Hidden costs – they’re everywhere, they’re everywhere… Is MFG 4.0 the answer…

Advanced Cushioning

Costs lie hidden in production environments – from the obvious to the not so obvious. 

Obvious… internal costs – cost associated with defects found before the customer receives the product

  • Waste, scrap, rework, recalls, recurring failures — and, the not so obvious failure to quantify all of the labor costs and lost opportunities associated with resolving these issues

Sometimes painfully obvious and extremely high cost… external costs – cost associated with defects found after the customer receives the product

  • Repairs and servicing, warranty / recall claims, complaints, returns

Obvious but bits and pieces are just accepted as a part of doing business – measuring & monitoring – costs incurred to determine the degree of conformance to quality requirements — all those little things we have to do but wish we didn’t have to do…

  • Verification, quality audits, supplier ratings

More of the stuff we wish we didn’t have to do and more costs that just aren’t always quantified – prevention / avoidance – costs incurred to keep failure, measurement & monitoring costs to a minimum

  • Managing product requirements, quality planning, quality assurance, training

Where are the next round of cost reductions in your organization?  What if the above cost could be cut by one half?  What would the impact on your financials be?

Keep learning…

Vision AND Action… there is no contradiction both are required in all areas of business

Being able to see hidden costs is the key to moving toward Manufacturing 4.0.  If hidden costs are a blind spot within an organization, they are not ready to justify taking the next steps.  What are the hidden costs an organization needs to focus on? Research has show that the:

  1. Cost of bad data -typically, 15% to 25% of revenue
  2. Cost of quality – typically, 15 to 20% of revenue
  3. Costs associated with OEE of 60% is fairly typical for discrete manufacturers
  4. Cost of under-utilized assets (manpower, equipment, facilities, etc.)

What costs are a prime target of Manufacturing 4.0?

Advanced Cushioning

Being able to see hidden costs is the key to moving toward #Manufacturing 4.0.  If hidden costs are a blind spot within an organization they are not ready to justify taking the next steps.  What are the hidden costs an organization needs to focus on? #Lean on steroids.

  1. Cost of bad data -typically, 15% to 25% of revenue
  2. Cost of quality – typically, 15 to 20% of revenue
  3. Costs associated with OEE of 60% is fairly typical for discrete manufacturers
    • Discrete manufacturing is typically described by individual or separate unit production. … The processes deployed in discrete manufacturing are not continuous / flowing in nature. A separate process step (discrete) can be started or stopped and can be run at varying production rates.
  4. Cost of under-utilized assets (manpower, equipment, facilities, etc.)

Free paper and readiness checkup.




Data, Data Everywhere in Manufacturing but…

Is manufacturing data one of the biggest challenges in #manufacturing operations? Harnessing manufacturing data is critical for growth and profitability.

Data is the NEW money BUT…

  • Data quality and complexity hampers an organization’s ability to control manufacturing processes
  • Process variability + poor data quality + complexity of operations + interpretation and utilization of data by employees = inability to control a manufacturing process
  • Complexity of manufacturing operations and output data = difficult to manage people, quality, cost, throughput and more…

Data maturity is critical to being prepared for Manufacturing 4.0.  Is your organization ready?  Learn more…

Achieving MFG 4.0 is a process that begins with a 1st step

Any action toward MFG 4.0 sets the stage – even taking that first 55 minutes to define the problem (challenge).  Beginning to learn, becoming an influencer to educate leaders, working to establish vision, assessing the current situation, gaining buy-in and  alignment, identifying a solution set for your organization, and beginning to pilot or implement are all good steps.  Understanding that you may already have leverageable assets in place to enable your success is critical.  Learning that the best MFG 4.0 solution for your organization will be matched to its uniqueness.  

AIA can help you move move down the path.  Contact us to learn about our assessment process; a process that can position you has the leader or a key influencer. 

MFG 4.0 – Is the only thing missing in your manufacturing world, knowledge of how manufacturing will change?

Innovation, defined as “the creation of something new that adds value”, begins with being able to see that a problem or challenge exists.  This does not mean that you have defined the problem or challenge correctly.  In fact, what we know is that the primary reason a solution has not been pursued or found is because there is uncertainty about the direction, or the problem / challenge has been defined incorrectly.

