At this time of year, many businesses begin planning, budgeting, and scheduling their operational initiatives for 2016. Much like our holiday shopping lists, the process can be overwhelming with long lists of things to do (or buy) and a real budgetary need to cherry-pick the must-dos (or must-gives).
Like many business tasks, selecting the right initiatives and setting KPIs to track them can be simplified by setting up a process.
1. Plan initiatives that align with business vision, mission, and goals
Review the core values of the organization and make sure the operational initiatives you are considering will further them. This way, it will be much easier to gain buy-in from all levels of the enterprise, and you can make sure you are working on things that truly matter to your company.
Many organizations have cost savings (and therefore, increased profit) at the top of their agendas. In manufacturing plants, this often translates to a need to reduce the cost per unit. The operational initiatives, therefore, should be the ones that contribute directly to improving Overall Equipment Effectiveness (OEE). This metric can be used to indicate the overall effectiveness of a piece of production equipment, or an entire production line.
Gaining device level visibility into the performance of each piece of equipment can help an organization quantify how well a manufacturing unit performs relative to its designed capacity, during the periods when it is scheduled to run
2. Hone in on the initiatives with the greatest impact
Once you focus on the goals that matter, select the proposed initiatives that can make the most difference in achieving those goals. Remember that KPIs should not be how much you do, but rather how much effect you have.
Sometimes, the simplest actions can have a great effect. Other times, eliminating actions may have an even greater effect. Typically, technology solutions are implemented in order to drive the most measurable impact. For example, one of our clients, after deploying our device level energy management solution, had the visibility they needed into the performance of their assets. As a result of that initiative, they identified the true cost idling equipment had for the business. By working to reduce idle time, they were able to save significantly on the cost of operations for that production line.
3. Base decisions on data
Generations ago, operational managers prided themselves on living, breathing, and knowing everything about their facilities – their hearts beat to the same rhythm that their machinery cycled. They awoke with a start when they sensed a piece of equipment was failing. In our Internet-of-Things connected ecosystem however, that is no longer an acceptable method for making decisions.
Today, we track, we monitor, and we benchmark; we get alerted to anomalies, we schedule maintenance when energy profiles detect a need, and we optimize every aspect of our facilities based on consumption data.
Using intelligent analytics, we can use data-backed indicators to detect, advise, predict, optimize, and continually improve.
4. Achieve the positives and avoid the negatives
While it may seem more effective to focus on the positive KPIs (i.e., increasing production yield, overall equipment effectiveness, and improving quality), it is also critical to undertake the operational initiatives that will avoid negatives (i.e., downtime, device idiling and compliance issues).
Avoiding negatives is sometimes hard to quantify as far as KPIs, as it is hard to measure how many bad things didn’t happen. In these cases, the ability to benchmark against industry standards, history, or comparable systems provides the metrics that drive success.
While a Facility Manager may not be able to say with certainty “I avoided 312 equipment failures this year,” he can say “I reduced equipment failures by 53% from last year” or “this location had 97 fewer equipment failures than another site.”
5. Track the results of all operational initiatives
Any operational initiative undertaken throughout the year should always be tracked, monitored, and reported on. With this information, the operational impact can be quantified and qualified.
For example, one of our clients performed upgrades to pumps by installing inverters. They easily calculated ROI very accurately and quickly verified that the device didn’t slide back. They tracked the resulting consumption drop and calculated its effect on the annual bottom line.
Make a list and check it twice
As 2015 comes to a close, now is a great time to make a list of the proposed operational initiatives for 2016, compare them to the corporate agenda, select the ones with the biggest potential, collect data and use it to make decisions, avoid the possibility of negative events, and plan to measure the results of each initiative.
Many strategic initiatives that may have been daunting undertakings in the past can now be deployed, with the assistance of current technologic advancements.
Are you spending too much on costly routine maintenance? Are your facilities personnel investing too much time managing vendors, service calls, retrofits, and other projects? Is the total cost of downtime caused by unforeseen equipment outages impacting your bottom line?
Find out how our solution can transform your maintenance operations: