What is production optimisation?
In production optimisation, manufacturing processes are continually improved and refined to maximise efficiency, productivity, and profitability. It encompasses various aspects, like streamlining workflows, reducing costs, improving product quality, and enhancing customer satisfaction.
Manufacturers of all sizes and industries can benefit from introducing optimisation strategies to achieve optimal performance and gain a competitive edge in the market.
Why production optimisation is important
Manufacturing business success depends on production optimisation for success and growth. Implementing these strategies can lead to a 30-50% reduction in production costs and a 20-50% increase in productivity. Let's explore how it helps achieve these benchmarks.
Increased efficiency and productivity
One of the primary advantages of optimisation is its ability to enhance efficiency and productivity significantly. You can identify and eliminate bottlenecks, enhance workflows, and reduce waste by systematically analysing and refining production processes.
Implementing lean manufacturing principles, like 5S (Sort, Set in Order, Shine, Standardise, Sustain) and Just-in-Time (JIT) production, helps minimise non-value-added activities and optimise resource allocation.
Automation and advanced technologies, like robotics and IoT sensors, further boost productivity by reducing manual labour, minimising human error, and enabling real-time monitoring and control. These improvements lead to faster cycle times, increased throughput, and higher overall equipment effectiveness (OEE).
Cost reduction and profitability
Strategies in optimisation directly impact a company's bottom line by reducing costs and improving profitability. Refining processes, minimising waste, and optimising resource usage can help you lower production costs, including labour, materials, and energy consumption.
Implementing inventory management techniques, like Economic Order Quantity (EOQ) and vendor-managed inventory (VMI), reduces inventory carrying costs and improves cash flow.
It enables manufacturers to identify and eliminate hidden costs, like excessive downtime, quality defects, and rework. Even in very competitive marketplaces, you can boost profit margins and drastically lower their cost per unit by tackling these problems.
Enhanced product quality and customer satisfaction
Production optimisation tools are key in ensuring consistent product quality and meeting customer expectations. Adding strong quality control processes like Statistical Process Control (SPC) and Six Sigma helps proactively identify and address quality issues.
You can deliver high-quality products that meet or exceed customer requirements by minimising defects, reducing variation, and improving process capability.
Optimised production processes also contribute to shorter lead times and improved on-time delivery performance. Companies can respond quickly to customer demands, fulfill orders more efficiently, and maintain high customer satisfaction by simplifying workflows and optimising production scheduling.
Improved agility and adaptability
Manufacturers must be agile and adaptable to stay competitive in today's rapidly changing business environment. With production optimisation, youcan respond quickly to market fluctuations, changing customer preferences, and new opportunities.
Using modular design concepts, flexible manufacturing systems, and fast changeover processes, youcan quickly modify your production lines to fit new goods or variations.
Continuous improvement initiatives and cross-functional teams foster a culture of innovation and problem-solving. Employees are encouraged to identify areas for improvement, suggest solutions, and contribute to the ongoing optimisation of production processes.
A mindset of continuous improvement and innovation can help you stay on top of changing industry trends and challenges.
Increased sustainability and environmental responsibility
Optimisation aligns with the growing emphasis on sustainability and environmental responsibility in the manufacturing industry. You may lessen your environmental impact and help create a greener future by minimising waste, cutting energy, and optimising resource usage.
Integrating sustainable manufacturing practices, including closed-loop recycling, renewable energy usage, and eco-friendly packaging, benefits the environment, enhances a company's reputation, and attracts environmentally conscious customers.
Real-time data and predictive analytics
Data is important in manufacturing optimisation, providing valuable details that enable informed decision-making. Real-time data collection and analysis allow businesses to monitor key performance indicators (KPIs), identify deviations, and take immediate corrective actions.
Predictive analytics and forecasting allow you to anticipate scenarios and make proactive decisions. Analysing historical data and market trends empowers businesses to predict demand, optimise inventory levels, and plan production schedules more effectively. Companies can identify potential issues before they occur, prevent production disruptions, and reduce costs.
Competitive advantage
Manufacturers can compete better in the market with production optimisation. Companies that embrace optimisation strategies can produce goods more efficiently and with higher quality than their competitors. To gain market share, you can offer competitive prices, respond quickly to customer demands, and provide quality products.
It fosters a culture of continuous improvement and innovation. You can stay ahead of industry trends, adapt to changing market conditions, and explore new growth opportunities by constantly seeking ways to enhance their processes and products.
