By Terry Siddens, Missouri Enterprise Project Manager
Every production organization needs a reliable process to plan and schedule manufacturing operations. While this seems obvious, many companies struggle to fully understand how their information process works, and this often contributes to less than satisfactory results in efficiency and profitable productivity. On its most basic level, success is fulfilling customer orders on time, ideally when the customer wants product, but at a minimum when the company promises and plans to deliver. Failing to deliver on time is a reflection on all aspects of the operation, and shortcomings in the ability to access and use critical operational information is often a culprit.
In operations, the most important success factor is the delivery of meaningful information to people making decisions. Meaningful information occupies two levels: necessary details for each task activity, and real time performance metrics showing process effectiveness.
The first can be likened to understanding the trees in a forestry company. Most systems currently employed provide volumes of data about each tree: species, diameter, height, boardfeet, age, planned harvest projections and more. Similarly in a manufacturing company, the history, current status, and some future projections can be instantly accessed for every order, every part, and every job. Most information systems achieve this goal…they allow you to quickly “see any tree in the forest”.
The second level of information is like knowing the size of the forest, the harvest rate, production levels by customer type, available capacity, and other in-process key performance indicators. This information tells how well the business is meeting customer demand for ontime delivery, product quality, and cost outcomes. Most information systems provide a basic tool set of report generators to capture and deliver process performance information. But these “canned” reports often aren’t up to the task of providing the meaningful information a manufacturer needs. A company needs to design and implement their own information system to maximize their ability to “run” the business at peak efficiency.
One solution is adding to the company’s enterprise information system with add-on database queries and off line spreadsheets and reports. Better solutions improve the enterprise information system to produce the in-process performance reporting in a single system. By generating and delivering this level of information, a manufacturer can achieve a better overall picture of their operations…the customization of information reporting allows you to “see the whole forest”.
Usually, companies need to improve the way they produce and utilize the higher level performance metrics that are key to their operations. However, new initiatives to improve information systems tend to get focused on the readily available, newest, detail information systems; the “latest and greatest” software. But investment in this area often provides limited return and does little to produce the kind of information company leaders and personnel need to recognize new insights into operational improvement. Without insight and the right system tools, a manufacturer’s ability to build a sustainable future is limited.
Fortunately, an abundance of tools is available to collect data, process, and deliver information. Unfortunately, few “come out of the box” ready to handle in-process key performance indicators well, so customizations to suit the specific needs of the user are inevitable. Information systems are costly and require large investments to install, deploy, and maintain, so it takes a focused effort to implement a new system, or to make effective changes and updates to existing systems. The help of a qualified outside expert can be extremely useful to assess, develop and implement effective information tools customized to your needs.
Software is necessary, but is only a tool to build an information system (at least it should be!). Information systems produce disappointing results when the software is outdated, mismatched, or poorly implemented; a problem faced by many organizations. Sometimes the software is dated and unsupported; sometimes it simply isn’t capable of handling the existing realities of the environment; and sometimes the company hasn’t dedicated the time and people needed to implement it well.
Companies in this situation are uncertain about the right steps to correct the system and build a working information system that will be a fit for today and the future. Hesitance comes from the high initial costs, limited ability to commit and dedicate the necessary resources, and not understanding how to plan for the right time and methodologies. Not implementing improvements leaves companies lagging behind, which costs even more!
The process of building a successful information system is made up of four elements:
- Understanding state of the art Production and Inventory Control methods
- Analysis of information utilization throughout the organization
- Selection of optimum software tools to fit the organization
- Implementing an information system specific to the needs of the company
The gaps in these areas vary within each organization. Some companies need improvement in all areas while others are weak in one or two areas. The key is to incorporate all four elements to ensure that the company’s commitment of time and dollars will provide a positive long-term return on investment.
Some common paths manufacturers take to build successful information systems include:
1) APICS is the professional association for supply chain management and is recognized as defining the body of knowledge for production and inventory control management. Their Certified Production and Inventory Manager program covers the complete supply chain from sourcing through distribution with emphasis on internal production functions. Learning this body of knowledge is the most common path utilized by organizations to develop the internal expertise in state of the art Production and Inventory methods.
2) Analysis of information utilization in the production process typically starts with mapping the current systems in place. The current software and manual information tools are evaluated to determine what information is captured, when, and how. The tools are then evaluated for how that information is delivered, analyzed and used, by whom, when, and where. These rough flow maps are the first stage of developing insights into desirable future characteristics of the information system.
In addition, current deficiencies in production results are analyzed to determine whether lack of information is the root cause. Together, these elements form the basis for definition of the improved information system. Recognized past problems provide a basis to estimate the profit potential from investing in system redesign and deployment.
3) With a new information system design in progress, issues of gaps in data capture, storage, or analysis will start the evaluation of current software capability. If software replacement or upgrade is possible, this analysis will form the specifications, features and capabilities sought in a new software investment.
A company’s software must make is easy to capture data and reliably deliver information to its targets. Sophisticated systems tend to be complicated and therefore are often poorly executed, largely because they rely on focused employee effort to “get it right”. The easy to use system may not have all the fancy “features and benefits”, but it is often much more reliable, simply because it will be utilized consistently. In general, software tools with fewer features included, but still capable of performing well, will cost less to implement and will ultimately perform better.
4) An information system specific to the needs of the company incorporates the right software tools and delivers meaningful information to the user at the time and place decisions are made and implemented. Standard system features readily deliver detail information on each part or job to any user wherever there is access to the system.
The specific in-process key performance indicators will require a design unique to the organization along with systems to implement the collection and processing of data. In addition, resources are needed to focus on the capability to deliver that information to the user, when and where it is utilized. This common understanding of company operational performance will increase speed of activity and decreases non-value added wasted resources.
All organizations have business outcome objectives. But all too often, information systems provide lagging indicators that offer little guidance for day to day management adjustments that will lead to better business outcomes at the end of the month.
Strategic analysis of operations identifies the essential process characteristics that must be achieved predictably and consistently in order to improve performance outcomes. This understanding is then translated into measures to be tracked in real time, using software tools to continually monitor and deliver key performance indicators. The system must be designed to collect the right data and deliver information in a form that is quickly internalized throughout the organization.
Dashboards of information are not just a cross section of the company data, rather, they are the key pieces of information that tells everyone they are winning hour by hour. Not only do organizations need to know they are winning but individuals must see that they are playing a winnable game. The next level of information systems must engage personnel in a way that empowers and motivates them to win that game.