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Total Productive Maintenance

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In this blog we will be looking at brief introduction to Total Productive Maintenance and how to do it,

With help of this you can learn what is TPM all about.

So let’s get in to details of it.

What is TPM?

Total productive maintenance (TPM), a resource-emphasized approach moves the paradigm of maintenance by putting emphasis on total employee involvement in the maintenance activities. Operators and all employees should be actively involved in a maintenance programme that enable to avoid any disruptions, breakdowns, stoppages, failures, and so forth in order to improve manufacturing performance

TPM originated in the Japanese industrial sector. Its aim is to help maintain and improve production systems. TPM tackles this across a full spectrum, involving all employees at all levels in the maintenance and servicing of their organization’s equipment and machinery.

Applying the principles properly will help you minimize the likelihood of equipment failures and maximize productivity and continuity. What’s more, TPM helps raise awareness among employees about technology, safety, and the environment because it instils a sense of ownership of the equipment and machinery they work with on a daily basis.

The TPM concept was developed to support (JIT)

You can’t be lean if you don’t have reliable equipment

 

 

TPM History

TPM is a innovative Japanese concept. The origin of TPM can be traced back to 1951 when preventive maintenance was introduced in Japan. However the concept of preventive maintenance was taken from USA. Nippondenso (of Toyota group) was the first company to introduce plant wide preventive maintenance in 1960.

Thus Nippondenso which already followed preventive maintenance also added Autonomous maintenance done by production operators.

Hence this preventive maintenance along with Employee Reliability making a better productive culture turned into Productive Maintenance concept.

Nippondenso of the Toyota group became the first company to obtain the TPM certification.

 

 

TPM Pillars

Autonomous Maintenance

Also Called as Individual Improvement and Jishu Hozen

  • Objective:- Operator has to be self-responsible for its machine / equipment.
  • AM Steps
Step 0 :- Cleaning and Identification of Abnormalities
Step 1 :- Correction of Abnormalities and Starting of OEE Measurement
Step 2 :- Identification & Improvement in HTAA and SOC Standards
Step 3 :- Achieve OEE desired level by Continual Improvements

 

Focused Improvement

  • Also Called as Kobetsu Kaizen
  • Objective:- Reduction of Such losses which are leading to decrease our 6M efficiency.
  • Losses Categorization:- There are 16 losses in FI/KK which are divided into 3 categories.
  • Category 1 :- Equipment Related Losses = 8 Losses
  • Category 2 :- Manpower Related Losses = 5 Losses
  • Category 3 :- Resource Consumption Related Losses = 3 Losses
  • Total Losses = 16 Losses.

Planned Maintenance

  • Also Called as Preventive Maintenance
  • Objective:- Reduction and Elimination of Breakdowns or any other downtimes caused by machine / equipment.
  • Types of Maintenance:- There are 3 types of Maintenance which results into reduction and elimination of Breakdown maintenance.

 

  • 1 :- Time based Maintenance = ( Preventive maintenance with timely planning machine wise)

                             

  • 2 :- Condition based Maintenance = (Machine / Equipment showing signs that it needs maintenance)

         

  • 3 :- Reliability Centered Maintenance = (An approach to reduce CBM and transfer the same to TBM)
  • What If Breakdown Happens
  • Firstly correction action is to be taken for making the machine back in running condition (Containment Action)
  • Contingency Plan :- CAPA = Corrective Action : Preventive Action

 

  • Steps Under CA :-
  1. To prepare a core team for solving the proble
  3. m occurred.
  4. Problem Statement is to be discussed among team
  5. RCA is to be done on the problem phenomena.
  6. Countermeasure is to be prepared and implemented.
  7. Trial and Performance run is to be done for about a limited time (Time depends upon the level of problem)
  8. After Success, Solution needs to be added in TBM Checklist for timely inspection of the same.
  • Steps Under PA :-
  1. Globalize the Solution on the machines where same working nature exists or same problem may occur. (Horizontal Deployment).

