Established management practices are becoming obsolete as the pace of manufacturing becomes more dynamic and supervisory-level salaries continue to rise.
Not only is it becoming increasingly difficult to manage operations by rote inspection; supervision as management—a control concept employed since the earliest days of modern manufacturing—is becoming impractical and unnecessary. Instead, manufacturers need to move toward management by exception by leveraging alerts triggered by real-time data.
Let’s start by defining management by exception and then review six ways manufacturers can apply this strategy to improve their performance.
Management by exception is a management style focused on identifying and resolving situations that deviate from normal or expected outcomes. It is a conscious decision to move from rote supervision and instead emphasize trust in teams and systems to alert management of issues requiring attention.
Within manufacturing, management by exception addresses four objectives:
In manufacturing, management by exception is typically implemented by using enterprise resource planning (ERP) and manufacturing execution system (MES) software as the eyes and ears of the operation.
These systems of operation are overlaid with workflows, alerts and intelligence that guide actions and monitor information streams and production processes. In effect, with workflows and alerts, automated queries continuously run in the background probing for next steps and identifying situations that require intervention.
For example, the DelmiaWorks Manufacturing ERP solution provides a single technology platform that delivers end-to-end visibility of the complete manufacturing process.
The real-time visibility of events occurring throughout the manufacturing process allows customers to eliminate waste and non-value added processes while improving manufacturing efficiency, including:
While there are myriad ways management by exception can be applied, here are six key examples of how manufacturers are applying it to improve their performance.
1. Financial management is one of the earliest uses of management by exception.
Today, a great first step is setting up dashboards that immediately alert the financial team when key performance indicators (KPIs) are trending out of established ranges. This eliminates the need to manually review ERP-generated reports on a daily basis while enabling management to respond faster to issues.
2. Inventory management is a fundamental value driver of ERP.
Workflows and alerts extend that value. For example, an ERP system can issue an inventory alert when there are not enough raw materials on hand to fulfill a new order. Additional alerts and workflows then work together to push an expedited materials purchase to the top of the purchasing department’s to-do list.
3. Real-time production and process monitoring of data from machines and sensors.
This real-time monitoring removes the need for an operator to manually monitor a job, and it can more readily identify potential issues, such as when the cycle rate is slow or pressure is too high. If something goes wrong, the monitoring software immediately notifies the proper supervisory personnel so the problem can be addressed.
Additionally, production and process monitoring combined with simple robotics have become the go-to solution for automating repetitive production work centers. Sensors monitor all the job particulars. Alerts monitor the sensors, and except when an issue is detected, the bulk of the job runs labor free.
4. Maintenance and repair can be timed more strategically.
MES records the run time on a given tool and specifications for the tool document its maintenance intervals. Alerts set between the two data points then combine to alert scheduling, maintenance and production workers to perform required maintenance when the tool is not in use to avoid unnecessary set-up and tear-down time and prevent breakage during an actual production run.
5. Quality inspection is more consistent and accurate with automated workflows and alerts.
First, a workflow in the MES can notify an operator logging on to the job of the need to take the periodic measurements. Meanwhile, the workstation operator screen provides a tool to input test results, and it timestamps the entries.
Additionally, the rules engine knows to alert supervision if measurements are not occurring or are outside specified limits. As a result, a correctly run job requires no intermediate supervision, and any issue with testing is identified immediately.
6. Back-filling important roles is easier with a management by exception strategy.
For instance, if a key regulatory supervisor unexpectedly goes on medical leave, any validation steps not being performed will trigger alerts, so the general manager can take remedial action and ensure nothing is forgotten.
Also, because production processes and assigned responsibility for each step have been codified, the general manager can proactively see exactly what tasks the absent supervisor owned and automatically reassign them. Similarly, the workers now responsible will be automatically advised of the when, where and what of these new tasks.
To remain competitive, manufacturers need to move from a high dependency on continuous oversight and tribal knowledge to management systems based on ordered processes that are recorded, institutionalized and implemented by automated systems.
By leveraging the automated management features of modern ERP and MES solutions, manufacturers can improve their financial and operational performance.
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