The Impact of Digitalization on On-Time Delivery
On-time delivery (OTD) is an essential metric that has an immediate and significant impact on any business, particularly manufacturing. Manufacturers need effective solutions to ensure high OTD rates. On today’s factory floor, digitalization is giving them new tools to improve OTD and avoid the costs associated with late delivery.
OTD ties into the overall profitability of any manufacturer in several ways. Late orders will negatively affect the relationship between the manufacturer and its customers, potentially losing business. Many contracts include specific terms for late orders, so the manufacturers could be on the line for direct losses as well. Rush delivery charges, overtime hours, and other additional costs add up as well.
The Causes Behind Poor OTD
There are many potential causes that lead to low OTD rates. Some fall outside the responsibility of production, like supply chain issues. However, there are many things that happen or don’t happen on the factory floor that contribute to low OTD.
Problems will always arise on the factory floor, but a major factor in maintaining OTD is being able to react quickly. When manufacturers lack the ability to promptly identify when, why, how, and where something has gone wrong, they allow machine stoppages, quality issues, and other problems to have a more significant impact on performance.
Of course, production planning and scheduling also play an important role. A disconnect between planned production and what really happens on the factory floor can leave manufacturers falling short of their production targets. Without the clear insight and reliable production data needed to develop accurate scheduling, manufacturers can find themselves with reduced OTD.
Operational efficiency, in general, has a major impact on the ability to maintain OTD. Whether due to machine availability, performance, or quality issues, a manufacturer can’t ship units that aren’t finished. Taking a holistic approach that deals with multiple important areas of production can let manufacturers shore up their OTD.
Digitalization on the Factory Floor
Digitalization is the holistic approach that can let manufacturers achieve better OTD than ever before. It’s the Industry 4.0 practice of improving connectivity and visibility on the factory floor to transform production data into actionable information.
Most manufacturers today already have a wealth of production data coming from the factory floor, however, the information is often analyzed post-mortum.
Digitalization is a revolution in how manufacturers can aggregate, analyze and use production data. It lets them continuously improve across many areas, including a wide range of production KPIs like OTD. There are a few key areas in which digitalization stands to provide the most benefit in improving OTD.
Achieving a New Level of Factory Floor Visibility
Digitalization gives manufacturers access to new levels of real-time visibility. All machines and sensors are connected in order to provide a constant flow of production data. This data can be aggregated and analyzed to provide production teams and management with a complete overview of the entire factory floor.
Real-time Operational Intelligence (RtOI) solutions achieves just that. With the Matics RtOI solution, important production information is readily available and presented in a clear and intuitive matter. Production teams and management can view production information at multiple levels, from evaluating the performance of individual machines to the entire factory floor’s output.
Being able to access this information from a single source in real-time streamlines many important aspects of production. When something does go wrong that could delay production and lead to reduced OTD, production teams can analyze the situation quickly and effectively. Because of the real-time data aggregation and ana;ysis, it becomes easier to identify where bottlenecks may occur or what events may impact production.
Reacting Faster With Real-time Alerts and Notifications
The latency between some event happening on the factory floor and the production team reacting can have a major impact on OTD. It’s more time spent operating at reduced capacity or not producing any units at all. Digitalization makes it possible for the appropriate stakeholders to know immediately when something goes wrong.
With RtOI solutions on the shop-floor, production teams can receive instant notifications whenever machines drop below specific KPI thresholds. This means that it’s not just complete machine stoppages that are instantly reported but gradual changes in parameters as well. Production teams are able to address these issues as quickly as possible, leading to fewer production delays and late deliveries.
These alerts can also inform managers and other stakeholders through mobile devices, letting them stay in the loop no matter where they are. Managers can then use that information to set workprocesses into effect, or even pre-determine automated workflows for certain triggers.
Developing More Accurate Production Schedules
Digitalization has numerous immediate impacts on the factory floor. It also plays an important role in improving production planning and scheduling. With more accurate production scheduling, manufacturers can avoid late delivery caused by failure to reach specified production.
The production information that digitalization can provide isn’t only for making decisions in real-time. The data is also stored and analyzed to identify long-term trends in important KPIs. With this kind of information for every machine, manufacturers can develop a more accurate picture of their actual production capacity and schedule accordingly.
Matics makes this easy by allowing manufacturers to evaluate historical KPI data at a wide range of different levels. They can view the performance of machines over specific time periods and see how individual shifts and operators vary in their performance. This makes it possible to develop the most accurate production schedules possible.
Taking Control of Quality Assurance
Quality issues contribute to poor OTD as well. When production is outside of quality thresholds, that production is either waste or will require additional processing. In either case, time is lost, and late delivery is a possibility. Digitalization helps manufacturers avoid this by enhancing their ability to monitor and maintain quality.
Production data from connected QA machines and sensors can be monitored through digitalization like any other important production KPIs. Production teams can be alerted immediately as these KPIs start to change instead of only finding out during scheduled checks. This lets them react to the problem and get production back on track sooner.
With Matics, manufacturers can go a step further and implement automated workflows based on these alerts and notifications. This ensures the fastest possible response to any quality deviation, reducing time, material, and energy wasted producing rejects.
Changing the way people work in factories
Request a DemoImproving Your OTD Through Digitalization
Digitalization can help transform your factory floor into one with higher performance, improved efficiency, and more consistent OTD. Matics provides a Real-time Operational Intelligence (RtOI) solution that lets your operation take full advantage of the numerous benefits that digitalization has to offer.
Our solution aggregates and analyzes all production data in real-time, providing essential production information in real-time, with alerts and notifications to let production teams and managers react quickly to ensure OTD. With Matics, manufacturers have access to the full depth of their production information, available in real-time, with context, at any level they need.
You can find out more about the benefits that digitalization can have for your unique operation by contacting Matics and scheduling a demo.