MFG 4.0 begins with defining what it is and how it should be matched to your organization’s needs to deliver market leadership and competitive advantage.  This means that it is more than just implementing the latest craze; it is about understanding what it will take to excel beyond your competition.

MFG 4.0 begins with assessment of your organization’s unique situation: vision; goals / objectives; operations; people; data collection / utilization objectives; and more…

Learn how AIA delivers your vision with ROI matched to your needs and minimum disruption to your day-to-day operations.  We enables MFG 4.0 from upfront assessment through the best implementation of MFG 4.0 for your organization.

Contact us to learn more…

Did you know that all systems evolve based on objective patterns?

Structured Innovation / TRIZ: The Road to Innovation

Objective patterns have been defined through research of the history of technology, markets and society.  The revealed evolutionary patterns and sequences define how systems have evolved throughout history.  And, history does repeat itself.  Research has been conducted going back to the beginning of mankind’s existence with studies including some of the oldest evolving systems, e.g. weapons, dwellings, transportation, communications, agriculture, communications, et al.  Learning about structured approaches to #innovation is the beginning… applying what you learn is progress. #evolution Did you know that you can apply these patterns to a system’s characteristics to redefine the system’s future?  For example, increasing dynamism and increasing controllability are two of a number of evolutionary patterns.  Now that you know, apply either or both to a characteristic such as a part of the process associated with the system and make it more dynamic or controllable.  Then assess the new value that could be realized as a result of the change(s).

Systematic and structured approaches to innovation provide a means of continually evolving systems toward a more ideal future state.  Have a great day and keep innovating. 

Production Bottlenecks

So what is a production bottleneck? It is a scenario confounded by contradictory requirements. The resolution of contradictions lies at the core of all great innovation.  So what is a contradiction?  As one characteristic of a system (e.g. a process) is improved, another characteristic is degraded.  Example, productivity is often based on the speed of production equipment and sometimes a machine ends up being the bottleneck that results in slower production. But as you try to increase the speed of the bottleneck machine quality degrades.  Restating the contradiction:  As productivity is improve quality degrades.  What’s interesting is that this is what I refer to as the ‘language of meetings’; it’s the way we have learned to talk about problems.  And, there is a hidden reality.  The way we talk results in making the problem more difficult to solve.  This contradiction was stated in terms of what I call a complex contradiction, two characteristics (productivity and quality) in opposition to each other.  The key to being able to solve a complex contradiction is to understand what is hidden inside it.  Structured approaches to innovation provide step-by-step procedures for dealing with complex contradictions by converting them to simple and then using a set of historically sound principles (separation principles) to resolve the contradiction.  #Innovation should be fun and lead to the profitability we need… there should never be an inability to solve a manufacturing problem or any other area of business.

MFG 4.0 brings new life to mature manufacturing processes

Manufacturing operations of all types have evolved.  Beginning in the 80’s, new life was brought to machining through the integration of computers with machine tools.  At the same time, at least in the US, quality initiatives took hold and began to drive quality higher and higher.  Over the years, Lean and Continuous Improvement have led to on-going incremental refinements.  Along the way, the ability to collect data became the norm and today many companies are trying to figure out how to leverage the peta-bytes of data that are being collected or have the potential to be collected.  Some are being run over by the abundance of data and what it means.  Along comes more computer advancements and the emergence of AI solutions but like every other evolution, these will not be the end of manufacturing evolution.

But, something is missing, can you see what it is?

MFG 4.0 brings new life to mature manufacturing processes… While some may talk about and be pursuing lights-out automation, there is another reality; evolution occurs in stages.  And, the reality that the people who live and work on the plant floor are valuable assets.  Actions to cause the relationship between plant floor personnel through leadership need to be evolving in new ways.  At AIA, we believe that a key element of MFG 4.0 is evolving how data is leveraged to enhance how people work throughout manufacturing and how information is efficiently and effectively reported throughout the ranks all the way to the top.  These changes have the potential to change the way people, from the bottom of the organization to the top work to deliver greater value.

We enable learning about MFG 4.0, assessing manufacturing readiness, preparing people, and implementing MFG 4.0 for organizational growth and profitability.  Learn more about MFG 4.0:  Manufacturing Innovation and Transformation™.