Moving From Dumb Manufacturing to Smart: Catching the Fourth Wave

Use Smart Manufacturing to close the information gap between the shop floor and the office floor.

Charles Horth | Jan 27, 2017

This is the third of my three posts on moving from dumb manufacturing to smart.

In the previous blog, we discussed Waves 1 and 2; this one will cover Waves 3 and 4. The four waves are layers--each builds on the one before.

Collectively, they drive first-time-right quality.

Wave 3: Improve quality management with centerlining

Traditional quality management measures outcomes--end products. Is the chocolate donut the right weight? Does the car door close properly? Are the tissues the right size?

But the flaw in this system is readily apparent--by the time you detect quality problems, you’ve already squandered time and resources on making flawed products.

By monitoring inputs rather than outcomes, centerlining takes a more proactive approach. The idea is to control the key parameters in the input, thereby run to target, and achieve the right output--do the right thing, consistently and continuously. Monitor what comes in, to gain consistency in what comes out.

Of course, you cannot eliminate quality measurement of finished products--particularly those, such as pharmaceuticals, with intense regulatory requirements.

But by decreasing the variability of key inputs, centerlining considerably decreases waste. Not to mention the amount of time spent dealing with isolated islands of data that arise from log sheets and lab data. As well, centerlining enables efficient short orders, and the ability to run a variety of products through the same equipment.

Leveraging the 80-20 rule

As always, the 80/20 rule rules: by determining the best settings and ranges for the important variables and eliminating variance in a handful (say 20%) of parameters, you can decrease 80% or more of errors. Think of it as a pre-emptive quality strike! 

And returning to the theme in the first of these three blogs, centerlining is one of the ways that smart manufacturing moves from art to science. In order to achieve that perfect cake, the oven temperature must stay between x and y, the flour must weigh between p and q, and so on. It’s measured, it’s digital, it’s scientific.

Still in its infancy!

Yet while most leading companies have adopted centerlining, the majority of manufacturers have not, certainly not to any significant extent. It’s far from uncommon in plants to have three shifts that have three ways of making a product--basically the definition of dumb manufacturing.

Centerlining never stops

The thinking is that if there’s a discrepancy or variation in output, there’s a reason, and the reason should be attended to. Proper centerlining is ongoing, allowing for changes in equipment, raw materials, or any other factor.  

Wave 4: ERP integration

Wave 1, visibility, is about connecting to the shop floor control systems. Wave 4 is about connecting to the business systems: e.g. ERP / SAP / Oracle.

Simply put, ERP systems exist to count money--not kilos or production numbers. Your ERP tells you what you want the plant to do: how many widgets to make, and when. Your MES (Management Execution System) tells you, in real time, what was actually done. What you produced, what materials you used, how much was wasted.

But until you have connected these two, you’ll be scheduling manually (and yes, using an Excel spreadsheet is still manual). Plus doing material management manually. In a world that keeps moving faster, your reaction time is slower, not to mention based on less accurate information.

Catching Wave 4 offers many business benefits--you will:

• Reduce overruns and under-runs
• Ensure right (released; matching Bill of Materials) material is being used
• Ensure right amount of material is delivered to lines at right time
• Ensure that schedule updates are communicated quickly to lines
• Ensure that lines can still run if ERP is off-line for prolonged period of time
• Provide detailed traceability from ingredients through to finished goods.

Once you connect your MES with your ERP, you’ve closed the schedule integration and material management loop. In fact … you’ve closed the gap between the shop floor and the office floor.

Now, you’re closely linked with your customers. You receive an order; the plant produces based on the information in the order; the output is shipped and invoiced. With the fourth wave, your opportunity to deliver the right thing, at the right time, profitably, takes a giant leap forward.

In summary

Smart Manufacturing--enabled, expanded and extended by the Internet of Things--merges operation with information technology. It enables insight in real time, and action, allowing everyone on the shop floor to base decision-making on readily available information.
The four waves I’ve described are the roadmap to get there.

Charles A. Horth is the CEO of Factora, a company of manufacturing consultants who use software to help factories achieve their full potential by raising the visibility of key information on the shop floor so that plant management, employees and company leadership can run more efficient manufacturing systems.