November 25, 2014 / best practices, Cost Management, human capital, LIT, operations metrics, operator training, Output, productivity, quality, root cause analysis, strategic planning
In any forging operation, there are certain overarching goals that are a given. Quality is one of them. When your parts are being used to construct buildings, airplanes, and space shuttles, there is no room for error.
However, claiming that quality is important is not the same thing as actually putting practices in place to ensure that your quality goals are met and maintained. In today’s competitive market, customers expect more than just your word. Quality needs to be baked into your strategy and your everyday operations—and you should be able to prove it.
One quality strategy used by many of today’s leading industrial metal-cutting companies is ISO 9001 certification. The standard, described in detail here, provides guidance and tools for companies and organizations that want to ensure that quality is consistently improved. With requirements such as internal audits, acquiring and sustaining certification can be tedious, but a growing number of manufacturers consider it a key strategy for maintaining consistent, high quality products and services. This, in turn, often brings business benefits like increased productivity and improved financial performance. For example, Metal Cutting Service, Inc., a specialty shop featured here in a series of case studies, estimates that its quality has improved 20 to 30% since it became ISO certified more than 12 years ago.
There are also some high-level strategies that executives can put in place to ensure quality. As this article from IndustryWeek states, taking a thoughtful approach to quality not only reduces error, scrap, and lost labor hours—it keeps costs under control. According to the IW article, there are five steps managers can take to improve their manufacturing quality and, in turn, better contain their costs:
- Use a Team Mindset
- Define Quality from the Customer Perspective
- Develop Organizational Understanding of the Cost of Quality
- Solve Problems Completely
- Employ Strong Process Discipline
Finally, managers also need to make sure that quality doesn’t start and stop with their internal operations. In fact, quality efforts should start before workers even touch a piece of metal. As this white paper describes, operations managers need to be sure they are tracking the quality and accuracy of the material coming from the supplier. Product liability and traceability continue to be huge concerns for forges and other metal-cutting companies, and mix-ups can be both expensive and dangerous. Thorough inbound inspection processes are just as critical as outbound quality processes. By taking the time to confirm what is coming in the door, forges can confidently supply products that are both accurate and fail-safe.
October 15, 2014 / agility, benchmarking, best practices, blade failure, bottlenecks, continuous improvement, Cost Management, customer delivery, LIT, material costs, operations metrics, Output, predictive management, preventative maintenance, productivity, resource allocation, ROI, strategic planning
Reports continue to show that U.S. manufacturing is on the upswing. According to the latest data from the Institute for Supply Management (ISM), manufacturing continued to expand in October, and new orders posted growth for the 17th consecutive month. The Fabricated Metal Products sector in particular reported growth in October, with one ISM survey respondent stating that “weakness in commodity prices has been very positive” for business.
All of this good news means that fabricators have a prime opportunity for growth and increased profitability. However, because many companies are already running lean, managers will need to get creative with how they meet increased demand, especially if they can’t afford huge capital expenditures.
Looking for ways to do more with less? Below are three key ways fabricators can increase manufacturing output without breaking the bank:
- Improve Raw Material Use. In a recent Manufacturing.net article, Philip Odette, the CEO of Global Supply Chain Solutions, lists raw materials as the go-to starting point for improving operations. Because of the fluctuating costs surrounding raw materials, Odette says the key is to focus on reducing waste, both in materials and processes. This can mean everything from reducing scrap rates to changing up your material purchasing strategies. Odette admits that there is no “magic bullet” that every manufacturer can use to make gains around raw materials, but he does believe data analytics should be a part of the process. “To improve how well you use your raw materials, you’ll need to collect information on the use at every point in your supply chain and production cycle,” he says in the manufacturing.net article. “Track whichever metric is most important for your manufacturing, such as weight and waste production. If steps in your process require a specific transition, you should make note of these special characteristics, such as temperature throughout, if one step waits for metal to cool.”
- Get the Most Out of Old Equipment. While brand new equipment could certainly increase productivity, the reality is that most companies are still running on tight budgets and old equipment. However, there are strategies that can ensure that your current machinery stays as productive as possible. A recent article from IndustryWeek offers five tips for optimizing aging equipment:
- Identify Trouble Spots. Take an assessment of the factory floor to find machinery that’s either close to failure or not producing as expected.
