by Kelsey H | Dec 6, 2022 | Process Improvement
Many of today’s manufacturing processes have grown increasingly complex, and as such, they can quickly become unorganized and scattered. If you work at a manufacturing site, you probably already know this. Like any strategic leader, you’re hoping to regain control and discover deeper insights about how to increase efficiency and profitability. To make significant improvements to plants and processes, the key is gathering accurate and detailed data. This information is the only way to implement real, workable solutions in your site.
However, many businesses struggle to track all the data generated at each plant. According to Forbes, many engineers working in manufacturing spend 30% or more of their time looking for information they need. When current data collection processes are so time-consuming, it’s no wonder these companies avoid implementing new solutions that require increased data upkeep.
Over the years, we’ve helped many of our clients overcome these same data challenges. With a few steps, any site can overcome their data problem and start making valuable process improvements.
Create Data Collection Tools
Before you can start better tracking and reporting data, your organization needs to set up a system to start collecting and sharing information across the site. We often run into scenarios where different departments manually gather only the data that is relevant to their job function with no easy way to reference data from other teams at the plant. Any data that may have been helpful for other departments is typically discarded. This lack of coordinated data collection results in data silos, which make it more difficult for the plant to respond to change, and decision-makers are left referencing inaccurate information.
As a first step, your teams need to communicate about which data from other departments would be beneficial for them to reference. Once those details are established, your site needs to implement a digital tool that gathers, stores, and shares data across departments. We often find that a digital tool that updates in real time is the most convenient and easy-to-implement solution for many organizations. Making data accessible throughout the site will cut down on any repeat data collection, which lowers to overall workload. It also prevents data silos from reappearing, giving teams at all levels a clear and accurate view of plant processes (as well as their inefficiencies).
Automate Your Data Collection
To further simplify your data collection process, be sure to connect your various supply chain systems whenever possible. If these external systems can share data, you’ll limit the time needed to update each individual platform with new information. Your team will spend less time colleting the data and instead dedicate more time analyzing it for improvements.
Additionally, the real-time data updates will help each of your supply chain tools unlock deeper, more powerful insights. When each system is working from the most current data, you can quickly and accurately analyze of the schedule for opportunities to take on new orders or products without disrupting other deadlines. These added capabilities can ultimately increase efficiency and profitability across production.
Ask for Help from the Experts
If the data collection process still seems overwhelming, it may be worth asking your software providers for help. These providers will know all the secret tricks and tips to their tool and may be able to provide advice. Perhaps there are configurations that you haven’t discovered yet that may be helpful, or there may be a feature they can add that will save you time. These expert tips may allow you to minimize the data input required to make the tool functional.
In the past, we’ve worked with our clients to create simpler data collection processes within our virtual modeling, planning and scheduling tool, VirtECS®. For example, for one of our specialty chemical manufacturing clients, we created templates within the software, which allowed them to duplicate fields as needed and quickly set up new products. We’ve also connected VirtECS® with our clients’ other tools, such as forecasting or ERP systems, to limit the need for data updates. If you’re interested in learning more about how VirtECS® helped one client gain control of their data, you can continue reading our internal case study here.
by Kelsey H | Nov 8, 2022 | Industry News, Supply Chain
It’s no secret that manufacturers have been rethinking their supply chains in recent years. Many reports indicated US companies were considering a manufacturing move, and this year, businesses were ready to take action. According to recent data from UBS, a staggering 80% of executives at American companies have plans to move their manufacturing out of China and reshore some or all of it back to the US.
Why are so many businesses bringing production back to the US? Why now? Is the country prepared to handle the influx of work, and how can manufacturers work around potential roadblocks? We’ll discuss all these questions and more below.
China’s Problems
For the last four years, China has suffered a series of setbacks that caused waves of US businesses to move manufacturing out of the country. It started back in 2018, when former President Trump imposed tariffs on many imported Chinese products that are still ongoing today. Then two years later, pandemic-related production delays and rising shipping costs further saddles Chinese manufacturing sites with inconveniences. Lower costs were the primary motivation for companies to outsource manufacturing to China; with rising prices, that advantage disappeared.
With manufacturers eager to move out of China, it naturally raises the question of where they should relocate to. For American companies, the resounding answer has been back to the continental US. Why are so many manufacturers choosing to onshore production, rather than move to other Asian countries or international sites?
