Friday, October 26, 2012

Top 5 Indicators You Might Benefit from a New Plant Layout

It’s the nature or nurture question for business. How much does the environment shape the workforce? OSHA regulations and workforce safety issues aside, are there things that a company can do to improve employee performance and product output? This goes beyond cleanliness, which we would file under workforce safety. Let’s take a look at our list of top 5 indicators.
5. You walk more than a mile in your (or someone else’s) shoes during your shift
4. You spend more time looking for your tools than using your tools.
3. CO emissions from the constantly moving hi-lo transporting materials in and out of your facility have you doing the Macarena (not that there’s anything wrong with that)
2. You have to climb the mountain of inventory to reach your work station or worse yet – the break room.
And the number one indicator
1.    Whenever you run out of space, you just add a room to your facility.
All kidding aside, the main reasons to consider a revised layout are to improve processes, reduce wasted work or non-value added steps (things that consume resources but adds no value to the product or service), and increase value added work or processes that the customer is willing to pay for - things that transform the product, service or information; in other words, to increase profitability.
A better process flow has many well known benefits such as eliminating over production, reducing wait times, balancing work load to name a few. Some of the unintended benefits include a more engaged workforce and utilization of talent – inviting the people involved in the day to day manufacturing process to articulate improvements. One MMTC client, facing huge obstacles, including incredible foreign competition, was able to use a plant layout and other lean tools to radically change the way it did business.
The end result was updated machinery, a new process, ISO 9001 compliance, an increase in volume of 9.8% and a savings of over $500,000. In addition, the company reduced lead time by 33%, reduced its footprint by 16%, reduced consumption of natural resources by 26%, and reduced work in process from two weeks to three days. What the company reported as the best part, however, was the employee engagement. Once visual cues and other modifications were introduced, no one wanted to be left out. Everyone wanted to be involved in the changes and make improvements in their workspace. The bottom line savings were successfully reinvested in research and development for new products. Every new improvement added a spark to the job. It became exciting to go to work again. In sports terms, that’s a home run.
To find out more about reducing waste, improving margins, streamlining processes or other business improvements, contact an MMTC business specialist today.

Monday, October 22, 2012

Challenges of Small to Mid-Sized Manufacturers in 2012

In an era of global competition, smaller manufacturers face challenges above and beyond the challenges that larger, more established companies face. By definition, small manufacturers are companies making less than $10 million in revenue annually. Based on numbers from the latest Michigan County Business Patterns, roughly 92.28% of Michigan’s SMMs or 11,423 of Michigan’s 12,378 manufacturing establishments meet this criterion. By understanding and confronting these challenges head on, these small manufacturers in Michigan can improve their productivity and profitability.

The 2011 Next Generation Manufacturing Study highlights some of the main challenges that small manufacturers face. They include:

Supply Chain Mgmt
Talent & Skills Development
Systems & Equip
Small to Medium
25% or approx. 2800 Mi Mfgrs
10% have both
33% have both

  • Supply Chain Management –
  • It is important for manufacturers to develop and manage supply chains and partnerships that provide flexibility, response time and delivery performance that exceed the competition. Almost all manufacturers recognize the importance of supply chain management and collaboration, but only 25% of small manufacturers are near or at world-class supply-chain management. Conversely, 41% of large manufacturers are at the same level.
  • Talent and Skills Development –
  • A mere 10% of small manufacturers have BOTH sufficient talent and skills-development programs. These programs drive work-class human capital management. 33% of large manufacturers have both of these programs in place. Manufacturers near or at world-class status for this category are more likely to have sufficient talent and development programs, state-of-the-art business systems, employees equipped to excel in high performance teams and advanced methods to measure their human capital returns.
  • Systems and Equipment –
  • The tools and equipment that manufacturers use are of course extremely important for profitability. 41% of small manufacturers have business systems and equipment able to support their current requirements for global engagement. A majority of large manufacturers, 65%, have this capability.

Organizations such as MMTC are in place throughout the nation to help manufacturers overcome their challenges. MMTC has 5 regional offices throughout the state of Michigan who assist small to medium-sized manufacturing companies. MMTC offers services to help implement and track improvement strategies. Our goal is to transfer our knowledge and expertise to our clients and drive innovation. To find out more about services offered to small and mid-sized businesses, click here.

