Rules for Manufacturing Efficiency

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Your company’s success is increasingly tied to improving manufacturing performance and improving it quickly.
Manufacturers are increasing their focus on the bottom line. This scrutiny is leading to renewed attention on manufacturing, where the most significant assets (plant and equipment) and costs are.  Manufacturers need to cut costs, increase cash flow and become more responsive to changing market conditions.

The following are 17 rules to pay attention to that will drive profitability to the bottom line.

Enhance Asset Utilization and Efficiency
Improving manufacturing efficiency is a pre-requisite to better profitability and corporate success. Enhancing manufacturing performance yields huge advantages – from cost reductions to a stronger competitive position – which can be passed on to shareholders or customers.  The trick is to be highly efficient while improving quality, expanding your product portfolio, and becoming more demand driven.

Flexibility Improves Efficiency
Being efficient while responsive to shifting customer demand requires an enterprise-wide manufacturing transformation: moving from Manufacturing-to-Forecast (MTF) to Build-to-Order (BTO) which can create a dramatic payoff.  Greater flexibility lets you allocate production across plants, shifts or suppliers, resulting in a faster response to changing conditions and improved overall plant utilization. Greater efficiency reduces Work in Process (WIP), labor, scrap and rework, saving both time and money.

Culture of Continuous Improvement
Having an enterprise platform for manufacturing operations real-time Key Performance Metrics such as OEE provides global visibility, across your operations.  These capabilities let you easily identify and replicate best practices across your global operations while instilling a culture of continuous improvement across production, warehouse, quality, maintenance and labor activities.
Standardized best-practices reduce cycle and takt times across your operations, helping to ensure On Time Delivery (OTD). Global, real-time visibility that is actionable on a 24/7 basis enables immediate resolution to operational disruptions.

Synchronize Material with Production
Reduce idle inventories and execute Lean initiatives to achieve operational excellence.  By synchronizing material flows across production, warehouse and quality operations you can reduce costs and improve cash flow – get the right materials to the right plant at the right time.  Material synchronization means your material flows are in tight coordination with actual demand – finished goods roll off the line based on customer demand, and WIP is “pulled” through the plant to meet sequenced final assembly demands.  Cash flow improves from reduced inventory levels.  Waste from obsolescence is reduced and facility requirements for storage are minimized.

Enhance Lean Initiatives Globally
Lean, demand-driven manufacturers can further reduce idle WIP and inventory buffers while gaining agility to respond faster and more accurately to customer demand. Electronic replenishment and e-Kanban sizing, triggered by actual demand and consumption can help optimize global operations. Costs go down, efficiency goes up and customer satisfaction escalates.

Just-In-Time, Sequenced Operations
Applying material synchronization one step further, Just-In-Time, sequenced production can further reduce excess inventories, for a truly demand driven production.  Track, view and coordinate the flow of goods from supplier to customer shipment.  You’ll need real time visibility and actionable control of your entire material flow – in-transit, landed, WIP and finished goods inventories – to enable precise synchronization of material and production demand.

Improve Quality
Best-in-Class quality means building your product “right the first time,” resulting in reduced waste, fewer returned items, lower warranty costs and higher customer satisfaction.  Implementing a platform for continuous quality improvement is a way to ensure profitability, achieve regulatory compliance, maintain brand integrity and provide sustainable competitive advantage.

Get it Right the First Time
Directed manufacturing and real-time decision support systems can enforce best practices and Poka Yoke to prevent errors, a minimum requirement for Six Sigma.  Quality processes based on real-time data validation can greatly improve first time yields.  Automated, paperless processes eliminate manual data entry errors.  Automated alerts can quarantine materials or even halt production for out of spec materials to cut costs.  An approach to automated data collection with real-time metrics across all manufacturing operations can greatly improve the likelihood your product will be built right, the first time, and every time.

Traceability and Containment
A comprehensive application across manufacturing operations managing materials, labor, equipment, tooling, processes and suppliers insures “interlocking traceability” of all product and process data. The precise interactions of all manufacturing elements can be used to identify and contain quality problems before they reach the customer. Automated traceability and containment processes can greatly reduce manufacturing, warranty and recall claim costs.

Accelerate New Product Introductions
Introduce new products faster by synchronizing engineering with production. Real-time integration of production specifications with engineering design helps evaluate how product components or processes can be modified to improve output, increase quality or enhance product performance.
In today’s “digital” world with rapid data dissemination surrounding global product launches, manufacturers must respond faster to market changes while flawlessly executing new product introductions.

Real-time Visibility to Operational and Design Data
With the growing complexity of new product designs, manufacturers are increasingly turning to virtual design programs to model product performance.  Establishing a continuous, real-time feedback loop between production and design applications can provide critical visibility to better product design, improved quality and an overall compressed timeframe for new product introductions.  Furthermore, sufficient flexibility can be maintained to perform ad hoc changes as often as needed when converting digital designs into physical products, thereby staying ahead of the competition.

