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Are you paying your management to be office clerks?

Written by CyFrame

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Are your key managers and administrative staff compiling your production entries into spreadsheets and formatting reports on their desktops?

Do those reports even supply you with crucial plastic processing performance information which is critical to your  bottom line?

What sort of delay from the actual production run is there before you have a production efficiency report… Hours, Days, Weeks, Months?

Are these results accurate and reliable? Are they helpful in making better production planning decisions that will improve performance and ensure customer deliveries? Can you actually track your efficiency today? Just imagine what impact having automated real-time actionable production information would have on your business profitability if: your management was empowered with drill down production performance reporting and was free to focus on optimizing machine capacity as well as customer and supplier on-time delivery.

All too often existing company processes are using up valuable salaries, producing poor quality information and leaving limited time for your staff to plan, react, correct and improve production efficiency, downtimes and rejects.

To reverse that situation, you’ll need to take some serious steps towards reviewing your operation.

If you don’t have this data readily available, find out how…

In essence, your focus should be directed at reviewing your current process to eliminate steps to speed up the compilation of production data, implement better controls so that your information is accurate and most of all, assign areas of responsibilities to key members but share the information among them to make the entire team accountable. The following top five aspects should be considered:

  • Are you scanning your production entries directly on the shop floor with devices like bar-code scanners and touch screens? Do you compare these production entries against real machine performance using integrated PLC counters that produce highly accurate entries? Most commonly these entries are produced manually and are prone to errors and delays. You should be tracking the finished goods produced, resin and other raw material consumption as well as machine, labor time, downtime and rejects directly from the production line.
  • Are you double checking your production entries against other metrics such as the time and attendance system, and planned machine capacity? Do you perform inventory spot-checks to ensure accuracy on a daily basis? All too often key daily controls are not implemented or respected. Supervisors must make sure the right resins-regrind-additives mixtures accurately reflect the work order specifications and must review daily time totals and machine speeds to ensure that they are in line with the reality observed on the floor.
  • Are the key formulas relating to the Bill Of Material (i.e. BOM) that are stored in your internal system or spreadsheets truly reflecting the reality such as the routing sequence of the operations (tooling setup, start time, cycle time for molding or feet per second for extrusion, part weight, density and dimension, packaging and special QA instructions)? While the process of recording production entries can be accurate, these formula assumptions can result in consistent inaccurate reporting.
  • Was any sort of internal analysis performed to evaluate the costs, risks of error and potential repercussions caused due to a lack of timely information within your existing processes? While it may not be obvious at first, a good automated system, properly managed, with simple control points performed daily, will improve profitability and also increase your company’s throughput. NB: This will also significantly minimize variances that are often only detected once a physical inventory is performed.
  • Do you compare your actual production costs (transferred to your finished goods from raw material) against your financial accounting system? Your accounting method (in transferring costs from raw material, labor and overhead in your finished product standard costs) needs to be compared and controlled every month against your financial accounting results. Wild fluctuations in profit or loss in your financial statements are often due to simple mistakes that can be avoided with such verification methods. But it can also truly indicate that some products are not what was estimated when priced originally. It is important to be able to explain why a month is profitable or not. If you are not able to answer all of these questions, it is very likely that you are not currently in control of your own destiny. You cannot begin to make the appropriate corrections until you can quantify what truly happens each day.

Think process optimization and empower your staff

Once your process is optimized, it is critical to establish clear areas of responsibility to specific individuals (and backups in their absence) for each control point to ensure accurate just-in-time reporting. These controls must be documented so that everyone involved in the process is held accountable. You may consider hiring external help to do so. It is always useful to have an unbiased opinion that can guide you through this process.

Consider technology as a way to simplify and eliminate points of failure to get accurate data

While you still need to analyze and understand the details of your process, scanning predetermined product bar-coded labels, using PLC counts that can be automated directly on your plastic processing machines and using a time-clock system on the shop floor can eliminate many error-prone manual labor steps in your process. The cost of doing so can easily be amortized over 7 to 10 years or more and reduce your current payroll costs that are incurred every day. What is even more impressive is that you can now empower key members of your staff to properly manage your operations and reduce inefficiencies in scheduling while expanding efforts in reducing rejects, downtime and late deliveries.

You may consider investing in management software to help drive this process. It is important to consider your options carefully in order to truly achieve an integrated system from the shop floor all the way to sound management and real-time financial reporting.  Your mission is to produce cost-effective, timely, quality plastic products, not to spend excessive time coordinating custom IT projects. Using what is readily available in the market, with little requirement for customized programming makes excellent long-term economic sense not to mention the technological challenges involved in keeping a system’s architecture current and competitive.

The most effective plastic processing companies are not necessarily the most talented. It’s those who consistently question their internal systems and procedures, who strive to constantly improve and implement best management practices who achieve the greatest success.