Investing in streamlined plant operations boosts profit

My job is to eliminate waste and redundancy at manufacturing plants. My customers and I aren’t pirates, but everyone loves a treasure hunt. And nowhere will you find more gold — i.e., profits — than by streamlining redundant or antiquated plant operations.

It bothers me to see so much waste and inefficiency in manufacturing, especially considering what took place years ago in the automotive industry, which really had its tail kicked. That sector has recovered, but the question remains: Has it learned anything since?

After 35-plus years in industry, it’s amazing to me that when walking into almost any manufacturing facility—even large aerospace companies—I’ll find 1960s and ’70s technology that’s poorly applied.

Another factor driving plant inefficiency is the decades-long decline in the number of top-notch machinists, who have been replaced with undertrained or undereducated operators. Years ago, shops relied on machinists’ skills to make sound decisions that drove efficiency and increased production.

Today, however, control of the manufacturing process is required at the highest levels of companies. Automation is king, and you must embrace data and let it drive the decision-making process. This is the pathway toward reducing costs and increasing throughput.

Leaning Out Waste

You have probably talked to other people in the manufacturing industry about the waste that exists along the supply chain. The conversation to have, though, is about whether you are exploring all the efficiencies available to further “lean” the supply chain, cost of acquisition, the number of hours required to produce a part and work in progress (WIP).

You must:

• generate a high capital-investment return on infrastructure;
• adopt a continuous-improvement mentality in every process;
• have a high throughput for any given manufacturing hour;
• have room to implement consolidated billing; and
• automate replenishment via radio-frequency identification, a vending solution or a “keep-fill.”

Combined, all these things can eliminate or drive down the cost of acquisition for purchase-order creation and the number of invoices you must pay suppliers. Other factors that drive up costs but are easy to rectify include risk avoidance, lost-time accident prevention and maintenance repair.

Parts manufacturers can obtain a better total indicator runout with modular tooling. Image courtesy of Stellar Industrial Supply.

The scenario off the shop floor is another matter entirely. What is your process for procuring products used on the floor? What steps are taken in the procurement process of those products? Are you stuck in the old three-bid process when procuring products?

Oftentimes, just auditing the methodology for how you obtain, dispense or replenish products at their point of use can lower the cost of procurement. Unnecessary actions waste time and money. If you bring materials into central storage, for instance, you need folks to inventory, manage and disperse them at the point of use. For replenishment, instead of using a minimum/maximum trigger, you could deploy an automated process that ensures the correct amounts of materials are dispensed, with the least amount of effort, while eliminating lost time and product waste.

It’s paramount to make your manufacturing and supply chain lean because you’re looking for them to be just-in-time, more predictive and more analytical while allowing data to drive decisions proactively vs. reactively.

Watch What You Eat

Before identifying problem areas, ask yourself if you’re really focused on reducing the cost of operations and not the piece-price of the products you buy. The overall cost of this includes labor, machine utilization and throughput per hour, as well as what can be invoiced per hour.