Operational excellence through plant floor visibility

Pier Manenti, practice director, operations technology strategies at IDC Manufacturing Insights explains how properly implementing plant floor visibility can help companies achieve operational excellence.

The troubled development of the world economy in recent years has proved to be a turnaround point for the manufacturing industry. If in the past 10–15 years the manufacturing industry was essentially “neglected” with respect to other sectors such as finance or services, today it is considered a critical source of wealth and an industry to invest in for the most advanced economies around the world.

Pier Manenti.

Governments now better understand that an economy purely based on services alone cannot survive in the long run. Recent Harvard University research confirms that the manufacturing industry is immensely important to the prosperity of nations, with over 70% of income variations of 128 nations over the last 60 years explained by differences in manufactured product export alone (source: WEF, 2012).

IDC Manufacturing Insights recently conducted a survey about the latest trends in manufacturing operations management in Europe. We interviewed over 240 European manufacturing enterprises across multiple sectors including CPG (Consumer Packaged Goods), high-tech/electronics, discrete manufacturing and process manufacturing.

The result of this survey confirms the above trend towards a growing importance of manufacturing. Survey results show that not only are governments realizing the importance of the manufacturing industry; also manufacturers themselves are changing their mindset in regard to the importance of making products. In fact, among the most critical business initiatives emerging from the survey is that over the next three years European manufacturers are going to prioritize initiatives aimed at “fostering operational excellence”, along with other more business orientated initiatives such as “exploiting new markets”.

European manufacturers are going back to basics. They are putting a renewed premium on production knowledge driven by the need to protect and enhance their product and production technology. Manufacturers are realizing that their direct involvement in production operations fosters innovation and improves customer service.

One of the most interesting results of the survey is that European manufacturers believe that the most compelling approach to achieve operational excellence is through gaining higher levels of plant floor visibility. In fact, about 65% of respondents think that the importance of plant floor visibility will increase over the next three years. They believe that gaining more plant floor visibility is the essential way forward to achieve operational excellence.

Pier would like to invite you to join himself and a select group of manufacturing executives for a Networking Dinner and Discussion on the evening of Wednesday, March 26 from 6:30pm onwards. The evening will begin with a champagne reception whilst taking in the views of London from a private capsule on the London Eye. We will then enjoy a three-course meal and discussion in the London Marriott Hotel County Hall nearby. During the evening you will meet industry peers and we will discuss the technology layers that enable much greater levels of plant floor visibility.

As a consequence, European manufacturers are ready to launch initiatives aimed at gaining better plant floor visibility – meaning: enabling plant floor personnel to have a better understanding of the status and performance of plant floor operations in real-time. The reason behind this specific focus on plant floor visibility is because European manufacturers are progressively recognizing the significant impact it can have on business performance. According to our survey, the majority of manufacturers expect to achieve multiple benefits through plant floor visibility, in particular speed up inbound/outbound operations and reduce inventory and WIP.

Survey results also confirm that adequate investments in modern information technology and operation technology will have a fundamental role to play in supporting manufacturers achieving operational excellence through a higher level of plant floor visibility.

The extraordinary advancements in technologies – that manufacturers responding to our survey identified in RFID, 2D barcodes on the short term and internet of things on the mid-long term – represent a great opportunity to improve manufacturing flexibility and customer fulfillment – all of that through achieving better plant floor visibility.

To fully harness the opportunities of plant floor visibility, manufacturers should not look at launching point initiatives aimed at increasing local visibility in one particular area of the plant floor. Instead they will need to undertake an end-to-end initiative focused at improving visibility throughout the entire plant floor. To do so, manufacturers will have to undertake a profound rejuvenation of their current IT/OT landscape and will have to allocate adequate budget. They should not just look at implementing each single technology in isolation. They should rather take a holistic IT approach that considers each technology as a part of an overall information layer that creates a real-time, collaborative decision-making environment.