How to Achieve Enhanced Operations Management with Industry 4.0

BY: CHUCK WERNER

Manufacturing occurs in real time. Issues and opportunities arise around each corner, often with little to no warning, and the wins and losses don’t wait around for the next reporting period to make an impact. But is your company agile enough to take advantage of one and avoid the other? Good decisions require good information – and business agility necessitates that your information provides a clear, concise and current picture of the shop floor.

If this sounds nice in theory but in reality you’re wondering how you can achieve the data and analysis necessary with an already task-saturated leadership team, perhaps your business can benefit from Enhanced Operations Management.

THE ABCs OF OPERATIONS MANAGEMENT – FROM MRP TO MES
In previous decades, modern manufacturers have worked to achieve operational excellence through several different management systems. This began with Manufacturing Resource Planning (MRP), which mostly dealt with aspects such as scheduling and purchasing to ensure a company has everything it needs to provide a product/service. This evolved into Computer-Integrated Manufacturing (CIM), which incorporated the use of computers but still required manual entry of information.

From there, manufacturers grew to utilize Enterprise Resource Planning (ERP) systems for managing high-level functions like purchasing or finance without tying in performance on the plant floor level. However, because manufacturers – especially smaller companies – win or lose at the plant floor level, this led to the creation of Manufacturing Execution Systems (MES) to manually collect data on performance related to defects, throughput, uptime and more. This is essentially where continuous improvement really kicked off as manufacturers started becoming data-driven, but the data still was not timely. Because performance data had to be manually monitored and collected, manufacturers were left to discover problems in production far after they had occurred.

APPLYING TECHNOLOGY TO ACHIEVE GREATER BUSINESS RESULTS
This is where technology comes into the concept of Enhanced Operations Management (EOM). Using Manufacturing Operations Management (MOM) systems, the goal is to get as close to real-time as possible through the application of Industry 4.0 technology. Through this digital approach, manufacturers are able to achieve instantaneous data on operational performance to make corrections in the moment and reach more impactful business results overall.

Compared to management systems of the past, MOM provides a greater context of the business. With data automatically collected through the use of sensors, then gathered and presented through System Integration and the Internet of Things, manufacturers can more accurately define a problem and identify the source of a problem in order to provide a more accurate solution. Data also is broken down into specific categories – such as yield, efficiency, uptime, etc. – so companies can see exactly where any issues are occurring. Data is no longer just informative, but is now actionable. Resource prioritization is made easy, which is especially important for smaller companies, as they have more finite resources and need to tackle the most pressing issues first.

Additionally, MOM provides the following benefits to manufacturers:

• Creates alignment through the organization and standard work for leadership. With data collected accurately and in real-time, everyone agrees on what the biggest problem is and works cohesively to respond accordingly. Everyone is on the same page with gathering data and building a cadence for reporting.
• Gives a bias for action. When workers see performance not meeting targets, they know exactly what to focus on and what needs to be done. This inspires workers to act in the moment, rather than allowing the problem to persist.
• Prevents backsliding on progress. Sometimes countermeasures don’t last because they aren’t tracked. Data enables companies to continuously audit and maintain performance.
• Provides a form of reward to employees. Collecting data over time gives employees a way to look back and see their accomplishments. They know they contributed to improvements and actually see the impact they made on operations.

It’s critical to note that, with the introduction of technology, manufacturers must always consider cybersecurity. With interconnectivity comes increased risk of cyberattacks, both electronic and self-inflicted in nature. Manufacturers should work to ensure data has integrity, is confidential and is available only to those who need it. This will guarantee both data and the business is kept safe.

ENHANCED OPERATIONS MANAGEMENT TRAINING AT THE CENTER
Learn more about the benefits and applications of EOM in The Center’s upcoming half-day Enhanced Operations Management course. Class topics covered include the components of Industry 4.0 (Big Data and Analytics, System Integration) and insight for how to get started. Reserve your spot in the September class here and learn more about The Center’s additional Industry 4.0 training offerings here.


MEET OUR EXPERT

Chuck Werner, Manager Operational Excellence/Lean Six Sigma Black Belt
Chuck has been a member of the team at The Center since 2016. His areas of expertise include Lean, Six Sigma and Quality. Chuck has devoted many years to practicing Six Sigma methods, ultimately earning a Six Sigma Master Black Belt in 2011. He is passionate about helping small and medium-sized manufacturers become more prosperous using a variety of tools and methods gathered from over 27 years of experience in manufacturing.

Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.