Technology & Automation
The US may not seem like an obvious choice to relocate production sites at first, given its strict regulations and an expensive, shrinking labor market. However, the US is also a global center of technological innovation, and the increased use of automated systems has curtailed the need for mass amounts of labor. In areas of the world where labor is less expensive, they haven’t had the need to develop automated processes to take the place of human labor. In countries like the US, though, thousands of unfilled manufacturing jobs exacerbated the demand for artificial intelligence-backed advancements.
For many plants, those advancements have led to implementing robotics and automated machines. Data from Reuters revealed that US manufacturers implemented more robots into their processes in 2021 than any other year in history. According to MIT, plants that utilize robotics often see increased productivity, as well as improved wages and job satisfaction among the employees they do have. If your business is willing to invest in technology for your plants, you may be ultimately unphased by labor shortages, and even come out more profitable than before.
Advantages of Keeping Production Closer to Consumers
In addition to technology-related advantages, the US also offers close proximity to many American companies’ primary customer base. International shipping can often result in unexpected delays and unpredictable schedules, so having a domestic supply chain can ensure customers find products in stock and receive their orders on time. According to research from McKinsey, if the product a consumer needs is out of stock, 39% will select a different brand or product rather than wait for their usual item to come back in stock.
There can also be internal benefits to keeping production close to your consumers. Some consumers place a high value on brands that support the local economy, so choosing to add manufacturing and new jobs in the US will make your company attractive to certain customers. Such measures may also coincide with some of your company’s larger brand promises, such as those related to sustainability or community involvement. For businesses who specifically produce semiconductor chips, President Biden has also offered a 25% tax credit and other financial incentives to those who build new plants within the US.
Ways to Offset Higher Costs for US Sites
These are just some of the reasons manufacturers are flocking back to the US. However, if your company is still concerned about heightened expenses related to onshoring production, know there are several other strategies that can make a domestic supply chain feasible. For example, if building a new plant seems daunting, but you already have one or more US sites, consider adding capacity to the structure. By adding on to a current plant or acquiring another existing site, you can still meet production needs without investing as much upfront.
Planning and scheduling optimization is another area that can provide significant savings and increased profitability. When based on a highly detailed virtual plant model, an optimization tool can help your site navigate inventory, product demands, and maintenance to find the most efficient production schedule. It can also analyze your site’s layout to determine how you can maximize capacity to get the most output possible. To learn more about our advanced planning, scheduling, and optimization tool, VirtECS, we invite you to download our short overview guide.
by Kelsey H | Oct 11, 2022 | Planning & Scheduling
If one of your business goals is to maximize profits or improve efficiency, matching production capacity plans to market forecasts is essential. If planned capacity doesn’t match the forecast, your company will either miss out on potential sales because of insufficient inventory or amass excess product that you can’t move, resulting in costly storage or product waste.
For years, most manufacturing plants have relied on a process called rough cut capacity planning, or RCCP, to create forecast-based production plans. Many businesses utilized RCCP because it provided improvements over manual planning processes, and there were few other options available. However, as the name implies, the calculations were based on rough estimates of the site’s capacity, which could still result in inventory that did not meet demand.
Throughout our years of experience, we’ve worked with a variety of manufacturers that still rely on RCCP as their capacity planning strategy. In that time, we’ve observed its advantages and disadvantages firsthand. We’ll share our knowledge with you below, and also discuss alternatives that can provide a more accurate and efficient approach to capacity planning.
Positives of RCCP
Naturally, there are many reasons RCCP became the industry standard for capacity planning. RCCP is a form of long-term capacity planning that balances current plant capacity metrics with the future demand forecast, giving the business time to build up inventory or add capacity to meet projected sales. For example, if forecasts indicate demand will increase in six months, RCCP will help your company identify whether you should hire more employees for certain shifts, invest in more equipment and production lines, or cut idle time. These insights help plants scale up profitability and avoid wasting any unsold product.
Because RCCP is powered by automated calculations, it’s also much easier to make frequent planning and scheduling modifications. When businesses rely on manual capacity calculations, the time and effort it takes to create a plan can make it difficult to adjust as forecasts change. Continuously using RCCP ensures the plant will stay on top of developing trends and works only from the most efficient plan. Similarly, your site can use RCCP to make quick schedule decisions based on the highest-priority or highest-demand activities in order to maximize valuable production time.
