Monthly Archives: February 2018

Where’d the money go? – How to turn Manufacturing Assets into Profit

If you don’t know where your materials are and how many you have, you don’t know where your money is. The purchase and storing of assets (materials, tools, parts) for manufacturing is one of your largest expenses, so why don’t you have complete control of it?

We see many cases where manufacturers simply don’t know what they have. One shop in particular comes to mind. In walking through a manufacturing shop floor for carbon components in the aerospace industry, we passed the Material Review Board (MRB) area. It was enclosed by a cage to protect the parts from walking off. Inventory in this area was scrap but too valuable to just throw out.

There were shelves upon shelves, and stacks upon stacks, of carbon parts rejected by Quality. Oven times may have fallen short of required minimums or temperatures may not have registered high enough.  Without a fast process for review, these parts were being housed and shelved (literally). They were useless. The manufacturer had an enormous, labor-intensive future job to go through all these parts and create a disposition for each.

The Connection Between Process Control and Manufacturing Scrap

What the team was ignoring was the money that was tied up in these parts. It seems obvious from the outside, yes, but they were focused more on the disposition process and what they were going to do with all those quality rejects. Not to mention how sloppy it looked when upper management came through.  But what they were really missing was the key, hidden issue that this prospect had yet to uncover.

When I see that many pieces of contained scrap [and yes, it happens all the time] I begin looking for the scrap that hasn’t even made it to the cage. The amount of scrap in the screened area signals to me that there is a process problem. Solving process problems are what we are really good at. Control the manufacturing process and you control the scrap. Control scrap and you have a really tight handle on costs, too. That’s where you really start making up lost margin.

When a team is unable to control what is happening on the manufacturing shop floor, especially within the tolerances that their own engineering teams have thought possible, it signals a lack of control in parts and tools. Have you asked for an inventory count of your tools recently? Are you over-ordering or over-stocking in order to make up for “lost” tools [which are inevitably found on the shop floor]?

Ultimately, that same prospect closed manufacturing for a few days to complete a tool inventory. Yikes.

Know where your stuff is, know how much what you build costs you and control the processes that you use to build your parts. These three key concepts are completely linked and fundamental to successful manufacturing, and completely controllable with the right tools. Just ask us how.

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The Problem with Managing Tools, Parts, and Materials in your ERP – and What You Can Do About It

Not long ago, we worked with a manufacturer struggling with a serious scrap problem.

They were a make-to-order composite manufacturer building an expensive product with several critical components. The problem was – operators often used the wrong component. Components were similar and the specifics precise, so every mistake generated scrap, delayed the shipment, and left the sales team scrambling for new excuses.

It didn’t take long for the CIMx Application Specialist to discover the problem… the shop floor was trying to manage production with a bill of material in their ERP.

The ERP Doesn’t Understand Your Bill of Materials

The bill of materials is a critical part of the production process, but if it’s being managed in an enterprise system like an ERP, the system and the shop floor sees it more like a shopping list than a specification, and that’s a problem costing your business productivity and profit.

For manufacturing, especially discrete manufacturing, assets are more than just a list – they are critical specifications required in accurate and error-free manufacturing. But if a shopping list is all the shop floor gets from the ERP, you have lost production conformance. There’s no validation or control in how parts and materials are used in production – just a list that may or may not be referenced later in the production process.

The Struggle Is Real on the Shop Floor

We’ve seen it happen before – operators find costly workarounds for the gaps and problems the ERP is causing. For example:

  • The shop floor hides tools they know they will need because the ERP isn’t tracking production or the assets used. It’s better for them to hide tools now than search for them later.
  • Operators grab materials during kitting without even consulting the bill of materials. They’ve done it before and know what they’re doing.
  • Tools and machines on the shop floor are out of calibration because the static bill of materials doesn’t track the shop floor or assets.
  • Experienced operators work from memory anyway, and never even look at the plans or bill of materials because there’s no validation, no process conformance, and no control of work.
  • There’s no way to specify tools and materials anyway, so mistakes aren’t caught till the end, and then it’s a problem for somebody else.

Many shop floors operate like this. Work is done and products ship, but it’s often in spite of production processes and planning. The ERP can’t support the conformance and control required for make-to-order manufacturing.

Process Control for Make-to-Order Manufacturing

The problem is the reliance on their ERP. The ERP can store information, but it’s not driving the conformance and control this manufacturer needs. The hands-off manufacturing approach of the system is fertile ground for mistakes and increased production costs. The shop floor tries to eliminate the errors, but they’re getting no support from the ERP.

The first step to solving the scrap problem for this customer is moving the bill of materials out of the ERP during production and into a production control system – Quantum.

During kitting, Quantum validates critical materials against the specifications on the bill of material. If the shop floor picks or tries to use the wrong materials, a simple barcode scan will flag the mistake and corrective action can be taken immediately. The problem ends there, minimizing the cost and impact on the schedule.

If necessary, conformance can be driven throughout the production process using pass/fail data collection and automated validation checks against the parts and materials specifications on the bill of material. The manufacturer can control the process and add necessary safeguards.

Problems are eliminated. The shop floor gets the support they need at every phase of production. The bill of material becomes a tool for error-free manufacturing and the foundation of conformance rather than a shopping list.

Contact CIMx today to learn more about Quantum and how you can turn a bill of material into a production tool that drives profit, and eliminates errors and scrap.

What it Takes to Succeed with Machine Maintenance

Manufacturers invest millions in machines and equipment. These high dollar assets provide the foundation of successful and efficient manufacturing, and yet many companies rely on a spreadsheet, a plastic binder hanging from a hook, and the memory and experience of employees to maintain that critical investment.

If a machine goes down, production stops. Work has to be re-routed, putting ship dates and orders at risk. If work has to be done by a partner company, production costs will skyrocket. Scrap, higher production costs and late shipments are common consequences of machine problems.

Modern shop floors can’t rely on spreadsheets, plastic sleeves, and memory for machine maintenance. Machine upkeep is a critical production process requiring a production control system like Quantum. Successful upkeep and maintenance incorporates process control and conformance, just like every shop floor operation, and should be linked to operations and scheduling to eliminate downtime and increase production velocity.

Control and Conformance for Machine Maintenance

When evaluating your current processes, consider the following critical elements of a successful machine maintenance program managed by a production control system:

  • Schedules and Alerts for Required Maintenance

Machine maintenance is a critical production activity. If you aren’t following maintenance protocol, you risk machine downtime, failed audits, and unsafe work conditions. A scheduled maintenance program eliminates these risks. Support the shop floor with alerts and a system that removes the risk of using a machine due for maintenance – a common occurrence when the shop floor is under pressure to move product and meet deadlines when maintenance is scheduled.

  • Revision-controlled Maintenance Instructions and Records

Machine failure is a risk when you rely on paper-based records or worse, memory, for maintenance instructions. Over time, maintenance requirements can change and employees retire or leave. You need accessible, revision-controlled maintenance and repair instructions that can be accessed when needed. Records, beyond initials on a spreadsheet, should be kept on maintenance activities. A robust maintenance program will protect your investment and significantly reduce machine downtime and production costs.

  • Integrated Maintenance and Production Schedules

When you are investing millions in production machines, maintenance must be a priority. It should be done regularly to optimize machine output and eliminate unscheduled downtime. A successful maintenance schedule that won’t negatively impact production must be integrated with the production schedule. The production supervisor should know when there is work scheduled on a machine to route orders accurately, and ensure shipping and production deadlines are met. With a digital schedule and a production control system, maintenance can be scheduled ahead of time and work optimized to maintain production velocity.

A Program for Optimizing Machine-use

Even though industrial machinery is a critical component of manufacturing, especially make-to-order manufacturing, many companies consider machine maintenance an afterthought until a machine goes down or the shop floor fails an audit. Spreadsheets and plastic sleeves on the machine aren’t an adequate maintenance program, especially when the shop floor comes under pressure to increase output.

Quantum production control system provides seamless support for your machine maintenance program as part of your standard production process, eliminating unscheduled machine downtime, the risk of failed audits, and the stress of upkeep while optimizing scheduling for machines and production. All the benefits are part of the standard product.

Contact CIMx to learn more about Quantum’s integrated machine maintenance in a production control system, and discover how you can optimize machine use while increasing production velocity.

Do You Know Where Your Production Assets Are?

While production requires tools, materials, parts and equipment, many manufacturers don’t track or properly manage these assets. This oversight adds “hidden” production costs like scrap, inefficiency and waste – costs that can quickly overwhelm profit.

How much scrap and waste is generated by one of your operators using the wrong part or searching for a missing tool? How many of your late shipments are symptoms of orders sitting on the shop floor waiting for missing parts or materials? Problems like these are common when companies aren’t tracking and controlling assets in production.

Without granular data to optimize and control asset usage, mistakes are made and costs increase. The Quantum production control system manages parts, materials and tools during production, eliminating these mistakes and reducing costs.

Empower Production with Asset Control

A production control system actively links the management of tools, parts and materials to manufacturing activities.

Serialized assets, or assets given a unique identifier, are not only be used to track parts and materials for regulatory compliance, but also eliminate the scrap and waste caused when the wrong parts and tools are used. Engineering specifies a tool to be used in an operation, the operator then validates the correct tool with a simple bar scan before work begins. The validation adds invaluable conformance and control to the shop floor.

By collecting and analyzing production data on tool usage, you can track when an asset requires calibration, further reducing mistakes and scrap. If a tool is due for calibration, an alert is sent and the tool is put on hold until the proper calibration can be performed.

Data from the production control system can further improve asset efficiency. Over time, as you begin collecting production data and matching it to the serialized assets used, tools that aren’t operating efficiently are identified. Corrective action, such as more frequent calibration or part replacement, can be taken before the issue becomes a serious problem.

By managing tools, parts and materials in a production control system and validating on-hand quantities, you eliminate a root cause of late shipments.

Before an order is released, Quantum validates parts and materials are available. The system automatically lists where they are stored, reducing the time and effort necessary for kitting. If materials or parts are missing, the floor supervisor can put a hold on the order until the assets are available. Inventory can be moved to fill the order, ensuring the shop floor stays focused on critical and available work. You can identify an asset issue at the earliest stages, allowing corrective steps to be taken. Linking asset availability eliminates wasted time and helps ensure orders ship on-time, every time.

Lower the Cost of Production

Assets are a critical component of a successful and efficient production process. Production costs and shop floor errors increase when there isn’t a link between production and asset management, especially for make-to-order manufacturers that work under strict conformance and control requirements.

Once the link is in place and the production team is synchronizing work and asset usage, you’ll start identifying and correcting additional sources of errors and inefficiencies, further fueling production cost savings.

Contact CIMx today to learn more about part and material management in Quantum, and discover how production control software can lower costs and increase productivity for your business.