Methods of Reducing Paperwork

In 1990, Eliyahu M Goldratt, the famed Israel-born physicist turned business consultant, and the originator of the theory of constraints published a book titled The haystack syndrome : sifting information out of the data ocean. Early in the book Eli says something rather profound about modern computer systems, “I think we should cut out the middleman and hook up the computer printers directly to the paper shredders.” This book, along with others who picked up on Eli’s simple idea gave birth to the idea’s of “paperless environments” as well as modern Business Intelligence software.

Effectively managing production operations in today’s demanding business environment is a difficult task. Market demands require flexible agility to deliver perceived value in the eyes of the customer. Economic pressures call for continual process improvement in the seemingly elusive goals of “lean manufacturing,” “constraints scheduling” and “just in time inventory.” We live in an era which is consumed by “TLA’s” (three letter acronyms) and competing management theories. While working for TRW Automotive I began to call this “buzzword du jour” as the theories and policy changes were coming faster than their implementations could be completed. The real question we should be asking ourselves is, “what value will this particular change or enhancement deliver to the bottom line of the organization. Whether production is driven from discrete work orders, repetitive schedules or demand pull signals, any disruption in the execution process is extremely costly.

When the inevitable finally occurs and either the demand changes, equipment malfunctions, or material shortages occur, it is important that every key person in the organization has immediate access to “real time” information allowing the free flow of decisions or changes to be communicated across the entire enterprise. Meeting these and other challenges requires only to embrace the very basics of manufacturing execution theories that will allow the organization to leverage real-time information and ensure products are produced according to stringent customer demands. These basic theories address all of the challenges any manufacturing organization faces today, and once completed embraced by the entire enterprise they also empower you to configure new processes as you continuously improve operations through the principals of Lean Execution™ developed by me over the past 27 years.

On Page 100 of Business @ the Speed of Thought, which was written by Bill Gates, he says, "Machines generally reach customers within three to five days of order. Dell’s business model is based upon the evils of inventory. The more Dell can reduce its inventory, the more it frees up working capital to drive into other revenue generating activities. Dell’s reduced inventory translates to a savings of hundreds of millions of dollars in assets. At the same time, the requirement for greater customer service means that you never want to be out of stock either. Only information technology can provide the means to balance these needs. ‘Physical assets used to be a defining advantage,’ Michael says. ‘Now they’re a liability. The closer you get to perfect information about demand, the closer you can get to zero inventory. It’s a simple formula. More inventory means less information, more information means less inventory. We’re trading physical assets for information.’”

Utilizing core JDEdwards EnterpriseOne Manufacturing software along with our Lean Execution™ methods can empower any manufacturer to create a “paperless shop floor,” and gain immediate benefits such as:

• Reduction of manufacturing cycle time
• Reduction of order lead time
• Reduction of direct labor costs
• Reduction of data entry time
• Reduction or elimination of paperwork
• Reduction of work in process (WIP) inventory
• Increase in machine utilization

Implementing Lean Execution™ techniques enables critical information to flow throughout the organization—including the often-forgotten areas of production and manufacturing. This requires that the information is within the control of those who actually produce your products. “Paperless shop floors” have been created for a few forward-thinking manufacturers, producing dramatic gains throughout their entire organizations. Now you will learn how the same results are possible for your company.

The Foundations of Lean Execution™

Quite simply, by introducing actionable, real-time information into the traditionally paper-based shop floor environment, it is possible to create a “paperless shop floor.” This real-time control empowers the organization to streamline production and ensure products are delivered according to stringent customer demands. Lean Execution™ allows manufacturers the flexibility to address the key business processes and functional activities that provide them with the quickest time to benefit. All of this can be implemented by simply using the basic Manufacturing Suite of software from JDEdwards.

The simple utilization of Operation Sequence and Operation Status Codes can leverage the existing Work With Operation Dispatch solution to control the event-driven notification and workflow and to provide proactive visibility into disruptions in the manufacturing process. Work instructions are communicated to workers in real time using a media object attachment to the routing master file. This approach replaces error-prone, paper-based communication with a streamlined, “paperless shop floor” environment.

Lean Execution™ With JDEdwards EnterpriseOne
Fast Cost Reduction

Now that we have defined how proper implementation of JDE Manufacturing can create “paperless shop floor environments,” the next question to be answered is “What benefits will my company realize?”

