Quality is an area where local businesses can excel.
The Australian manufacturing industry continues to face significant challenges that mean businesses need to find ways to evolve and outperform their competitors to remain viable. Competition from overseas manufacturers with lower costs and a strong Australian dollar have put pressure on local businesses in recent years.
“However, there are signs the Australian manufacturing industry could be set for a comeback with manufacturing jobs increasing by 40,000 in the last 12 months. (1) This suggests Australian manufacturers have found new ways to compete and prove their relevance,” said Greg O’Loan, regional vice president, ANZ for Epicor Software.
The most successful manufacturers tend to concentrate their efforts in three key areas:
1. Production planning and scheduling
Manufacturers must first plan what products need to be produced to satisfy existing orders, then when these products can be made. There are four ways manufacturers can maximise production:
- Define existing capability for production: a realistic assessment of production capacity includes factors such as the availability of machine time, the flexibility of the various types of machines for different tasks, and the availability of skilled labour within the organisation.
- Improve accuracy of production scheduling: organisations must continuously refine both manufacturing processes and the time allocated to them.
This may be achieved by storing the load time (the amount of time it takes for production) for each job operation and recalling this to improve scheduling accuracy for future quotations as well as for actual production.
- Use technology to enhance production control: an accurate schedule should be available not only to those in production planning, but also to people on the shop floor who may be actively managing or producing products.
An enterprise resource planning (ERP) system has these capabilities and is flexible enough to accommodate changes.
- Communicate the schedule to all stakeholders in the organisation: the availability of online schedules means that anyone connected to the manufacturing process has the accurate, up-to-date information they need to make good production decisions.
- Cloud-deployed ERP systems make key workflows easily available across the enterprise and the global supply chain. Cloud deployment is the most effective way to bring accessibility and integration to most organisations, with only an internet-connected PC, tablet, or smartphone required.
- Production management
Managing production processes can help save time and money. This is the part of the process where manufacturing businesses can gain efficiencies or increased quality for their products, which are key markets of competitiveness. There are four tasks in the production management process that can be optimised for better outcomes:
- Stay on time: businesses must develop realistic production plans and schedules, then execute strictly according to those plans. The process of production should be the same whether the product calls for a single day or a week’s worth of production.
- Be proactive: managing any changes in production proactively will minimise the impact of changes on the overall schedule. Businesses shouldn’t wait until the last minute to update schedules and notify customers regarding changes.
- Increase visibility: manufacturers need full visibility of the entire production process to manage it effectively. This means making the production schedule, materials management, current production operations, and quality assurance process available to everyone in the organisation according to job roles.
Senior executives in manufacturing should be able to see a live view of production output and costs such as energy and materials, to enable data-driven decision-making for executives through to the shop floor team. This capability should be built into the ERP system.
- Close the finished job: many manufacturers miss the opportunity to implement continuous process improvement. The ability to compare expected costs and labour against actual results is critical to driving the organisation towards more efficient manufacturing processes.
“Since Australian manufacturers tend not to be able to compete with overseas businesses on price, quality is an area where local businesses can excel. To deliver a high-quality product that commands a premium price, top-performing manufacturers must maintain a focus on quality throughout the production process,” said O’Loan.
They can do this by instilling quality principles throughout the organisation, including:
- tracking quality incidents in a systematically and regularly, beginning with the production floor
- identifying the root cause of a quality problem so that quality issues can be avoided in the future
- making quality in the production cycle an organisational objective.
“While the Australian manufacturing industry is strong with plenty of potential for growth, businesses that don’t regularly review and improve their operations will fall by the wayside. By focusing on these three areas, manufacturers can increase their competitive capabilities, reduce costs, and streamline operations for increased efficiencies.
This positions these businesses for ongoing, sustainable growth,” concluded O’Loan.
(1) The Australia Institute Centre for Future Work: Manufacturing: A Moment of Opportunity. June 2017