The manufacturing sector in North America stands as a vital cornerstone of the economy, driving innovation, employment, and economic growth. However, amidst global competition, the migration of manufacturing operations to regions like China has raised concerns about the sustainability of manufacturing in the United States and Canada. For service manufacturers catering to original equipment manufacturers (OEMs), ensuring shop floor visibility becomes paramount in maintaining quality standards, fostering stronger OEM relationships, and ultimately revitalizing American manufacturing.
The Significance of Manufacturing in North America
Manufacturing in North America contributes significantly to the GDP. In the United States alone, it accounted for about $2.55 trillion in 2022, and in Canada, manufacturing contributes around 10% to the GDP.
- Job Creation: Over 12 million Americans are employed in the manufacturing sector, and it generates high-paying jobs, accounting for a substantial part of the labor force.
- Innovation Hub: Manufacturing drives innovation, with over 75% of private-sector R&D expenditure in the U.S. stemming from the manufacturing sector.
- Exports and Trade: Manufacturing plays a crucial role in exports, with goods manufactured in the U.S. contributing significantly to international trade.
The Shift to China and the Challenges Faced
OEMs have often looked to China due to lower labor costs, favorable regulations, and access to a vast supply chain. However, the dependency on outsourcing to distant locations poses challenges:
- Quality Control Concerns: Distant manufacturing raises quality control challenges, affecting the relationship between OEMs and service manufacturers. Quality continues to unravel when you are not met with a dedicated customer service representative to understand your concerns and communicate them to the shop floor, pushing for a more localized, dedicated service.
- Supply Chain Disruptions: Global disruptions, as experienced during the pandemic, highlighted vulnerabilities in lengthy and complex supply chains. A few unpredictable and unpreventable natural disasters can completely throw an OEM for a loop, dramatically delaying production and compromising business as a whole.
- Logistical Issues: Shipping delays, increased lead times, and rising transportation costs affect the timely delivery of products to OEMs. A large part of these logistical issues could be streamlined with a software solution that provides order visibility to prevent the delay or loss of an order.
The Role of Shop Floor Visibility and Production Software
To reinvigorate manufacturing in North America, an emphasis on shop floor visibility through innovative technology solutions becomes imperative. Ensuring efficiency and clarity within the manufacturing facility starts with preventing employees from wandering in search of answers. Queries like "How should I process this part?" or "What parts should I work on next?" shouldn't lead to a wild goose chase for information.
Establishing a streamlined communication channel that keeps pertinent information at each station is pivotal. Operators need to remain engaged with their designated work cells or stations to enhance productivity naturally. At the point of order entry, it's crucial to provide comprehensive instructions, ensuring operators have all the necessary guidance without needing to interrupt their workflow.
The Best Operator Systems
An excellent illustration of effective operator instruction lies in masking, a manual task with considerable variability in speed and quality. Introducing real-time work instructions with multimedia elements like photos, videos, and text directly at the workstation enables quicker training for newer employees and elevates overall quality standards.
The next level involves integrating a digital interface that facilitates swift communication between the front office and the work cell. Steelhead specializes in "Just in Time" instructions, where specific guidance, be it text, images, or videos, is embedded into the operator's interface at the exact step of the process, ensuring that instructions remain focused and uncluttered.
"For us, adopting this system meant a 15-minute demo from my manager, and then, within a few days, I was fully attuned to it," shared Harold, Night Shift Manager at Commercial Powder Coating. "The value it brings is immense—no more chasing paperwork or struggling to track job timings by traversing from station to station."
Brian, an Operator at Commercial Powder Coating, echoed similar sentiments, stating, "I grasped the system after one demonstration and within half an hour, I was seamlessly using it in my routine tasks."
By implementing such comprehensive and intuitive systems, manufacturers can optimize their workflow, minimize downtime, and significantly enhance operational efficiency across the production floor.
FOCUS ON Quality Control
Implementing integrated Quality Management Systems (QMS) ensures stringent quality standards, reducing defects and rework rates. Quality isn't just a checkbox; it's a direct driver of profitability within manufacturing. Poor quality output leads to extensive waste—scrap parts, lost labor, and underutilized assets—forcing costly rework and tarnishing a company's reputation. This underscores the critical need for every company to institute at least a basic Quality Operating System. Even with minimal digitization, companies can bolster their processes, yielding immediate and enduring financial benefits.
"Improve quality, and you automatically improve productivity." - W. Edwards Deming
At the core, operators must measure and document key part characteristics, ensuring sufficient sampling rates to confirm batch compliance with specifications. Automating the summarization of this data empowers the operations team to react swiftly in real-time when necessary.
