10 Steps To An Effective Manufacturing Operations Management Strategy
Overcoming the challenges of making company-wide manufacturing operations more customer-driven requires a clear definition of success.
- Accurate, real-time production visibility improves product quality, order accuracy, and customer satisfaction while driving down manufacturing costs at the plant level.
- Keeping manufacturing operations across all locations focused on a common set of goals improves gross margins, reducing the total cost per unit while improving on-time order delivery and perfect order performance.
- The era of Manufacturing Intelligence has arrived, fueled by data from Manufacturing Execution Systems (MES). Manufacturing operations management strategies are accelerating adoption company-wide.
- Adopting a company-wide manufacturing operations management strategy can improve product quality, reduce cycle times, automate manual workflows, and streamline plant floor operations.
Defining the strategic goal of having all production centers contribute to a series of company-wide lean manufacturing, supply chain, quality, production, service, and customer satisfaction goals galvanizes diverse production locations together.
Instead of having to rely on many different, disconnected systems to manage diverse production locations to a common set of goals, manufacturers are adopting company-wide Manufacturing Execution Management (MES) systems as a key component of an overall Manufacturing Operations Management (MOM) solution.
Planning and scheduling, quality management, inventory optimization, tooling management, preventative and predictive maintenance, and Manufacturing Intelligence are the core functional areas included in a MOM solution today.
Meeting Customer Expectations of Real-Time Responsiveness And Quality
Across all selling and service channels customers expect real-time responses to their questions in addition to product quality that is world class. How well a manufacturer meets or exceeds these expectations will have a big impact on their future growth opportunities. That’s why having a scalable, secure manufacturing operations management strategy in place is key to future growth.
The core components of this strategy are available in a MOM solution. They need to be orchestrated to excel in the context of a given manufacturer’s unique challenges. While each manufacturer’s operations strategies and challenges are different, many share the following:
- Increasing company-wide production efficiency across all plant locations from the production team to the location level while reducing costs.
- Making quality a core part of production operations with each plant making contributions to overarching quality goals instead of allowing it to be a siloed function.
- Achieving real-time supply chain, order management, and production performance visibility across all manufacturing operations.
- Excelling at data collection at the machine, team, and plant levels, including piloting the Internet of Things (IoT) to capture data in real-time.
- Defining manufacturing operations analytics that encompasses all production centers and provides updates on Overall Equipment Effectiveness (OEE) and Manufacturing Intelligence.
10 Steps To Defining An Effective Manufacturing Operations Management Strategy
Increasing customer trust, making on-time order shipments, earning a reputation for high-quality products, achieving traceability, and optimizing production scheduling are all achievable with manufacturing operations management strategies. The following ten steps serve as a guideline for getting started:
- Select an underperforming product line as the basis for a pilot to define a manufacturing operations framework.
The worst-performing product lines often have multiple problems, from lack of customer awareness and sales to production scheduling, quality, traceability challenges, or fulfillment problems. With an underperforming product, it will also be easier to capture the factors contributing to its turnaround. - Define a common set of metrics and KPIs that can scale across all manufacturing operations and create a useful dashboard.
Resist the tendency to add in dozens of metrics and KPIs. Instead, concentrate only on the most relevant to streamlining manufacturing operations. Consider creating a roadmap of the most relevant metrics and KPIs that need to be added in the future once additional data collection systems and processes are in place. - Define how the MES will capture machine-level data including equipment utilization and key process parameters.
This step aims to capture machine-level data that can be used to calculate Overall Equipment Effectiveness (OEE) and the additional metrics and KPIs on the dashboard. Process-related parameters at the machine level also need to be captured and aggregated to the work center and plant levels.
These metrics will be used over time to calculate machine or asset utilization value. This data will also be used to define analytics that monitor machine performance against set limits. - For purposes of the pilot, enable older machines with PLCs and add-on sensors.
Using a PLC Controller and sensor on older machines is commonly done in the first series of steps in a pilot to provide 100% visibility across an entire plant floor. Gaining data from older machines could provide insights into how the product could potentially be redesigned for more efficient manufacturing too. - Define and test all the system integration links necessary to capture the metrics and KPIs needed for the dashboard.
Create and test the real-time integration links that will power the dashboard. Then, make the dashboard live on a company Intranet site just for the cross-functional team members. It’s also a good idea to think ahead about which future metrics and KPIs could be included, for example, traceability, inbound inspection, and measures of corrective action/preventative action (CAPA) during this integration test phase. - Gain senior management support by having a VP or C-level executive lead the cross-functional team responsible for fine-tuning the manufacturing operations strategy.
Making change management work starts with a senior executive on the team to remove organizational and technical issues that block progress. According to Boston Consulting Group studies of IT change management, senior executives who evangelize manufacturing operations management strategies improve the odds of these initiatives’ success by 75% or more. - Cross-functional team members need to provide data on how their specific areas are working to improve the pilot products’ performance at every meeting.
Providing an overview of the pipeline along with incentives and any special promotions needs to be the focus of marketing and sales. Quality needs to cover any blocking issues or challenges, and manufacturing operations, the overall effectiveness of the strategy. Finance can provide insights into how any shifts in production strategy as a result of the data have improved gross margins. In short, every team member needs to provide insights that can help determine how best to improve product performance. - Use pilot data to begin a company-wide Manufacturing Intelligence strategy.
The foundation of any solid manufacturing operations management strategy is real-time, accurate, reliable data. Once an MES is providing data at a constant rate, it’s best to move beyond the basics and introduce Manufacturing Intelligence into the operations management strategy framework. Adding in predictive analytics ability that can interpret and provide recommendations on quality data is invaluable for improving operations. - Start planning for greater integration between ERP and MES to provide financial insights into manufacturing operations.
Translating what’s happening on the shop floor into financial metrics will drive C-level executives’ dashboards once the manufacturing operations management strategy gets going. Getting real-time integration enabled between accounting and MES/MOM will provide financial insights that can guide further strategies for improving manufacturing performance. - Conclude the pilot and define a timeline for launching a manufacturing operations strategy company-wide based on the insights gained.
With the MES providing the production data for the dashboard and a member of the senior management team owning the manufacturing operations management strategy, there is a very good chance of success. With the pilot completed, scaling the operations management strategy to every plant will go more smoothly based on the lessons learned.