- Estimate your savings. Once you fully understand the impact of the old equipment on your floor, run some calculations.
- Find your MacGyvers. Seek out specialists who’ve been handling specific types of equipment for years and see what creative ideas they have to boost efficiency.
- Set bounties for difficult challenges. Track each efficiency experiment to get a sense of what may be possible. Then, set bigger targets and attach a bounty to encourage friendly competition among experts.
- Raise the stakes. Engage everyone by creating factory-wide incentives for when targets are met.
- Adopt Smarter, More Predictive Operations Management. In today’s fast-paced market, it may be tempting for managers to fall into “react mode.” However, experts continue to say that proactive operations management strategies offer the best return. Data from LIT’s industry benchmark study, for example, suggests that fabricators and other industrial metal-cutting operations with high machine uptime can benefit from investing in smarter, more predictive operations management approaches. According to the survey results, 67 percent of industrial metal-cutting operations that follow all scheduled and planned maintenance on their machines also report that their job completion rate is trending upward year over year—a meaningful correlation. The implication is that less disruptive, unplanned downtime and more anticipated, planned downtime translates into more jobs being completed on time. By utilizing proactive strategies such as preventative maintenance, operations managers can actually predict issues like machine downtime and blade failure and, as a result, can plan around it.
October 5, 2014 / agility, Cost Management, customer delivery, customer satisfaction metrics, LIT, Output, productivity, resource allocation, strategic planning, value-added services
In today’s competitive landscape, many industries are finding that enhanced customer service is becoming more important than ever. Companies like Amazon are raising the bar on what customers should expect from a service provider, whether that means Sunday deliveries or using the latest technology to improve the purchasing experience.
Not surprisingly, the so-called “Amazon effect” has found its way into the manufacturing world. Supply chain consultant Lisa Anderson says she has seen this first hand with all of her manufacturing and distribution clients. On-time deliveries, she says, are no longer enough. Today’s customers are looking for suppliers that can offer faster lead times and value-added services that will benefit their bottom line. Sound familiar?
In this blog post, Anderson suggests several ways manufacturers can provide Amazon-type service in their own operations. From same-day delivery to collaborative programs, she challenges manufacturers to think outside their service “comfort zone” and consider new ways they can add value to their customer relationships.
This trend has already started to take root among leading service centers. As stated in this white paper from the LENOX Institute of Technology, more and more service centers are relying on value-added processing services like sawing, laser cutting, and parts fabrication for a more predictable stream of revenue. These additional services offerings are also helping these companies gain an edge over the competition.
What could this mean for your service center? What services could you add? The answer to those questions will vary based on the needs of your customers, your budget, and simply put, your willingness to change.
To help get your wheels turning, below are examples of three metal service centers that decided to enhance their current services in some way. While each company took a different approach, all three have found that value-added service has been beneficial to both their customers and their business.
- Klein Steel, a service center recently featured in MetalMiner, decided to pursue a national nuclear quality assurance standard called NQA-1. According to the MetalMiner article, this not only helped the company better serve its existing customers, but expanded its geographic footprint. In addition, because the NQA-1 standard goes beyond ISO standards, it has opened doors for the service center to serve the wind, oil, and gas industries as well. You can read the full article here.
- Recently named the 2014 Service Center of the Year by American Metals Market, Berlin Metals LLC literally turned its attention to its customers as a means for differentiation. The company conducts a formal customer satisfaction survey every year and then uses the results to set its improvement objectives and strategies. It also engages in a continuous feedback loop where all customer concerns and accolades are constantly communicated to management and employees. To enhance communication, the company has developed a multidimensional website that serves as an educational resource for its customers, as well as for its employees and suppliers. Berlin’s efforts have more than paid off — the service center’s 2013 survey showed that 98% of respondents would strongly recommend the company and 95% said the service center had earned their support. You can read more about the company and other AMM winners here.
- Churchill Steel Plate Ltd., a service center startup featured here in Modern Metals magazine, is focusing on the strengths it offers as a smaller firm. Jim Stevenson, the company’s president, believes that consolidation within the service center industry has compromised customer service, and his goal is to change that. “We are small, customer oriented, flexible, nimble and able to do things most customers don’t get from larger competitors: Fast delivery and quick response times,” he says in the MM article. “I want to provide a response to customer inquiries in hours, not days.” So far, the strategy has been working. Stevenson tells MM that he is “burning plate in two to three days after receiving an order” and that he is “picking up new customers from all over the country.”
