Recommended Strategy: Utilize Metrics to Quantify and Improve Performance
As the old adage goes, you can’t improve what you can’t measure. In other words, quantifying the performance of an operation is the only way to set goals and identify areas that need improvement. To drive continuous improvement in performance, quality, and cost reduction, LIT recommends that today’s industrial metal-cutting operations focus on increasing their proficiency and sophistication in measurement and optimization.
According to research conducted by LNS Research and MESA International, the following four operational measurement categories have the biggest impact on average annual improvements in financial/business performance:
1. Inventory. One inventory metric to consider is WIP (Work in Process) inventory/turns. This commonly used ratio calculation measures the efficient use of inventory materials. It is calculated by dividing the cost of goods sold by the average inventory used to produce those goods.
2. Efficiency. Metrics in this category include throughput, capacity utilization, Overall Equipment Effectiveness (OEE), and schedule/production attainment.
3. Quality. One quality metric worth tracking is yield—the percentage of products that are manufactured correctly and to specifications the first time through the manufacturing process without scrap or rework. Other quality metrics include customer rejects/return material authorizations/returns and incoming quality (from vendors).
4. Responsiveness. Common metrics in this category include on-time delivery to commit, manufacturing cycle time, and time to make changeovers.
Frustration #4: The Ability to Optimize Jobs to Meet Production Goals
Survey results revealed that optimization is also a main source of frustration for industrial metal-cutting companies. A little more than 60% of survey respondents listed one or more of the following as challenges:
• Job optimization (i.e., right material, right saw, correct parameters)
• Forecasting and production scheduling
• Time to job completion
• Meeting productivity targets
• Meeting production targets
Data suggest that these frustrations are impacting performance. As previously stated, only 37% of survey respondents are running at optimal performance more than 75% of the time. Additional findings point to other areas of inefficiency. For example, only 33% of respondents have uptime over 75%, which indicates that metal-cutting companies are not as efficient as they could be with their equipment. In addition, only 33% of respondents said they get the cut quality they desire more than 50% of the time.
Research findings also revealed that respondents are seeing little improvement in performance.
While survey results show that most respondents aren’t seeing decreased performance year over year, the majority seem to be achieving the same results year after year. According to the survey, 60% of respondents indicated they are seeing no change in their metal-cutting machine’s cutting time year over year; 58% are seeing no change in machine set-up time; and 45% are seeing no change in on-time job completion.
Performance also appears to be flat when comparing current benchmark data to the 2013 benchmark study. For example, 44% of 2013 respondents said on-time job completion was increasing year over year, and 42% said the same in 2017. In addition, 26% of 2013 respondents reported that metal-cutting machine set-up time was decreasing year over year, whereas approximately 25% said the same in 2017.
This static performance indicates that industrial metal-cutting companies are not continuously improving, nor are they reaching their full potential.
Recommended Strategy: Work Closely With Your Blade Supplier to Achieve Optimal Results
One common reason many industrial metal-cutting companies are unable to optimize is a lack of resources. This is especially true for smaller operations. Finding the time, money, and manpower to train operators, correct mistakes, and measure performance makes it difficult for companies to achieve optimal results.
To correct this issue, LIT suggests that metal-cutting organizations work closely with trusted suppliers that can provide value-added resources that can lead to optimal performance.
Below are some possible areas where suppliers can help:
• Training and Performance Improvement. If your goal is to increase productivity, many suppliers offer troubleshooting expertise and training resources. You may even ask suppliers to include training as part of your original purchase agreement. Some suppliers can also provide useful, practical tools like free software to help your operators work smarter.
• Measurement. Most industrial metal-cutting companies don’t possess all of the knowledge, resources, or infrastructure necessary to collect efficiency data, let alone analyze it. This is where a supply partner can help you gather some quantifiable, useable data.
• De-costing. If you are looking to save costs, one of your best resources is your supply chain. Factories with a strong record in de-costing often create local customer teams made up of top suppliers. This could include original equipment manufacturers, parts suppliers, distributors, etc. In an increasingly global market, it is also important to seek expertise from suppliers that can provide a global perspective and international best practices.
Conclusion
Regardless of market conditions, thriving in today’s competitive market requires companies to embrace change and focus on continuous improvement in all areas of their business. Lenox Institute of Technology’s benchmarking study reveals four key sources of frustration for today’s industrial metal-cutting organizations and recommended strategies for attacking each challenge. Industry leaders know that real change requires action. Without it, performance remains stagnant. Formal training processes, proactive care of equipment, measurement, and close supplier partnerships are just a few of the strategies metal-cutting operations can implement now to start seeing better results on the shop floor and on the bottom line.
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