Optimize Now, or There Will Be No Tomorrow

Moshe BenBassat

Chairman, Plataine

 

Throughout history, manufacturing jobs kept fleeing towards low wage regions, whether it was from the North East to the South of the United States or from the United States to lower wage countries.

 

Thanks to technology, we now stand a chance to balk the trend. Ultimately, it is all about healthy financial results on a sustainable basis: revenues, operating margins, and growth. Factory floor optimization is one of the most promising areas for improving business performance. By adopting new optimization technologies, manufacturers can now improve financial results and combat lower-wage but lesser optimized competition.

 

Financial results are driven by well-known operational metrics. Shortening delivery times and delivering high quality products at competitive rates are keys to winning new customers and retaining existing ones—propelling revenue and growth. Improving material utilization, increasing overall productivity, and reducing inventories are drivers of higher profit margins.

 

While it might be relatively straightforward to achieve one or a few of these goals at any given time, satisfying all of them all the time may be close to impossible. To reach an optimal balance, we must enlist the help of sophisticated computer technologies; such programs can quickly and reliable evaluate all the variables that play into any situation, calculate the implications, and point out the most favorable options that are both feasible and support our financial goals.

 

These are the new tools of the trade. Until not too long ago, they were unavailable to us. But just like we replaced rulers with Computer Aided Design and sow with Computer Numeric Control routers, we will now learn to replace gut feel and manual processes with computer decision support systems to optimize production on a daily basis.

 

Optimization as a Way of Life
Optimization is not a once week, once a month event. It is not something you can do one day and forget the next, or apply to one order and not to the rest. To be effective, optimization must be performed in a consistent manner.

 

At any point in time we need to optimize the execution of two types of jobs:

1. Those that have already been scheduled for today’s production and beyond
2. New jobs that need to be added to the schedule; some of which could be urgent jobs from top clients that we may wish to accommodate into the schedule by pushing others to later dates

Traditional techniques for promising delivery time to customers are based on estimates for machine capacity and raw material availability. A better way to promise delivery time is to optimally integrate the customer order into the existing production schedule, based on actual material availability and machine and labor capacity, as well as subject to all requirements, constraints, and optimization objectives. By doing so, we increase the likelihood that the order will be delivered on time, while optimally utilizing factory resources to support our profitability goals.

 

What was optimal an hour ago may not be optimal now. At any given time, new information comes in: jobs take longer than planned, new high priority jobs come in, a machine may be down, or material may not arrive on time. Being able to act in real-time and modify the plan to continually maintain optimality ensures that we squeeze the most out of the available capacity and respond in a manner which is consistent with our business priorities.

In an optimized factory, the manufacturing plan is "live" at all times. Every new order gets integrated into the plan in a way that maximizes the business value of the total plan, as opposed to optimizing individual orders.

 

From Textbook Principles to Practical Optimization
Over the years, we became familiar with many principles and methods that can support production optimization, including Kanban, Just In Time, and the theory of constraints. The key to making optimization a reality is keeping in mind that all of these principles are just aides. Sticking religiously to any single method can undermine our success. For optimization to work, we need to apply it in a manner that is flexible enough to support our ultimate business goals--providing better products and service at lower cost.

 

Can you optimize your production?
Can new optimization technologies work in your production environment?

Contact your local Plataine office to schedule an exploratory session.