The first Industrial Revolution brought large-scale manufacturing to the world and fundamentally changed the course of human history. Since then, manufacturing has undergone at least two more major changes, and today we are well into the fourth Industrial Revolution – or Industry 4.0. Many organizations have embraced Industry 4.0 and are well underway, while others are still trying to chart the right path or even find their starting point.
Companies in the advanced manufacturing and mobility (AM&M) sector — which includes aerospace and defence, automotive, chemicals, industrial and transportation — are working towards modernization and embracing Industry 4.0. Here, we look at some of the pressures facing the sector in Canada today, and highlight how a holistic and cohesive operational excellence program can be a catalyst for the AM&M sector as it steps into or accelerates Industry 4.0.
The AM&M sector over the past 12 months
The AM&M sector has been challenged during the pandemic with organizations across the sector dealing with pressure from both ends of the supply chain while responding as best as they can to minimize disruptions to their operations and meet changing customer demands. However, the pressure to do more with less remains and many organizations feel they have done everything they can to control costs. This is where operational excellence comes in, to lay the foundation towards transforming your operations and becoming an agile organization that can respond to today’s realties and climate and accelerate their Industry 4.0 agenda.
Many organizations see operational excellence programs as synonymous with cost savings measures, often temporary in nature, and required to get through the hard times. But leading organizations see it for what it truly is: an investment in the future. Operational excellence is not only about cost optimization; it goes further to bring together the right combination of processes, technology and people to enable your company to deliver products safely and reliably, all while embracing a zero-loss mindset.
Our experience shows that transforming your operations happens by pulling on four key levers: smarter operations, smarter equipment, smarter infrastructure and, most important, smarter people to drive the transformation process.
Smarter operations: streamline processes to achieve desired results
Aging processes and organizational complacency have set in and have created a huge opportunity to embrace – or in some cases, revive – a culture of operational excellence. This starts by shifting the culture from one based on tribal knowledge to one that uses operational data on the front lines to drive data-based decision-making and root-cause analysis. Although it sounds simple, the combination of instituting new processes to use data properly and standardization of operating practices on the floor results in real bottom-line savings.
We’ve seen this time and time again. By streamlining processes at one of our automotive supplier clients, they were able to reduce stops by 90% and unplanned downtime of equipment by 96%, all while increasing overall equipment effectiveness and throughput by more than 15%. At another client, we saw a 23% reduction in operating costs through a 32% reduction in changeover time and 43% efficiency improvement.
Smarter equipment: use data to drive performance
Operational excellence is dependent on having quality data to drive decision-making. While innovation is disrupting the AM&M sector, early technology adopters are leading the transformation. Advanced and emerging technologies can offer tangible benefits, including decreasing operating costs, providing high levels of output by reducing human error, improving flexibility in operations and increasing speed to market. And while automation and advanced and emerging technologies can be a key enabler to making data collection easy, quality data can exist in any environment. As a first step, companies need to be able to properly identify and understand the data that’s already available to them. From here, there are often opportunities to make simple behavioural changes, like using unused functionality or increasing discipline around current equipment use to provide new insights.
Smarter infrastructure: digital can be a game changer
Beyond data, organizations can use digital technologies to more easily and effectively capture and convert leading practices of the organization into process improvements that can be more broadly applied across the company. Multimedia platforms, for example, can enable workers to easily create instructional training content and guides that go beyond traditional manuals and written instructions — such as interactive platforms that can accommodate a wide range of content, including video, audio, written pieces, webcam images, screen captures and hyperlinks. Analytics platforms can simplify and automate data collection, and presentation and digital work systems can shift us to a paperless model. The opportunities are endless. And connecting equipment into the Internet of Things can revolutionize what can be achieved in assets, equipment and facilities.
Smarter people: the heart of everything
Conversations on talent management in organizations are frequently centred around an impending loss of a human workforce in favour of machines. While automation is a reality for many organizations, operations will remain heavily dependent on human operators to drive performance.
Although automation is sure to impact your workforce, empowered employees will be key to support your business through the transition and help strategize around how to best operate in the new reality. Understanding how to foster employee ownership and engagement will be essential to propelling your business to growth and prosperity in the future. This includes empowering the workforce to run operations and individual pieces of equipment to their greatest capacity to help you get value from the talent you’ve put in place to help drive efficiencies and profit.
Transform your business today through operational excellence
Operational excellence can help companies in the AM&M sector outperform their peers in a variety of ways, from growing revenue to lowering costs. But it cannot be achieved without creating an empowering company culture that supports and encourages your workforce to continuously improve. Investing in operational excellence is an investment in your future and, in uncertain times, a necessity in providing you with the agility you need for longevity.
Are you looking for more information on operational excellence programs? Contact one of our business advisors today.