Reduce Manufacturing IT Costs
Complexity, process integration and systems disparity may be a reality, but are an unnecessary evil that can hurt production performance, force unnecessary training, waste resources and limit your ability to respond quickly to changing market conditions. Multiple, redundant systems across the plant can lead to unnecessary implementation, maintenance and upgrade costs.

Single Platform Enables IT Rationalization
Leading companies seek to consolidate and rationalize disparate applications – ideally into a strategic platform across manufacturing operations.  Integration, maintenance and support costs can be reduced significantly.  Linking a manufacturing system platform to ERP and the Automation layer creates a comprehensive solution for manufacturing operational excellence.

Core Deployment Program
Create a “Center of Excellence” of best practice manufacturing processes within a central ‘lab’ or ‘testing environment,’ which can then be rolled out to other locations as a “Core” deployment program for your manufacturing processes.  Up to 80 percent of these processes can typically be standardized, helping to accelerate multi-location deployments and simplify future updates as new best practices are identified.

Leverage ERP for What it Does Best
Many manufacturers have invested heavily in an ERP system to improve operations and have been successful within Finance, HR and other corporate departments. ERP implementations have struggled, or worse, in gaining acceptance in the plant.  Instead, industry leaders are leveraging ERP by connecting it to a manufacturing system to enable real-time visibility, control and synchronization across manufacturing operations, corporate planning and scheduling.

Focus on Planning in ERP, not Execution
Many attempts to directly extend ERP to the plant floor have ended in budget overruns, reduced functionality from what was originally conceived, or even complete failure. Corporate financial planning tools were simply not designed to manage complex, dynamic 24/7 real-time environments.

Let Manufacturing Shop Floor System Drive Production
This approach can provide real-time visibility, control and synchronization across your operations, while letting you truly leverage existing planning systems to effectively deliver value to the plant floor while reducing ERP customization. Benefits from such an approach include improved operational performance, accelerated ERP connectivity to the plants, minimized project risks and an overall reduction in IT costs.

Memex continues its tradition of serving the discrete manufacturing sector, supplying component hardware, memory upgrades, and visionary shop floor communication technology. Memex products allow a manufacturer to realize the impact of OEE Profitability.

MEMEX - Industry 4.0

Universal Machine Interface compared to Programmable Logic Controllers

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Customers have asked how a Memex Ax9150 Universal Machine Interface (UMI) compares to a typical Programmable Logic Controllers (PLC). In answering, we are faced with the same dilemma as the apple to a tennis ball. Both the UMI and PLC have digital inputs and outputs, but that is where the comparison ends. A PLC is only a hardware component, whereas the Memex Ax9150 UMI is a full system of hardware, firmware, software applications and configuration tools designed to connect to any machine. The Memex Ax9150 UMI is part of a comprehensive OEE production monitoring and control system that ties the Shop Floor to the Top Floor.

A PLC may have no operator interface and cannot be used with just any machine. In contrast, the UMI is specifically designed to connect with ALL machines. Although the UMI collects most data automatically so that operator input is not mandatory, such input is often used to further increase the system’s functionality, an option not easily accomplished without expensive custom services for a PLC.

Memex’s UMI-based comprehensive production monitoring system consists of the following components:
1) Ax9150 UMI with Ax2200 for Ethernet communications.
2) Mx2000 handheld HMI unit.
3) AxConfig software for logic ladder setup, configuration and communications traffic direction (driver).
4) Production OEE machine monitoring software.
5) AxERP interface to bi-directionally connect the shop floor to the top floor.
6) AxEmail alert system to catch small problems before they become big ones, and allow operators to problem-solve.
7) AxDNC for CNC part file transfer, including large amounts of memory stored at the machine with a file system.

To re-create the Memex Productivity system with just a PLC collecting digital I/O points is virtually impossible. Manufacturers would have to add an HMI plus advanced configuration and custom code development services. Moreover, the cost of developing a PLC-based system for use as an OEE shop floor interface historically has cost $15,000 – 20,000+ per machine and has required extensive, support services, and is most often a non starter for a company due to the overall cost of the project. Compare this reality with the $4,000 per machine cost (installed) of the UMI — it is now affordable.

– Automated data collection from machine
– Accurate and objective information
– Not reliant on operator
– Down Time Log – detailed to the second reporting all down time with reason codes
– Historical data from analysis
– Visibility of machine performance in real-time
– Proactive alerts rather than reactive
– Leading OEE Metrics, automatically
– Minimize “Cultural Impact” on operations
– 20% of cost of PLC based solutions
– No need for barcode scanning (optional)
– Connect to any machine
– Supports OPC standards
– Supports MTConnect standards (serve data from machine to the consumer application)
– Event monitoring
– Send job/shift completion results automatically back to ERP/MES

Memex continues its tradition of serving the discrete manufacturing sector, supplying component hardware, memory upgrades, and visionary shop floor communication technology. Memex products allow a manufacturer to realize the impact of OEE Profitability.

