Category Archives: Operational Intelligence

Can ERP solve a service problem?

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While an Enterprise Resource Planning (ERP) software system can provide many benefits to a small to mid-size business (SME), business owners often struggle with the decision to purchase a new system because of the costs. They usually have an accounting software package already, and perhaps another software  system in purchasing or the plant, is it really worth the time and cost to upgrade?

A fully integrated ERP system can have benefits far beyond accounting and inventory, it can open doors to more efficient operations and eliminate problems that you might not think were even related.

As companies grow they often develop systems that are based on the skills of the individuals involved rather than with any overall plan, there just isn’t enough time in a day. As the company grows, it eventually reaches a point where they can’t rely on just the memories of key people, systems have to be developed that operate consistently regardless of the people involved. Companies that introduce systems that take them to the next level continue to grow and prosper.

For example, the owner of a machinery manufacturer was struggling with what he thought was a service problem. He had more clients demanding service than he had service techs and he couldn’t justify finding and training new techs. But was service really the issue? It turned out that the company didn’t have any capacity planning capability. When they were chasing new business, they quoted whatever delivery time they thought would get them the order, based on their experience with similar past orders. As long as they only had a couple of major orders on the go at one time, they could keep a lid on things just by memory. When they got busy, people became overwhelmed, small things were overlooked and the system (such as it was) broke down.

With a paper based order entry system, they were behind before they even started. Engineering would be rushed and unable to create a complete bill of materials, but that would be “fixed on the floor as the guys had made something like this before”. Without the bill of materials smaller parts weren’t ordered and put into inventory so there were constant delays as parts had to be brought in, slowing production. Since the owner had to approve significant purchases, there were further delays as he was often on the road or in meetings. As the delays built up, the customer would start screaming, adding more pressure. When the machine was finally built, the testing was rushed and incomplete as the service managers who normally did the testing were in the field (fixing the last delayed project), so the order was rushed out the door with the hope that the service techs would fix any problems on start-up. Since solving problems in the field takes many times longer and costs more than doing it in the shop, there were cost overruns and unhappy customers, and a service problem.

How did an ERP system remedy the situation? By providing capacity planning capabilities, they could predict how a new order would affect the flow so they could plan where they might have to either reschedule assets, add temporary capacity or farm out work. Even if they had to commit to a shorter delivery time to get an order they could at least see the bottlenecks beforehand so they could plan around them. Since they made similar machines with only a few customized features, they could call up previous orders to quickly develop a complete bill of materials to reduce engineering and have all the parts in inventory before they were needed. This was a major improvement as chasing parts was a primary cause of delays on the floor. Since the owner had access to a daily screen of planned purchases on his laptop, he could approve everything in a few minutes per day via remote access, eliminating another delay. With improved planning and inventory management, even multiple projects were completed on schedule, leaving time for testing and debugging in the plant. And with start-ups taking less time, the service techs were able to handle more projects, solving the service problem, which was never really a service problem at all!

If you would like to find out  how we can help your business grow to the next level, contact us today!

Increase Productivity and Overall Equipment Effectiveness

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Operational and Enterprise Intelligence solutions acquire data in real-time and provide enterprise-wide visibility, including key operating data, consumption, profitability, efficiencies, capacity and cost data. These systems are easy to deploy, asset agnostic and have payback periods of only a few months.

When a leading manufacturer of quality packaging materials in North and Central America wanted to improve plant performance and reduce operational costs, they faced two main challenges. The first was transitioning to an automated  data collection process without significant downtime, the second was to translate the automated data into a measurable value that could tie-in with their operator’s incentive program.

Our OEM provided a real-time reporting and analysis solution that was rolled out to nine plants in total. Management was provided with real-time reporting and analysis capabilities that provided visibility into operations to support planning and strategic decision making. At the plant level, they provided real-time visibility of equipment performance to each operator with an LED display located above assets on the plant floor which empowered the operator to take immediate action to improve machine performance as issues occur rather than after the fact.

Installation of the equipment in each plant was easy and completed in only half a day with virtually no downtime. According to the client’s project manager, “The product was highly intuitive and within a few hours our operators were trained and interfacing with the system without skipping a beat”.

As a result of the implementation, the client achieved their goals of improving plant performance and reducing costs. Make ready times were reduced by 36% and run speeds increased by an average of 23%.  This was accomplished with significantly reduced operator involvement as there was also a 65% reduction in labour required for reporting.  “Eliminating our manual data took out the guesswork. We no longer question the reliability of our machine data so we are able to make production decisions with confidence”, according to the project manager.

The client had incentive programs in place where operators received bonuses based on individual accomplishments. With the new system installed the company was able to assign accountability and identify key contributors to reward them appropriately during performance reviews. As a result, operators aspired to higher levels of operational excellence, promoting a culture of continuous improvement.

“Our operators are more proactive and better equipped to improve the output of their machines while supporting our productivity goals. At the same time, our management team is able to make better and more informed decisions based on real-time equipment information. Within the first few weeks of installing the system we identified a significant amount of unused capacity on our die cutting machines. Knowing exactly where to focus our efforts, we increased our Overall Equipment Effectiveness (OEE) by 40%. With this additional capacity, we deferred the purchase of additional equipment, saving us millions of dollars in capital investment” according to the client.

The client’s project manager said  “We are truly leveraging the skills and knowledge of operators with this system. It has elevated us to a whole new level of productivity and we are closer to our vision of manufacturing excellence”.