September 28, 2014 / benchmarking, best practices, continuous improvement, KPIs, lean manufacturing, LIT, operations metrics, operator training, Output, performance metrics, productivity, quality, strategic planning
At this point, most metals executives have heard the message of continuous improvement loud and clear. As a benchmark study from the LENOX Institute of Technology (LIT) confirms, a large number of industrial metal-cutting organizations are embracing smarter, more proactive operations management to stay competitive in today’s uncertain market.
However, knowing where to start can often be both intimidating and frustrating. Active change takes time and costs money, so managers need to be sure they are strategically choosing the right methods to achieve their operational goals.
Two improvement methodologies that are widely used in industrial metal cutting are lean manufacturing and Six Sigma. While both are used to improve productivity and profitability, their approaches are not the same. Understanding the difference between both methods is important not only for managers trying to choose the right organizational improvement program, but also for managers who may want to consider using them together.
According to leanproduction.com, lean manufacturing is “a collection of tips, tools, and techniques that have been proven effective for driving waste out of the manufacturing process.” Toyota is credited for developing it the 1980s, and over the years it has been used by manufacturers worldwide to improve all facets of the manufacturing business, from quality assurance to human resources.
Below are some key attributes of lean manufacturing, as defined by The Process Excellence Network:
- Focuses on Eliminating Waste. The main goal of lean manufacturing is to eliminate waste and superfluous processes in order to reduce production time and costs. Toyota defined seven types of waste, including transport, inventory, motion, waiting, overproduction, over-processing, and defects.
- Uses Simple Tools. Lean tools are relatively easy to understand and can be used by anyone in the organization. Examples include 5S, value stream mapping, kanban, and poka-yoke (error proofing).
- Culture-Oriented. For Lean to be successful, experts agree it has to permeate the business silos and receive universal backing amongst senior management and employees. It typically only used in manufacturing applications.
- Fast implementation. Lean’s strength is its quick turnaround. Immediate benefits relate to productivity, error reduction, and customer lead times. Long-term benefits include improvements to financial performance, customer satisfaction, and staff morale.
iSixSigma defines Six Sigma as “a disciplined, data-driven approach and methodology for eliminating defects in any process, from manufacturing to transactional and from product to service.” It was developed in the mid-1980s by Motorola engineers who were unhappy with traditional quality metrics. In response, they developed a new standard, as well as the methodology and needed cultural change associated with it. Six Sigma gained popularity in the 1990s after General Electric adopted it as part of its business strategy.
Below are some key attributes of Six Sigma, as defined by The Process Excellence Network:
- Focuses on Quality. The main purpose of Six Sigma is to limit defects and variability in business processes to achieve overall process improvement. Using statistical methods, teams identify errors and then work to eliminate them as much as possible. Perfect performance is the goal.
- Uses a Sophisticated Toolset. Six Sigma tools typically require more extensive training, including formal engineering skills and use of sophisticated software. It uses two project methodologies: DMAIC (define, measure, analyze, improve, control) and DMADV (define, measure, analyze, design, verify).
- Built Around Process Improvement Teams. Six Sigma’s implementation is based on a dedicated improvement team. This team is divided into hierarchies based on a “belt” accreditation system that ranges from “black belts,” who lead teams, down to “white belts,” who are still learning the basics and can’t yet participate in project teams.
- Multifaceted Methodology. Six Sigma can be used in a manufacturing environment, but it also can be used for error reduction in non-manufacturing fields. Broadly speaking, it provides companies with a framework to train its employees in key performance areas, shape strategy, align its services with customer needs, and measure and improve the effectiveness of business processes.
The above is just a brief overview of two of the industry’s improvement methodologies and only touches on some of the main characteristics. For a more in depth, side-by-side comparison of lean manufacturing and Six Sigma, check out this article from Chron.
In an upcoming blog, LIT will explore how managers can strategically utilize both methodologies to achieve what some experts believe are longer lasting business results.
