Most companies that implement a supply chain view of their operations struggle to find an optimum balance between responsiveness to customers - and cost efficiency. Wasn't it Henry Ford that said his customers can "... have any color they want, as long as it is black." The responsiveness/efficiency balance can depend on a number of factors. Some of the obstacles that supply chain managers must consider as they develop strategy include:
- Increasing Product Variety; product proliferation is rampant in today's markets.
- Shorter Product Life Cycles; many product life cycles now are measured in months, not years, as has been common is earlier days. This is true for not just niche products - commodities too.
- Increasingly Demanding Customers; delivery lead times, costs, product performance, inability to pass through cost increases. Customers today (who evaluate their own supply chains) are demanding faster fulfillment, better quality, and better performing products for the same price.
- Fragmentation of Supply Chain Ownership; many firms are less vertically integrated than they were in previous decades, and many have outsourced "non-core" functions and activities.
- Globalization; supply chains are increasingly global which can have cost benefits, but coordination across distant elements and time zones can make management more complex.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Wednesday, October 31, 2007
Tuesday, October 30, 2007
Plant Maintenance: the Cost/Risk Confusion
In the process industry, our manufacturing plants are often capital intensive. Maintenance of these physical assets can be a significant part of the operating budget leading to the inevitable question of "how much do we really need to spend on maintenance?" There is a widespread belief that there is an optimum level of maintenance spending that balances cost and a company's risk. We believe there is no such thing as a generic cost/risk trade off for all industries. The level of maintenance spending is more a function of the level of consequences of failure.
Industries, or even individual manufacturing sites, with an extremely high consequence of failure need to manage risk to the lowest practicable level - maintenance costs may not even be a subject for discussion - ie nuclear power, etc. In the chemical industry the consequences of failure can be extreme when plants are close to highly populated areas. In the general process industry the risk of failure can be managed by plant design initiatives such as redundancy, and surge capacity.
There is not always a direct link between the cost of plant maintenance and the level of risk. There is almost always an opportunity to reduce maintenance costs while increasing the level of risk management. This effort depends on the sophistication of the maintenance effort when this initiative commences.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Industries, or even individual manufacturing sites, with an extremely high consequence of failure need to manage risk to the lowest practicable level - maintenance costs may not even be a subject for discussion - ie nuclear power, etc. In the chemical industry the consequences of failure can be extreme when plants are close to highly populated areas. In the general process industry the risk of failure can be managed by plant design initiatives such as redundancy, and surge capacity.
There is not always a direct link between the cost of plant maintenance and the level of risk. There is almost always an opportunity to reduce maintenance costs while increasing the level of risk management. This effort depends on the sophistication of the maintenance effort when this initiative commences.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Monday, October 29, 2007
A Strategic View of Plant Maintenance
Winston Churchill once observed that "However beautiful the strategy, you should occasionally look at the results." Developing strategy is good, but it the implementation of strategy that separates successful organizations from average or failing organizations. The process industry, which is frequently capital intensive, can achieve strategic advantages through effective management of their physical asset base. The core process to managing that asset base is plant maintenance. Done well, maintenance is a reliability effort, not a repair focused effort. Maintenance performance can, and should be measured, and appropriate metrics should be used to benchmark the organization and develop improvement objectives.
A good structure for deploying metrics is to focus on metrics at three levels:
- The Corporate Level - Safety, maintenance costs/replacement asset value, etc
- The Strategic Level - Percent planned work, downtime due to maintenance, etc
- The Functional Level - Length of time to perform a routine task, rework, etc
We are comfortable with managing a business via a balanced score card. We should approach our maintenance and reliability efforts with the same perspective.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
A good structure for deploying metrics is to focus on metrics at three levels:
- The Corporate Level - Safety, maintenance costs/replacement asset value, etc
- The Strategic Level - Percent planned work, downtime due to maintenance, etc
- The Functional Level - Length of time to perform a routine task, rework, etc
We are comfortable with managing a business via a balanced score card. We should approach our maintenance and reliability efforts with the same perspective.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Sunday, October 28, 2007
Working Together - Sales & Operational Planning (S&OP)
Implementing sales and operational planning (S&OP) will help your organization function well as an overall whole. It may not directly benefit any specific function, or guarantee a profit increase, but as we always say - we assure you that an overall supply chain perspective, and a disciplined effort to do a regular sales and operational planning process will absolutely help sales, and the top line.
- The general manager needs to get everybody working together and exercise leadership.
- S&OP deals with families of products, and requires a planning horizon, and monthly reviews.
- S&OP links the business plan with the operations of each department.
- The Sales & Operational Planning process yields realistic plans.
- Sales and Operational Planning eliminates surprises, and hidden decisions...
