Increasing Production Capacity
Increasing Production Capacity
Three techniques to mine untapped potential in manufacturing operations
Many manufacturers are profiting from robust growth, with U.S. manufacturing gross output rising from $5.5 trillion in 2008 to more than $6 trillion in 2017(1). Yet for other manufacturers, rapid growth leads to increased frustration as they struggle to cost-effectively meet new demand.
In fact, when production volumes strain capacity, some manufacturers actually stop accepting new orders. Why? Because even if these companies want to accommodate growth, it could overtax operations — and put profitability and reputations at risk as:
- Overburdened workers and managers lead to fatigue, safety lapses, absenteeism, and labor turnover.
- Longer runtimes cause poorly maintained machines to break down.
- Increased production speed generates quality problems, while any changes in customer orders and/or production issues create disarray.
For these organizations, gains from increased production are quickly offset by increased hiring costs, machine investments, warranty costs, etc. Why risk customer relationships for limited (or no) boosts in profitability?
Fortunately, it doesn’t have to be this way. High-performance lean plants accommodate increased and/or changing customer demands by being fast and flexible — and with frequent improvements.
How to Increase Production Capacity
By leveraging three elements of the Milliken Performance System (MPS) — patterned after the Toyota Production System and similar lean management systems — to improve operations, build in agility, and safely and efficiently achieve increased high-quality production
- Zero loss thinking assesses all processes to estimate potential production outcomes if there are zero wastes. At most companies, production goals are guided by legacy standards and annual budgeting. What if perfection — zero losses — were the objective instead? Achieving Zero losses is difficult (if not impossible), yet as a directional objective — no injuries, no poor quality, no breakdowns, no delays, no customer complaints — can drive dramatic improvements. Identifying and prioritizing zero loss opportunities moves plants closer to perfection, freeing up hidden capacity while eliminating unnecessary costs (e.g., scrap and rework, warranty costs, unplanned maintenance).
- Training and education helps manufacturers unleash the potential of their workforces. Performance Solutions by Milliken can help to develop programs for continuous skills development (CSD), a standardized training process that ensures associates do the right things, the right way, at the right time. CSD creates a culture in which associates adhere to best practices, achieve desired performance objectives, and then raise the bar even further. CSD also lowers training investments by providing just-in-time instruction, resulting in decreased labor turnover, improved processes, and increased capacity.
- Planned maintenance (PM) of equipment is an established approach to increase production capacity. U.S and international plants report machine availability (as a percentage of scheduled uptime) of 85 percent (median) — i.e., plants typically lose 15 percent of their potential capacity. Even worse, almost a third of plants report machine availability of 65 percent or worse, and unplanned maintenance accounts for 15 percent of total maintenance expenses median(2). Few plants can meet increased or changing demand if throttled by unexpected work stoppages and equipment failures. PM provides a foundation of preventive and predictive maintenance, efficiently distributing maintenance staff and costs while creating a proactive approach to optimize daily operations and long-term capital budgets.
Manufacturers must position themselves to capture, convert and profit from all potential orders as efficiently as possible. Performance Solutions by Milliken can help.
(1)Industry Data, GDP-by-Industry, Bureau of Economic Analysis, April 19, 2018.
(2)MPI Manufacturing Study, The MPI Group, March 2018.