August 15, 2014 / best practices, bottlenecks, continuous improvement, Cost Management, customer satisfaction metrics, KPIs, LIT, operations metrics, Output, performance metrics, productivity, quality, strategic planning, value-added services
If the words the “Internet of Things” and “real-time data” mean nothing to you or your metal-cutting operation, you may want to lean in. A growing number of industry experts believe these buzzwords may just transform the manufacturing industry.
“Today’s more powerful sensors and devices, connected to back-end systems, analytics software, and the cloud, are transforming industries, right now,” says Sanjay Ravi, Worldwide Managing Director, Discrete Manufacturing Industry at Microsoft in this blog post. “With the rise of these connected operations, manufacturing executives are not only finding new ways to automate and create efficiency, they are also focusing on a big new opportunity for revenue growth—services.”
In other words, forward-thinking manufacturers are finding that connecting their production equipment to the Internet and/or to other devices is providing insight into their internal operations they may not have been able to get otherwise. By gathering production data and then using software to make it understandable, they are improving efficiency and uncovering new service opportunities.
And according to Ravi, this is no passing trend. Quoting research from IDC (commissioned by Microsoft), Ravi says “manufacturers stand to gain $371 billion in value from data over the next four years.”
A recent article from Forbes echoes this sentiment, stating that factories that are connected to the Internet are more efficient, productive, and smarter than their non-connected counterparts. However, the article also says that only 10 percent of industrial operations are currently using the connected enterprise, which means 90 percent are missing out.
The way in which manufacturers can use connectivity will vary by industry and application, but as this article from O’Reilly Radar describes, the Internet of Things (IoT) and connectivity are revolutionizing manufacturing policies and procedures in two key ways:
- For the first time, managers can actually know what’s happening on the assembly line to both products and machinery in real time.
- That information can be shared, also in real time, with anyone inside or outside the enterprise who could improve their operating efficiency and decision-making with that real-time data.
As the Forbes article describes, companies like manufacturing giant GE, bread maker King’s Hawaiian, and Sine-Wave, a provider of technology solutions, are already taking full advantage of what many are calling the “information revolution.” At GE’s Durathon battery factory in Schenectady, NY, for example, 10,000 sensors on the assembly line, along with sensors located in every single battery it produces, allow managers to instantly find out the status of production.
This is happening in the metal-cutting world as well. According to this white paper from the LENOX Institute of Technology (LIT), one metal service center developed an internal software system to automatically track the number of square inches processed by each band saw and each blade. At any point, the operations manager can go to a computer screen, click on a saw, and see how many square inches that saw is currently processing and has processed in the past. This has allowed the service center to easily track trends and quickly detect problem areas.
Tim Heston, senior editor at The Fabricator, also sees the opportunities sensors, data, and connectivity offer the metal fabrication industry and its supply chain. “Imagine a future in which you have trillions of sensors able to predict customer demand throughout the supply chain, monitor machine conditions to prevent unplanned downtime; and a future with machine tool technology and manufacturing methodologies allowing shops to change over between jobs within seconds (some of this technology is already here), all synced with customer demands,” he says in a recent editorial. “In short, imagine a future in which the majority of activities in the supply chain add value.”
Does connectivity have a place in your metal-cutting operation? Could it? At the very least, these are the questions leading companies should be asking. Unless, of course, they are part of the 10 percent that is already connected.
August 10, 2014 / benchmarking, best practices, bottlenecks, KPIs, lean manufacturing, LIT, Output, performance metrics, productivity, quality
Over the last several years, a growing number of fabricators and other industrial metal-cutting companies have started measuring overall equipment effectiveness (OEE). This is definitely a good trend, as measurement is a critical part of continuous improvement. However, many companies are jumping on the OEE bandwagon without being fully informed, which is causing a lot of misunderstanding and misuse of this important metric.
Knowing what OEE is—and what it isn’t—is the only way to make sure you are using it effectively. Here’s a quick primer.
What OEE Is
According to leanproduction.com, OEE is a best practices metric that measures the percentage of production time that is truly productive. It takes into account all six types of loss, resulting in a measure of productive manufacturing time.
In simple terms, OEE can be described as the ratio of fully productive time to planned production time. According to leanproduction.com, it can be measured in one of two ways:
(Good Pieces x Ideal Cycle Time) / Planned Production Time
Availability x Performance x Quality
(You can find a more detailed description of the calculation here, as well as a sample calculation.)
