In this article, Evren Ozkaya explores labor tracking technologies and how they can improve production.
Factories around the world are experiencing one of two emergencies during the COVID-19 pandemic. They are either experiencing demand surge (e.g., personal protection equipment – PPE, hand sanitizers, essential pharmaceuticals) or demand loss (e.g., automotive, oil & gas products, non-essential consumer goods). In either case, factories need to respond fast & effectively to the change in demand/supply balance by increasing their capacities to meet the demand or decreasing their costs to stay profitable. In the new & more volatile post-pandemic economy, the factories would need to be more agile to scale up or down their capacities and costs, as needed, to simply maintain competitiveness and stay in the business.
Overall Equipment Effectiveness (OEE) has been an important measure for production efficiency across all industries. With OEE, it is possible to monitor the production lines (e.g., equipment, assets) working hours (uptime vs. downtime), and calculate time, speed and quality losses during production. Thus, OEE provides valuable insights so that one can start improving effectiveness of the machines and decreasing unit production cost. [See Improving Manufacturing & Packaging OEE with Digital Technologies a free webinar on how Supply Chain Wizard helps manufacturers improve OEE using digital technologies.]
However, equipment or machine cost constitutes only one of the main costs (or capacity) factors at the shop floor. The other high impact component for capacity AND cost of goods sold (COGS) in production typically is the labor. Labor, unlike the machines, show much greater variability in “availability” (e.g., absenteeism), “performance” (e.g., experience) and “quality” (e.g., training), deserving a much closer look by site heads or site financial controllers. Manufacturers typically know the amount of time their operational workforce spend inside the facility by capturing the entry & exit times to the facility at large. On the other hand, the real labor hours spent at the individual production lines and labor distributions during production are typically not measured or measured on paper at best.
This level of granular labor data is far more insightful than simple entry & exit times to the facility. Add to this the new reality of “social distancing” and “worker health” considerations, calculating the true “Overall Labor Effectiveness” with digital systems is starting to become a crucial part of manufacturing best practices.
Key points include:
- The “Digital Factory” vision
- Improving employee engagement via gamification
- Implementing “social distancing” between subsequent shifts
Read the full article, Labor Tracking Technologies to Boost Factory Capacity & Reduce Costs, on SupplyChainWizard.com.