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
- The general manager needs to get everybody working together and exercise leadership.
- S&OP deals with families of products, and requires a planning horizon, and monthly reviews.
- S&OP links the business plan with the operations of each department.
- The Sales & Operational Planning process yields realistic plans.
- Sales and Operational Planning eliminates surprises, and hidden decisions...
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Saturday, October 27, 2007
Logistics Planning vs. Logistics Strategy
Many firms in the process industry consider logistics as part of their overall supply chain, but fail to differentiate between logistics strategy and logistics planning. Firms that explicitly distinguish between these activities benefit in at least three ways:
-Opportunities for differentiation based on operational, logistics, or customer service excellence are more likely to be exploited.
- Logistics tends to have a more visible and important role in the company.
- Investments in the logistics function or infrastructure are more likely to be approved.
In firms that do not differentiate between logistics strategy and logistics planning, logistics tends to become just a budgeting exercise, and seen as a "cost" rather than value added activity.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
-Opportunities for differentiation based on operational, logistics, or customer service excellence are more likely to be exploited.
- Logistics tends to have a more visible and important role in the company.
- Investments in the logistics function or infrastructure are more likely to be approved.
In firms that do not differentiate between logistics strategy and logistics planning, logistics tends to become just a budgeting exercise, and seen as a "cost" rather than value added activity.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Best Practices: Condition Monitoring of Belt Conveyors
I am sure my friends and colleagues in an unnamed agricultural chemical manufacturing, formulation, and packaging company will indulge me in an observation of best practices for belt conveyors - just like the ones we use to package bottles, 4X2.5 packages etc for our products. If you agree or disagree, please add your comments to this posting - but we do not accept anonymous comments, please give us your direct feedback...
Belt conveyors are very reliable. When performing preventive maintenance on belt conveyors we highly suggest condition monitoring and maintenance versus interval maintenance. Best practice includes:
- Lock out / tag out before maintenance begins.
- Check overall condition of the belt.
- Check that rollers are rotating freely, if not repair or replace.
- Check belt cleaning device for proper operation, adjust if necessary.
- Check belt tension, tighten or adjust to repair for sagging, jerky, or slipping movements.
- Check frame solidity, check for cracks, physical damage, and loose bolts.
- Belt Guide, check belt guides for loose fasteners, and proper function.
- Hatches and Doors, check for leakage, condition of sealing rings, and inspect locking devices.
During plant shutdowns there are a number of other activities that are required to properly maintain belt conveyors. Lubricate bearings, inspect and adjust alignment, check for vibration induced changes - loose nuts and bolts, bearing play, fittings, zero speed switches, etc.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Belt conveyors are very reliable. When performing preventive maintenance on belt conveyors we highly suggest condition monitoring and maintenance versus interval maintenance. Best practice includes:
- Lock out / tag out before maintenance begins.
- Check overall condition of the belt.
- Check that rollers are rotating freely, if not repair or replace.
- Check belt cleaning device for proper operation, adjust if necessary.
- Check belt tension, tighten or adjust to repair for sagging, jerky, or slipping movements.
- Check frame solidity, check for cracks, physical damage, and loose bolts.
- Belt Guide, check belt guides for loose fasteners, and proper function.
- Hatches and Doors, check for leakage, condition of sealing rings, and inspect locking devices.
During plant shutdowns there are a number of other activities that are required to properly maintain belt conveyors. Lubricate bearings, inspect and adjust alignment, check for vibration induced changes - loose nuts and bolts, bearing play, fittings, zero speed switches, etc.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
Friday, October 26, 2007
Operational Excellence - Safety Performance
There are many priorities in manufacturing plants in the process industry. Our fundamental priority is safety management - with a focus on preventing all injuries. The key elements of an excellent safety system are:
- Management commitment - at the highest levels.
- First line, and progressive ownership of safety performance.
- Universal involvement in safety activities and training.
- Comprehensive corporate safety procedures, standards, and practices.
- Fully staffed, trained, and professional safety specialists with a supporting organization.
All of these elements are important, if not critical to an organizations safety performance. If we had to pick the most critical, important, or fundamental - it would be management commitment. Executive leadership must understand safety, believe in it, and have a passion for it.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
- Management commitment - at the highest levels.
- First line, and progressive ownership of safety performance.
- Universal involvement in safety activities and training.
- Comprehensive corporate safety procedures, standards, and practices.
- Fully staffed, trained, and professional safety specialists with a supporting organization.
All of these elements are important, if not critical to an organizations safety performance. If we had to pick the most critical, important, or fundamental - it would be management commitment. Executive leadership must understand safety, believe in it, and have a passion for it.
Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.
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