A plant with an OEE score of 100 percent has achieved perfect production—high quality parts as fast as possible, with zero down time. While that’s ideal, it’s not quite possible in the real world. According to oee.com, studies show that the average OEE rate among manufacturing plants is 60 percent, which leaves substantial room for improvement. Most experts agree that an OEE rate of 85 percent or better is considered “world class” and is a good long-term goal for most operations. The good news it that 85 percent is achievable. As this case study from Metalforming magazine describes, Magellan Aerospace in Kitchener, Ontario, Canada was able to improve its OEE from a mere 36 percent to a world-class 85-percent-plus.
Managers can use OEE as both a benchmark and baseline. Specifically, leanproduction.com says it can be used to “compare the performance of a given production asset to industry standards, to similar in-house assets, or to results for different shifts working on the same asset.” It can also be used as a baseline “to track progress over time in eliminating waste from a given production asset.”
What OEE Isn’t
Even with a basic understanding of OEE, many operations are still misinterpreting it and, therefore, aren’t using it effectively. This blog post, for example, argues that OEE is not a key performance indicator (KPI), and it shouldn’t be measured at a company or plant level. The author goes on to state five reasons why OEE is not a good KPI, including the fact that it is not comparable between different pieces of equipment and/or different locations. Instead, he suggests OEE should be used as a way to help identify and eliminate waste in front of a process, line, or equipment.
Another misconception is that OEE is the same thing as Total Productive Maintenance (TPM). An article from IndustryWeek (IW) says this is definitely not the case. “OEE is the measure most closely associated with TPM, but OEE is not equivalent to TPM,” the IW article states. “At its heart, TPM is not about complex metrics; it’s about developing the capabilities of people.” So while a good understanding of OEE can help with TPM, the two terms shouldn’t be used interchangeably.
How to Use OEE Effectively
So how do you use OEE correctly? Below are a few pointers we called out from the IW article:
- Use OEE as an improvement measure—not a KPI.
- OEE is best used on a single piece of equipment or synchronized line.
- There is no absolute that works as an OEE benchmark or target—it’s relative to your situation.
- Use it as a yardstick, not a club.
Also, if you are short-run, high-mix fabricator, don’t assume OEE isn’t for you. Check out this article from thefabricator.com, which describes how automated data collection can help you to better measure OEE in more custom manufacturing applications.
As the IW article states, OEE is often misused, but it is not a “bad metric.” In fact, it can be very useful in helping companies quantify improvement opportunities. Just be sure you know the facts before you start using OEE measurements to make strategic decisions.
August 5, 2014 / benchmarking, best practices, continuous improvement, human capital, lean manufacturing, LIT, material costs, Output, performance metrics, predictive management, preventative maintenance, productivity, quality, strategic planning
Whether or not you consider yourself a “lean” operation, there are some lean manufacturing principles that are universal to almost every manufacturer. One of those is waste. As a metal service center, your ultimate goal is to turn material into profit as efficiently possible, which means you want to avoid waste and downtime at all costs. And while this isn’t groundbreaking information, many service centers aren’t effectively tackling waste because they don’t know where to start.
Identification of the Six Big Losses is one tool manufacturers can use to understand the most common forms of waste or “loss” within their operations. According to leanproduction.com, the Six Big Losses are key because ”they are nearly universal in application for discrete manufacturing, and they provide a great starting framework for thinking about, identifying, and attacking waste.”
The first step to reducing waste in your organization is to identify your losses. There are six types of loss every manufacturing operation faces, and each fall under three main categories—downtime loss, speed loss, and quality loss.
The following is a brief description of each of the Six Big Losses:
- Breakdowns. These are considered a downtime loss and could include tooling failure, unplanned maintenance, and motor failure.
- Setup and Adjustments. This is also a downtime loss and could include changeover, material shortage, operator shortage, and warm-up time.
- Small Stops. This is considered a speed loss, and it only includes stops that are less than 5 minutes and don’t require maintenance. This might include a blocked sensor or minor cleaning.
- Slow Running. This is another speed loss, and it covers anything that prohibits equipment from running at its optimal speed. Incorrect setting of parameters and equipment wear are prime examples.
- Startup Defects. This quality loss covers any scarp or rework that occurs during setup or very early in the production phase.
