Being Proactive Is the Key to Smarter Operations Management

December 19, 2013 / ,

With increased competition and uncertain economic conditions, today’s operations managers have to be more than just good problem solvers. Yes, they still need to be able to handle unforeseeable crisis on the fly; however, now, more then ever, managers also need to have strategies in place that predict risks. By using a more proactive approach to management, industrial metal-cutting companies are finding they can actually reduce the adverse effects that can happen in a manufacturing environment.

In a recent market research report, Aberdeen Group details a predictive, more agile management strategy called Operational Risk Management (ORM). According to the firm’s research, best-in-class manufacturers are taking a risk-focused approach for three main reasons:

Put simply, these leading companies are using ORM to improve operating performance. Aberdeen says the goal of this type of management is to create “a framework that helps executives, employees on the plant floor, and maintenance personnel understand and manage the risks impacting their organization, establish processes to effectively address these risks, and implement procedures for corrective and preventative actions.”

Several leaders in the industrial metal-cutting segment are finding ways to use proactive operations management. In fact, data from the LENOX Institute of Technology’s Benchmark Survey revealed that companies with high machine uptime are benefitting from investing in smarter, more predictive and agile management operations approaches. For example, 76 percent of industrial metal-cutting operations that followed scheduled and planned maintenance on their machines also reported that their job completion rate is trending upward year over year. In addition, more than half of organizations that “always” follow preventative maintenance (PM) plans reported that they can “always” or “mostly” predict blade failure.

By having this “predictive downtime” information, managers can plan for downtime and actually use it to their benefit. This is quite different than “interruptive downtime,” which can negatively impact performance, customer delivery, and equipment and material costs.  Steel of Carolina LLC, a fabricator, featured in this case study from LIT, has said that weekly PM checks have become critical to keeping its saws operating as much as possible. To keep production running smoothly, the company schedules PM checks for the weekends (when equipment isn’t running) and also keeps specific wear parts in stock for quick replacement.

Of course, PM and parts inventory is only a small part of predictive management. Aberdeen outlines an entire roadmap for manufacturers that want to establish a formal ORM framework. You can download a copy of the report here and read information on technology enablers and a great case study on Coca-Cola.

In the end, there is no crystal ball. However, by implementing predictive strategies that go beyond simply reacting to crisis, operations managers can minimize risk, increase agility, and perform smarter in today’s volatile market.