Moreover, a simple yet effective practice involves conducting post-order surveys to gauge customer satisfaction regarding quality. These surveys, easily managed through emails or web forms for convenience and anonymity, offer valuable insights into customer perceptions, integral for enhancing quality standards.
Best Quality Management Solutions
Top job shops worldwide offer customers real-time quality data or progress updates on their parts, ensuring a healthy dock-to-dock time. Implementing robust quality strategies includes instituting a formal monthly Prevent Action Closure process. This process ensures that all Corrective Action Requests are thoroughly addressed with verified fixes and preventive measures against escape points and root causes of failures.
Having a team member trained in Six Sigma and fostering a data-driven approach to rapid problem-solving underpins industry-leading quality control. Establishing QMS processes in your integrated job shop software to identify and resolve workload issues preemptively shields against rushed execution. Total visibility through capacity planning aids in avoiding overtime and extended shifts by proactively adjusting priorities and redistributing work among stations.
By integrating these practices, manufacturers can elevate their quality standards, reduce wastage, enhance customer satisfaction, and ultimately bolster their bottom line, showcasing a commitment to excellence in every facet of their operations.
Live Production Data Analysis
Production floor software enables real-time monitoring, predictive analytics, and immediate response to fluctuations or issues, fostering order predictability. Shop owners understand the importance of collecting the right information to make smart business choices. When job shops use the correct reports and analysis tools, it helps keep track of expenses, figure out what customers want, spot where to focus efforts, and see how well everything is doing.
But with so much data, where do production managers begin?
Luckily, using the right shop floor reports and analysis makes it easy to find out how much profit is being made, discover ways to save money, and make smarter choices that help the business.
When managers have this data ready to use, it helps them decide how to best use resources and improve how things are done. This information helps leaders see where they can save money and make things better, giving them what they need to take the business to the next level. The reports and analysis also show the latest view of how much it costs to make things, which helps decide prices and manage expenses better. Some important data to keep an eye on includes things like how much work gets done, how often things need fixing, the cost of workers, how much inventory there is, how often deals are won or lost, the money made per product, the profit from each customer, and how well workers are doing their jobs.
Cost Control and Job Costing
Detailed manufacturing job costing capabilities and auto margin analysis help manage total costs efficiently, enabling competitive pricing while maintaining profitability. Manufacturing job shops often try to guess how much each job will cost. But these guesses are usually wrong and don’t show the true cost. When mistakes happen or things need to be redone, like changing the amount being done or switching the production line, the risk of not making enough money keeps getting higher.
Basic Job Costing
Think of getting reports and insights like having a TV with a strong signal. But if there's no regular checking of job costs, understanding profits, and looking at data, it's like using a TV without an antenna. You end up with a blurry picture of how much it costs for each work order. Without fixing these issues, shop owners might lose a lot of money every month without even knowing it.
Smart Job Costing
One shop, D&K Powder Coating in Minnesota, found they were spending too much money on some parts of their work when they checked the costs closely. They realized they were not charging customers enough. So, they used better systems to see how long it really takes to do things like masking and packaging. This helped them give more accurate prices for future jobs. They also looked at jobs that were losing money and changed the prices for the next time to make sure they made sense.
By using this information, they could see how much it cost to do small jobs and adjust their prices to make them fair for their customers. They also figured out the best amount of parts to work on, so customers got a good price and they still made enough money.
North America Takes Control with Shop Floor Software
Comparing manufacturing in China versus America illuminates the strengths of American manufacturing:
- Quality Assurance: North American manufacturers prioritize quality, offering higher precision and adherence to stringent standards.
- Innovation and Technology Adoption: American manufacturers lead in adopting cutting-edge technology and innovation, ensuring efficiency and competitiveness.
- Proximity and Agility: Localized production allows for quicker response times, reduced shipping costs, and increased flexibility in meeting OEM demands.
Steelhead's production floor software stands as a beacon in fortifying North American manufacturing:
- Shop Floor Visibility: Provides real-time insights into production processes, fostering transparency and enabling quick responses to maintain quality standards.
- Job Costing Programs: Enables accurate cost calculations, ensuring profitability and competitiveness in the market.
- Integrated QMS System: Ensures stringent quality control, bolstering OEM trust and fostering long-term partnerships.
- Total Cost Control: Detailed cost analysis and margin assessments empower manufacturers to make informed decisions, ensuring sustainable growth.
In the realm of service manufacturing for OEMs, prioritizing shop floor visibility through innovative technology solutions is pivotal in reinvigorating American manufacturing. By emphasizing quality, order predictability, and cost control with tools like Steelhead's production floor software, manufacturers can not only retain OEM partnerships but also champion North America's manufacturing renaissance.
As the global manufacturing landscape evolves, investing in technology-driven shop floor solutions becomes the linchpin in ensuring the sustainability and resurgence of American manufacturing on the world stage.