Manufacturing is undergoing a digital revolution. But not every company within the industry is keeping up with the constant changes. In the years that I have been working with large manufacturing companies across the country, I have noticed shared pain points and solutions that have helped plants not only work to become world-class organizations but have been able to adapt to the digital transformation, streamline processes, reduce costs and boost efficiency.
These companies and even specific roles all have clearly defined KPI’s, measurements or goals they are monitoring whether it be parts per year, dollars saved, energy costs, percent increase, percent decrease, and more. What is getting in the way is the inability to see all their data in one place, dig deep into that data and understand why they may not hit their goals as well as understanding hidden costs that may affect their bottom line.
This means not just observing if parts or processes have broken down but identifying why the parts or process broke down. Data visualization tools allow them to see trends across but don’t allow access to the database to see where something went wrong. This can be challenging with tools or platforms that only present the numbers, but don’t allow you the opportunity to dig deeper and track the root cause of the problem that then contributes to hidden costs.
A large automobile manufacturer I have worked with was previously using phone calls, email, Microsoft Access and spreadsheets to track machine breakdowns and parts replaced. This process was largely inefficient because it became difficult to track the path of this one part that was costing them money down the line. By having a platform in place that tracked where pieces originated from and explains why the piece broke down, they have been able to move closer to becoming a world class organization, be better prepared for audits as well as reduce hidden costs.
Companies have also been hindered by silos that prevent plants or departments from sharing useful information company-wide that could reduce rework costs down the road. It’s important to enable organizations to identify an issue, resolve it and then take it and apply it to every other scenario where this problem occurs across multiple plants or wherever else the same issue exists.
I have observed a six-phase journey these manufacturing companies go through while working towards becoming a world class organization. They are:
The big question for companies today is: How do you go from being reactive to any and every issue that arises to a leader in the industry that others will use as a benchmark? In order to answer that question, we need to understand each stage of the process.
Companies in the reactive stage are simply reacting to every issue that occurs. These companies likely do not have a strategy in place or a standard solution for problems that continuously arise. Because of this they are bogged down by busy work, unable to plan ahead or understand why these problems continue to happen.
For example, an automotive engine plant manufacturer has a pump that continues to fail, but they don’t have time to identify the root cause of the issue. Instead they just continue to replace the pump indefinitely, driving up costs.
A company moves into the proactive stage when they begin to identify pain points within their processes and take steps to fix them. By fixing problems that happen quite frequently, like if you institute an initiative to replace a part every month because you have found that the machine breaks down every month, your plant has become proactive. In the beginning, many companies may have a few, but not all, processes handled proactively thanks to preventative maintenance, , while others are still in the reactive stage.
At this stage, you may have more free time to identify other areas of improvement that could reduce costs and increase efficiency. Some of these improvements could be developing a common language so that there is a common name for how departments or plants within a company label machines, parts and processes. The goal is to define everything once and then scale to every plant using the common set of standards.
Once a company or plant within a company has started to proactively identify areas of improvement, it allows the company to begin to think more strategically about how to further increase efficiency. Being strategic may allow firms, for example, to invest in projects over time and measure the results to determine the hard savings or impact on those improvements. Over time, successful projects are repeated and reused across the organization for the greatest scale and impact. Being able to leverage lessons learned, from a cost savings standpoint, gives companies a huge reuse.
Once a company or a plant within a company begins to think more strategically, leaders can become innovators and think outside the box on ways to adjust and adapt to the constantly evolving nature of the manufacturing industry which is ripe for disruption.
By building a more innovative environment, companies can help push their company forward with bold ideas beyond continuous improvement and strategizing ways to reduce costs and increase efficiency.
Becoming an innovative company or plant within a company allows you to differentiate from others within the industry. Your company is now not only a part of the pack but seen as a benchmark that competitors are looking to.
Ultimately, by differentiating your company or a plant within your company, from others within your industry now puts you in a position of leadership. Other companies within your industry, as well as those in other industries, could look to your organization as a benchmark for higher standards.
This is extremely common for companies to compare themselves to companies within industries with higher standards. Appliance manufacturers benchmark themselves against automobile manufacturers. Automobile manufacturers look to airlines, which benchmark themselves to nuclear power plants.
Read more about how Quickbase has helped Lighthouse Electric Company, one of the largest electrical contractors on the East Coast, create a centralized system to replace spreadsheets, documents and emails shared between departments. The result of standardizing their system has been greater efficiency and improved coordination across the company.