The Financial Director was asked by the Operations Director to join him in the production area to see for himself the changes and improvements made as a result of his recent investment.
“No, I am too busy!” replied the FD.
“But, though you were initially sceptical, you agreed to invest a significant amount of money to improve efficiency and quality consistency. Don’t you want to see how it is being used and delivering benefits?” continued the OD
“Oh OK, but make it quick.”
They enter the production hall together.
“What’s that large TV above line 1 telling us? It looks colourful,” asked the FD
“Pleased you asked. That’s continually reminding line operators and team leaders of the current status of that line. It shows us all how much of our raw material is being wasted in overpack, how many we have produced, whether we are on target to finish the batch on time, any quality, date coding or other compliance issues and the current line efficiency, together with real-time improvement opportunities,” replied the OD.
“I see it’s showing few failures, very little overfill and around 70% efficiency, but that’s about what we were doing before isn’t it?”
“I wish!” replied the OD. “When we first installed the system, we carried out an ‘as is’ evaluation and found that our overfill (a significant part of our materials wastage) was about 0.6 % and our efficiency was around the low 40s in percentage terms. So, in a nutshell, our overfills are now significantly lower, which alone has already more than repaid our investment, and the increase in efficiency means that we can now produce more than 50% extra, during the same time frame, with no additional labour or production machinery, simply the additional packaging and product content. In addition, we have reduced customer complaints and are confident that all batches have been dispatched with the correct packaging and date code. What’s more, we have instant paperless traceability to prove it.”
“Well” continued the FD, “that sounds great, but do we have sufficient orders to fill the extra capacity generated by such improved efficiency?”
“Not quite yet, but we are already delivering all orders in full and on time and have about an extra 10% capacity to fill. However, and you would know more about this than me, the improved efficiency has potentially reduced our unit production costs so should make us more competitive in bidding for new business.”
They continue their tour.
“How do you know that the results are as good as you say?” asked the FD. “In other words, how do we know that what the big screen is telling us is accurate?”
“The way the integrated system works, we automatically collect a lot of production line data such as line speeds, product counts, line stop and restart times, stop durations and downtime reasons, we automatically set-up the date coders and on-line scanners to minimise operator errors, but still keep the operators and team leaders fully engaged with each line through various screens. These are the HMIs, Human Machine Interfaces, that keep the operational teams fully engaged at all times and informed of compliance/quality issues, together with improvement opportunities through short interval control data.”
“What’s short interval control?” asks the FD.
“Well, you may remember those old whiteboards that we had on each line to tell the ops team how well, or badly, they were doing, which required operators to write the number they actually produced against a pre-written target level each hour and then, if they didn’t achieve target, to write a reason or reasons for the shortfall.” said the OD.
“Oh yes, I remember. Half the time, they were not completed anyway,” replied the FD.
“Now you’ll notice, the whiteboards have gone, as all the SIC information is captured automatically and displayed on those large TV screens and on the operator HMIs, with little or no operator intervention. So now the majority of their efforts are focussed upon performance improvement, i.e. taking actions based upon the prioritised information automatically provided, rather than filling in sheets of paper and white boards.”
“Yes, I noticed around that HMI work station you showed me that there was no paper. In fact, there’s no paper anywhere. Last time I came into production there was paper everywhere and operators with their heads down filling in sheets” said the FD.
“You are absolutely right,” said the OD, “They were filling in sheets that went mostly unread and were even less acted upon. Now, the tests that need to be done, are still done of course, but there is no paper generated. Much quicker and easier for operators and, as you can see, far more efficient.”
“So”, said the FD, “where are the large TV screens on these three lines?”
“Well, they were in the original proposal, but you knocked them out when you approved the rest.”
“Now I have seen what the system can do, how soon can we get them installed on all lines?” the FD responded.
“I’ll look into it today!”
“The other thing”, continued the FD, “I can see that some of this information could be very useful to me and my team on a regular basis. Could we, for example, have financial summaries, units per man hour produced, etc., say weekly and monthly?”
“You could have the full management suite installed on your desk PC, for no extra cost, and we could also set it up so that you could have printed reports of preselected info, automatically printed and instantly available on a regular basis, for when you arrive.”
“Great,” said the FD. “I also run a fish packing facility in the Highlands, supplying most of the retailers. Could something like this work for that site too?”
“Absolutely” replied the OD, “It works for every company, just needs to be set up differently to deal with the variables unique to that business. Though the products, lines and customers may be very different, we all have the same problems, optimisation of raw materials usage and labour.”
Though names and site details have been omitted to protect individuals, the above is a precis of an actual conversation between Directors at one of our installations.
Roy Green, Harford Control, September 2018