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cost increases. Energy bills, higher interest rates, rising wages and higher transportation costs put thousands of firms on the edge of existence. To tackle the soaring costs, factories are actively looking for easy quick solutions to deal with the challenges. For example, KEM ONE, a PVC manufacturer based in France, encourages its workers to work at night and over weekends in order to benefit from the off-peak cheaper electricity bills.
However, there is no point in evaluating the cost of turning a light on, if you can’t afford the mortgage on your premises and the team that brings it to life.
Short-term solutions could work at a time when the supply chain is stable and predictable. Preparing for business uncertainty and possible upheaval however requires a long-term strategy and structural resilience.
Actions are needed In the short term, manufacturers are to be confronted with challenging energy bills and the devalued pound this winter. In the longer run, factories are under pressure to look at their performance and optimise their production processes to be able to build resilience and face future challenges. At this stage, two actions seem critical in an attempt to bring production costs down and build structural resilience: 1. Revaluate production performance. It’s not just the OEE score that you need to pay attention to, but, more importantly, the root cause of downtime. Waste is one of the key areas that factories can take full advantage of. Every year, millions of tons of waste are unnecessarily created across the manufacturing spectrum. By reducing end-to-end transformation costs by a mere 1% could double or triple your net profit; see Figure 1. This could be enough to tackle the challenges through this difficult winter.
2. Streamline your operations through digital transformation. We found that many factories are still using paper or computer spreadsheets to record their production performance. This provides no option to control downtime, product quality or production issues, in real time. A real-
automationmagazine.co.uk Figure 1: Direct transformation costs from inputs to outputs
time manufacturing execution system is more important than ever in times of business uncertainty. Instant visibility of all information could provide valuable opportunities to make cost- effective improvements and reduce waste. Operators can be proactive to prevent issues that might otherwise range from batch rejections to fines, or even delisting. Managers can obtain real-time information for the production processes and ensure Right First Time, Right Every Time quality.
Rapid ROI As there is, for many companies, such a significant level of wastage contained within the conversion process, to implement a paperless system with such visibility should provide rapid and cost-effective improvements, such that no new money is required. The right system for the right application would be financed from existing wastage costs. Systemisation is therefore absolutely essential for any company seriously intent upon minimisation of risk and wastage and maximisation of Right First Time quality, at lowest manufactured cost.
Surely automation can come to the rescue? Not necessarily. Automation obviously has its role to play and there are some great examples across FMCG industries, who have used automation
to great advantage. However, amongst all the other challenges, retailers are consistently looking for additional ways to drive down their own costs and are therefore less inclined to hold their own stocks in expensive-to-maintain chilled or frozen warehouses. Consequently, they task manufacturers to deliver smaller batch runs more frequently. This means that manufacturers are faced with more frequent product changeovers and downtime. This in turn means that some of the automation opportunities would be of little value as such opportunities can rely upon long batch runs with fewer changeovers. Harford Control is here to help manufacturers not only get through this difficult winter, but also to help and support building resilience to face any future challenges. Harford MES helps factories eliminate risk, reduce wastage and improve efficiency by turning data into instantly actionable information. In some cases, we have helped companies make savings of 20% and more. It costs nothing to share your application with us in confidence. Together we can manage business uncertainty more effectively and keep building that all important sustainability.
CONTACT:
Harford Control
www.harfordcontrol.com; 01225 764461
Automation | October 2022
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