Max­i­miz­ing Man­u­fac­tur­ing Pro­duc­tiv­i­ty: A Holis­tic Man­age­ment Con­trol Sys­tem for Pro­duc­tion and Planning

BACKGROUND

Main­tain­ing com­pet­i­tive­ness man­dates com­pa­nies to con­tin­u­al­ly mon­i­tor and enhance their oper­a­tions. An essen­tial tool for mea­sur­ing man­u­fac­tur­ing effi­cien­cy is Over­all Equip­ment Effec­tive­ness (OEE), which pro­vides a com­pre­hen­sive met­ric for assess­ing the per­for­mance of machines or pro­duc­tion lines rel­a­tive to their max­i­mum poten­tial. By mon­i­tor­ing OEE, man­u­fac­tur­ers can uncov­er oppor­tu­ni­ties for improve­ment, min­i­mize down­time, and boost productivity.

This case study offers valu­able insights into the ben­e­fits of estab­lish­ing a robust man­age­ment con­trol sys­tem in a pro­duc­tion envi­ron­ment, which serves as a sol­id foun­da­tion for effec­tive­ly util­is­ing incre­men­tal and sus­tain­able OEE opti­miza­tion in a large fur­ni­ture fac­to­ry. The study also out­lines the process used to opti­mise the man­u­fac­tur­ing operations.

THE CHALLENGE

The Client oper­ates one of the largest fur­ni­ture man­u­fac­tur­ers in South­east Asia with more than 3,000 employ­ees. Its main mar­ket is the US export market.

The CFO had rec­og­nized the need for a sig­nif­i­cant over­haul of the fac­to­ry oper­a­tions with the aim to increase its pro­duc­tiv­i­ty and effi­cien­cy. To help achieve this, he asked to con­duct an analy­sis of the com­pa­ny’s oper­a­tions and to help the com­pa­ny tran­si­tion from a founder-centric man­age­ment style to a system-centric approach to achieve its objectives.

ANALYSIS

The ambi­tion to improve oper­at­ing sys­tems at the com­pa­ny became the biggest dri­ver for the project. Renoir part­nered in the trans­for­ma­tion pro­gram by improv­ing oper­a­tional process­es and man­age­ment con­trol sys­tems for the fol­low­ing areas: Pro­duc­tion, Pro­duc­tion Plan­ning, and Mate­r­i­al Management.

As well as iden­ti­fy­ing the need for a robust man­age­ment sys­tem, oth­er areas of improve­ment were iden­ti­fied includ­ing OEE, labour pro­duc­tiv­i­ty per­for­mance and dead­stock iden­ti­fi­ca­tion and removal.

PROJECT APPROACH

To lead mul­ti­func­tion­al teams, a task force was cre­at­ed with guid­ance and coach­ing from full-time con­sul­tants. The teams mapped all key process­es, iden­ti­fied oppor­tu­ni­ties for improve­ment, deter­mined root caus­es of inef­fi­cien­cy, pri­or­i­tized those issues, and devel­oped action plans to imple­ment per­ma­nent solu­tions. Mech­a­nisms were also estab­lished to mea­sure the progress and suc­cess of the initiatives.

Despite chal­lenges relat­ed to prod­uct cus­tomiza­tions, the teams devel­oped a robust man­age­ment con­trol sys­tem that focused on week­ly per­for­mance man­age­ment, uti­liz­ing a daily/weekly oper­at­ing report, dai­ly team hud­dles, and vol­ume growth strate­gies for the focus area with­in the scope.

IMPLEMENTATION

The imple­men­ta­tion of a holis­tic man­age­ment con­trol sys­tem for pro­duc­tion and pro­duc­tion plan­ning, includ­ing dai­ly and week­ly oper­at­ing reports, dai­ly hud­dle meet­ings focus­ing on OEE, week­ly depart­ment per­for­mance reviews, and bi-weekly man­age­ment per­for­mance reviews, helped to improve the plan­t’s pro­duc­tiv­i­ty and on-time deliv­ery rate.

Dur­ing the ini­tia­tive, the exist­ing cul­ture was the strongest bar­ri­er to the project. But with con­stant sup­port, guid­ing and coach­ing from man­age­ment, the team suc­cess­ful­ly designed and imple­ment­ed a robust man­age­ment con­trol sys­tem. By util­is­ing Renoir’s Focus Process®, the team iden­ti­fied major gaps in oper­a­tions: a lack of per­for­mance man­age­ment, no KPIs and, most impor­tant­ly, a lack of data dri­ven analy­sis on which to base informed decisions.

“ Renoir’s approach helped us define our real poten­tial and they sup­port­ed us in estab­lish­ing the foun­da­tion of our sys­tem. The solu­tion they imple­ment­ed was tai­lored to our needs. The whole team has suc­cess­ful­ly deliv­ered the project’s objectives. ”

CFO

The scope was to reduce direct labour by increas­ing plant pro­duc­tiv­i­ty. How­ev­er, labour avail­abil­i­ty was only at 40% and order com­ple­tion for the year was low. Rather than reduc­ing head­count, how­ev­er, the deci­sion was made to increase labour avail­abil­i­ty instead.

The use of a new pro­duc­tiv­i­ty dash­board enabled vis­i­bil­i­ty and mea­sure­ment of per­for­mance, as well as the devel­op­ment of insights to address vari­ances to targets.

Late deliv­ery to cus­tomers was also an issue. A cri­sis team was formed to track every sin­gle late order and devel­op actions to mit­i­gate for improv­ing the on-time deliv­ery rate. 

Before any changes or improve­ments were made, the goal for the entire fac­to­ry was to reach a cer­tain lev­el of pro­duc­tion out­put each month. How­ev­er, this tar­get did not con­sid­er the cur­rent way of cal­cu­lat­ing costs, which meant that it was not clear how much mon­ey was being spent on direct labour or how many steps or process­es were required to pro­duce each item. Essen­tial­ly, the tar­get was based sole­ly on out­put quan­ti­ty rather than the actu­al cost of production.

A daily/weekly/monthly pro­duc­tiv­i­ty dash­board was designed and imple­ment­ed to allow vis­i­bil­i­ty to mea­sure per­for­mance and devel­op actions for vari­ances to tar­gets. Rea­sons for down­time were agreed and logged dai­ly to under­stand the biggest con­trib­u­tors to machine down­time. Actions were cre­at­ed to mit­i­gate down­time risk, and Kaizen events planned to mea­sure the impact of the improvements.

This enabled the man­age­ment to help focus on the strat­e­gy to grow vol­umes and, to focus on prof­itable prod­ucts. Com­pli­ance audits were installed to sup­port and fos­ter the cul­ture of con­tin­u­ous improvement.

RESULTS