Improved employee engagement and safety
Employees at all levels often get involved in optimisation initiatives, fostering a sense of ownership and engagement. When workers are actively involved in identifying areas for improvement and implementing solutions, they feel valued and motivated. Working with employees to identify and employ improvements boosts job happiness, productivity, and retention.
Worker safety tends to be a top priority in production optimisation. Some manufacturers use sophisticated technologies, ergonomic designs, and safety training programs to make workplaces safer. These actions increase productivity, lower accident rates, and boost worker well-being.
It helps you comply with increasingly stringent environmental regulations and industry standards. You can avoid expensive fines, keep your operating licenses, and establish your company as pioneers in responsible manufacturing by proactively addressing sustainability challenges and integrating them into your optimisation plans.
The different ways production can be optimised
Different approaches exist for optimising production, each targeting specific aspects of the manufacturing process. Let's explore three key areas of production optimisation:
1. Production process optimisation
Analysing and improving individual processes within the manufacturing workflow is the key focus of production process optimisation. It involves identifying bottlenecks, reducing cycle times, and eliminating non-value-added activities.
How it works:
- Map out the process flow to visualise the entire manufacturing process.
- Conduct time studies to identify time-consuming tasks and potential areas for improvement.
- Implement lean manufacturing techniques like Value Stream Mapping (VSM) to enhance processes and eliminate waste
Example
Tesla optimised its production processes to ramp up the production of its Model 3 and meet market demands. They introduced several process optimisation techniques, like:
- Optimising meetings by banning large meetings, prohibiting frequent meetings, and empowering employees to leave meetings that weren't adding value.
- Evaluating and trimming contractors who weren't meeting performance standards and whose contracts impeded Tesla's productivity.
- Optimising internal communications by eliminating silos and enabling employees to go directly to the source of information they needed, reducing unnecessary mediators and communication gaps.
These process optimisation automation and facility management efficiencies enabled Tesla to set new production records for their Model 3 in Q3 and Q4 of 2018.
2. Production line optimisation
Maximising the throughput and efficiency of the entire production line is the primary goal of production line optimisation. It involves optimising equipment layout, balancing workloads, and minimising changeover times.
The process requires careful analysis of bottlenecks, standardising work procedures, establishing preventive maintenance schedules, and ensuring smooth material flow between workstations to reduce downtime and waste.
How it works:
- Analyse the current production line layout and identify areas for improvement
- Embrace techniques like line balancing to distribute workloads across workstations evenly
- Use cellular manufacturing to group similar products and processes together
- Leverage automation and robotics to enhance production line performance
Example
A Swiss chemical company optimised its perfume production line to improve production speed and anticipate slowdowns. Initial data analysis revealed that clogged valves caused slowdowns. Cleaning the valves increased overall equipment effectiveness (OEE) by 8% and increased production by 15%.
The company built a custom application to monitor KPIs in real time and alert operators about undetected issues. The production line optimisation resulted in an 8x return on investment.
3. Production scheduling optimisation
The core focus of production scheduling optimisation is efficiently allocating resources and scheduling production activities to meet customer demands while minimising costs. It optimises production planning, capacity usage, and inventory levels to ensure timely delivery and maximises overall efficiency.
How it works:
- Formulate the production scheduling problem as a mathematical model, typically a mixed integer linear programming (MILP) problem, with an objective function and a set of constraints.
- Define the objective function based on the desired outcome, like minimising makespan, delay, production costs, or a combination of multiple objectives.
- Specify constraints that govern the scheduling process, including job sequencing, machine availability, due dates, and inventory requirements.
- Use advanced planning and scheduling (APS) systems or constraint programming configurations like Google Optimisation Tools (OR-Tools) to solve the mathematical model and generate optimal production schedules.
- Analyse the generated schedules, visualise them using Gantt charts, and make informed decisions based on the results.
Example
A manufacturing company set up production scheduling optimisation for two of its sites, Site A and Site B, each with unique requirements and constraints:
Site A:
- The objective was to minimise the gap between the first batch's start date and the last batch's end date to maximise capacity usage.
- Constraints included specific timelines for each batch, required gaps between consecutive batches, and cluster-based manufacturing requirements.
- The optimisation model generated the sequence of batches and each process's start and end dates, resulting in a three-year optimised schedule.
Site B:
- The Machine Assignment Model and the Batch Scheduling Model separated the production scheduling problem.
- The Machine Assignment Model aimed to assign machines to each process while minimising the deviation from the average duration for each machine type.
- The Batch Scheduling Model focused on minimising the makespan and maximising capacity usage, considering constraints like process dependencies, machine availability, and maximum allowable gaps between consecutive batches.
- The optimised schedule ensured efficient resource allocation and improved overall productivity for the site.
