The manufacturing industry is committed to improving production efficiency. Utilizing lean production strategies to reduce costs and increase throughput while maintaining quality is challenging. Manufacturers with a continuous improvement mindset see it as more of an opportunity than a challenge.
Manufacturers can only be as efficient as their competitors. So long as the manufacturers can beat them, then they win. As new technologies allow them to make better and faster decisions using actionable insights, the "standards" of the industry will rise. For instance, the output of Manufacturing has increased despite a decline in workers.
Productivity vs. Efficiency: What's the Difference and Why Does it Matter?
Contrary to common belief, productivity and efficiency do not mean the same thing. Although both are worthy of optimization, it is essential to understand the relationships between each and how they relate for manufacturers to make these improvements.
Productivity Is a Measure Of Efficiency But Not The Other Way Around
All of these words have the exact origin. You'll probably hear them in manufacturing facilities several times per week. It's the best way to recall the definition of productivity. Productivity measures how many products you can produce and the resources it takes to make them.
The Concept Of Efficiency Is Broader Than Productivity
It is important to remember that efficiency goes beyond inputs and outputs. When productivity takes precedence over efficiency, it can affect the quality of work. Activating efficient production goals helps manufacturers pay attention to the big picture and not only do their work productively.
By focusing on efficiency, you can maximize your resources and maintain a high level of quality while minimizing risks and potential losses. It does not mean that productivity is to be sacrificed for efficiency. You will still get angry (or potential) customers if you can't meet the customer's demands.
The Five Steps to Improve Manufacturing Cycle Efficiency
The manufacturing cycle begins long before the widgets are produced and continues afterwards. Companies must consider all elements to ensure a competitive cycle time. Each element of the lifecycle process should be examined to eliminate waste, including innovation, development, testing, and Manufacturing.
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Concept and Development
The process of developing new products is often fraught with waste simply because it needs to take into account efficiency.
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Purchase Process
With a streamlined ordering procedure that considers potential complicating factors like the current level of stock held, sales volume, and future trends, manufacturing cycle efficiency is readily improved.
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Schedule Production
The production schedule should maximize the company's available manufacturing resources regarding equipment and workers.
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Manufacturers
Innovative companies use machine monitoring software for real-time insight into the performance of their shop floors.
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Transport
Cancellations, payment delays and many other issues can all undermine your efforts to improve the manufacturing cycle. Arion manufacturing ERP dashboard that analyzes cycles.
What Can Be Done To Improve Manufacturing Efficiency?
The following methods can improve the efficiency of Manufacturing:
Bottlenecks Are Identified
A bottleneck can stop production quickly, which will frustrate the staff and impede downstream processes. Most significant are the impacts on production efficiency and the shop floor. A bottleneck analysis can help you identify bottlenecks and increase efficiency. The root cause analysis identifies places where the production process is constrained. When bottlenecks have been identified, it is possible to implement solutions that will remove them. These solutions can be used to improve the optimization process and avoid future blockages.
Reducing Waste
Many manufacturers are focused on reducing production waste, but they often overlook this as a way to increase production efficiency. Begin with what is obvious: recycling, reworking, or removing material. It creates the space needed to stage WIPs and materials for production. But waste goes beyond scraps or trash. You can identify more waste by adopting the Lean Manufacturing philosophy, which includes waiting time, unnecessary motions, and constraints.
Utilize Standard Work
Standard work can be a valuable tool to improve production efficiency and reduce variation in manufacturing processes. If left up to the individual, each person will work differently. Posting detailed instructions for everyday work with photos and graphs will encourage all employees to complete tasks similarly. Simple work that is automated allows for real-time updates and changes.
Organize Yourself
Many people need to realize how much housekeeping contributes to manufacturing inefficiency. Contamination can affect the material flow and product quality control. Employees need clarification when they can't locate the required tool, which affects morale. One of the most advantageous Lean Manufacturing techniques is applying the 5S system. Adopting a 5S programme, which stands for sort, put in order, shine up, standardize, and maintain, is quick and easy.
Audit your Processes
Many manufacturing processes have unnecessary steps. Some may have changed over the years as new machines or layouts were implemented. Process mapping can help you identify problem areas and improve processes by auditing workflows and processes. It is possible to map the process for an individual product, machine or facility. Regular audits and training of employees will increase manufacturing efficiency.
