Effective shop floor management is crucial for enhancing manufacturing performance and profitability. However, determining and addressing root causes can be challenging. Below are the seven key areas to monitor while touring a plant or observing shop floor operations during due diligence, performance assessments, or with an active portfolio company.
Assess the engagement and productivity of hourly associates involved in value-add activities. Look for performance metrics at each machine or production line to ensure full utilization. Identify overstaffing by examining activity levels and addressing inventory imbalances between operations.
Evaluate efficiencies within support roles (e.g., forklift drivers, inspectors, etc.). Optimize transportation routes and minimize the need for excessive inspections, usually an indication of low confidence within the manufacturing process.
Persistent overtime often signals deeper issues within production. Analyze root causes including delivery delays, high scrap levels, and equipment reliability. Resolving these issues can significantly reduce costs while improving overall efficiency.
Focus on reducing scrap and improving yield by benchmarking against industry standards. Investigate the causes of incorrect units and hidden scrap and implement solutions to enhance first-pass yield and minimize rework.
A robust maintenance strategy is essential to avoid unplanned downtime. Monitor KPIs (e.g., preventive maintenance completion, equipment availability, etc.) to ensure reasonable tolerances are maintained. Engage frontline workers for insights and align maintenance practices with best-in-class standards.
Use OEE as a core metric to measure asset performance. Review or develop action plans to address stagnant metrics and align production schedules to optimize asset utilization.
Leverage automation to reduce labor costs and enhance quality. Ensure equipment reliability and high utilization. Explore opportunities to use equipment for multiple products or as a revenue stream through rental.
By systematically addressing these areas, manufacturers can uncover significant opportunities for shop floor improvements, leading to increased efficiency and profitability.
Palm Tree brings decades of experience to help assess your company’s operations, identify areas of improvement, and implement strategies to optimize processes and performance. We deliver insights on data that enable business operators to make more informed decisions, minimize business disruption, visualize opportunities, and drive value creation.