- It formulated a job shop scheduling problem as a MILP model to optimise the scheduling of jobs with varying processing times on machines. The objective function was set to minimise the makespan, equivalent to maximising machine usage. Constraints included task sequencing, machine availability, and job timelines.
- The optimisation model determined the optimal start times for each task, considering the specified constraints and objectives. A Gantt chart visualised the final schedule, which improved resource allocation and decision-making.
7 effective production optimisation techniques
Implementing effective production optimisation techniques is crucial for manufacturers looking to refine their processes and drive business success.
Here are seven powerful techniques to optimise production in your business:
1. Production optimisation software
Various systems and tools, collectively known as production optimisation software, help refine processes, optimise resource usage, and drive continuous improvement.
These software solutions and other optimisation tools provide real-time visibility, data-driven insights, and automation capabilities to enhance production efficiency, reduce waste, improve quality, and increase profitability.
Examples of production optimisation software include:
- Manufacturing Execution Systems (MES)
- Enterprise Resource Planning (ERP) systems
- Advanced Planning and Scheduling (APS) systems
- Overall Equipment Effectiveness (OEE) monitoring systems
- Predictive maintenance solutions
- Bill of Materials management software
2. Implement lean manufacturing principles
Lean manufacturing principles focus on eliminating waste, improving flow, and maximising value.
Adopt lean techniques like 5S (Sort, Set in Order, Shine, Standardise, Sustain), Just-in-Time (JIT) production, and Kanban systems to streamline processes, reduce inventory, and improve efficiency. Identify and eliminate non-value-added activities, reduce lead times, and foster a culture of continuous improvement.
3. Leverage data analytics and IoT
Collect and analyse real-time data from production equipment, sensors, and systems to gain valuable information into process performance, identify bottlenecks, and make data-driven decisions. Use Internet of Things (IoT) technologies to integrate data from various sources and gain a detailed view of the manufacturing process.
Use advanced analytics tools, like predictive maintenance and machine learning algorithms, to optimise processes, predict equipment failures, and improve quality control.
4. Implement total productive maintenance (TPM)
Total Productive Maintenance (TPM) is an all-encompassing approach to maximising equipment effectiveness through proactive maintenance, operator involvement, and continuous improvement.
Use TPM practices including autonomous maintenance, planned maintenance, and root cause analysis to reduce downtime, improve equipment performance, and extend asset life. Involve operators in maintenance activities and foster a culture of ownership and responsibility.
5. Embrace automation and robotics
Deploy automation and robotics technologies to enhance production efficiency, accuracy, and flexibility. Automate repetitive tasks to reduce human error, increase throughput, and improve product quality.
Use collaborative robots (cobots) to enable efficient human-machine collaboration. Leverage automation for real-time monitoring and control of production processes, facilitating quick responses to deviations and optimising overall performance.
6. Foster a culture of continuous improvement
Encourage employee involvement, problem-solving, and innovation to drive continuous improvement. Adopt programs, suggestion systems, and cross-functional teams to empower employees to identify and eliminate waste. Celebrate successes and recognise individual contributions to reinforce the commitment to continuous improvement.
Foster open communication channels where employees feel comfortable sharing ideas and concerns. Provide resources and support for implementing improvement initiatives, and establish clear metrics to track progress and demonstrate the impact of employee-driven changes.
7. Optimise inventory management
Use inventory optimisation techniques like ABC analysis, Economic Order Quantity (EOQ), and vendor-managed inventory (VMI) to maintain optimal stock levels, reduce inventory carrying costs, and improve cash flow.
Leverage real-time inventory data and demand forecasting tools to make informed decisions, avoid stockouts, and minimise excess inventory. Collaborate with suppliers and use just-in-time (JIT) inventory practices to reduce lead times and improve responsiveness.
Optimise production with manufacturing inventory software
Cloud-based manufacturing inventory software facilitates effective production optimisation by providing real-time visibility, refined processes, and data-driven insights. Unleashed is a leading manufacturing inventory software that leverages cloud technology to help you make informed decisions, respond quickly to changes, and continually improve your processes.
The benefits of using Unleashed manufacturing inventory software include:
- Increased visibility and control over inventory levels
- Reduced manual data entry and errors
- Improved production planning
- Optimised resource allocation and usage
- Enhanced collaboration and communication across teams
- Faster order fulfilment and improved customer satisfaction
- Reduced waste and increased profitability
Don't let inefficiencies and challenges hold back your manufacturing business any longer. Take the first step towards optimising your production processes by trying Unleashed for free today.
