How to increase production capacity without adding resources

November 12, 2015

As business rebounds after the long climb out of the Great Recession, many manufacturers are having the welcome experience of seeing orders and demands increase. This trend leads many companies to consider adding resources and expanding operations, but what happens if the economy takes a dip and you have added people to your payroll or invested in capital equipment that is no longer needed? It's a situation that suppliers to the automotive sector, to cite one example, know all too well. Before adding resources, IQMS (Paso Robles, CA), a developer of enterprise resource planning (ERP) and manufacturing execution system (MES) software, recommends eliminating waste in existing resources—and the average manufacturer has plenty of that, apparently—and optimizing efficiencies. Oftentimes, this approach allows companies to increase capacity without adding floor space, equipment or personnel, according to IQMS. It worked for employee-owned injection molding company AMA Plastics (Riverside, CA).

AMA Plastics
AMA Plastics runs 94 injection molding machines at its state-of-the-art plant in Riverside, CA.

Prior to implementing an IQMS system, "everything was done through spreadsheets, white boards, verbal communication and email," says Vice President of Operations Michael Engler in a short video posted by IQMS. As the company grew—it currently runs 94 presses in a state-of-the-art, 165,000-square-foot facility—those methods were unsustainable.

Like many companies adapting to increasing demand, AMA bolted on resources as they became necessary, neglecting to take a more holistic view. "We were using an accounting system and a manufacturing system that did not talk to each other," explains Master Scheduler Ian Donnelly. "Customer service put orders into the accounting system and I would have to find those orders and manually put them into the manufacturing system. If they made a change, I would have to find the change and manually edit it. Had we stayed on that route as our company has grown, you would need five people to do that job," says Donnelly. According to Customer Service Manager Pat Williams, "IQMS was instrumental to the success of the company, [because it] allows us to understand what is going on across all areas of the company."

To provide manufacturers across all sectors with an overview of how its systems can help them to operate successfully under various business climates, IQMS has published an interview with Cindy Jutras, president of the research and advisory firm Mint Jutras. She has more than 40 years of corporate experience at all junctures of the supply chain and, prior to founding Mint Jutras, was Vice President, Research Fellow and Group Director for the Aberdeen Group. In this in-depth interview with IQMS, Jutras explains how a tightly integrated ERP/MES program can reveal hidden efficiencies.

According to Jutras, the average company implementing a modern, technology-enabled, fully functional ERP system can increase production output by 9%. "A world-class ERP implementation increases production output by an average of 19%," she says, adding that this is not at the expense of rising inventory levels. "Inventory value, obsolete inventory and cycle times also shrink."

For companies with a comprehensive ERP and MES system and some automation, the most immediate return on investment is sitting on the shop floor, says Jutras, where capacity is actually consumed. "With a process monitoring module that allows you to link directly to work centers and high-value production equipment through programmable logic controllers and sensors to collect process data and compare against set thresholds and parameters, you are able to see in real-time how you are performing and producing," says Jutras. To leverage this visibility into increased capacity, however, the data must be relayed to an ERP system for analysis. "You need to make your ERP solution an active participant in the manufacturing process," stresses Jutras, who cautions manufacturers from assuming that every ERP system has a process monitoring module.

Real-time process monitoring can also benefit manufacturers who are struggling with finding skilled workers. Process monitoring, which can be done remotely, can require fewer eyeballs than traditional manufacturing methods. "Where one operator per machine might have been required before," explains Jutras, "by implementing process monitoring, you might be able to have a single operator overseeing production on several machines."

The interview with Jutras explores a number of other ways in which IQMS software can help manufacturers increase capacity without putting resources into additional qualified personnel (assuming you can find them), new machines or more floor space. The article can be downloaded free of charge from the IQMS website.

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