Due to the COVID-19 pandemic, operations managers are considering how to update operational practices while maintaining output. Facilities are grappling with issues such as reduced headcount, increased safety measures, and physical distancing. How can they implement these measures without compromising throughput and profitability?
While one approach is to simply make changes and then retrospectively analyze how well they worked. A better way, however, eliminates the guesswork and allows operating managers to understand how changes will impact the bottom line before they are ever implemented, thus allowing time for challenges and obstacles to be identified and addressed. This forward-looking approach can include both process simulations and operations improvement, which can analyze new workflow processes, remove bottlenecks, and identify inefficiencies. Let’s look more closely at how these approaches work.
Process simulations and modeling take the guesswork out of facility changes by taking ideas for a test drive. Although the methodology of this discipline has been around for a while, recent advancements in computing have allowed it to grow by leaps and bounds. At this point, we are able to try out process alternatives for everything from a single unit operation to an entire manufacturing plant before risking capital expenditures. Doing so allows us to either justify a hypothesis or dismiss an idea early.
How simulations work
Simulations allow management to make confident data-driven decisions—and often very different ones than were originally under consideration. In order to test out possible solutions, employ this precise seven-step approach:
Real life example: finding the right headcount using simulations
Exactly how many operators do you need to run a facility? This was the question one manufacturing facility approached our team to address. Their current scheduling setup was triggering a lot of overtime and they knew there was room for improvement—but where? Our challenge was to optimize their operations schedule while minimizing overtime.
When we ran simulations based on the facility’s current way of doing things, we saw that the main issue was too few operators. In an effort to save money, the owners had reduced operators. This required three sequential runs for certain unit operations, but these often ran into overtime due to a lack of operators. Now that we understood the cause of the problem, we needed to find the sweet spot of how many operators were needed to get the job done without incurring overtime.
Next, we ran multiple simulations with various numbers of operators, observing the delay time in acquiring an operator for each task. Based on our simulations, it was starkly evident that running with fewer than 32 operators caused peak wait times to increase rapidly, delaying activities. Interestingly, we could see that while there were some time gains in adding a 33rd or 34th operator, we quickly hit a point of diminishing returns when adding more operators.
As this example illustrates, there are some consistent considerations for running simulations for any facility with a similarly complex question:
- What are the constraints?
- How can we “level the load” without impacting overall lead times?
- What is the point of diminishing returns?
The beauty of simulations lies in their scope and accuracy. After a possible scenario has been simulated, we can clearly identify if we moved the needle, or simply moved the bottleneck. Only simulations can look into the future and answer an important question: did this solution help us meet our goals?
Operations improvement (OI)
Operations improvement is all about reducing operating costs, improving time to market, and uncovering opportunities that boost your bottom line. In an era of social distancing, it is imperative to identify superfluous steps in your process and any other inefficiencies slowing down your operators. OI can identify these issues and tighten your process to maintain adequate throughput during these tough times.
How OI works
Get a baseline
To see where improvements may be possible, start with a thorough understanding of baseline operations. For example, we interview members of the team and watch them work to understand how they are doing things right now. During this step, we define our goals and metric definitions, gather data, and do a current state analysis. This step is similar to developing a baseline for the simulation effort.
Along the way, we challenge every unit operation, asking why each step is done a certain way. OI techniques are also helpful for tackling inefficiencies that are a function of company culture. As outsiders, our consulting team is able to quickly identify ingrained inefficiencies and help a facility soar to new levels of productivity.
Once you have a thorough knowledge of how things are currently done, conduct a LEAN analysis. By taking a higher view and challenging every aspect of unit operations, you identify where efficiencies may be gained. During this step, list all improvements that can be made and then perform cost/benefit feasibility analysis for each idea. Then you can determine specific, actionable suggestions to improve current operations.
Identify implementation challenges
Change is hard. Based on countless previous projects, the main theme emerges: the biggest obstacle to implementing change is culture. There is a real risk of initial implementation without sustained follow-through —teams can simply fall back in the trap of doing the thing the way they did before. When we take on OI projects, we work closely with leadership to prevent this from happening.
Our team addresses the potential challenges associated with implementing our suggestions. For example, there may be a technical learning curve for operators. Or perhaps there are IT challenges. By identifying implementation challenges ahead of time, our team prepares clients for the smoothest transition.
Real-life example: using OI to reduce travel distances
In this project, our team was challenged to shorten the distance and time operators traveled within a large facility. To do this, it was important to improve material/personnel flows and address area adjacencies. This was a matter of rearranging the floor plan of the facility while accounting for new products and increased volumes.
To begin, we looked at all products manufactured in the facility and created product families. This helped us understand the collective flow behavior, creating an improved floor plan. Next, we demonstrated how a centralized staging location could be a game-changer as far as shortening an employee’s travel from one area to another. Overall, the changes we implemented using OI techniques reduced distances and time traveled by an aggregate of >48%.
Real-life example: avoiding accidents with OI
Forklift collisions pose a real risk within a manufacturing facility. When a client asked us to analyze pinch points within their facility layout to ensure the safety of its operators, we used OI techniques to conduct a safety analysis. Our goal was to confirm equipment adequacy and create a lean layout that would minimize potential forklift interactions, and subsequently, collisions.
After examining current traffic levels in various corridors and facility areas, we identified high traffic corridors and potential accident zones. Next, we addressed facility traffic issues by developing new operating rules to minimize traffic and optimize corridors and passageways to improve material and personnel flow.
As a result of our OI-based design suggestions to address choke-points, traffic in key corridors reduced by 23% and there was a reduction of over $2 million in MH&D equipment. And the potential lives saved? Priceless!
Across all facilities, the need for progress never stops, so look beyond current operations and consider what future operations could look like. As part of the OI process, examine questions such as:
- What should your future state be?
- What does the road map look like? How do you get to your future state?
- What are the stop gates that are holding you back?
A worthwhile investment
All markets are trying to get more and more from their facilities. Unfortunately, if you skip over the essential steps of truly optimizing your processes, you may face an extremely high normalized cost of operations. Instead, facility owners can look into the future and get their biggest value by incorporating process simulations and operations improvement from the onset. These methodologies will build flexibility and sustainability into any facility—a surefire strategy for long-term success!
Ready to discuss your facility’s long-term success? Let’s chat.