Drawbacks of RCCP
Although RCCP offers improvements and benefits to traditional, manual capacity planning, it’s still based primarily on approximations and back-of-the-napkin assessments rather than a highly detailed plant model. As a result, there are often inconsistencies or errors in RCCP’s model, and the subsequent capacity plan will not account for every constraint or contributing factor. Without a fully optimized and accurate plan, your business will always miss out on some opportunities to increase capacity and sufficiently meet demand.
It’s also important to note that utilizing RCCP requires your plant to stay organized and on top of data collection. Without regularly updating the tool with new information on productivity, maintenance, waste levels, and other factors, the plans it creates will become increasingly inaccurate and outdated. If your business doesn’t have the time or systemization in place to gather this data, RCCP can’t function effectively. Despite these drawbacks, companies continued to rely on RCCP because until recently, it was the best choice they had.
Advantages of Finite Capacity Planning as an Alternative
To improve upon the benefits already offered by RCCP, other capacity planning strategies must offer more definite and detailed solutions. To achieve that, they must be based on precise specifications and a plant model that contains all the process knowledge of the site. When you increase the specificity, your business can engage in a more finite capacity planning process. This added level of detail will help the plant respond to projected forecasts even more purposefully, which can have lasting financial advantages. For example, a finite capacity planning tool can help your plant make smart tradeoff decisions based on your most profitable products, or instantly calculate the cost of an urgent plant schedule revision to determine whether the disruption is worthwhile.
After working with a client in the specialty chemical manufacturing industry, we recognized how their newly acquired site could benefit from finite capacity planning capabilities. During our project, we took the pre-existing detailed plant model we created and layered capacity planning optimization on top. Given the impressive results we saw with this client, we recently invested in creating a finite capacity planning tool that can be adapted to manufacturing sites in several industries. To learn more how this tool benefited our specialty chemical client, check out our recent case study.
by Kelsey H | Sep 20, 2022 | Process Improvement
Sophisticated manufacturing facilities naturally require sophisticated software tools to optimize their supply chain operations. These tools typically include a wide range of features that help provide a deeper understanding of operational capabilities. Those insights may be incredibly valuable, but generating them comes with its own learning curve.
Once users are familiar with the software’s capabilities, it can save considerable time and effort. However, each user will need guidance to learn the needed functions and nuances. The more training your employees receive, the more value the software will bring to your organization.
When selecting a software partner and building your training guidelines, there are some key strategies that will help you get more value from the tool faster. Keep reading to find out how beneficial training can be when learning a new supply chain software.
Provide Background Information
At most facilities, your employees will be the people using the new manufacturing software most frequently. If they’re going to adopt the tool into their daily work and use it effectively, they will need to first buy into the benefits the software provides. Some users may be hesitant to accept the change, especially if previous processes were not unpopular. Before you dive into training employees on the many technical aspects, it’s important to start by explaining exactly how the software will improve operations, relieve pain points, and make employees’ day-to-day lives easier. With that kind of motivation, your team will feel much more inspired to learn as much about the tool as they can.
Take a Top-Down Approach
With everyone on the team on board, it’s time for your superusers leaders to spend time mastering features of the new software. Taking a superuser-first approach to training ensures that broader user training is informed by your organization’s needs and insights from the superusers. Additionally, if your superusers are skilled at teaching, they can also play an important role in training the rest of the team. Given that they already learned the software first, they may be able to provide helpful advice to new users or act as a consultant as more people begin working with the tool.
Give It Time
The sophisticated nature of manufacturing processes requires sophisticated tools that take time to master. If you tell each of your employees to simply finish learning new software as they have time, they may never have enough room in their work schedule to learn the tool’s full functionality. Therefore, it’s up to your plant’s leaders to encourage and facilitate training by building time into employees’ workdays to complete training. If the software improves operational efficiency, you’ll quickly recoup the time spent training and begin reaping the many benefits that made the tool attractive in the first place.
Use Interactive Formats
Think back to your school days. In your experience, was it easier to learn something new by reading facts out of a book, or by viewing examples and practicing the new skills yourself? For most people, it’s much easier to learn when provided with a more interactive format.
