quickly you can fill orders, how effective your machine output is, and more. With business intelligence software manufacturers can see exactly what procedures cost them to run and how long it takes each procedure to be completed. This helps them better plan for a more efficient supply chain.
Production (or manufacturing) business intelligence analytics answers these questions by enabling companies to analyze the effectiveness of their lean manufacturing efforts, assess the efficiency and utilization of their production operations, and pinpoint any variances that may occur relative to labor, material and overhead.
Categorized in: Intelligent Analytics
This post was written by Pat Hennel