Infosys’ blog on industry solutions, trends, business process transformation and global implementation in Oracle.

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November 24, 2008

Using Operational Levers To Boost Supply Chain Performance

To remain competitive in today's environment, manufacturing companies are looking at boosting their supply chain performance. One of the key levers for improving supply chain is 'cost reduction' at various stages of the entire chain.

One such stage is the manufacturing plant which, it can be said is the center of the supply chain. Optimal handling of plant operations can have a hugely positive impact on the upstream and downstream supply chain. Some of the plant level strategies that can help manufacturers improve the performance of their supply chain are -

  • Cycle Time Reduction: Organizations must optimize the various manufacturing operations (e.g., reduction in queue times at work center) to reduce cycle time. This leads to increase in throughput and lower inventory cost. Reduction in cycle time leads to improved time-to-market, thereby helping organizations to react to market changes quickly
  • Small Batch Size: This strategy can be useful to plants that produce a high product-mix. For such manufacturers, batch size reduction reduces the inventory cost. In order for small batch sizes to work, the changeovers must be quick 
  • Reducing Downtime: Unplanned downtime is a 'waste' and plant staff should minimize downtime.

The above strategies, if adopted will lead to reduced inventory in the entire supply chain.

ERP systems along with Manufacturing Execution System (MES) help organizations track performance of a production line, the overall plant level performance and also the performance on various customer and supplier related parameters. The extensive data that get captured in the ERP and MES systems, can be used to implement an improvement plan to achieve manufacturing excellence

November 17, 2008

Manufacturing Execution System – Make it work for you!

Are you having to deal with low percentage of on-time completions, high throughput times, frequent line down situations or high WIP? Obviously something is very wrong, particularly if you said "Yes" to more than one of the above. Having consulted for several discrete manufacturing clients has made one thing very apparent to me - a lean and agile manufacturing environment is not an option but an imperative for manufacturing industries to achieve operational excellence. All of the above were contra-indicators of operational excellence. A manufacturing execution system (MES) can support a manufacturing firm in achieving this very objective. An MES system works in tandem with a mainstream ERP system to execute, monitor and manage the production processes on a shop floor. Together with an ERP system, an MES system can nudge (or push, if required!) an enterprise into adopting standardized processes and at the same time creating key data elements for performance measurements.

Consider the ways in which an MES system can assist you:

  • Detailed scheduling: An MES system can take input from capacities defined for work centers and hourly usage of machines and labor (in routings) to perform detail scheduling. Sophisticated MES systems can take setup times into cognizance to minimize setups and maximize utilization
  • Dispatching: A MES system can use a dispatch list format to feed work to work centers. It can be used to perform real time prioritization of work orders to reflect reality on the floor - component shortages, current work center availability, downstream work center availability, premium customers and even executive diktats (a late evening call from the plant manager overrides everything else!!)
  • Operational Reporting: An MES system, complemented by the use of the mobile devices using radio frequency, can be used to perform move transactions from one operation to another. This is important in a job shop environment which may have long lead times, to track work orders, correctly reflect work in process costs and perform dispatching of jobs
  • Nonconformance tracking: An MES system will provide ways of tracking and managing non-conformances. While eliminating waste such as non-conformances remains a top priority for organizations, managing them on occurrence remains a grim reality. Ways to quickly identify, segregate and disposition non-conformances will aid in minimizing impact upon customer orders

    An MES system is now frequently offered by ERP vendors as an add-on or they provide integration with best-of-breed MES vendors. So its time for companies who have not yet invested in MES systems to see how they can make it work for them!

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