Friday, October 12, 2012

Sustainability: More Than Just Being ‘Green’

Kermit may have had it right when he sang “it’s not easy being green,” but it may be profitable. More and more companies are finding that what used to promise only incremental change can now improve margins by 10% to 15% and in a lot less time. The environmental payoff is immediate, but for companies struggling to stay afloat, it can’t just be about recycling and reducing waste. Good news, it’s not just about utility savings and it’s a growing trend.
An initiative called E3: Economy, Energy and Environment, attempts to bridge the gap between knowledge and understanding and practical implementation, to help companies realize benefits faster. E3 focuses not only on environmental performance, but industrial processes and increasing profitability. Several companies in Michigan have successfully completed project work with MMTC experts and have seen drastic improvements.
Due to the rising costs for natural gas and electricity, utility costs were up by 29% for one west Michigan company. With a few modifications to their existing processes and a slight redesign of its lean work cells, the company was able to reduce annual natural gas costs by $73,000 a year. The improvements also eliminated a week from its delivery time, leading to a 30% reduction in order to delivery time for customers, increasing customer satisfaction and retention. Add to that the public relations benefit of reducing its carbon footprint and the project was a win. The benefit to this company was its ability to have someone come in and do a thorough evaluation of its business with a fresh perspective, which led to realizing previously unidentified opportunities.
Another west Michigan company wanted to tackle its outdated HVAC system. By integrating a computer management system they had the ability to schedule shutdowns at night and over holidays. The company was able to reduce utility use by $33,000 annually, the equivalent of 250 metric tons of CO2, The next item it tackled was lighting. Between rebates from its utility and redistribution of compressors, the company realized a savings over $100,000, and another annual utility reduction of $47,160, along with a 22% improvement or reduction in sound level within the shop. The company then turned from energy usage to processes. By switching to a ‘green’ chemical, it was able to remove two process stages, heat less water, and realize additional savings. Recycling at the source and separating materials increased the additional revenue earned by selling scrap materials to other businesses. The company was able to recycle over one million pounds of steel and earn over $250,000 dollars. The ability to reuse packaging and other materials eliminated waste and resulted in additional savings over $500,000. The end results was its ability to avoid 325 pounds of air pollution, save over 62,000 kWh of electricity, eliminate using $10,676 gallons of oil – enough fuel to fill over 334 cars. The additional benefits to this company included a brand new product line – one that used 180 tons less steel, 855,000 fewer parts a year and 900,000 fewer press strokes. Customers now have opportunity to purchase a better product, with improved aesthetics and options.
Click for more information about E3 or MMTC or to read some recently published articles surrounding corporate sustainability, Grand Rapids and other municipality sustainability, and information on how companies are implementing zero-waste to landfill operations.

Friday, October 5, 2012

Manufacturers Across Michigan Open Their Doors to Celebrate National Manufacturing Day on Friday, October 5th

National Manufacturing Day is Friday, October 5, 2012.  The day was designed to expand the knowledge about and improve the general perception of manufacturing careers and emphasize manufacturing’s value to the U.S. economy. Coproduced by the NIST Manufacturing Extension Partnership (MEP), Fabricators & Manufacturers Association International, National Association of Manufacturers and the Manufacturing Institute, Manufacturing Day is for students, parents, educators, media, customers, suppliers and the community at large.

Manufacturing Day
As part of the celebration, several training facilities, colleges and manufacturers throughout Michigan are sponsoring facility tours and open houses in their communities. Visitors will learn about real career opportunities, training and available industry resources.  Manufacturers will also learn about business improvement resources and services delivered through MEPs. To see a list of all of the companies participating in this event, click here.

There are several MMTC clients who are hosting tours at their facilities to celebrate the day:

  • Anchor Danley is featuring three facility tours in Ithaca, Bellaire and Grand Rapids

Additionally, Manpower will be hosting three tours to feature manufacturing jobs.

If you are a manufacturer in Michigan, join the Proud to Manufacture in Michigan programThe Proud to Manufacture in Michigan program is a forum to highlight Michigan’s manufacturing contributions and assist our state’s manufacturers. MMTC is dedicated to helping manufacturers across the state of Michigan.

How are you celebrating National Manufacturing Day? Leave a comment below and let us know!