Fabrication Industry Use Case illustrates how actionable intelligence can drive business results.
In many assembly and fabrication businesses, one of the biggest challenges I’ve encountered is folks simply Not Knowing Where Stuff Is (NKWSI). They lack timely actionable intelligence about their business operations. This is especially problematic when the product is complex, takes multiple shifts to complete, and involves a lot of people.
Signs of NKWSI include:
- Unplanned expedited orders
- Partial shipments
- Chronically high WIP (Work in Progress) costs
- Increased stress – even panic – when any of the first three of these occur
I’ll talk about each in some detail.
Unplanned Expedited Orders
You know the drill – you think everything is moving through the assembly process according to schedule until a customer calls to ask where their order is.
Then panic ensues.
You run out to the assembly line to find out exactly where it stands. As the customer screams in your ear, the whole team goes into panic mode. Of course, expediting one order puts another customer’s order at risk, and you can end up with cascading problems.
Maybe you had a truck scheduled to pick up the order, but not all of it was ready. Since some is usually better than none, you went ahead and shipped what you had hoping it would tie the customer over. Your shipping costs go up as your credibility with your customer goes down.
Chronically high WIP costs
Sometimes NKWSI shows up as chronically high WIP costs. I know one mid-sized assembly company that realized this was their problem when the 2008 recession hit. They were assembling large units that would get moved off the production line if, say, a key component was missing. Sometimes these units would fall completely off of everyone’s radar until somebody noticed the order hadn’t been shipped. Meanwhile all of this WIP sat on the books. It was the accepted way of doing business.
Whatever the experienced pain point, the underlying reason for NKWSI is the same: leaders lacking visibility into the true state of the progress of units through the assembly process.
Knowing Where Stuff IS
The GainSeeker platform includes all the applications you need to help you Know Where Stuff Is and thus, have happier customers.
The biggest issue is always getting the data into the system. We’ve found that the best source is usually the operators. They’re closest to the situation and know the most about it. If that isn’t feasible, then it might be picked up by a supervisor or a quality technician as part of their regular inspection process.
Probably the most important thing is to make sure you’re not punishing people (either intentionally or unconsciously) for telling the truth.
Upton Sinclair famously said, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”
In the same way, it is difficult to get someone to give you bad news when their salary (and status) depends on them not giving it to you.
The solution is to reward people for telling the truth. Reward doesn’t mean compensation – it means paying respect and public appreciation, and making sure that they don’t suffer (decreased compensation or incentives, or getting bogged down in paperwork and reports) for telling you what you need to know.
If the system you use to capture the data is cumbersome, intimidating, or hard to use, that can be punishment in and of itself. That’s why systems like GainSeeker make it easy to set up the operator interface so that it is easy for the operator to use. You can see a fifteen-second video of an operator using the GS Collect iPad App.
Too much or too little data – The “Goldilocks Problem”
Collecting the right data is critical. You might think of this as the Goldilocks Problem: Too much data is costly, both in time and effort. Too little data can leave you without the ability to extract valuable insights into your business. You want the Baby Bear solution – not too much or too little, but just right.
Fundamentally you’re after the status (Active or Stopped) of every unit at every gate. If something is Stopped or Incomplete, you need to know what is incomplete and why. Frequently your ERP system knows additional information about the job, the customer, and suppliers.
Creating an automatic integration point between these systems and GainSeeker can eliminate the cost of getting that critical data into GainSeeker for further analysis. If you can get this information for free (and without imposing a burden on the operator) do so. It will have a profound, positive effect on the usability of the information at a low cost.
Integrate with other systems where possible. Make the user interface for anything an operator actually has to touch to be as easy and fun to use as possible.
Actionable intelligence gleaned from data
Once you have the data logged, you’ll have a rich repository of information. We see this knowledge used in at least four ways:
With this information, you’ll have a better handle on inventory bottlenecks. You’ll be able to predict what suppliers and components cause the most issues and proactively address underlying problems.
A key benefit of this knowledge is that you’ll be able to make better scheduling predictions. This information can be easily transformed into cycle time data, making it far easier to see shifts in on-time delivery. And when significant contextual information is provided, it can point to the root cause of bottle necks.
With this information in hand, you can document compliance to your own build and content specifications. This is especially important in assembly situations with lots of component parts sourced from internal and external suppliers. There is overlap here with lot genealogy. The side benefit of knowing where stuff is, is that you also know what went into the product. This gives you a strong leg to stand on when you need to show you did what you said you would.
Finally, better tracking and accountability of workflow and inventory has a huge positive impact on customer service. Having this accurate, timely information available to customer-facing staff helps them be far more proactive. Reach out to a client as soon as a problem surfaces can give you valuable time to plan together to find workable solutions.
How does all of this impact the business?
Having accurate, timely gate information delivers several benefits to the business and the people in the business.
With improved customer service, problems become “moments of truth” that foster customer confidence and trust. This in turn improves the experience of partnership that is necessary to optimize the entire supply chain network, and can lead to increased repeat business.
This information can help drive increases in the success rate for profitable, perfect orders. This in turn may drive up revenue per shipment because orders are completed faster, on a more timely basis.
Furthermore, partial shipments should also be reduced. Of course a reduction in partial shipments drives reduced shipping costs as well.
And of course faster order completion cycle times will reduce the Order to Cash cycle times, resulting in increased cash and improved cash flow.
Finally, on a personal level, having access to accurate, timely gate information can greatly reduce levels of personal stress because your team is operating with full knowledge and a single point of truth. This enables them to get out of reacting to crisis, and into a position of the power that comes with proactive knowledge.
What about you? Do you operate in an assembly or fabrication business? Do you deal with expedited orders, partial shipments, or a chronically high cost of WIP. Do you have timely, accurate information about units as they move through your plant? What systems do you have in place to minimize the downside of the problem?
Leave a comment below, or request a free consultation with our staff to discuss your situation, and learn how GainSeeker Suite can empower you to turn manufacturing data into real-time actionable intelligence.