Quality Maintenance

  • To move from Quality control to Quality Assurance.
  • Objective:- Reduction and Elimination of Defects, Making Process so robust that it will be produce FTR products with Zero defects.

 

  • Steps involved in QM:-

1 :- To Check the Process from Raw Material (Input)

2 :- To Identify and Validate the Critical parameters of Raw material and Throughput w.r.t. Customer Demand (Output)

3 :- Quality Maintenance Matrix is to be made for Regular check (Sustenance)

Safety, health and environment

Objective:- To provide a safe and healthy environment to employee for his/ her well being.

  • What to do in Safety :-
  1. Safety hazards (Near miss and Leads to near miss) to be identified and recorded.
  2. HIRA (Hazard identification risk assessment) is to be done on every equipment for zero accidents assurance on Shop floor.
  3. PPE’s (Personal Protective Equipment’s) are to be provided to each and every employee.
  4. Visual Management regarding safety is to be done.
  5. PPE matrix is to be made machine wise.
  6. LOTO (Lock out Tag out) is to be done if any machine is under maintenance or any area where work is under progress.
  7. One Assembly point is required for gathering of each employee (if there is a chance of any mis-happening in the plant premises).

 

  • What to do in Health :-
  1. To keep human being healthy is the main objective.
  2. Periodic Food and water checkup list is to be prepared and implemented.
  3. Periodic checkup of each employee in OHC (Occupation health center) should be implemented.
  4. Ergonomic study on shop floor should be conducted by Safety and Health department and resources should be provided to employee for ergonomic satisfaction.
  • What to do in Environment :-
  1. To Check each machine various hazardous gaseous emission through chimneys while producing output via gas emission detectors.
  2. To Check for Air Pollution, Water Pollution, Noise Pollution and Land Pollution with Environment engineer on periodic bases and to take necessary steps against any Non-Conformance.

 

Article By:- Vallabh Gawade

 

 

IMPACT OF INDUSTRY 4.0 ON SUPPLY CHAINS AND ITS BENEFITS

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Industry 4.0 is fast transforming how businesses manage their key functions.  Digitalization aided by disruptive new technologies such as IoT, AI, big data & analytics,  machine learning, automation and robotics, cloud computing, blockchain, 3D printing, etc. and  the explosive growth of smart devices is leaving no segment of the business untouched.  

Supply chain management, more complex than ever before, stands to benefit tremendously  from going digital. Studies suggest that an interconnected, digital supply chain can lower  operational costs by more than 30 percent, reduce lost sales opportunities by more than 60  percent, and even reduce inventory requirements by more than 70 percent, all while making  companies faster, more agile, granular, accurate, and efficient.  

While transitioning to a digitized, automated and fully interconnected supply chain requires  significant efforts and long-term investments, the pay-offs are huge. Bringing supply chains  online can help enterprises reach the next level of operational effectiveness and realize  significant cost reductions. Here we discuss how digitalization makes the supply chain more  efficient: 

5 Key Benefits and the Impact of Industry 4.0 on Supply Chain

  1. 1. Greater Transparency and Accuracy 

Global supply chains can involve thousands of suppliers operating within the supply chain  ecosystem of a company. In such cases, ensuring end-to-end transparency and real-time asset  tracking is crucial, any gaps in supply chain risk management can lead to supply chain  disruptions, lost sales, and unnecessary costs. Going digital enables companies to track the  entire supply chain in real time, such as finding out the exact location of goods (on order, in  transit, or in a warehouse). Advanced solutions easily track inventory by combining updates  from supply chain partners with IoT data. This improves order accuracy and ETAs (minimizing  out-of-stock situations), enhances lot and batch control, optimizes inventory, and lowers  associated costs. 

  1. 2. Increased Interconnectedness and Collaboration 

A fully integrated, digital supply chain management software enables information to flow  seamlessly between suppliers, manufactures, and customers, taking collaboration to the next  level. Being a shared platform, it breaks silos and transforms planning into a continuous  process. It enables greater trust and support, and joint planning solutions, especially in cases of  non-competitive relationships. Stakeholders can choose to carry out supply chain-related  activities together to not only save costs, but to share best practices and learn from each other.  