- Production Defects. This is the second form of quality loss. This refers to any scrap or rework that happens during the steady-state production process.
Once you have identified the Six Big Losses and the events that contribute to them, the next step is to record and monitor what you find within your operation. The only way to do this effectively is through measurement and documentation. This article from oee.com gives several tips for addressing each loss category and includes helpful links to help you accurately measure your losses.
The final step is attacking your losses and preventing them from happening again. This is where strategy comes into play. In a recent benchmark study of industrial metal-cutting organizations, the LENOX Institute of Technology (LIT) identified three key areas where organizations can gain additional productivity and efficiency on the shop floor. These include the following:
- invest in smarter, more predictive operations management;
- embrace proactive care and maintenance of saws and saw blades; and
- invest in human capital.
To read more about these recommendations, you can download the full report here.
As a service center that cuts and processes metal, some waste and loss are inevitable. However, the only way to keep those losses from hurting your business is to identify, monitor, and attack them, one by one. Add in a little strategy, and you might just be able to turn those losses into opportunities for improvement and growth.
April 30, 2014 / agility, benchmarking, best practices, continuous improvement, industry news, KPIs, LIT, operations metrics, Output, performance metrics, predictive management, preventative maintenance, productivity, strategic planning
A recent report from Gartner continues to build the case that metrics and smarter, more predictive management strategies are critical for industrial metal-cutting companies that want to succeed in today’s competitive landscape. In fact, according to the consulting firm, organizations that use predictive business performance metrics will increase their profitability by 20 percent by 2017.
“Using historical measures to gauge business and process performance is a thing of the past,” Samantha Searle, research analyst, said in a Gartner press release. “To prevail in challenging market conditions, businesses need predictive metrics—also known as ‘leading indicators’—rather than just historical metrics (aka ‘lagging indicators’).”
Gartner said that predictive risk metrics are particularly important for mitigating and even preventing the impact of disruptive events on profitability. The key is for companies to have predictive metrics that contribute to strategic key performance indicators (KPIs); however, Gartner discovered that many companies are failing to do just that.
Metrics vs. Strategic KPIs
After conducting a survey of 498 business and IT leaders in the fourth quarter of 2013, Gartner analysts found that while 71% of business and IT leaders understood which KPIs are critical to supporting the business strategy, only 48% said they can access metrics that help them understand how their work contributes to strategic KPIs. In addition, only 31% had a dashboard to provide visibility into KPIs.
However, according to Searle, even visible metrics won’t help drive strategic business outcomes if business leaders don’t have the right metrics in place. The problem, she says, is that managers often misinterpret the goal of a KPI.
The first thing companies need to realize is that KPIs are metrics, but not all metrics are KPIs. A KPI is a measure that should indicate what you need to do to significantly improve performance—or that indicates where performance is trending—which means it is predictive in nature. However, Gartner’s Searle says many companies don’t have predictive measures in place. “They persist in using historical measures and consequently miss the opportunity to either capture a business moment that would increase profit or intervene to prevent an unforeseen event, resulting in a decrease in profit,” she explains.
If you are still unsure of what qualifies as a KPI, check out this article, which lists five rules for selecting the best KPIs for your manufacturing organization. As the article states, “the key to success is selecting KPIs that will deliver long-term value to the organization.”
The larger lesson here is that in today’s fast-moving market, companies need to anticipate business events—not react to them. From a high level, Gartner is saying that this requires KPIs that are predictive. But what does this mean from a plant-floor level? What type of shop floor metrics can help businesses anticipate business events and provide input into strategic KPIs?
A benchmark study from the LENOX Institute of Technology (LIT) may provide a little insight. The following are two of the study’s key findings:
- 67% of industrial metal-cutting operations that follow all scheduled and planned maintenance on their machines also report that their job completion rate is trending upward year over year—a meaningful correlation. The implication is that less disruptive, unplanned downtime and more anticipated, planned downtime translates into more jobs being completed on time.
- 51% of organizations that “always” follow scheduled and preventative maintenance plans say that blade failure is predicted “always or “mostly.” This shows that preventative maintenance helps operations predict blade failure. And as any metal-cutting leader knows, predicting blade failure not only keeps production flowing, it also helps tooling and maintenance costs under control.
