Matics Webinar: Increase Profitability With a Real-time Production Floor Management System

The modern manufacturing landscape is highly competitive and is undergoing rapid change as manufacturers implement the latest solutions. Our most recent Matics webinar draws the connection between the advantages provided by a real-time production floor management system and the impact it has on a manufacturer’s profitability.

The webinar is hosted by Business Development Manager at Matics, Elie Slama, who is joined by CEO and Founder at Mikan, Michael Odongo, and Vice President of Sales for North America at Matics, Brian Tilley. Mikan is a pioneer in data, analytics, and continuous improvement, and together Mikan and Matics have developed a strategic partnership providing real-time solutions for the North American manufacturing sector.

This webinar features expert industry insight into the shifting landscape and how manufacturers need modern solutions to continue driving profitability. You can view the webinar in full or read on for the key takeaways.

Key Takeaway 1: Industry 4.0 Is Critical for Driving Profitability Today

The connection between operational efficiency and profitability has always been understood. In the past, manufacturers throughout the industry have been able to make considerable leaps in profitability by developing efficiency. However, modern challenges require a more modern approach.

Today, so many of the clear measures for improving efficiency have already been fully implemented. To achieve an improvement today, manufacturers will often have to undertake major capital expenditure projects that hinder profits in the short term and only pay off after years.

Industry 4.0 technologies and solutions provide an alternative to these massive capital expenditures and delayed results. With improved technology, new opportunities for efficiency and productivity have emerged. By taking advantage of these opportunities, manufacturers can continue to drive profitability through continuous improvement on the production floor.

However, most manufacturers haven’t yet made a serious commitment toward these Industry 4.0 improvements.

“We find that there are companies that are fully strategizing about Industry 4.0 and smart manufacturing, and there are other companies that might have just heard about it, but it’s something elusive to them and that they don’t have any work in place, they don’t have any projects in place, it’s just not part of their manufacturing or corporate strategy.

But Industry 4.0 is not necessarily a place to get to. It’s more about a journey. It’s about making your machines, equipment, people, and processes vocal and having that information available in terms of data. Industry 4.0 is about a lot of different capabilities and enablement that are all focused around data and that allow you to run your plant, run your manufacturing operations better, by the numbers.”

– Brian Tilley

Real-time production management systems are a prime example of how Industry 4.0 solutions develop profitability through improved production efficiency. These systems make it possible to optimize production with real-time visibility, and this should be a key strategic objective for manufacturers today.

Through real-time visibility alone, manufacturers can reduce quality issues, improve machine availability, reduce material waste, and improve shop floor transparency and collaboration. Even greater benefits are possible with the right solutions, leading to even higher profitability.

Key Takeaway 2: Improved Profitability Relies on Overcoming OEE Challenges

Overall equipment effectiveness (OEE) is the most widely used metric for getting an overall sense of manufacturing productivity. It’s tied very closely to profitability. OEE takes into account actual production rates vs. optimal rates, unplanned machine downtime, and the impact of quality and rejected units. This simple metric provides a good sense of where a manufacturing operation stands.

In theory, any manufacturer would prefer an OEE of 100% with no downtime and no waste whatsoever. However, this isn’t realistic in an actual production environment. Benchmarks show that most manufacturers operate at between 50 and 60% OEE. While they may not be able to reach 100%, attaining 80% is generally considered a realistic goal for a productive and efficient manufacturing operation.

Achieving that level of productivity and the profitability that comes with it relies on the active input of stakeholders throughout the organization. On the shop floor, operators, technicians, and planners have a direct impact on OEE every moment of every shift. Managers also significantly impact OEE with the decisions they make.

The one thing that these stakeholders have in common, regardless of their specific role, is that they rely on accurate and timely information to make effective decisions. They need to know what’s really happening at any given time if they’re going to take action to resolve issues and improve OEE.

These stakeholders must contend with a wide range of challenges, but most issues that impact OEE fall within one of these categories:

Frequent downtime due to unplanned maintenance or inefficient scheduling
Low production rate caused by a variety of potential bottlenecks
Low machine utilization due to unexpected delays and lag between processing steps
High material waste caused by ineffective management of material resources
High energy consumption due to lack of optimization
High scrap or rework rates caused by unaddressed quality issues

Production teams can take effective action to resolve these issues only when they’re aware of them, understand them, and have the essential production information they need to make the right decision to resolve them.