An interconnected platform also lowers lead times through better communication, as suppliers  can provide warnings early, increasing a company’s responsiveness to risk. Another vital  feature of such closed-loop planning is that pricing decisions are integrated with demand and  supply planning; prices can be changed as per the expected demand, stock levels, and  replenishment capacity. This boosts revenues and optimizes inventory. 

  1. 3. Improved Warehouse Management 

Digitalization can significantly improve warehouse management capabilities, especially with  regard to supply chain inventory and transportation logistics. For example, sensors can track  goods in real time, and accurately predict how long it will take for a consignment to arrive. Such  real-time tracking ensures on-time pickup and delivery. RFID technology can predict the exact  location of a product, even its exact position inside a truck. Such preciseness helps managers  provide location-based instructions to workers, saving time. Labour hours consumed per order  are also reduced. Thanks to tracking devices, companies can avoid last-minute shocks such as  inadequate quantity or non-compliance. Machine-to-machine communication also optimizes the  number of carriers per shipment, reducing transportation costs. Inventory storage per square  foot is also optimized through accurate demand prediction. This way, plant managers can easily  control the flow of inventory globally.

  1. 4. “Intelligent” Supply Chain 

“Thinking” supply chains can “learn” to recognize risks and change their supply chain  parameters to mitigate such risks. They continuously evolve and learn to handle many  exceptions without the need for any human involvement, except in case of any unforeseen risks,  when human intervention is required to determine the next course of action. 

  1. 5. Greater Agility 

Advanced supply chain solutions integrate data from suppliers, service providers, etc. in a  “supply chain cloud”, ensuring that all stakeholders take decisions based on the same facts.  Such end-to-end, real-time visibility will enable companies to respond more swiftly to disruptions  in real time and minimize risk. Also, the emergence of “Supply Chain as a Service” will increase  agility significantly.  

Clearly, companies have a lot to gain from improving their supply chain management in Industry  4.0, and those that are reluctant to do so run the risk of becoming uncompetitive.

 

Article by:- Akash Chowkampally

10 steps to choosing a warehouse management system

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Choosing the right warehouse management system can often be as simple as taking a few considerations into account:

Step 1. Understand your current systems

If you are already using software to manage your warehouse operations or part of your warehouse operations, then you should start by looking at it in detail. What functions does it have that you like? What functions does it not have that you want?

You will also need to know what integrations you require from your warehouse management system. For example, you may require it to integrate it with your shipping carriers or sales channels.

Step 2. Decide if your picking process requires a WMS

If you are running a very small ecommerce operation, like a side-hustle, a WMS is unlikely to be necessary. But, if you are moving any reasonable number of products or you have any ambitions to scale you will need a more sophisticated solution.

Step 3. Understand what you are looking for in a warehouse management system

This is where you make your checklist of ‘must-haves’ and ‘like-to-haves’. You can then compare this list against your options.

Step 4. Decide on your budget

Of course, good warehouse management systems will cost money. So you will need to know how much money you can commit from your cash flow to purchasing one.

Step 5. Create a shortlist

There will be a few different options you can choose from. The easiest way to decide which ones to shortlist is simply to create a list or spreadsheet listing prices and features.

Once you have created a shortlist you can then go and use free trials or book demos with those you think are right for you.

Step 6. Check it integrates with your entire fulfillment process

Warehouse management is only part of the puzzle of ecommerce. Your WMS should also connect with your inventory management system and shipping carriers.

Step 7. Check it gives you the reports your need

A good warehouse management system will give you reports that can make definite improvements to your business. It should provide these reports in an easily accessible way.

It’s also good if the WMS provides demand forecasting as this will help prevent under and overstocking in the future.

Step 8.  Check it works with your ecommerce tech-stack

You probably use a range of platforms, marketplaces, sales channels and shipping carriers. You need to check that your warehouse management system either has a native integration, seamless workaround or open API to do this.

