Microsoft founder Bill Gates once said that automation makes efficient operations more efficient and inefficient operations less efficient. The implication is that manufacturers should improve the efficiency of their automated processes.
It is a bit like driving faster to reach an important appointment on time. The effort is only worthwhile if you are driving on the right road: if you missed a turn along the way, you will still be moving quickly but in the wrong direction, so you aren't saving time.
This article covers key performance indicators (KPIs) that should be tracked to determine the impact that automation or other refinements have on manufacturing production and quality. It could also help you to avoid some common and expensive pitfalls.
The Trend Toward Reshoring
Vulnerabilities in the global supply chain that were concealed for years by a booming economy are now prompting manufacturers to completely rethink their operations.
According to a recent survey, four in 10 manufacturers have plans to automate production to reduce labor costs and 22 percent intend to abandon foreign factories altogether and reshore their facilities in the United States.
To meet these goals, manufacturers will have to make major investments in both machinery and labor and then closely monitor key data as their plans unfold.
KPI Pitfalls to Avoid
Overthinking a problem usually makes matters worse not better, and this is especially true when deciding which KPIs to keep track of. Here are a few of the mistakes manufacturers make when they put systems in place to measure the effectiveness of their automation system:
- Gathering too much data: KPIs should be based on clear objectives, and only information pertinent to them should be collected. Collecting too much data can lead to a situation where crucial information is missed because it is hidden in a sea of irrelevant details.
- Setting vague goals: Success can be hard to measure when goals are vague. KPIs can only reveal how well you are doing when they are compared to well-defined and measurable goals.
- Overlooking training: Failing to provide production workers and supervisors with training about KPIs and the rationale behind them is a mistake that many companies make when they automate. Workers who are told why they should do something exhibit more urgency than workers who are just given instructions. Understanding why they do specific tasks helps them feel like they are contributing to a team effort too.
- Relying on poor data: GIGO, which stands for garbage in, garbage out, is a hard truth that has plagued the technology sector for decades. If the information you collect is inaccurate, out of date or misleading, any conclusions you reach based on it will be flawed. Be sure the data you collect actually reflects what you intend to measure.
Tracking Automation Metrics
Before deciding which KPIs to keep track of, you should develop a process assessment plan that sets defined and realistic goals in the following three areas:
- Activities: These metrics track individual tasks and processes, and could help you identify problems when new equipment is deployed to automate production. If your results are not as good as you expected, it could be because your workers lack motivation or need additional training.
- Efficiency: Improvements to daily operations are measured by efficiency metrics. KPIs that measure efficiency can reveal bottlenecks, redundancies and pain points, and they should not be overlooked.
- Value: These metrics measure how much impact automation has on the bottom line. They keep track of things like raw material consumption, inventory costs and wage bills.
KPIs for Automated Manufacturing Processes
So which KPIs should you be tracking to find out if your automation initiatives are providing the kind of results you hoped for? Also, how can they help you to reach your goals? To help you answer these questions, here is a list of some of the most important manufacturing KPIs:
- Output: This is the most basic production KPI. It keeps track of the number of units produced during a given period, but it does not take quality into account.
- Good items produced: This KPI measures the number of items produced that are free of defects. When this number is low, it could signify a lack of control over processes and high variability. It could mean that machines need to be recalibrated or workers require closer supervision or additional training.
- Defective items produced: Watching this metric closely could help you to pinpoint issues with machinery or raw materials. When implemented properly, automation programs should reduce the number of bad items produced significantly. Charts are one effective way to address the amount of defects.
- Substandard items produced: This KPI measures the number of nonconforming items produced that required rework before they could be packaged and shipped. It could help you to identify substandard components or raw materials. Six Sigma tracking KPIs/charts can work well here too.
- Production slowdowns: Slow production cycles reduce efficiency and drain resources. This KPI could help you to spot production snags and speed up your production line.
- Production pauses: This KPI measures how often production is halted temporarily to address an issue or deal with a setback.
- Planned production stops: Keeping track of how often production is stopped to maintain, service, or upgrade machinery could help you to identify problems and plan future equipment purchases.
- Unplanned production stops: Unexpected production stops can be ruinously expensive. Keeping an eye on this KPI could reveal underlying issues and prevent stoppages caused by breakdowns or power outages.
- Equipment use: This indicator measures how much of the time manufacturing equipment is running. Machinery that is always running is available 100 percent of the time. Planned and unplanned production stops reduce this figure.
- Overall equipment effectiveness: Usually abbreviated as OEE, this metric uses product quality and equipment availability to gauge the overall effectiveness of automation initiatives.
The Key to Thriving in a Global Economy
The global marketplace is extremely competitive, and manufacturers must seize the opportunities created by new technology in order to survive and thrive. Automating production eliminates waste, improves quality, and reduces overhead, and the equipment needed to implement these changes is becoming more affordable every year.
Force Design has been a leader in automation for more than 20 years, and our experts have helped hundreds of manufacturers to reach their goals. If you would like to learn more about the ways that Force Design could improve your manufacturing efficiency and increase your profits, you can call us at 937-473-3737, or download our free ROI calculator.