For manufacturing tools, this might mean asking your software partner to train a few “power users” in person, and then asking your new experts to guide other users as they begin the training process. You might also find it beneficial to compile a resource that allows employees to share tips or shortcuts amongst each other to help the collective group learn how to use the software most efficiently. Additionally, consider asking your software partner if they can provide engaging training guidelines of their own for you to pass on to your organization’s users.
Though the basic functions of VirtECS can be learned quickly, plants that wish to harness the full value and power of the tool will find the support from our dedicated experts especially helpful. We will work with your team to develop in-depth training materials and share best practices based on our extensive experience. Additionally, we are always working to update our resources for all current and future partners to help them gain the most advanced insights into their own facilities. For more information on how VirtECS® can remove bottlenecks and create optimized schedules for your plant, send us a message and one of our experts will reach out to you shortly.
by Kelsey H | Sep 7, 2022 | Planning & Scheduling, Process Improvement
There are many ways to meaningfully expand a manufacturing business. We’ve discussed in the past how building a new plant or onshoring your supply chain can be strategic choices that offer increased control and customization. However, those methods can take months or years to accomplish. To expand more quickly, some companies choose to acquire existing manufacturing sites instead.
Companies have used acquisition as an expansion strategy for decades, but it’s become a higher priority for growing businesses in recent years. According to Deloitte, 53% of US executives planned to increase their merger and acquisition investment in 2021.
Advantages of Acquisition
First and foremost, the most obvious advantage of acquiring an existing site is that it’s already a fully functioning building. You don’t need to devote additional upfront costs into creating the plant’s framework or spend the significant time it takes to get a large manufacturing site up and running. According to an expert from JHP Pharmaceuticals, it typically takes two to three years to finish construction on a new plant. Any money or time you invest into the site after acquisition can be focused on making improvements or upgrades from the existing foundation.
Additionally, as an existing business, the site may potentially come with an existing customer base, if the previous owner manufactured similar products. Acquiring a site that’s already within your industry and market can give your business quick access to a pool of customers that you can begin working with from the start. You’ll spend less time and effort on business development than if you had to build an audience from nothing. Instead, your team can focus on how to improve profitability and improve the already established sales process.
…And the Disadvantages
Unfortunately, there are unique challenges that will accompany an existing site, as well. When you inherit the site’s infrastructure and customer base, you also inherit all the issues that led the previous company to sell. The plant may be underperforming financially or have limits on production and storage capacity. Instead of building a new facility to your exact specifications, you must learn to work with the current framework and quickly identify where investments should be made to make improvements. Though your business did purchase the physical plant, you’re really paying for the potential of what the site could soon become.
How a Virtual Model Helps from the Start
To begin improving on that potential as soon as possible, many experts recommend creating a virtual model that captures all the processes within the plant as soon as you’ve made the decision to acquire it. The practice of creating the model will create an opportunity to unlock existing data from the plant and reveal major pain points. Loading the virtual model with information will make the data accessible to many people or groups, rather than the handful of operators who remember how things were set up when the plant opened years ago.
One of the clearest benefits of a virtual model is how it combines a plant’s entire process with current orders and forecasts to sort through every possible schedule for production. If you begin using this tool as soon as possible, you can limit the amount of time wasted due to unoptimized processes. For example, a schedule based on a virtual model can decrease idle time or craft sequences in a way that minimizes time-consuming transitions between products. Virtual models can also further connect with other plant systems to increase coordination and save time when making schedule changes.
In addition to improving the schedule based on current conditions, a virtual model can also help your team understand all potential configurations of the plant. At any time, you can test the outcome of adding different investments to the site, such as additional lines to increase capacity or increased product storage. You can then compare the results of the various options and decide which investment will produce the highest financial return. For companies who acquire a site that is potentially outdated or in need of repairs, this feature can become a huge asset, as it limits risk and makes it easier to predict future production.
Several large manufacturers have successfully used our virtual modeling, planning, and scheduling tool, VirtECS®, to improve operations after acquiring a new site. When one of our specialty chemical clients purchased an existing yet unprofitable site, they immediately turned to our experts to transform their planning and scheduling processes. “Once we created a model of the plant within VirtECS®, our client’s planning and scheduling process became much more robust. Rather than using a manual process that required people to exchange calls and track down data, it became a seamless process that multiple people could access,” said Steve Harding, President of APCI. To learn more about how virtual modeling transformed this chemical manufacturing site, you can check out our recent case study.