This is where you can make use of a free trial. As it’s hard to know if a system works for you without testing it out.

Step 9. Is it easy for pickers to use and understand?

A good WMS will be easy for your pickers and warehouse team to understand and use. While there will always be a training period with any new software, you should look for an intuitive interface and easy-to-understand processes. This will make it easier for your team to pick up the new system and cut down on training time for new hires.

Step 10. Does it come with support?

Your business will be unique, therefore it’s important that any service you purchase comes with support. This support will be able to help you through any issues that arise with the product.

 

 

Article by:- Akshay Patel

Capacity Planning for Manufacturing

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In this blog we will be learning the basics of capacity planning and how to do it, With help of this you can perform capacity analysis for any manufacturing facility. So let’s get in to details of it.

What is capacity?

As name suggests capacity is the maximum amount that something can contain or produce, in manufacturing terms we can say that capacity is ability to manufacture a particular quantity of products in a particular duration of time.

So what about the planning

Capacity planning is basically an analysis done to check whether a manufacturing plant can produce a particular no of products in a given period, with available no of resources.

The capacity is calculated over days or weeks or months. The measurement is done in a way that we can adjust our production capacity according to the demand from the market.

Normally capacity planning is done on machines or equipment. There will be two outcome of this analysis; either there is capacity or numbers.

If want to take in to consider the number, then we can tell how much more machines to be required to fulfil the demand.

Calculation of Machine hour Capacity

Our first step is to understand and calculate the capacity of the machine hour in the factory. For an example if a factory has 200 machines, and the workers in the factory utilize the machine from 8 am to 6 pm for 10 hours a day, then the capacity would be 10 multiplied by 200, which comes to 2000 machine hours.

Production capacity with a single product

1st step to calculate capacity with single product is to determine time to produce a single product, and then it is divided by the plant capacity in hours.

For example, if one worker takes 40 minutes (0.66hrs) on a machine to make one product and the capacity of the machine has 2000 hours, then the production capacity would be

2000 / 0.66, then this would be 3003 units per day

How to do capacity planning

For better understanding let’s see an example

Suppose manufacturing plants needs to produce 100 units per day and we need to do capacity analysis

And if this product requires two operations A and B and its standard times are 5 minutes and 10 minutes respectively.

So the standard times are calculated by a method called time study.

And also operation A and B use two machines X and Y respectively. And presently have one each.

Standard working time of this plant is 420 minutes per shift breaks are excluded and this plant operates three shifts per day.

Also on an average 30 minutes is required for both machines for maintenance or we can say for down time, change overs, etc.

Suppose 98% is the yield of the both machines. Also these two machines is only able to run at 85% efficiency of its standard speed, if we take in to consideration of minor stoppages.

So let’s calculate.

Considering the minor speed loss, cycle time per product for both machines will be 5/(0.85) and 10/(0.85) minutes, respectively.

This is 5.88 and 11.76 respectively.

Also since yield for these machines is 98%, to produce 2% more of the demand, which is, 100 x 1.02 = 108

Now let’s calculate load on each machines.

  1. Calculate load of the machine X…

This is equal to demand per shift x cycle time

= (108/3) x 5.88

= 211.68 minutes.

  1. Calculate load of the machine Y…

This is equal to demand per shift x cycle time

= (108/3) x 11.76

= 423.36 minutes.

Now let’s calculate no of each machine required for meeting the demand.

No of the machine = Load per shift / Available time per shift per machine.

= 211.68 / (420 – 30)

= 0.54

This is one machine. And we have enough capacity for doing the operation A. No need to worry.

Now let’s check the capacity for operation B.

No of the machine = Load per shift / Available time per shift per machine.

= 432.36 / (420- 30)

= 1.11

So we require two machines for doing operation B.

We can conclude that there is a capacity issue. We only have one machine for doing operation B and we need one more.