MEMEX - OEE Factory Automation

Watershed Thinking in our Industry – New Tooling is Only Marginal Improvement

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I had some most interesting customer feedback, as it is a watershed in what is going on in our industry – huge productivity gains will come from efficiency on the shop floor production processes, not just the machines themselves.

About 15 months ago, my partner and I presented to the corporate management team of an international machine tool manufacturing vendor – we had the ears of the top execs.  Moreover we had the connection with shop floor engineers in specific plants that wanted to install our OEE Productivity Monitoring systems – they needed our system.  Well nothing happened, and it dragged on – you know the story.

Yesterday I got a call from the main engineer (we had met at IMTS – 2008) the project was on!

He described the political layout, champions, etc., and mentioned the people we met 15 months ago, and pointed out that their corporate boss (CEO / VP MFG) was driving this project.  Yes, this is excellent sales work, sowing the seeds, planning, capital budgets, etc.

But most importantly, the engineer shared with me that over the last few years they have invested in the latest and greatest equipment, fastest this machine and that, better tooling, all kinds of things.  They had noticed that their productivity improvement from new equipment usage was initially in the 20% range and has steadily dropped down to the 2% range.  That means the marginal gain of using the latest and best equipment was really minimal.  So the question then was why – what was happening in their process that meant they could not get a high return on their new equipment.  Was it machine utilization, equipment, was it their processes?  Where could they spend their financial capital to get a maximum return?

They have come to realize now that their huge productivity gain would come from efficiency on the shop floor.

But first, they needed to measure what was going on – and this is where Memex comes in, as this is what we do, automatically at the machine.  This to me is huge – we understand it by being in the industry, and it is like the forest and trees syndrome, but to hear a customer quantify it with real return numbers was music to our ears.

I also believe the economic cycle is at work here, 2011 is the year manufacturers are spending, and it has taken until now to open up those projects.  I can tell you we are gearing up engineering in a big way – for all the right reasons.

We expect manufacturers to be more efficient, we are seeing it with our customers daily in real-time!

Advice on Software for Job Shops

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Recently the manufacturing journalist, Derek Singleton published an interesting article in Software Advice that should be of strong interest to Job Shops.

During his research with shop leaders, three areas surfaced as essential components to consider when choosing software: flexibility of bill of materials, work order features and the ability to deliver real-time, actionable data. We at Memex believe in providing real-time data, automatically from the machine and complementing a flexible work order system on the shop floor. Our customers tell us the same things, as we support them to bring true value to their operations. Below is a quick synopsis of Derek’s article.

  1. A Flexible Bill of Materials Fosters Custom Production – Job shop production requires software that supports a dynamic bill of materials (BOM). As such, it’s important to look for BOM functionality that allows the production team to adjust materials during manufacturing processes. At the same time, there should be functionality to substitute alternative materials in an already defined BOM plan. This is a fundamental building block of job shop production and important feature for the high level of product variation in shops.
  2. Work Order Functionality Maintains Workflow – It’s not unusual for a mid-sized job shop to have 200 work orders floating around at a given time. Managing these manually is a paperwork nightmare – not to mention inefficient. With automated software, however, you can deliver work orders directly to machine operators at their work stations. This prevents operators from having to go to the production manager to ask for their next tasks.
  3. Real-time Data Creates a Proactive Environment – Having a flexible BOM and strong work order functionality does little good if real-time data isn’t accessible for employees to make the best decisions. The laundry list of information that needs to be kept up to date can be dizzying. A shop needs to know what’s being fabricated, what’s being scrapped, why items were scrapped, how many parts shipped and so on. Providing real-time access to this data clearly means gathering information in real time. One way to achieve this is to follow Forrest Machining’s lead: Put computers at or near every work station for workers to input data for analysis.

Beyond knowing which software components are the most important, it’s also necessary to understand how to get the most out of your system. In other words, the software alone cannot make your shop successful – you must also be able to make efficient use of the functionality to maximize your outcomes.

MTConnect and Memex Support Legacy Machine Connectivity E-mail Clarification

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Dave Edstrom, President and Chairman of the Board for the MTConnect Institute, has requested that we clarify an earlier email where we stated, “A significant announcement at the show was the industry consortium, MTConnect, asked Memex to co-chair the Legacy Machine Tool Connectivity Working Group to develop industry standards, effectively endorsing our product direction.”

Dave Edstrom stated, “We are thrilled that David McPhail is the Co-Chair, with John Turner, of the new Legacy Machine Tool Connectivity Working Group. It is imperative that everyone understands that the MTConnect Institute has never and will never endorse any company, organization or set of products. This is why I asked Memex Automation to send out this clarification.”