Johannesburg, 31 Jan 2007
Reporting software development house, Opus Technologies, has teamed up with Shopware IT to supply manufacturing performance software solutions, designed to support South African companies striving to become leaner for world-class status.
The companies recently invited suppliers to implement a pilot project to quantify the potential benefits of implementing an MES/MIS (manufacturing execution systems/management information system) solution.
"No company will achieve and maintain world-class status without an IT solution to support its manufacturing operations," says Shopware's managing director, Deon Fourie.
Dave Wibberley, managing director of Adroit and Opus Technologies, concurs: "If you are manufacturing something and not measuring performance of that operation using standard methodologies such as overall equipment efficiency (OEE), it is virtually impossible to adopt a lean strategy. Striving to continuously improve means you need to have something against which you can measure yourself."
Wibberley points to the continuous improvement cycle to support the necessity for manufacturers to define, measure, analyse and improve performance to achieve benchmark standards.
Malcolm Heathfield, business development director of Opus Technologies, describes one of the pilot projects at a top South African electronics manufacturer, who wished to remain anonymous.
He says: "A world-class organisation could produce almost double the throughput achieved by the company we visited, with the same resources. Labour and capital productivity will also be around double the level in this company. Situations like these demonstrate the necessity of implementing a real-time performance management software solution.
"We were called in as part of a pilot project in which various suppliers were asked to justify an IT solution to support the companies manufacturing operation. As industry veterans, we understood the manufacturing problems and set about implementing a real-time solution using the Shopware production management software, Adroit supervisory control and data acquisition (Scada) software and Opus reporting technology. With the data from two machines, we were able to build a business case for the project and to implement a full solution with relative ease."
The plant required a factory-wide manufacturing information system that could meet real-time efficiency management with a visual interface to enable rapid identification and rectification of problem areas and manufacturing bottlenecks, as well as an automatic download of work orders from the enterprise resource planning (ERP) system to the production information system, for operational scheduling.
Based on discussions with company representatives, the Adroit/Opus/Shopware consortium identified functional requirements to support their business requirements.
These included machine utilisation analysis, operational scheduling, OEE calculation and analysis, production monitoring, shop floor data collection, and manufacturing visibility and historical reporting.
"The company did have systems in place to monitor production and OEE, in order to create an environment of continuous improvement, but the production and utilisation data at the company was manually collected by operators on an hourly basis," explains Heathfield.
From this point, the data was then manually collated into an Excel report. The process was time-consuming, often inaccurate and unreliable; it provided low hourly data resolution, and report generation was cumbersome with extended report intervals and lag times.
"These findings are typical of many traditional/manual production recording and reporting systems," says Heathfield. The components of OEE: availability, performance and quality, were investigated by the consortium to find the major areas of loss. During the pilot period the scrap analysis functionality was not configured or used to determine quality losses.
However, the OEE for the two machines for the pilot period was 43.5%, which is well below the world-class benchmark of 85%for OEE.
The availability analysis of the equipment revealed that material losses and the absence of planned work were areas that must be targeted for improvement.
"It should be possible through teamwork and cross-functional co-ordination to eliminate half of the loss categories 'no work planned' (21%) and 'no material' (4.25%) in the short term," says Heathfield.
This would result in an improvement of 12.6% (from 45.8% to 58.4%) in availability, or a percentage improvement of 28% (12.6 / 45.8 = 28%).
A similar 28% percentage improvement is expected in OEE, from 43.5% to 55.7%.
In terms of the company's performance, it registered at 95%, which is in line with the world-class benchmark - also 95%.
"Performance loss would not be targeted as a first priority, however we need to question the standards and the resulting product costing," says Heathfield.
"The proposed solution automates work study so that we know in real-time exactly what the company's performance is against the standards. It will never again be necessary to do a manual work study on standard times."
"We can see from the speed-per-product figures, the actual performance against standards indicates that there are large discrepancies. If this data accurately represents reality there could be major product costing and pricing distortions in the business," advises Heathfield.
"A cost benefit analysis was done and ROI and financial justification projected forward. A significant opportunity for improvement has been identified. This opportunity should be exploited to ensure the long-term sustainability of the company.
"The Shopware Visual Management Solution offers many features that will make the realisation of the business potential quicker, faster, cheaper and easier to achieve, and ROI calculations indicate that an investment in Shopware will give very favourable payback.
"This case study simply begs the question why more manufacturers aren't adopting IT related shop-floor MES/MIS solutions as an integral part of the business strategy," concludes Heathfield.
For any further information, please contact Malcolm Heathfield at Opus Technologies: malcolmh@opusoft.com.
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