This is how the capacity planning is been done

 

Article By – Shivank Kumar Choubey

 

KRA/KPI – The way of measuring your business

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When it comes to measuring success, then KPI and KRA are two key measurable values that help business owners to measure their success and progress. 

Measuring growth and goals is considered one of the most important activities of a business. Measuring and tracking success is important because it gives you a clear picture of your journey: Where you are right now, where you are going, how soon can you reach it, and who will help you reach your destination.

Businesses that don’t measure the growth and performance of their employees are often diverted from their primary goals and end up wasting time and resources which could otherwise have been utilized for their success. When it comes to measuring success, then KPI and KRA are two key measurable values that help business owners to gauge their success and progress. KRA is Key Result Area or also known as the Key Responsibility Area and KPI is Key Performance Indicators.

We will share the key performance indicators for employees, and the difference between KPI and KRA, which every business owner should be aware of.

But first, let’s understand these terms: What is KPI and KRA? 

What is KPI or Key Performance Indicators?

KPIs are quantifiable and measurable values, which are used to evaluate and measure the success of a company or employees. Depending upon the business objectives, KPIs for different companies and organizations can be different, and unique.

For example, KPIs for a manufacturing firm can be daily production count and utilization resources. At the same time, KPIs for a cinema theatre can be customer satisfaction and the number of non-empty seats in the auditorium at any given time.

What is KRA or Key Responsibility Area?

KRA or Key Responsibility Area are quantifiable and measurable tasks and responsibilities for employees in an organization. Depending on the job profile, experience and expectations, different employees can have different KRAs within the same company.

For example, KRA for a sales manager can be the total number of sales in a quarter, while KRA for an HR Manager can be attrition rate and employee satisfaction.

Difference Between KPI and KRA

Types of Key Performance Indicators

When it comes to an organization, then profit is the most critical metric to gauge the success or failure, over a period of time.

Against this backdrop, the key performance indicators for an organization are:
  1. Revenue Growth: Tracking revenues from one period of time to the other is an important metric to monitor, and thus, included in the list of key performance indicators for the company.
  2. Income Sources: Companies can calculate revenue per client, revenues per unit of product sold, and more to find out the true picture of the growth of a company.
  3. Profitability Over Time: What is the profitability ratio over time, vis-a-vis revenues and expenses. If profitability is reduced, then how can you increase it? Should cost-cutting be a solution?
  4. Working Capital: Working capital is the funds needed to carry on the day-to-day activities and business operations of a company.
Key Performance Indicators for Employees

When it comes to finding out the key performance indicators for employees, then these factors can be considered, depending on the business objectives and goals:

  • Customer Service
  • Communication
  • Job Departments
  • Teamwork
  • Performance of individual

To find out the right metrics, and to start monitoring them, you need expert guidance from someone (Consultants) who has working history with employees, organizations, projects and optimized them as well.

 

Article by Ravi Nashit.

Total Quality Management (TQM)

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Let us first understand what is TQM and after that we will look into its 4 major pillars which helps us in TQM for achieving desired results.

Total = Made up of the whole.
Quality = Degree of excellence of a product or service provides.
Management = Art of Planning, Organizing, Controlling etc.

TQM can be further divided into 3 parts as follows

System = All persons of all divisions at every stratum.
Method = In methods there are different tools and methods which are used to
achieve desired result such as Kaizen, QC Circle, 5S, TPM, MSA, OEE etc.
Purpose = Purpose can be any of the following from (QCDSME).
▪ Q: Quality improvement
▪ C: Cost reduction
▪ D: Delivery execution
▪ S: Safety maintenance
▪ M: Morale boosting
▪ E: Environmental protection

TQM can be defined as a management approach for an organization, centred on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society. And the main motive of TQM is to “Do the right things right the first time, every time”

❖ 4 Pillars of TQM

  1. Customer Focus: Studying customer needs, gathering customer requirements, and measuring and managing customer satisfaction. Customer satisfaction is seen as the company’s highest priority. The company believes that it will only be successful if its customers are satisfied.
  2. Process Management: Develop a production process that reduce the product variations. Applying the same process; the same product should be produces with the same level of quality every time. Teams are process-oriented, and interact with their internal customers to deliver the required results. Management’s focus is on controlling the overall process, and rewarding teamwork.
  3. Employee Empowerment: TQM environment requires a committed and well trained work force that participates fully in quality improvement activities. Ongoing education and training of all employees supports the drive for quality.
  4. Continuous Improvement: TQM recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the company’s processes. This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality. Measurement and analysis id the tool that has been used for that

 

Article By.

