Written by: Paul Hogendoorn, MEE Cluster Digital Transformation Consultant
How can technology help address the labour shortage issue, or improve your company’s productivity? It can in many ways, but the first answer I offer to those two questions is often not the answer people expect; they expect something about automation, or robots, or eliminating the need for people on the plant floor. But that’s not where I often see the biggest bang for the buck.
As beneficial as automation and on-the-floor technologies may be, the most immediate and certainly the most cost-effective way for many manufacturers to improve productivity and address the labour shortage challenge is by deploying technology and techniques that lead to better planning and better preparation.
Everything in manufacturing comes down to two things: planning and execution. Automation and robots are all about execution. They are expensive and take time to properly select, purchase and deploy. And in most cases, they only address specific functions or areas of execution. Improved planning and preparation, however, benefits every function and area of execution in the whole operation – not just on the floor, but in the office too. With that said, in most engineer-to-order, (or “project-based” manufacturing operations), as well as in many “product-based” (or produce-to-order manufacturers), better planning is key.
Before I elaborate on this further, I’ll start by sharing some outcomes that I’ve seen two manufacturers I’m very familiar with achieve. The first is a large “engineer to order” (or E2O) company that used to design, produce and deliver approximately 28 projects a year, but now delivers 56 projects a year – with the same headcount, the same number of machines, out of the same building, while at the same time eliminating all overtime, pulling back in all subcontracted work, and giving their production people extra time off between Christmas and New Years. The second is a medium “build to order” (B2O) operation that has a standard product mix of about 200 recurring products, with 15 to 20 of them representing 80% of their overall revenue. Their typical order-to-delivery time used to be about two weeks. In the last two years, their top line revenue stayed the same, but their “hands on” head count dropped significantly, and their delivery time is now consistently one week. Needless to say, the bottom line in both companies improved greatly.
To be fair, both companies did invest in some new machines and technology on the plant floor, but even this was a function of better planning and preparation. They had the data to support their purchasing decisions and the insights to know where to spend it. But new machines only affect “up time”, or “value creating/adding time”. Part of improving uptime is reducing or eliminating “downtime”, but the biggest waste in many companies I tour is not downtime, it’s “wait time” – the time between processes or operations where something in process is waiting at the end of an aisle on a skid, or shuttled to a holding area, or put back into inventory as WIP. In Lean terms, this is considered waste – a waste of capacity, of space, of capital, and of time.
Planning and preparation doesn’t start on the plant floor, it starts in the front office. Time lost by not processing orders, getting drawings done or approved, or ordering specialty parts in a timely way goes unnoticed, and the consequences go unfelt until the product or project hits the plant floor. And then its panic, pressure, and stress caused by shifting daily priorities. Adding automation and equipment on the plant floor to address the issues caused by poor upstream processes is a far more costly resolution to the problem, treating the symptoms, not the cause. Eliminating the problem is far better than mitigating the problem.
Better planning tools start at the quoting and estimating stage, and if the order is won, continue through the engineering and approval stage and into the production planning and execution stage. With better planning, raw materials aren’t machined into finished components before they’re needed just to improve an expensive machine’s OEE numbers. Sheet metal pieces aren’t cut, bent and punched, too far ahead of when they can be welded, assembled and painted. Finished products are finished on time – never later, but never too far ahead of time either. Anytime something is sitting still, in a semi-completed state, time and capital is being wasted and capacity is being lost. Investments in automation, equipment and robotics can help certain steps along the production chain, but investment in better planning and preparation tools helps the whole way.
In this case, I used the word “tools” rather than “technology” very intentionally, because not all “tools” involve “technology” as far as better planning and preparation is concerned. Better planning should start with doing (or having someone like the MEE Cluster do) a “Value Stream Map” of your process, from the quoting and estimating of a job, through every administrative and hands-on process of the job, right through to the completion and delivery. On the value stream map, key “weigh points” are identified, including all the upstream (administrative and engineering) functions associated with the job, helping establish coordinated schedules to get work through the whole operation, and providing empirical metrics and visual feedback for objective accountability for everyone.
Better preparation could involve technology, but it can also be as simple as better training for your people, and better workplace conditions for them to perform their work in.
Most highly effective manufacturing companies I’ve toured have skills matrixes for their people, encouraging cross training and skills development for their people, taking advantage of the time they freed up through their process improvements while at the same time engaging them more fully, which in turn improves their ability to retain them. A cross trained work force is a more flexible work force, which is an effective way of addressing the skills and labour shortages.
Better work conditions on the plant floor (and in the office) help with productivity and retention (not to mention safety) and is frequently just a matter of placing an intentional company-wide focus on cleanliness and order – a right place for everything, and everything in its right place. This is often taught as “5S”, one of the tenants of Lean.
So, with all of this in mind – the notion that perhaps automation and technology is not the immediate silver bullet solution to the problem you need to solve – where do you start? If you are a Western Canadian based company, a good place to start would be “LEAP”, the MEE Cluster’s Lean Accelerator Program, a quick and effective program designed to help get you traction with all the topics discussed above. It’s a great way to learn about Lean, get all your people on the same page, and create a roadmap for you and your team to start executing on immediately. Its not a big step, but it’s a first step, and something you can do right away.
About the Author
Paul Hogendoorn
MEE Cluster Digital Transformation Consultant
Paul has 40 years of experience in manufacturing and technology industries, having co-founded multiple companies, building them from start-ups to internationally recognized brands. Paul Hogendoorn is a co-founder of FreePoint Technologies (2013), a co-founder of OES-Inc (1981) and related companies OES-A (El Paso), IST and BloomAuction.com.
Paul is a self described “incurable entrepreneur” that leveraged natural technology development skills to successfully launch numerous companies, building them to international acclaim and significance, and effectively transition them to future owners and management teams for continued growth and prosperity. His primary skills include: ‘tactile’ information technology (IIoT) development and implementation skills, proven sales and marketing abilities, and demonstrated leadership, vision casting and team building skills. Primary assets include a vast knowledge of manufacturing machines, methods and industry verticals; comprehensive understanding of technology development from design of hardware, firmware and software to team building, R&D ITC and intellectual property protection applications; decades of trust-based relationships with technology companies, manufacturing companies, industry influencers and leaders.