Production is not merely ‘making things’. There are processes to be studied and decisions to be taken at every stage of the production cycle, and these decisions can affect revenue and profits. Production decisions revolve around myriad aspects, such as ‘what goods should I produce?’, ‘how do I produce them’, ‘what are the expected costs?’, and ‘how do I best optimise the mix of resource inputs used in their production?’ And the science of overseeing this complex web of operations is what production management is all about.
Production management, through the application of rigorous frameworks and sophisticated techniques, oversees all aspects of developing products and delivering services. Its ultimate goal is the efficacious consumption and allocation of resource inputs, while maximising the quality and quantity of goods produced or services rendered.
Even with major advances in productivity and efficiency, a majority of production facilities still have some ground to cover in terms of improving their performance. Managers the world-over now realise that technology can help achieve the twin objectives of productivity and cost reduction. And yet, enterprises have not sufficiently invested in technology that can make their existing assets more productive. Neither have they taken requisite measures to maximise production efficiency.
The reasons for this are many. Perhaps the inability to access reliable and timely information that only exists in peoples’ heads leads to weaknesses in the design of essential processes. Ad hoc approaches to production improvement and the lack of a well-defined method to measure plant performance only exacerbate the issue. Employing good, proven practices can do away with the need for a complete restructuring of processes.
There are some universal best practices that can improve productivity and enhance production management. For instance, using demand forecasting to predetermine production plans can lessen inventory backlog or surplus, and thus reduce costs. Forecasting capabilities can be further enhanced by incorporating proven technology solutions.
Another useful tool is standardisation. Standardising methodologies, such as process re-engineering and major product redesign, can be implemented by predicting developments on products and on processes. These methodologies require process automation and again, technology intervention.
But technology alone is not enough. The success of technology presupposes the vigilance of managers in being constantly aware of the factors that affect quality, cost and time. Those responsible for production management can benefit greatly from certain popular approaches, most notably ‘lean manufacturing’ and ‘workplace improvement’.
Lean manufacturing methodically prunes away the waste that is responsible for production incompetence, including overproduction, miscalculations in inventory planning, inefficient transportation, product defects and unnecessary and redundant processes. Workplace improvement, on the other hand, involves developing good working relationships with all stakeholders (including employees), acquiring state-of-the-art technology, and empowering workers to make improvements. Both approaches encourage worker and management collaboration, build mutual respect, and promote straightforward and transparent improvement methodologies.
In the final analysis, the manager would do well to keep in mind that a total restructuring of the production process in order to maximise productivity is more difficult to implement than simply maintaining good and tested practices over time.
New concepts are emerging all the time in the search for optimal production and efficiency. One cannot emphasise enough the importance of Six Sigma in production management. A rigorous and disciplined methodology, it uses data and statistical
analysis to improve operational performance by eliminating defects in manufacturing and service-related processes. Lean Six Sigma, more specifically, improves an on-going process by implementing small changes that remove defects and thus, improve the overall quality and speed. The ‘Oneperformance’ improvement concept fast gaining acceptance in Lean Six Sigma, is based upon utilising a key performance indicator (KPI) known as overall equipment effectiveness (OEE). While not a new concept, OEE is only now being applied in industries far removed from its historical roots in automotive and pure manufacturing. The significance of this development is that with OEE, for the first time we have a well-defined method of measuring plant
performance that has both universal understanding and acceptance.
A key measurement of efficiency in manufacturing processes, OEE is essentially a function of three factors - availability, performance and quality, where OEE = availability x performance x quality.
The objective of OEE is improvement. By using OEE as an analysis tool, organisations can benchmark themselves against worldclass performance in their respective domains. However, for all that it provides data that can facilitate improvement, the onus for optimisation is still on businesses which have to recognise these opportunities for improvement and act upon the available data.
Certain OEE benchmarks have been constituted as ‘best practice’ scores: Availability – 90 per cent, Performance – 95 per cent, Quality - 99.9 per cent, and OEE – 85 per cent. Research however shows that most production operations have scores of around 60-70 per cent, indicating that most organisations still have a long way to go in improving their manufacturing operations.
The key to achieving effective OEE is capturing and analysing data from production equipment in close to real-time, and presenting this to plant operators and manufacturing management, in a format that facilitates understanding and action.
Such requirements can be more than adequately met by manufacturing execution
software (MES) packages. MES packages provide information and insight to all
relevant stakeholders, from business heads to shop floor maintenance engineers - using a variety of graphs and charts that can be personalised based on stakeholders’ information needs and preferences.
If understood well and used effectively and carefully, OEE solutions bring significant
benefits to organisations through lower total cost, greater visibility and streamlined processes; and help meet production management’s ultimate goal – the efficient consumption and allocation of resource inputs to maximise the quality and quantity of goods produced or services rendered.
Suresh Nair is head of the Manufacturing Execution System (MES) Practice at Wipro Technologies. Suresh has worked in the MES and manufacturing IT field for about 16 years. He has been advising global clients in creating manufacturing IT strategy and roadmaps. He has worked for manufacturing industries for close to seven years and has been in management consulting & manufacturing IT for nine years.Wipro
Wipro is a $5.2 bn global provider of IT services, outsourced R&D, infrastructure outsourcing, business process services, and business consulting. With 25 years in the global delivery of technology services, Wipro is the world’s largest third-party provider of R&D services and the world’s first PCMM and CMMi level five company. Wipro is uniquely positioned across the digital supply chain and has experience spanning over two decades working with lead global players.
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