Train Your Employees Regularly
Many companies train their employees only once and then rarely return to it. Modern Manufacturing, with its advanced automation and regular training, is essential. Exercise is necessary to keep processes moving, and employees are trained quickly on new procedures.
Implement Cellular Manufacturing
Consider adding cellular production to your facility if you have many similar processes. This will improve efficiency. Cellular Manufacturing may include machines capable of performing multiple tasks. However, the output from a cell and its contribution to factory flow and processes are considered one set of standard functions. To reduce the number of unnecessary steps, materials, tools, and supplies can be arranged and ready for cell use.
Maintaining Your Vehicles is Easy
For a long time, preventive maintenance in the manufacturing industry has been standard practice. Whether your maintenance program is predictive or preventive, you must optimize it to minimize equipment failures. When CMMS and other software are used to organize and plan maintenance, the power of an optimized strategy increases. As the overall effectiveness of equipment increases across the entire factory, machines will perform at their best.
Automatism
Most manufacturers often include automation in their products. Automation is not just about machine functions; it provides for the automation of processes and tasks. Automation has a huge impact when tasks that are time-consuming and prone to errors (such as collecting data) become automatic and relevant in real-time. When paired with the advanced analytics provided by a machine-data platform, this automation can boost manufacturing efficiency on the factory floor.
Real-time Data
Machine data is the best tool to maximize efficiency and optimize your processes. Machine data platforms provide real-time insight and drive opportunities for innovative Manufacturing in many different functions. These functions all improve efficiency and business processes.
Calculating Manufacturing Efficiency
In the world of Manufacturing, success is dependent on measuring and analyzing successes, failures and progress. Manufacturing efficiency is the same, regardless of the numbers used. Divide your standard output and your actual output to calculate your manufacturing efficiency. Then, express the result in percent form. You can either use software to calculate this automatically or manually.
Calculate your Actual Output
This requires that you first define your outputs. Divide your output total by the total input to determine your outcome. The unit in which you measure productivity will determine how you present this.
Calculate your Standard Output
You can use your historical data or a benchmark industry figure that you may find in an article. You can compare your performance to that of a competitor or an industry. These two factors can help you determine your overall manufacturing efficiency, which helps set KPIs and other efficiency measures.
Take Your Operations to the Next Level with Data
Measuring productivity in Manufacturing operations aims to understand production performance and how it relates to profitability. Stakeholders at all levels of the organization, including operators, managers, supervisors, and corporate, need to understand what is happening on the shop floor. This is only possible if the team can access accurate production reports and real-time production data to help them make faster, better decisions.
Arion ERP allows manufacturers to quickly gather and utilize production data to increase efficiency and productivity. Our plug-and-play system gives managers and operators the tools to act swiftly, giving them immediate access to the shop floor and control. Due to the ease with which Arion ERP can spot significant production bottlenecks, customers can experience ROI in as little as five days.
The Benefits Of Manufacturing ERP Software
The manufacturing industry is highly dynamic and competitive. The need to increase productivity and efficiency will continue to grow as the demand for goods and services increases. The manufacturing industry is staying strong, as it caters to the increasing population, infrastructure improvement and day-to-day business and consumer needs.
Software to manage production must be updated to match the demands of the industry and customers. ERP Software, which has existed for more than forty years, has improved productivity and traceability in Manufacturing. ERP software has many benefits for Manufacturing. Seven manufacturing management software benefits are listed below.
Automation
You've heard "automation" more than once in your research on software. There is a good reason why it's mentioned so frequently when discussing ERP software. The opposite of the term "automatic" is "manual."
You may remember when you could only call a family member or friend using a dial. Now, you can open your smartphone and ask Siri to call Will Smith. Within a few seconds, the phone will dial Will. In this age, it's hard to imagine using a dial. This is almost the same as using manual systems instead of integrated software like ERP for your manufacturing company.
Manufacturing by hand can result in errors throughout the production cycle, from ordering to shipping. Automation allows you to do the following:
- Better track production
- Manage material reordering points
- Report work in progress (WIP),
- Notify customers about upcoming deliveries and
- Schedule work on the shop floor according to machine availability and employee availability.
The system runs modules in the background that aren't in use to keep data accurate and current. The manufacturing management software reacts to real-time changes so that you always have the most up-to-date information. It is essential to track and report on jobs.