Increased Levels of On-Time and Complete Shipments

JDEdwards provides the workflow, visibility and event notification required to ensure that manufacturing is meeting customer demand. Additionally, these systems reduce non value-added activity, increase data accuracy and provide the other ERP systems with the real-time data needed to maximize processing, planning and scheduling activities. This results in the ability to increase levels of on-time and complete shipments.

As stated earlier Lean Execution™ requires putting information in the hands of those who actually handle the inventory or produce the products. This is sometimes the biggest stumbling block in entire process because managers and supervisors don’t readily believe that the production and manufacturing workers can be trained to input the correct data. However, once this hurdle is overcome the solution creates a paperless environment by giving operators instant access to work instructions and CAD drawings, so they always have the up to date information required to build products that meet the customers’ demanding specifications.

More importantly, having information about events as they occur allows decision makers to easily identify or prevent potential problems and bottlenecks. For example, the planners may already be well aware of the problems created by shortages of key manufacturing materials that may halt production, shipments arriving late or incomplete, and backorders; however, with a few properly implemented steps the material pickers, the purchasing agent and the receiving department can also be updated as to the status of critical parts. Additionally, the lack of visibility into machines operating outside control limits or processes not meeting appropriate yields can ultimately delay customer shipments. With JDE Workflow, real-time notification of events and exceptions—often before they occur—allows the appropriate parties to take proactive steps to manage them. This will likely save the cost of expediting shipments that were unexpectedly completed late. Ultimately, the ability to keep costs in check, production and shipments on schedule, and customers happy increases bottom line profitability.

By streamlining data acquisition and execution for operators on the factory floor, it is possible to create efficient processes that consist only of the value-added activities. The result is a lean and efficient environment. Additional investment can be made into mobile data terminals for material handlers or strategically placed WIP stations or terminals on the factory floor, workers can then be directed to perform tasks and collect information in real time using either third party tools or standard user interfaces. In addition, new employee training time is significantly reduced, while workflow notification and electronic communication provides crosstraining opportunities within the existing workforce. Lean Execution™ solutions empower JDEdwards EnterpriseOne users to easily implement and manage truly paperless manufacturing processes.
Strengthened Decision-Making Based on Real-Time Information A Lean Execution™ implementation supplies key personnel the decision-making data necessary to optimize manufacturing performance. From any location, the technology will allow managers to make immediate decisions on staffing, maximize labor efficiencies, control order fulfillment and monitor machine utilization. Real-time performance reports such as actual versus plan, production unit cycle time, production efficiency, scrap and downtime by machine or work cell can all be specifically configured for up-to-the-second review and action by management.

When unexpected events do occur, Lean Execution™ also helps managers and lead operators take proactive steps by utilizing your customized set of alerts and alarms. Using workflow notification key individuals are notified about potential issues—before they become costly problems. Manufacturing execution solutions do not stop after notifying operators of unexpected events. This type of system pairs event notification with appropriate workflow so operators take suitable resolution steps in real time without affecting operations.

Production order status and work in process are readily accessible via standard JDE Video Screens. This can also empower managers and other decision-makers to communicate information electronically to customers and other manufacturing locations. Ease of information access also smoothes the daily transition between shift managers and provides updated statistics on key performance indicators (KPI), wellness views and other important reports.

Continuous Improvement: “Adapt or Fail” Manufacturers have learned that staying competitive means they must continually improve their processes or face the consequences of technological Darwinism—”adapt or fail.” Whether the initiative is Six Sigma or kaizen, traditional implementations of JDEdwards EnterpriseOne are nearly impossible to change when needed because they require expensive, time consuming custom code-based modifications. Because of this, the software becomes a barrier to operational excellence. This usually means that improvement opportunities are lost, or work-arounds are developed to accomplish tasks outside of the system. This results in poor data accuracy.

A new approach, called Lean Execution™ has recently been compiled on the belief that software should be a catalyst for continuous improvement—not an obstacle. Our implementation methodology not only provides a detailed view of plant history, but the flexible architecture also allows reconfiguration quickly and cost-effectively as the manufacturing operations change and evolve. We also provide the Business Intelligence needed to make fact-based decisions and adapt as manufacturing operations improve over time.