Dhavalkumar Gohel

5S An Opportunity

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5S is a methodology that helps in organizing our workplace and ensures that work is performed efficiently, effectively and more importantly in a safe environment. This helps in making our work environment secure, non- hazardous and improves communication and discipline between the workers.

5S consists of 5 terms that define the whole methodology of this process.

 

 

 

 

 

 

 

1S – Seiri(Sorting)

This term involves sorting out the required and non- required items of our workplace. After this Red tags are assigned to the periodically used or non-required items and a separate place is allotted to the Red Tag material called as Red tag area. This helps in improving the space utilization and also results in monetary

2S – Seiton(Set in Order)

According to this term “Everything must have its place and Everything must be at its place”. In this process we define and fix the layout of the work area and arrange everything in order that reduces search time/waiting time, helps in faster movement

3S – Seiso(Shine)

This term means to keep our working environment clean. This helps to detect leakages if any, provides a hygienic and safe working environment and improves working efficiency. It involves of providing cleaning check lists, CLIT checklists etc. to ensure cleaning action is being carried out regularly and timely.

4S – Seiketsu (Standardize)

In this method Standard Operating Procedures (SOPs) are created for more visual display, engagement of the It helps to assign regular tasks, create schedules and enforce instructions so that the activities become daily life routine. It helps in uniform implementation of 1S, 2S and 3S in the organization.

5S – Shitsuke (Sustain)

Sustain means to ensure discipline throughout the implementation of 5S. It is the centre of the whole 5S process and unless it is carried out perfectly by the work force of the organization 5S cannot be implemented. It involves keeping a record of the improvement and analyse the loop holes for which 5S is not getting implemented. Here a 5S audit is done and score is provided to each zone that helps to understand where the particular organization or area stands in terms of 5S.

 

Article by

Taksh Agarwal

Top 24 Warehouse KPIs

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TOP 24 WAREHOUSE KPIS

Receiving

Among the most critical warehouse KPIs are the metrics that measure receiving performance. Warehouse operations begin with this process, and any inefficiencies here will snowball through all the subsequent processes.

Warehouse KPI metrics that correspond to the receiving process are:

1. Cost of Receiving Per Receiving Line:

The expense that the warehouse incurs on the receiving process of each receiving line. This includes handling costs as well.

2. Receiving Productivity:

Determined in terms of labour by measuring the volume of goods received per warehouse clerk per hour.

3. Receiving Accuracy:

Percentage of accurate receipts, i.e., the proportion of correctly received orders against purchase orders.

4. Dock Door Utilization:

Percentage of how many of the total dock doors were utilized.

5. Receiving Cycle Time:

The time taken to process each receipt.

These warehouse KPIs help managers identify any lapses in receiving and avoid a chain reaction of inefficiencies down the process line.

Catching inefficiencies, such as a long receiving cycle caused by busy dock doors, can reduce deficiencies as early as in the receiving stage.

Putaway

Once goods are received, the process of putaway begins with placing each item at a designated location selected for most convenient retrieval.

Effective putaway ensures a smooth picking process, thus significantly reducing lead time.

Here are some of the important warehouse KPIs that you must track to measure the efficiency of the putaway process:

6. Putaway Cost Per Line:

Expenses incurred for putting away stock per line, including labor, handling, and equipment costs.

7. Putaway Productivity:

Volume of stock put away per warehouse clerk per hour.