Both of the benchmark findings are, in fact, key metrics that can help industrial metal-cutting companies better understand strategic KPIs. In this case, we discovered that a proactive strategy like preventative maintenance can help managers plan for downtime and, in essence, allows them to create “predictive downtime,” which can actually improve cutting performance and extend equipment life. This is a much different from “interruptive downtime,” which can hurt performance, reduce on-time customer delivery, and increase material costs.
Based on this example, the KPI might be whether or not an organization is hitting its preventative maintenance schedule or whether or not the cadence of preventative maintenance is increasing or decreasing. For instance, if production was increasing but preventive maintenance measurements were static, it could predict massive failure issues.
Moving forward, here are a few questions to consider: What metrics are you using to measure business performance? Are they KPIs? Are your management strategies focused on being proactive or reactive? Are there ways you can predict business events such as blade failure and machine downtime?
Answering these key questions may help you determine whether or not your company is on track to increased profitability or at risk for being stagnant. Proactive strategies like the predictive metrics suggested by Gartner and the preventative measures suggested by the LIT study are critical for industrial metal-cutting companies that want improve their agility and, most importantly, their bottom line. Leaders are realizing that they need to act now—not later—if they want to be successful in the future. When it comes to today’s manufacturing landscape, good things will not come to those who wait.
December 15, 2013 / Employee Morale, Output, Safety
In an industrial metal-cutting environment, safety is critical. Everyone knows that. In fact, most managers would probably list it as a top priority. However, in practice, most of those same managers treat safety more like a necessary evil than a business strategy. In other words, their safety initiatives are built around simply meeting OSHA requirements, not as a means of maintaining—or better yet, improving—the bottom line.
The truth is that most managers need to shift their mindset when it comes to safety. Randy DeVaul, author of Performance Safety: A Practical Approach and Performance Safety: Lessons For Life, argues that safety should be viewed as a value, not a priority. What’s the difference? According to DeVaul, priorities change depending on the circumstances; however, a value is maintained, regardless of the circumstances. In other words, safety should be a constant, and it should be integrated into every aspect of your industrial metal-cutting processes.
The concept is actually fairly simple: Injured operators can’t be productive.
If your best operator is constantly calling off because of a bad back, someone else needs to be trained to take his place. This not only takes time away from production, it could also affect quality. And, of course, there is the cost element.
There are several ways safety can have an impact on overall business operations, but here are three key points today’s managers should consider:
- An unsafe environment is expensive. According to the U.S. Department of Labor, “businesses spend $170 billion a year on costs associated with occupational injuries and illnesses—expenditures that come straight out of company profits.” In fact, a 2012 workplace safety study by Liberty Mutual says that overexertion, which is defined as “injuries related to lifting, pushing, pulling, holding, carrying, or throwing,” cost businesses $13.61 billion in direct costs. However, by establishing safety and health management systems, the Department of Labor says that workplaces can reduce their injury and illness costs by 20 to 40 percent. That’s pretty significant in today’s challenging marketplace.
- Low safety scores can indicate poor workflow on the shop floor. Constant injuries can be the symptom of larger operational problems. If an operator has to transport a piece of steel halfway across the facility to perform the next process, both safety and productivity are at risk. The less an operator touches a piece of material, the less likely he is going to get injured and the more efficient he can perform. According to LENOX Institute of Technology’s recent paper, Tackling the Top 5 Operating Challenges in Industrial Metal Cutting, simple changes like strategic equipment placement, adjustable “scissor” tables, and elimination of trip hazards can make your shop safer and, in the meantime, eliminate bottlenecks and improve productivity.
- A workplace built around safety can improve employee morale, especially if operators are included in safety initiatives. No one knows the production process better than an operator, which makes his or her input extremely valuable. Managers should be consistently asking production employees how they can make the metal-cutting process faster and safer, whether that means repositioning the saw at a certain angle or adding a table on the backside of the saw to save a trip after each cut. The key is to not only ask for suggestions, but to also follow through and make adjustments. This increases safety and also empowers employees to be a part of the company’s overall success. It’s a win-win for everyone.
While an operator’s wellbeing should always be the top concern, the value of safety goes beyond employee health. A safer environment is more productive; a more productive environment provides more output; and more output provides more money. Really, it’s that simple.