Imagine a world where your businesses have (Overall Equipment Effectiveness)—the ratio of Fully Productive Time to Planned Productive Time—world-class OEE. While that may seem like a faraway dream, there is a possibility of achieving it. You just need to know the right tools. Evocon estimates that '6% of manufacturing organizations have an OEE score of 85% or above'. So, what are these companies doing differently?
In short, these companies are allocating financial resources to different areas of their operations, including investments in equipment and fleet efficiency. Rather than putting all their eggs in one basket, they invest based on evaluated trends and regular reviews. In a world of rapidly changing industry, it is becoming harder and harder to stay ahead. This is why operational excellence is the future of manufacturing investments.
Improved Efficiency
Seems like the most obvious place to start. If you can get to a place where you are able to reduce downtime and boost productivity, congratulations, you are getting the most out of your operations! You want to start by using data to track equipment performance: every minute your machines are idle—or worse, broken—your business is losing money. Tracking your machines can lead to refined operations and prevent error further down the line. You may consider investing in automation to remove human error, reduce bottlenecks, and create a streamlined process. Invest in innovation to come up with more ideas like this!
Business Resilience
For your business to achieve a perfect 100% OEE is unlikely. Even the world-class standard of 85% seems out of reach for most manufacturers. Manufacturing software company Evocon suggests it is easier—and looks better for the business—if you set a low-target and a high-target to give your operators a range, instead of a single score. If the average business is sitting at 55% operational efficiency, it would be disheartening to have a target of 85% hanging above your head, constantly flashing red as your numbers climb slowly.
Make sure to invest in manufacturing software that is user-friendly and breaks down measurements of performance, quality, and availability in a humane way that encourages continuous growth. If your efficiency has a positive trajectory, it is likely your business is more equipped for any unpredictable dips in the market or—God forbid—any future pandemics.
Increased Competition
Companies who react and adapt to trends, demands, and developments in technology are likely to stay ahead if they make proactive investments accordingly. This is not to say that you should have your eyes glued to what the competition area is doing; aim to focus your energies on your own optimisation and innovation to stay ahead of the curve.
The manufacturing sector currently makes up 10.3% of the US economy, which is much higher than the GDP (Gross Domestic Product) offered by most trades and services. In short, the manufacturing sector is a secure industry and there will always be someone to compare your progress to.
Focus on Long-Term Value
It can be scary, especially as a Small to Medium Sized Enterprise (SME), to trust that your allocated resources will generate a worthwhile return on investment (ROI). The fear of risk is understandable, but failure should be seen as an opportunity for growth, not decline. Ultimately, there can be no return if there is no investment - it is important to trust in the process and focus on the long-term.
What are your long-term business goals? Will you still be in the same warehouse in 5 years? Who are your ideal clients, and will they still be with you in 10 years?
You may not experience results immediately, and failure is likely. But being open to change and learning on the way is exactly what is going to get you to a place where you don’t have to worry anymore. You don’t have to pour in your life savings into one big idea; start small and test the waters, and build from there.
Reduced Waste, Increased Sustainability
By 2035, the United States of America have promised to cut their greenhouse gas emissions (GHG) by 61-66% of what it was in 2005. They also aim for the entire economy to be net zero by 2050. Businesses are expected to support these ambitious goals by moving towards more sustainable practices to reduce their carbon footprint. Such a shift will require investment in energy-efficient infrastructure, renewable energy, and waste management. Not only do these changes align with the nation's climate goals, but they also keep up with consumer demand for more eco-friendly products—another way to be a model for the industry and stay ahead of the curve.
Only using the materials required and recycling where you will have a measurable impact on operational excellence. Lowering consumption of natural resources and single-use plastics is great for the planet and your bottom line—it is a win-win! Moving towards a circular economy is the way forward. It is well worth looking at your current energy usage and waste practices now, before climate conscious legislation forces you to do so. If you were looking for a place to start investing, this is a great place to start.
Conclusion
As I am sure you have realized by now, operational excellence is not just about efficiency, it is about future-proofing your business. It is an overwhelming task—a bit like decluttering your kitchen: by the time you get through all the draws and cupboards you realize the first draw you started on has started collecting clutter again. Similarly, performance enhancing is an ongoing journey, especially as we continue to see developments in AI, robotics and computers.
Despite the rapidly changing world, investing in operations is not a waste of money. You want your business to be constantly growing and developing; you are not aiming for a destination; investment is a journey. The key is to measure your progress and make thoughtful, calculated actions. Long-term thinking and forward-thinking are investments that foster growth in your enterprise; make decisions today that will support your business tomorrow.
