Система управления производством
Система управления производством
Production management system
Production management system

Production management is crucial especially in the era of the employee market and global competition. Its effectiveness significantly affects the company’s costs and profits. Although the exact guidelines of an experienced consultant would suggest after a detailed analysis and mapping of the company’s business processes, there are universal rules that we will share in this series of articles.

The problem of conversion and size of a lot does not only concern large-scale production. If you produce individually on request (eg on the basis of a drawing from the customer), you also set the machine, eg a CNC milling machine for various products. But from the beginning:

Each conversion is expensive …

… even if it only costs you a moment. Often, it also requires special skills that all production employees do not have. It happens that waiting for the right person creates bottlenecks. And this in turn the delay in delivery to the customer. Often the quality of retooling has a significant impact on the number of production errors that arise later in the process.

Our example company produces 3 products:

Product Changeover timeProduction time 1 piece
X1,5 h0,5 h
Y1 h0,2 h
Z0,3 h1 h

For simplicity, we assume that:

  • each product is made on one resource with one operation,
  • the company is working on 1 shift,
  • the employee actually works 7.5 hours (0.5 hour for access to the workplace and breakfast break).

How much does the changeover and production time cost?

Let’s take the market:

1 h = 78 zł

Wait a minute! Production so expensive ?! Let’s calculate exactly:

  • machine leasing
  • employee’s time
  • part of the annual costs of servicing the machine
  • electricity
  • the cost of maintaining the hall and installation, tax for the ground, heating, etc.

Please note that we neglect the raw material costs and potential shortages (discordant items). I think that PLN 104 is an understated cost of the working hours of the production resource …

Let’s assume that our company has accepted 10 orders:

Order No. ProductOrder quantity
1X3
2Y2
3Z10
4X2
5Y1
6Z5
7X11
8Y3
9Z10
10X1

See what happens to the costs and deadline if we process these orders in two ways:

Solution 1. Without optimization and matching of production orders

I simply trade orders in production orders and give them for production.

Order no.ProductQuantity Change costs Costs all pcs. Total time of completing the order  the total cost of the contract
1X3 117  zł 117  zł3 234  zł
2Y2 78  zł 31  zł1,4 109  zł
3Z10 23  zł 780  zł10,3 803  zł
4X2 117  zł 78  zł2,5 195  zł
5Y1 78  zł 16  zł1,2 94  zł
6Z5 23  zł 390  zł5,3 413  zł
7X11 117  zł 429  zł7 546  zł
8Y3 78  zł 47  zł1,6 125  zł
9Z10 23  zł 780  zł10,3 803  zł
10X1 117  zł 39  zł2 156  zł
Suma   772  zł 2 707  zł44,6 h

6 days

 3 479  zł

Solution 2. Simple assembly of production orders

And now in an optimized production schedule with the aggregation of orders (we assume that the terms allow it):

Order no.ProductQuantity Change cost  Cost all pcs.Total time of completing the orderThe total cost of the contract
1X17 117  zł 663  zł10 h 780  zł
2Y6 78  zł 94  zł2,2 h 172  zł
3Z25 23  zł 1 950  zł25,3 h 1 973  zł
Suma   218  zł 2 707  zł37,5 h

5 days

 2 925  zł

Let’s find out both solutions in terms of completing the entire order basket:

 Solution 1Solution 2
Production time 6 bussines days 5 bussines days
The cost of PLN 3 479  zł 2 925  zł

The solution of 2 visas is PLN 554 and one business day. So it’s not enough that we produce cheaper, we make potentially less mistakes in retooling, we still get an additional working day on production. On such a small scale you can not see the effect yet. But let’s count how much is the percentage of time and money saved? Reply:

16% savings

And we must remember that we have used a very simple method, without advanced optimization of the entire chain of operations, raw materials, logistics, assembly, semi-finished and replacement trees, etc. And here is a very important question:

How much is your 16% annual savings worth in your company?

In real life, the key isthe ability to simulate and compare different variants.. After selecting the optimal variant, we issue orders for production. Production uses raw materials and produces products. But what about the effects? In the end, to keep improving (LEAN) you have to measure the effects.

Check and optimize

Unfortunately, many companies still do not measure the effects of implementation. Of course, there is a brigadier / manager who writes a number of gaps on a paper order, so that his boss could get nervous afterwards. Often a tool is missing that easily tracks the full tracebility of each product and each batch. And it not only calculates remuneration based on real efficiency (eg taking into account complaints), but also can indicate with which of the technologists (engineers) preparing the production is associated with the most problems. The same applies to setters or other services specialized in conversion.

Production management in 2017

In 2017, the three most-requested functions were among our clients:

  • -Minimation of total production time by effective time
  • -Minimization of production costs
  • -Minimization of inventory

We implement them thanks to the optimization engine, but a few-man production company calmly cope with the owner’s cunning. In larger organizations without a good tool it will be difficult to predict the risk of optimization and measure their effects.

Thanks

Thank you for reading my article and I invite you to the discussion in the comments. In the following parts of the cycle “Production management” me and members of the OptiMES team will discuss, among others matters related to fire policy, employee motivation, periodic technology validation, waste, TPM and bids. Wait a minute, but what does the offer have to do with it? We will answer the answer soon.

Have any questions?
Have any questions?

A team of OptiMES specialists already has over 14 years of experience in implementing IT solutions in manufacturing enterprises

If you have any questions, write to us! We are available by phone
0048 535 455 855 and e-mail address biuro@syneo.pl.

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