Manufacturing Capability Improvement

Technology advancement global and regional economic uncertainty, energy problems and environmental concerns, have both positive and negative impacts for the manufacturing sector. This brings more challenges to the manufacturing sector. Manufacturers need to be prepared for any situation, opportunities that come with the economy growth of the country or the region or challenges and crises like economic fluctuations, natural disasters, and even wars, which can occur all the time. There are some certain things that will surely happen in the near future. First,industrial products will feature higher efficiency,more functionality, greater energy efficiency,more environmental friendly, and most important,time-to-market will be much shorter. These will change the way we produce products that will require higher precision from high-tech machines and better engineered processes. At the same time, labor and personnel shortage problems for the manufacturing sector will get even more intense. In addition, energy and environmental problems will force businesses to embrace the green factory concept. All of these will result in higher production cost.This moment is the most appropriate time for manufacturers to pay attention to these concerns and streamline their production process to improve their manufacturing capabilities. They also need to reduce production costs and make their organizations lean, flexible,modernized and ready for competition.

Production Cost Reduction While cost reduction is a task that should be worked on all the time, many just seriously think about this when problems or a crisis arise. In general, cost reduction in manufacturing is carried out two ways; resource waste reduction and increase energy efficiency. Resources in a manufacturing organization comprise machines, products and raw materials. Machines are the most valued assets and are the essence for processing the raw material into finished goods. So, we need to make sure that our machines are at the highest efficiency or get them replaced with higher performance ones. The production processes should be also improved so that the highest machine utilization is achieved and generating minimum wastes. Quality controls, both process audit and product inspection, should be carried out at every process step. SPC (Cpk) is an effective tool used to detect defects and at the same time it is used for process improvement. Modern manufacturers need to have high performance machines that can fulfill all the customer’s demands. Many manufacturers lost opportunities to receive more purchase orders from customers due to their out-of-date machines and can’t produce the products that meet tighter tolerance. Furthermore, factories are also required to have an effective preventive maintenance procedure and sufficient spare parts to minimize machine downtimes. Losses from production come from the wrong part being produced or parts that don’t conform to the required specification. Another source is from raw materials either not meeting desired quality requirements or those with are expired or close to the end of their shelf life. To solve this problem, the responsible person has to immediately arrange the MRB (Material Review Board) meeting to dispose of the rejected lot of products or materials. It is important to quickly make a decision with the rejected lots. We can negotiate with customers on conditions for delivering the problematic lots to them. We also need to return the rejected raw material to suppliers. The longer the rejected lots are left unattended, the lower their value. In addition, it wastes space on the production floor for stocking and could miss-value the company in terms of accounting integrity. One method for the rejected lots being left unattended is to keep them in high-valued item areas, or use color stickers to identify high value items so they can be easily seen. Energy efficiency measures will be forced into practice that manufacturers can’t avoid. Due to its global impact, the international industry standards like ISO have released standards such as the ISO 5001 for organizations to establish and implement energy management systems. Some countries have enacted their own laws. For example the US has the Clean Energy Efficiency and Renewable law. In general, we can assure energy efficiency in our factories by 3 ways; 1) improving the production processes to minimize energy loss,for example reusing the released heat; 2) replacing heat exchanger equipment with higher performance ones which consume less energy; and 3) implementing a basic maintenance program and monitor the machines operating systems such as by installing a heat shield, readjusting the burning ratio of the boiler, or replacing the lighting with energysaving light bulbs or LEDs that consume less electricity.

Automated Production Systems Automation can increase productivity and efficiency. It also helps reduce human error and reduce operating costs in the long term. When talking about automation, many will think of robots. In fact, industrial automation can be anything from simple systems such as conveyors to move parts and work pieces, pneumatic systems, auto-ID, RFID, which is widely adopted for many applications such as logistics, inventory systems, and production systems (for identifying the products and raw materials), to sophisticated and advanced robotic technology. Generally, automation can be used in various processes of production. It can be added to the machine, such as automatic pallet changers for loading and unloading the work pieces. It’s also used to transfer the finished part or raw materials between machines or between processes. It’s also used in part assembly. We also used automation in quality control such as automatic inspection equipment. When adopting automation in your production, there are three important basic components to take into consideration. First is the actuator of the automation. You need to specify the movement types, whether linear or rotational movements. The second component is the type of measuring device and sensor, such as thermal sensor, light sensor or electronic sensors. The third is the control unit. It can be a logic control or numerical control. The widely implemented automation is RFID technology that uses barcodes or label inspection. High resolution and high speed cameras are also used to inspect the defects on work pieces. In addition,modern equipment comes with automatic functions to increase efficiency and convenience,increasing work efficiency for manufacturers as well. Adopting automation systems for Thai SMEs is a challenging task and is something that should not be overlooked. In western industrial countries that turn to manufacturing such as the US and EU, they take it seriously. For Thailand, there are also some efforts by the government to help, for example the Automation and Mechatronics Laboratory at MTEC, where manufacturers can find information and consult for adopting automation.

Getting Precise Information with ERP Enterprise resource planning, or ERP, is a vital effective organizational tool for managing all the organization’s functions to get the most out of resources. ERP connects all functions of the organization and each unit can share common data and can integrate functions, whether sales, production, accounting and finance, inventory, or supply chain management. For example, the purchase orders from customers. In traditional practice, PO documents will be generated and hand carried from one department to the other until completing the loop in the factory. The same information will be manually entered into the department’s computer again. This way of working wastes a lot of time and the paper could be missing and typing errors during data entry. At the same time, no one knows the exact status of the product during production. Sale people don’t know when the product will be finished and ready for delivery. In order to know the status, the company needs to conduct a meeting and many times the collected information is not correct and precised. Today, ERP has been designed employing best practices and classified into business modules where each module can provide data and receive data at the same time. For a factory, the top management and department heads are able to access all production data. They know the exact quantity of raw materials and products at each process in real time. Furthermore, some ERP software have included the quality functions such as ISO standards or SPC that allows the QC manager to be able to follow up the progress. Top management can access the financial data that helps them gain advantages for business decisions. The good news is that ERP software can now be developed by Thai companies and it’s not too expensive, so Thai manufacturers should consider it.

Increased Employee Potential, Increased Organizational Potential A successful organization is driven by high-potential employees. It means that the organization needs to fulfill these three relationships. First, the company needs to make sure that the employees fulfill the organizational objectives and goals by having shared goals, aligned interests and motivational measures. Secondly, the organization needs to provide human resource development opportunity to increase employee competency. Third, the organization needs to value its employees and support them to grow their career paths. Besides a fair salary or wage, an organization that provides opportunities for employee empowerment, encourages teamwork, and establishes an environment for life-long learning in order to develop skills and competency, will encourage employees to create new ideas that can help improve the way an organization works. Not only will these measures garner loyalty for the organization, but it has also been found that activities or projects initiated by lower-level employees will lead to more collaboration and a better chance for success than those driven by the management, although it is important to note that management still needs to support them. strong>Conclusion Globalization and very demanding modern industrial products have brought along challenges and higher competition.Challenges could mean difficulty or obstacle for some manufacturers, but for those who understand what customers need and get well prepared, they provide business opportunity and organization growth. So,increased manufacturing capability and operating cost reductions will enable them to have greater flexibility and be ready for any situation.


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Reference : Blue Update Edition 13