Econ survival 101: Best-in-class manufacturers respond to operations challenges via uniform KPIs
A new study out of Boston-based Aberdeen Group underscores the need for an enterprise software platform for manufacturing operations management (MOM) to achieve best-in-class performance. MOM solutions specialist Apriso is seeing this trend in the marketplace as its customers improve performance while lowering total cost of manufacturing using Apriso’s FlexNet enterprise software platform for operations execution.
According to Aberdeen Group, “Executives face numerous challenges in managing global manufacturing operations and successfully collaborating across internal groups and external partners. In today’s economic environment, the No. 1 driving force behind focusing on manufacturing operations is to “reduce the total cost of manufacturing.”
Prior Aberdeen research has found that to accomplish this objective, “many executives are attempting to synchronize manufacturing operations by deploying a common platform to manage maintenance, production, quality, and inventory.”
According to Pascal Ober, director of competency Centers at Saint-Gobain Sekurit , an Apriso customer, “We are heavily exposed to client pressure to contain costs and improve logistics excellence. Our customers asked that we reduce prices by 6 percent while simultaneously delivering 10-percent improvements in productivity. To address these pressures, we have implemented a platform with both a manufacturing execution system and a warehouse management system, [delivering] real-time visibility and control for global manufacturing operations management.”
As an operations execution system, Apriso FlexNet helps customers improve performance across their global manufacturing operations, lowering cost and streamlining inventory flows between production and supply chain operations, while managing quality at all operational points.
According to Aberdeen Group, best-in-class manufacturers:
• Leverage development of best-practice operations processes as standard processes across their global manufacturing operations;
• Rely on executive sponsorship to lead the collaboration of manufacturing operations outside of the context of a single plant; and
• Invest in real-time interoperability across technologies to manage global operations.
“Holistically managing and optimizing operations across globally distributed manufacturing facilities involves aligning corporate and operational objectives, but is much more,” explains Matthew Littlefield and Mehul Shah, manufacturing research analysts for Aberdeen Group. “Supplier collaboration, the load balancing of factories to meet local versus global demand, break/fix versus preventative versus predictive approaches to maintenance, new product introduction, and the role of quality are all examples… highlighting the importance of a holistic approach.”
Another critical process capability the Best-in-Class are standardizing is key performance indicator (KPI) measurement, they add. “This means the best-in-class have invested in a standard scoreboard across manufacturing operations with which to measure operational performance. In fact, two-thirds [68 percent] of the best-in-class leverage standardized metrics. This could mean, in the case of a global manufacturer, that a plant in mainland Europe measures OEE or customer service in the same way as a plant in the Asia Pacific region.”
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2012 Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.