Supply Chain Management
Supply chain management is essential in a custom environment or in producing standard products. Supply chain management is vital for all aspects of your business, from raw material procurement to timely delivery. Stock Management Both raw materials and finished products (if you are working with standard parts) will become increasingly important as your business grows and the competition in your industry increases.
Inventory Management is a critical component of ERP. Up-to-date inventory counts allow you to give your clients accurate time and resource estimates. Arion ERP lets your warehouse or supply chain manager keep detailed records of all vendor deliveries. This will allow them to identify which vendors are the most reliable and deserve your company's business. Vendor B may be more reliable than Vendor A in the future. You can learn these things with an ERP system or data management software.
Connectivity
When ERP software is discussed, better communication is always brought up. How does the customer service department update staff on the shopfloor if, for example, the work order was already released, but the customer called to request an adjustment? The machine operator must be informed immediately if the drawing has changed. The customer service department can instantly update the ERP database to notify the staff on the shop floor about the updates without having to run to the tech to correct them.
If an inventory is low for a particular raw material, shop floor staff can also request the material directly from their station without having to speed-walk to the office and inform the purchasing department. ERP software allows you to communicate directly with your clients through dashboards. Arion ERP provides what we refer to as Web dashboards, which would enable our customers to provide the information that they want to their customers regarding open projects.
Cost Reduction
ERP software can reduce costs for your company. You ask, what exactly is meant by cost reduction?
- Profitability can be increased by accurately calculating job costs
- Efficient staffing
- Reduce idle time on machines - They are costly, so make the most of them.
- Nesting order to conserve material (lean Manufacturing) will reduce costs
- Save time by automating inventory management.
- Spending less time in order entry, scheduling, and quoting will save you money
Production Efficiency
Production efficiency, like automation, is the concept that all processes will run smoothly and efficiently throughout the production process without entering data in multiple places. ERP software is a great help in most companies' first phase of Manufacturing. If you use various estimators, there might not be an efficient quotation process.
For a consistent quoting process, it is crucial to have consistency between estimators and estimates. Arion ERP allows you to create an invoice directly from the customer's request for a quote. You can also make the sales and work orders that will be sent to your shop. You can create invoices directly from the module for sales orders.
ERP software allows you to see bottlenecks and how they can be eliminated. Manufacturing bottlenecks include:
- Inventory levels are too low.
- machine capacity.
- Forecasting mistakes and
- scheduling conflicts.
ERP software can prevent these bottlenecks with its proper automation, inventory control and inventory management, as well as reporting on WIP and Advanced Planning Scheduling.
Decision-Making
You'll see that many of the benefits are dependent on decision-making. Your team will have to decide how to deal with bottlenecks and improve production. They'll also need to choose where they want to save money, what stock to maintain, and whether to automate processes to increase efficiency.
By providing information on production costs, employee productivity, machine utilization, sales success, and profitability, your management team can make better judgements. ERP software offers all the resources required to facilitate decision-making. These resources will distinguish your company from that of your rivals. Making the right decisions is essential to your business's success. ERP software can make a massive difference to the success of a company.
Customer Satisfaction
Customer satisfaction is, without a doubt, one of the most significant benefits that ERP software can provide. This article has explained that having visibility over your supply chain and eliminating bottlenecks benefit customers.
- Customers can receive email notifications and updates.
- On-time delivery.
- Pricing that is accurate and competitive (once you know your costs).
- Price your products and services competitively without losing money. Customer retention is essential, but so are profits! Retain your existing customers!
Most businesses know how important it is to keep customers happy. Still, they need to learn the best ways to do so. Customer retention will rise if you prompt delivery of goods and services, keep clients informed about fulfilment, and-most importantly-offer loyal clients competitive edge pricing and discounts.
Conclusion
The role of an ERP system can be a benchmark between failure and success. ERP software offers many benefits, including automation, improved decision-making, increased productivity, reduced costs, better supply chain management and interdepartmental communication. It can be challenging to implement and evaluate Enterprise Resource Planning software in your manufacturing business operations. However, it's worth the effort if you wish to remain competitive. Visit our Resources section to read articles about ERP software and take Arion ERP manufacturing management software Solutions. For smoothening manufacturing processes in your business.
