There is an ongoing debate about growth in Swedish industries where some critics claim that sooner or later it will be necessary to move large productions of the Swedish industries to low-wage countries, to be able to sustain and improve the competitiveness and therefore attain continuous growth.
We at INVID deem that if Swedish industry dare to rethink and start focusing on Smart manufacturing, we can make unused production potential available (45%) and therefore empower the competitiveness and create growth for industry companies. This term, Smart manufacturing, is also called Industry 4.0, where the purpose is for Swedish industry to be in the front within the digital development and within using digitizing opportunities.
One of the reasons for waste within Swedish industry production of today is that what is measured is usually only the production efficiency (lack of a better key figure) by comparing staffing hours which are pre-calculated, with the hours calculated after – the so called E Factor.
This analysis may have its value but usually triggers none or very few actions of improvement. By originating from how many machine hours you will get out of your machines, and the hours you get in terms of intermissions, it will trigger offensive actions of improvements. Many flaws will be obvious!
E Factor and effective production are two different terms
The E Factor is an economic metric figure which shows whether an order has been economically beneficial or not compared to the existing calculations. In some cases, you compare by reviewing the selling price. The E Factor is therefore an important metric figure.
However, it does not reveal the use of equipment and time. In the pre-calculations in the industries, there has been an acceptance of waste by calculating excess regarding intermissions and downtime.
The E Factor neither shows the period of time between a closed order and an order that is starting. This particular period of time is the biggest reason for a low machine utilization. Many companies do not know the amount of time that is wasted during this interval.
The usage of the E Factor also complicates the improvements considerably because of the fact that the measurement is towards subjective goals (calculated duration), where the deviations can easily be excused with reasons such as low set times, individual performance differences etc.
Our manufactured machines take breaks worth 650 billion kr
If we use effective machine hours as KPI-numbers, our machines will display out of a national perspective a stagnation of 45% of the time which is staffed.
If we theoretically calculate towards an ideal number of 100% machine utilization, it means that our machines are currently continuously standing still for 650 billion kr early.
This is of course an unreachable number aiming to point at the opportunities – and above all the enormous potential of growth our Smart manufacturing industries contain.
Focus on effective machine hours
Today INVID helps Swedish industry companies with implementing and strengthen its focus of the term Smart manufacturing – the duration of time which the machines are actually producing approved products.
The time which is released in the machines while the time of an intermission decreases, means that overtime, extra shifts, hired personnel etc. also decreases. Which is something that provides increased flexibility and also time for training and improvement. These parameters will all together generate instant positive effects for the income statement.
Effective machine hours is the time when the machines are producing approved products – valuable created time. The focus on the KPI-number is what clarifies wastage and triggers improvements.
Make everybody involved
Create the same ground of values among the employees regarding the client, product quality, delivery precision, responsibility and authority within improvement etc.
Every employee in an organisation is equally valuable! Have in mind that not everybody will be on board at the beginning, therefore repeat the message continuously and give a thorough explanation of the meaning of Industry 4.0, and also automation and digitization of industries.
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