Key Takeaway 3: Real-time Solutions Provide Numerous Opportunities for Improvement

When a real-time solution is put in place, it provides many opportunities for manufacturers to improve their operations. At the foundation of any real-time solution is the aggregation of production data from all sources. IoT and other technologies have made collecting data from all machines and sensors much more practical today, and an effective real-time solution draws data from other sources across the organization as well.

With this data and analysis, it’s possible to address efficiency in real time. Production teams can act as events are happening rather than simply trying to catch up after the fact.

This wealth of data also makes it possible for manufacturers to better know their standing. They can accurately compare their operations with industry benchmarks in order to gain competitive insights. This fosters continuous improvement, providing clear targets and an accurate, real-time method to track progress.

Implementing real-time solutions lets stakeholders identify and solve problems in real time. When responding to any event, there are several opportunities to introduce a time delay. From the event happening to visibility, from visibility to analysis, from analysis to action, and from action to results are all vital steps that each take up a certain amount of time.

Without a real-time solution, some of these steps could be extended to the point of entire shifts, days, or even months. With a real-time solution, these steps are carried out in real time as the event occurs. The latency between most of these steps is essentially eliminated through the visibility and alerts that such a solution provides.

“The system gives those operators, gives the stakeholders who drive the production flow and the manufacturing process the data and the insights they need to be able to impact each of these areas, now, not tomorrow, but right now.”

– Michael Odongo

With a real-time solution, production teams are able to take corrective action as early as possible. Instead of identifying losses in productivity after the fact, a drop in productivity can be identified and resolved before it can result in a significant impact on the manufacturer’s bottom line.

Key Takeaway 4: How Organizations Can Make the Move Toward a Real-time Solution

Implementing a real-time solution opens the door to many opportunities for continuous improvement that will ultimately provide a better bottom line for manufacturers. However, there are challenges to implementing such a solution and ensuring the level of adoption necessary to enjoy these benefits.

If you’re a stakeholder within a manufacturing operation, the potential impact of improved visibility and reduced latency on the production floor is incredibly clear. However, the stakeholders who have the production floor experience and insight to identify a real-time production floor management system as an asset are rarely in a position to make unilateral decisions for the company.

The first challenge to implementing such a solution is to secure buy-in from the executive suite of the organization. At this level of the company, making the argument for change will require translating the OEE impact that the solution can provide into metrics focused on dollars and cents. The solution must be linked to a business objective rather than seeing it from an operational perspective.

In many cases, the most effective route forward is to highlight the impact of failing to implement such a solution rather than the benefits it can provide. Manufacturers who don’t move forward with Industry 4.0 solutions are falling behind and becoming less competitive. While your competitors are making major improvements in OEE and reducing waste, your productivity is stagnating.

Once the executive leadership of the organization is on board with the prospect of real-time production floor management, the manufacturer can develop a framework for making such a transition. The implementation of the solution itself is critical in both the short and long terms. The manufacturer must avoid short-term impact caused by a difficult integration while ensuring that the new solution is set firmly in place.

These technical challenges are accompanied by equally as important organizational and personnel challenges. Educating stakeholders throughout the organization and establishing a real culture change are vital to the successful implementation of a real-time production floor management system.

Key Takeaway 5: Real-time Operational Intelligence Puts Data to Work on the Production Floor

Real-Time Operational Intelligence (RtOI) is a solution that lets manufacturers take full advantage of the benefits that production data has to offer. It builds on the foundation of Industry 4.0 advancements to address productivity and efficiency across multiple fronts, providing improved profitability for manufacturers.

One of the most important aspects of this solution is data democratization. The conventional way of doing things has always been to restrict access to production data to specific roles, whether within certain disciplines or different levels of management within the organization. Data democratization means providing production data to all stakeholders so that no potential benefits are overlooked.

More than simply providing that data, RtOI ensures that individual stakeholders have the data they need in the appropriate context. When events trigger alerts, the appropriate stakeholders are notified immediately with actionable information so that they can resolve the issue as quickly as possible. Getting this key data to stakeholders when they need it most can greatly improve productivity and efficiency.

Being able to monitor KPIs across the production process in real time also provides opportunities for improved productivity. Rather than isolating production steps, everyone within the organization can see the current status of the overall operation. This allows for more collaboration, preventing important information from staying isolated and uncommunicated with individual stakeholders.

This leads to a situation where the real-time solution is more than simply monitoring tied to alerts. It creates a production floor environment that is truly collaborative, allowing all stakeholders to contribute to the continuous improvement, productivity, efficiency, and profitability of the organization.