8. Putaway Accuracy:

Percentage of number of items put away accurately at the designated location.

9. Labor and Equipment Utilization:

Percentage of the labor and material handling equipment utilized during the put-away process.

10. Putaway Cycle Time:

Total time taken during the entire process of each put-away task.

Evaluating the putaway through these warehouse KPIs gives you a clear picture of potential inefficiencies in the process. Recognizing snags such as inaccuracies or scarcity of labor will help you to optimize and streamline the process.

Storage

Whether your warehouse is dependent on storing goods manually or uses AS/RS (Automated Storage and Retrieval System), you still need to measure efficiency. Here are some important warehouse KPIs to measure storage efficiency:

11. Carrying Cost of Inventory: 

The cost of storage over a particular span of time, including the cost of inventory, capital costs, service costs, damage costs, and costs of obsolescence. The longer the stock stays in storage, the higher the cost to the warehouse.

12. Storage Productivity:

Volume of inventory stored per square foot.

13. Space Utilization:

Percentage of space occupied by inventory out of the total space available for storage.

14. Inventory Turnover:

The number of times the entire inventory passes through during a period of time.

15. Inventory to Sales Ratio:

Measure of stock levels against sales. This helps managers identify monthly increases in inventory against falling sales.

These storage & inventory management KPIs are of immense value when it comes to maximizing storage utilization and reducing cost of inventory. For example, a low inventory turnover spurs you to track down a reason and helps you improve inventory management.

Pick & Pack

The process of picking & packing directly impacts lead time. Greater accuracy in picking means shorter lead time.

Picking in the right order decreases the rate of order return and increases customer satisfaction.

16. Picking and Packing Cost:

The cost incurred per order line, including handling, labeling, relabeling, and packing.

17. Picking Productivity:

The number of order lines picked per hour.

18. Picking Accuracy: 

The percentage of orders picked and packed without error.

19. Labor and Equipment Utilization:

The percentage of labor & pick/pack equipment out of the total labor and equipment utilized during the process.

20. Picking Cycle Time:

Time taken to pick each order.

Distribution

As the roles and responsibilities of warehouses expand with the growth of always-on supply chain, the added function of distribution exerts additional pressure on warehouse management. Here are some warehouse KPIs relevant to distribution:

21. Order Lead Time:

The average time taken by an order to reach the customer once the order has been placed. This is one of the most crucial KPIs for warehouses and distribution centers.

22. Perfect Order Rate:

Number of orders the warehouse delivered without error. It indicates the success rate of the warehouse/distribution center.

23. Back Order Rate:

The rate at which orders are coming in for items that are out of stock. There are situations wherein unexpected spike in demand causes this. However, if this rate is consistently high, it is an indication that there are lapses in planning and forecasting.

These distribution KPIs will help you diagnose underlying problems.

For example, a high back-order rate indicates that a warehouse or distribution center isn’t stocking the appropriate inventory volumes. In this case, the problem lies in understanding consumer behavior and better forecasting demand so as to properly set inventory levels.

Reverse Logistics

The returns and reverse logistics is another crucial process where warehouse KPIs need to be measured. In most cases, the always-on warehouse is exposed to this process, and it’s essential to measure its efficiency and effectiveness.

Here is a warehouse KPI that should not be ignored if you are exposed to this process:

24. Rate of Return: 

The rate at which goods, once sold, are being returned. This is most effectively used when segmented by reason for return.

This is one of the top warehouse KPIs that can help the warehouse/operations manager diagnose the exact reasons for rising warehousing costs and customer dissatisfaction, as it lets you dig into the reasons for returns.

 

FTT – First Time Through

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First Time Through is the percentage of the time that a product or service passes through a process step without any defects on the first attempt.

  • It is a measure of production efficiency, ability/skill, and quality.
  • It measures how many goods are produced correctly without flaws or re-work as percentage of total units produced in a production process or value stream.

This concept can also be easily applied to the service industry as a measure of service or orders delivered satisfactorily to customers the first time without any amendments, re-work, or complaints.

