How RTLS Technology helps Support Lean Manufacturing

In this article:

• How RTLS technology responds to the seven wastes of Lean Manufacturing
• What is the main purpose of RTLS regarding Lean Manufacturing?
• A short case study of RTLS application in Confectionery Manufacturing

Many European manufacturing businesses struggling with overhead costs and rising operational expenses found Lean Manufacturing strategy to be effective in creating a culture of Continuous Improvement and reducing costs.

That’s why almost every manufacturing conference we visit includes at least one success story of a plant that used Lean to achieve cost reduction, told by a happy manager. In fact, many of them say that their plants were “transformed” thanks to Lean because of profound changes brought by cost reduction projects.

However, as the research shows, only 24 percent of companies using Lean in manufacturing succeed at achieving significant results. Accordingly, such a high failure rate is a result of a lack of employee adherence and control over processes.

To eliminate these issues, production managers require a sophisticated monitoring system capable of supplying process & performance data close to real-time.

Why Real-Time Location Systems (RTLS) for Lean Implementation?

In our experience working with manufacturing facilities throughout Poland, we found that the use of Lean Manufacturing principles is an effective way to show and identify the value of RTLS for businesses.

We’ll use the seven wastes of Lean Manufacturing as the principles showing the benefits of product monitoring and optimization with RTLS.

Below, we provide a guide for finding opportunities for using RTLS to optimize production through Lean Manufacturing Principles by using a small case study.

RTLS in Manufacturing: Use Cases

According to the Lean strategy, the list of wastes in manufacturing includes:

The 7 wastes of Lean. Credit: Kanbanize.com

• Overproduction. Simply explained, this involves storing too much of a finished product that results in excess inventory and associated costs
• Transportation. It doesn’t add any value to a product, so unnecessary transportation results in increased operational costs: employing staff, using extra space, safety issues, and unnecessary product handling
• Overprocessing. Any unnecessary manufacturing process component that doesn’t add any value for both businesses and customers
• Waiting. This involves wasted time that occurs because of a stopped manufacturing process
• Defects. These are deviations from the target product state and design that require replacement of the entire product
• Motion. This is wasteful asset motion that doesn’t add any value for the business and adds avoidable costs
• Inventory. This refers to inventory left in storage, waiting to be shipped to the customer. Unnecessary inventory can take up a lot of storage space and hurts a company’s cash flow.

Below, we’ll consider three specific situations that create each of these wastes and who using an RTLS can help to minimize their impact.

1. Dependency on Real-Time Issue Reporting in Manufacturing

Automation of process key performance indicators’ (KPI) collection with RTLS has significant benefits for manufacturing businesses.

For example, stakeholders depending on the data throughout the process flow will be able to correct issues and manage inventory more effectively.

There are four wastes that can occur due to untimely data supply:

• Waiting. If a problem in a manufacturing process is noticed too late, the entire process can stop until the correction is completed
• Overproduction. Having inaccurate data often results in producing unnecessary WIP (work-in-progress)
• Inventory. Unnecessary WIP and poor inventory planning often results in producing too many products
• Defects. Having incorrect or incomplete data may result in improper or incomplete product processing and completion.

2. Asset Performance and Inventory Supply Data Collection

In terms of collecting manufacturing-related data, two types of waste can be created due to inefficient manual methods:

• Motion. Employees involved in manufacturing may not know about locations of assets and inventory, so unnecessary movement may occur
• Transportation. A lack of complete or accurate data may lead forklift operators to conduct unnecessary transportation of products, thus increasing operational expenses

3. Continuous Monitoring of Manufacturing Processes

Real-time monitoring of manufacturing processes is important for managers to make quick decisions and maximize uptime. A lack of real-time control, however, often leads to decisions based on outdated information, which can cause additional problems.

If real-time monitoring of manufacturing processes is compromised, two wastes can happen:

• Overproduction. A lack of information about the movement of WIP and finished inventory can result in a manager making decisions on inaccurate data
• Inventory. A production manager can believe that the completed inventory level for a specific product is lower than the actual one and order more products.

RTLS can provide continuous process monitoring for managers at two levels: batch level and item level; moreover, you can place location tags at WIP and track its movement and stock in specific processes.

As you can see, the ultimate problem that leads to all seven wastes is a lack of accurate, timely data. Since providing this data is the main purpose of RTLS, using it to track processes is an effective solution to improve manufacturing with more informed decisions.

Now, let’s illustrate the impact of using RTLS with an example of a confectionery plant.

The Application of RTLS to Track Processes in Confectionery Manufacturing

Let’s suppose that a manager of a confectionery plant uses RTLS to identify Lean Manufacturing waste. The plant is a large producer of a wide range of confectionery products that utilizes a centrally controlled batch production method.

Batch production is a style of manufacturing where the process is divided into different operations that must be completed before it can continue. The group of products that moves along the production line always stays together, so a final outcome is a group (batch) of products.

The RTLS consisting of asset tracking hardware and visual monitoring & analysis software tracks the production and internal logistics in the plant for several weeks. By analyzing the results of monitoring moving assets and WIP with mobile location tags, the following issues are discovered:

• Too complicated manufacturing routes result in unnecessary WIP buffers and introduce a risk of incorrect storage of finished products (thus risk of overproduction)
• The usage patterns of containers based on their entry to specific facility areas is much more effective than manual. For example, the manager was able to see when a container that carries batches of products was late in the process, thus preventing waiting waste
• The managers reduced the risk of overproduction and unnecessary inventory by tracking a high number of WIP containers and their locations throughout the facility more effectively with a real-time facility map provided by RTLS software
• Employee tracking showed wasted movement and identified the need for more effective routines and task allocation.

By eliminating the wastes identified by RTLS, the managers can work on optimization and reduce expenses by keeping everything in check. This can translate into significant savings in both short- and long-term.

The Bottom Line

Of course, this is just a concise summary of a typical asset tracking project completed by our Lean Manufacturing team at Indoorway. Production managers have to deal with a lot of issues to ensure continuous improvement of processes and cost reduction, but one thing is clear:

they can’t achieve this goal without accurate and timely data.

That’s why we’ve developed RTLS specifically for manufacturing businesses that managers can use to identify the seven wastes more effectively.

If you’d like to know more about how you can track your production and internal logistics processes, feel free to visit our website indoorway.com,

Also, check out our Forklift Utilization case study for a more detailed analysis of how our Indoorway RTLS helped an automotive business discover transportation waste.