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  Manufacturing Insights   |   November, 2008
Moving Toward Best-in-Class
by Thomas R. Cutler

Evan Miller, President of SPC (statistical process control) Hertzler Systems, recently sponsored an Aberdeen Group benchmark report titled Event Driven Manufacturing Intelligence – Creating Closed Loop Performance Management. Miller wanted to differentiate Best-in-Class (BIC) performers from Average or Laggard performers.

To derive these data the percentage of BIC performers who practiced specific behaviors were divided by the percentage of Average performers using the same behavior; this measurement provided “Impact.”

Miller asserts that the common theme among the top four or five high impact differentiators between Average and Best-in-Class performances is real-time data. “Best-in-Class performers are twice as likely to have continuous improvement teams leverage analytics and real-time visibility into operations…while it’s not difficult to believe that BIC performers are more likely to have active continuous improvement teams, keeping these teams productive and energized is difficult. The crush of gut-grinding day-to-day business issues and the inertia of ‘but we’ve always done it this way,’ top the list.”

© 2008 Hertzler Systems

The epistemological underpinnings suggest that the lack of visibility into operations due to little real-time actionable data is central to companies being stuck. “If you can see what is going on in the organizations, it is much easier to motivate people to action, and much easier to sustain the efforts of the continuous improvement teams,” argues Miller.

TJ Smith, Product Manager for Crown Audio said, “We’ve always tried to focus, but we’ve never just been able to get the resolutions of knowing exactly where to focus and what the magnitude of problems were. In the past you could see that the THD (Total harmonic distortion) failed more last week. If you wanted more information beyond that, it would have taken weeks. Having real-time data has definitely helped us focus our efforts.”

Best-in-Class manufacturers are 1.8 times more likely that Average performers to leverage real-time data for production release and control and use real-time data to optimize production and respond to process deviations. Manufacturers who have access to real-time data and use that data to control and release product to shipping are able to convert Work in Process (WIP) to inventory or receivables much more quickly. If problems occur, real-time data allows for real-time responses. According the Miller, “Real-time responses have far-reaching implications for everything from material control to inventory turns…from cash to customer satisfaction.”

Plant Floor Exceptions: Monitor in Real-Time

A Hertzler customer was required by their customer to quarantine any finished goods that had been produced since the last good inspection whenever a process deviation was identified. Prior to implementing the GainSeeker Suite, the customer performed all inspections manually and, because of the workload, was only able to get to each production line once per shift. This meant that if a deviation was identified, the manufacturer was required to quarantine an entire shifts-worth of production and then manually inspect every unit made during that period. The resulted in significant bottlenecks for inspection staff and tied up finished goods in WIP until they could be inspected and released. Since automating the process much of the data collection and alarming process, the manufacturer was able to increase the frequency of inspection by four times (with no increase in staff) so that the process deviations were identified within two hours. This reduced the inspection bottleneck and increased throughput to inventory, providing a significant and permanent boost to profitability.

Operational Data and Metrics Displayed in Real-Time

Displaying real-time performance metrics onto enormous screens, suspend above each production line helps to quickly identify core metrics. Miller said, “First Pass Yield, Defect Levels and Efficiency data is available and visible to all employees on the line, and the data is accessible as desktops and reports that can be pulled up by any user.”

Crown Audio’s Smith explained, “The real-time part of it has been cool…I’ve walking into several meetings and said, ‘As of five minutes ago this weeks MTF first pass rate is 93%. In the past, I walk into a Cost and Quality meeting every week and I’d be reporting on week-old data. Inevitably there would be the question: ‘Do we have this fixed yet?’ and the answer: ‘I think so.’ Now we know for sure.”

Moving toward Best-in-Class

Installing software by itself will not transform a business. Hertzler’s Miller urges that a company seeking Best-in-Class status “Must align these technology solutions with strategy and culture to transform a business. The right system with the right implementation strategy can have a power impact on the ability to move to Best-in-Class.”

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based TR Cutler, Inc, ( Cutler is the founder of the Manufacturing Media Consortium of three thousand journalists and editors writing about trends in manufacturing. Cutler is a member of the Society of Professional Journalists, Online News Association, and American Society of Business Publication Editors, as well as author of more than 300 feature articles annually regarding the manufacturing sector. Cutler can be contacted at See More Details.

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