Should a discrete manufacturer focus on overall production yield (Traditional Method), or on first time through yield?

In short, we recommend manufacturers focus on first time yield—let’s discuss why this is a more effective metric.

How do you calculate overall production yield (Traditional Method)?

80% yield may sound great, we have calculated the yield only based on final scrap items, we haven’t considered the rework included. FTT will help us in calculating the hidden cost (rework) of manufacturing.

How do you calculate FTT?

The output is same in both the processes but the Yields are different. FTT helps us in calculating the actual yield of the process.

Benefits of Tracking FTT
  • Hidden Cost – Helps in calculating the cost of rework or repair
  • Great measure of efficiency – This data is easy to communicate and is often used as part of overall efficiency calculations, such as OEE (overall equipment efficiency).
  • Identifying areas of improvement – First time yield, along with throughput yield, are key metrics used to determine where the quality issues are occurring, and their impact to the system.

 

Article By Thomas B.

SMED (Single Minute Exchange of Dies)

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BASICS OF SMED

SMED was developed by Shigeo Shingo, a Japanese industrial engineer who was extraordinarily successful in helping companies dramatically reduce their changeover times. His pioneering work led to documented reductions in changeover times averaging 94% (e.g., from 90 minutes to less than 5 minutes) across a wide range of companies.

WHAT IS SMED?

SMED (Single-Minute Exchange of Die) is a system for dramatically reducing the time it takes to complete equipment changeovers. The essence of the SMED system is to convert as many changeover steps as possible to “external” (performed while the equipment is running), and to simplify and streamline the remaining steps. The name Single-Minute Exchange of Die comes from the goal of reducing changeover times to the “single” digits (i.e., less than 10 minutes).

Examples of SMED:

  • For many people, changing a single tire can easily take 15 minutes.
  • For a NASCAR pit crew, changing four tires takes less than 15 seconds.

The speed of pit crews often can make the difference between winning and losing for race car drivers. Pit crews typically videotape each pit stop, constantly looking for ways to speed up the time a car stays in the pit lane. The time spent for each operation is analysed – changing tires, cleaning windshields and pumping gas.

SMED Benefits

  • Reduce batch size
  • Increase flexibility
  • Reduce inline stock
  • Reduce lead time
  • Improve quality
  • Reduce waste
  • Increase capacity
  • Reduce expenses
  • Set up error elimination
  • Reduce trail run time
  • Increase machine work duration from set up time

Where is SMED can be implemented?

  • Continuous process industries.
  • Where change over time are Exceptionally time consuming.

Steps To Implement SMED

The following is an outline of the steps that need to be taken to implement SMED.

a. Identify The Process

In this first step, the focus area for improving changeover times is identified. It needs to be a situation where:

  • The changeover is long enough where there is room for improvement
  • There has historically been a lot of variances in the past in changeover times
  • The operation is done frequently
  • All employees involved in the changeover process have been trained and have buy-in for the change
  • The process has been a bottleneck in the overall operation, meaning changes will have immediate impact

b. Identify Elements

  • Again, video typically comes in handy. Seeing how the process is being handled can help identify areas for improvement.
  • Each element of the process should be quantified by the amount of time it takes as well as the cost.
  • The process is then mapped out by each individual element, those involving both human and machine activities.
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c. Separate External Elements

  • In this step, all elements of the operation that are external should be separated. This includes elements that are currently internal but can be made external.
  • On each element, it should be asked: can this be done while the equipment or process is running? If so, it can be accomplished before the actual changeover takes place.

d. Convert Internal to External

  • As mentioned above, any element that can be moved to external.
  • Prioritize the list so that the elements with the most potential impact on reducing time
  • It also could involve reconfiguring machinery or investing in extra machinery that can handle an external element while the main process is still running.

e. Streamline

In this final step, the internal elements should be simplified to take less time. Every single element must be considered. This also can involve new equipment or modification of existing equipment to make changeovers run smoother and faster.

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By- Pramoth V