Manufacturers should consider Smart Manufacturing as the “4th Journey” in their quest to create more value in their business. We discussed the four key questions every organization should ask themselves about Smart Manufacturing in a prior post.
Manufacturers who have been on a lean operations journey will be familiar with many continuous improvement tools such as Six Sigma, kaizen events and many others. Variants of these tools are used as to implement Smart Manufacturing principles and practices. Let’s look at the twist put on each one they are applied along the Smart Manufacturing journey:
Value Stream Mapping
One of the most popular tools in the lean toolkit is value stream mapping (VSM). VSM is used for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer. VSM normally includes the timeline mapping of both material flows and information flows.
Information Value Loops: Are you missing value with open loops in your information flows?
VSM is a method to visualize waste in material and information flows in critical business or factory floor processes. In practice, most manufacturers and lean coaches tend to focus more on the material flow than the information flows. This is an oversight that can result in missed opportunity for value creation. The consulting company, Deloitte, has raised awareness of this opportunity through a concept known as the Information Value Loop.
If your manufacturing process currently has many open information loops, you are likely leaving value on the table.
Creating value from Information Value Loops
According to Deloitte, the value of information lies in real-time, closed loop information flows, from the point of creation all the way back to informing more effective decisions and problem analysis. This implies that information can be valued much as one would value any critical flow, such as cash flow. The value of information, much like cash, is determined by the volume and velocity of the flow as well as your confidence level in the flow.
Overall Equipment Effectiveness: The leading indicator of value creation for manufacturers
Overall Equipment Effectiveness (OEE) measures the effectiveness of manufacturing by means of a numerical value. A formula calculates the availability rate, performance rate, and quality of output of any given machine or tool to show how many usable components it has manufactured in a set time frame. OEE is calculated as follows: availability rate x performance rate x quality rate = OEE
There continues to be a trend toward mixed-model production lines that output a larger variety of products, but with lower quantities. Toyota originally developed the concept of mixed-model production in the 1960s. The idea is not to compromise efficiency during changeovers in order to achieve a high degree of variation. This kind of manufacturing has more challenges with regard to workflow and material flow. OEE benchmarks help mixed-model production lines incur minimal or, ideally, zero losses in time, quality, cost, or quantity.
How does Smart Manufacturing change the OEE game?
The real value of OEE comes from interpreting the losses incurred due to availability, performance or quality. By focusing on these losses, and more importantly, by taking action to reduce these losses, your OEE score will naturally improve. For factories to enjoy optimal OEE, device connectivity is essential in order to collect precise data. Many new Smart Manufacturing solutions are available for factories to upgrade their production technology in order to improve the availability and performance rates of their equipment as well as their quality output.
Real-time machine monitoring is one of the more mature solutions with short ROI payback that has yet to be adopted by many small-medium manufacturers. Collecting uptime, cycle time and quality data manually by work cell operators at the end of shift simply is not sufficient any more in terms of capturing more value from your information flows. We will discuss more Smart Manufacturing solutions to help factories migrate to real-time, closed loop information flows in future articles.
Ready to get started on your Smart Manufacturing Journey? We’re ready to help!
Connected Factory Global is uniquely positioned to help your manufacturing business start evaluating how these Smart Manufacturing tools and start making progress on its Smart Manufacturing journey. Our team of Smart Manufacturing experts will objectively assess where you are today, help you decide what your future goals should be, which best-in-class solutions will meet your needs, and how you can get to where you need to be.
Let Connected Factory Global help—contact us today.