Staying Competitive in Manufacturing

Staying Competitive in Manufacturing

Context: Staying Competitive in Manufacturing

Manufacturing is a pillar of many economies and touches every aspect of modern industry and society. Since industrialization began, there have been several developments and paradigm shifts that have revolutionized the process to dramatically increase production. An early example is the assembly lines used to build the Ford Model T in the early 1900s, which was so efficient that in its peak year of output, Ford made more cars than all other automakers combined. In just 10 years, the cost of a Model T dropped by 75% and Ford became an industry leader and benchmark, with the power to set prices.

This illustrates the impact of process efficiency on a business’s competitive edge. The concept of maximizing output while minimizing input and waste (=efficiency) holds true in all manufacturing contexts. Lean manufacturing is a production philosophy made influential and symbolized by the success of another automaker, Toyota. Emerging as an articulated methodology in the 1990s, the principles are thought to be responsible for the steady growth of a small Japanese company into the largest automaker in the world. In essence, it emphasizes the elimination of activities that use resources without adding direct value to consumers.

This “lean” thinking underpins the development of technological tools in the manufacturing sector. ERP systems are designed to oversee operations and show how the hard assets and resources are being utilized and identify areas for repairs and improvement. By tracking all the moving parts in a plant, the aggregated data paints a picture of the workflow and gives a critical end-to-end oversight in large and complex work chains. The information serves as a driving force for making process improvements and increasing profit margins by eliminating waste.

But while ERP systems will prove indispensable for a long time to come, the manufacturing sector is facing the law of diminishing returns, where the value of efficiency improvements has plateaued. Even as pressures such as global competition and outsourcing heighten the need for advances, processes have seemingly reached a critical point where the gains become marginal. Short of saying that the current model has been perfected, there is no ground-breaking development on the horizon. Even as innovation continues in making machines more efficient, the model itself has stabilized.

Enter workforce analytics. New technologies are quickly unearthing new realms for investigation and improvement and mapping the interactions between hard assets and human capital. Workforce insights can answer previously neglected questions of who and how. Who is working the overtime shifts? Who is best-suited to work in specific shifts? Who is at risk of fatigue and should be given a break? Also, how are the shifts being scheduled and based on what criteria? How optimal are those allocated shifts? Before delving into these specifics, we will first elaborate on the idea of ‘doing more what you have’.

 

Tl;dr Analytics help manufacturers become more efficient. Beyond measuring the output of equipment, workforce management is providing a new realm for improving performance.

 

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