5 Reasons why Manufacturing Floor Control with Real-Time Tracking is Important for Cost Reduction
Many of Indoorway’s customers are manufacturing businesses. Even though they come from different industries and manufacture different products we often notice one common trend while speaking with them about their asset tracking needs.
The pressure that comes from ruthless competitors and demanding customers makes it important for manufacturers to develop rapid response capabilities and make smart decisions as close to “real-time” as possible.
A lack of such capabilities often results in increased operational costs; for example, Steve Baker, a Forbes contributor, recently wrote that:
- a 20 percent of excess inventory is a cross-industry estimate, which translates into millions of dollars of lost profits
- In the automotive industry, manufacturers and suppliers of parts can be fined as much as $4,000 per minute if they fail to deliver and cause production downtime.
We think that to minimize the risk of failures to deliver on time, eliminate delays, and address other pressures, manufacturers must have a clear, real-time overview of production and internal supply chain process.
Here, Ultra-Wideband (UWB) tracking of every asset and inventory item on the manufacturing floor can provide manufacturers with that much-needed control. In this article, we’re going to give you excellent five reasons why we think it’s a great option.
Reason 1: Minimize Delays and Improve Planning
Our experience with manufacturing businesses showed that many of them used to add more equipment and employees to specific processes when they were late with making deadlines of customers.
However, there are two major problems with this approach.
First and foremost, it’s not always possible for a business to locate additional employees and equipment that can quickly be redirected to work on the tasks where help was needed. As a result, more problems have emerged, as more administrative staff and supervisors were required to manage those who were added to the project.
This means more labor costs.
Second, adding more machines and employees also raises overhead costs, which translates into more capital expenses, equipment usage, more requirements, planning, and other unplanned processes.
So, it’s no longer effective to add more people and machines. To prevent the above-mentioned costs, manufacturers need to have better control over relevant production activities and supply chain operations to manage the process more effectively.
For example, using a UWB real-time asset tracking system like Indoorway, manufacturing managers can get a real-time overview of processes on an ongoing basis. By having Location Tags on assets such as employees, work-in-progress, inventory, forklifts, and others, they can:
- See where bottlenecks in production and internal supply chain occur
- Define where more employees are needed to increase the speed of processes
- Identify production issues and immediately begin investigation and repair
- Replenish inventory quickly and keep production running
- Improve overall productivity.
In other words, the real-time overview of the manufacturing floor provided by a real-time asset tracking system can give the manager the data they need to see delays and issues and identify improvement opportunities.
Ultimately, the data will help them to make decisions to increase the predictability of manufacturing processes and minimize excessive inventory.
Reason 2: Reduced Excess Labor Costs
By tracking the workforce in real-time, the manager can see if they’re working on value-adding tasks. For example, if the manager recognizes that the amount of work during one shift can be completed with fewer employees, he or she can remove one worker and redirect them to other tasks.
As a result, the manager minimizes non-productive time and saves money that otherwise would’ve been spent on salaries.
Read about employee tracking in the automotive industry to know more.
Reason 3: Reduced Administrative Labor
Application of a UWB real-time asset tracking system often eliminates many processes where a manual recording of information is needed.
For example, Indoorway infrastructure consisting of Data Hubs and Location Tags can record the number of times an asset like an employee or a forklift enters a certain area on a manufacturing floor or a warehouse, which counts as an activity indicator.
By combining real-time movement data with activity data, manufacturing floor managers can eliminate time clocks and other processes requiring manual recording of information.
Besides, a real-time tracking system will improve the accuracy of such data, as UWB technology ensures high location accuracy even in highly metallic, vast industrial environments.
Ultimately, real-time asset activity data ensures increased accountability, enabling managers to track and monitor the activities of shifts and individual asset throughout specific time periods.
For example, below is a chart showing the activity data of forklift working for 24 hours (three shifts). As you can see, the activity tops in the morning and remains fairly high during the day shift, but falls rapidly during the last night shift on the right (see time indicators at the bottom of the image).
You can read about asset activity insights found in the above chart in this Forklift Utilization in Automotive Industry Case Study.
Reason 4: Improved Customer Relations
Continuous improvement of production and supply chain thanks to real-time asset tracking increases the ability of a business to deliver on time.
By properly loading the factory, monitoring the movement of work-in-progress, ensuring inventory availability and eliminating process bottlenecks, a business will have a much better chance to deliver orders and keep their customers and partners satisfied.
Reason 5: More Effective Production Managers
Manufacturing floor managers and employee supervisors can use real-time and historical asset movement data to help them do their jobs more effectively. The data will make them more informed about their processes and common problems, and ultimately will help them to understand the sources of problems.
As a result, they will be able to “act rather than react” if a production issue occurs.
Final Considerations
By having real-time asset tracking at their disposal, production managers can improve Just-in-Time delivery and deliver significant cost reductions.
Having a real-time overview of production and internal supply is clearly important to improve management’s ability to identify and solve issues and delays before they escalate, thus allowing to improve overall productivity and reduce excess costs.
If this sounds interesting, here’s what you need to know to select a real-time asset location system for manufacturing.
