Richard Hedman

A model for linking shop floor improvements to manufacturing cost and profitability

Manufacturing units in the so called high-cost countries are struggling under fierce competition on the global market. In order to survive, the factory needs to generate profit to its owners. Profitability can be reached in many different ways apart from only lowering the employees’ salaries. It can be improved through increased profit margins (sales in relation to costs) or with an increased capital turnover rate. Finding ways to free capacity and to improve flexibility in order to increase sales is often more interesting to the manufacturing companies than cutting the direct salary costs. A model for analysing profitability of a manufacturing unit is proposed. It is found on a production system analysis and combines in-depth production engineering analysis with economical accounting analysis of the factory. The manual work tasks are of special interest and the productivity of selected bottleneck work areas are analysed thoroughly. The model is intended for use by two industrial analysts during a one-week study. Simulation of different improvement scenarios is carried out and presented to the factory management at the end of the profitability study. A software implementation is required in order to generate the model, collect data and make simulation within the intended time. The implementation is made in spread sheet software using Visual Basic to program interfaces and automatic functions. The primary area of application is the electronics industry in Sweden where the model is used in a research project to strengthen the competitiveness of that industry.

A state of the art system for managing time data in manual assembly

Valid time data, a prerequisite for the efficient use of manufacturing resources, directly influence planning and control quality. However, access to time data that capture real shop-floor operations in general and manual operations in particular is often assumed by both academics and practitioners. This has led to a mismatch between reality and the data found in systems for production planning and control, causing operational inefficiencies and negatively affecting decision-making in manufacturing companies. This article addresses the importance of updated and valid time data in planning and controlling production and considers how they relate to manufacturing system performance and improvement. The focus is on how to determine, utilise, and sustain valid time data for manual assembly operations through integrating enterprise information systems. The article builds on a case study performed at a large manufacturing enterprise that operates a state of the art system for managing time data in manual assembly. Findings from the case study reveal how standalone system applications can be integrated with the organisational functions of an enterprise to achieve updated and valid operation times.