Productivity improvement management brief fast_react_evolve

Management Brief Ref: Fast React_Evolve_Management Brief_Productivity Improvement

PRODUCTIVITY IMPROVEMENT WITH FAST REACT.How Fast React can help your business to increase efficiency.

Fast React Systems Ltd – EuropeTel: +44 (0)1332 668942 Email: [email protected] Web: www.fastreact.com

Fast React Systems Ltd – AsiaTel: +66 (0)2 664 3326Email: [email protected] Web: www.fastreact.com

All manufacturing businesses, even those in low-cost countries, are faced with the problems of rising costs and increased competition for skilled labour so a sustainable and profitable business is ultimately dependent on constant improvements in productivity. The scope for productivity improvement in most businesses is significant. You only have to look at the variations in daily output to see that the difference between a bad day and a good day could be as much as 30%. Having a few more good days and a few less bad days can easily increase average output by 5 to 10%.

Planning and Productivity - How planning issues can cost you output.

Many companies look at ways to sew faster, however this is no easy task for a number of reasons:

• Sewing faster can have an adverse effect on quality.

• Only some styles and some operations can be automated or improved with new machinery, others rely totally on operator skill.

• Operator training and incentive schemes only work when labour turnover is low and the IE team are skilled to ensure incentives are fair and accurate.

BUT the good news is that sewing faster is not the easiest way to increase productivity.

Often the most effective way to improve factory productivity is to focus on making sure your operators spend more of their time sewing and minimise style/product type changes. In reality all factories lose 5%-20% of their capacity due to a combination of changes to the plan (that increase the number of style changes required therefore causing lower overall efficiencies) and non productive (waiting) time in the lines.

These changes to the plan are typically due to:

• Missing or delayed fabric, trims & accessories.

• Cut, print, embroidery and special machine bottlenecks plus WIP shortages.

• Delays with sample and other approvals by the buyer.

• Management struggling to get the right information to make the right decision in time.

Opportunities for improvement

Consider the potential saving of a 5% improvement in your own factory efficiency. A typical factory in South East Asia employs 1000 workers and pays a daily wage of around $8 per worker. The annual wage bill is therefore in the region of $ 2.2 million. It is commonly accepted that the real cost is at least double this when considering overheads; so $4.4 million per year. A 5% improvement in operator utilisation would net a direct saving of $220,000. Given the scope for improvement there is huge opportunity for cost saving in a business by investing in a tool to support the planning, control and management decision making process. Read on to understand how Fast React and better planning help deliver real productivity improvements in your business.

1. Waiting for Materials and Accessories This is one of the most common causes of changes to the plan. Non-arrival of materials usually results in fire-fighting, increased non-productive time, lower operating efficiency and capacity usage that is far from optimal. Whilst it is easy to blame suppliers for this, the reality is that many companies struggle to;

• Clearly prioritise and communicate what they need from their suppliers and when.

• Coordinate fabric and trims so that all items are available in the right sequence for manufacturing.

• Communicate quickly between planning and material purchasing.

The reason for this is that ‘materials in house’ target dates are usually based on overly simple rules. For example, most companies use the delivery date less a standard lead time for production i.e. fabric in house 40 days before delivery date.

“Material inventory levels used to fluctuate wildly, with little correlation to our production plan. Effective masterplanning synchronizes our entire supply chain. Even though our current season bookings are up 30%, we haven’t shipped a single item late in over a quarter. Our performance is so good that we are starting a new guaranteed on-time or its free shipping program.”Perform Group LLC - USA

1

Detailed sewing line plan in materials status view, showing an at a glance “traffic light” view of material availability to meet the plan.

The problem is that using this approach, if we have 30 orders all for the same delivery date, all orders will have the same target material in house date. However, of course that’s not the real situation. In reality, we need the materials for some orders earlier than others and only the latest production plan can reflect our true priorities for delivery.

How Can Fast React Help?

Fast React’s Evolve provides clear targets for each order/material item, based on ‘how much’ is required and ‘when’ in time for production. These targets are calculated on Just In Time (JIT)/Lean principles so clear priorities are set. These priorities are driven directly from the latest production plan and so consider SMV, order quantity, production process, pull forward in low season, number of sewing lines used, subcontracting activity etc.

Fast React’s Evolve can then receive feedback on expected and actual materials availability for quick and easy chasing and re-planning.

2. Bottlenecks due to Machine Shortages or Capacity Problems and WIP Shortages

Managing the other non-sewing production processes is becoming increasingly important as factories invest in special labour saving machines such as pocket welt, fashion trends include more embellishment and Hi Tec features like laser cut




and bonding. Many buyers also aim to reduce risk of non-compliance by pushing their suppliers to avoid subcontracting and do all production processes in-house.

Most factories fail to see far enough in advance that the style mix at a particular time will mean machine shortages on certain machines in sewing, or capacity problems with production processes before or after sewing. With a plan that changes weekly due to changing buyer demands trying to track potential bottlenecks with a manual spreadsheet based system is an almost impossible task.

Another challenge is the daily check to ensure all these process are meeting their target and therefore the Work In Progress (WIP) is enough to support the sewing plan but not too much so excessive WIP is generated.

“The most immediate benefit is having all the key information in one system instead of many Excel files; this greatly reduces the workload for the planning team...the planner can spend more time to maximise the use of planned capacity and avoid or work around the risk of critical process delay or material problems Despite the ever increasing pressure on production and planning from shorter lead times, style complexity and smaller order sizes we have been able to keep running the operation at an optimum level, maintaining idle capacity losses at less than 3% and with less than 0.3% delivery claims.”Crystal Elegance - Hong Kong, China, Vietnam and Bangladesh

2






Fast React’s Evolve allows the user to define which operations and machines they wish to monitor. As soon as the main sewing plan is created, the operation bar-charts provide an easy to read picture of the loading on key machines or process areas.

Potential overloads and problems are highlighted well in advance (by operation and by day/week/month), in plenty of time to take corrective action. Full drill down and ‘modelling’ of capacity and working hours etc. allows for rapid ‘what-if’ problem solving.

Fast React’s Evolve generates daily work schedules for all departments including any subcontractors and from daily production updates fed into the solution immediately identifies any WIP problems, such as insufficient cut work. Problem orders are highlighted with a colour coded warning on the Fast React’s Evolve planning board and are also shown in management WIP shortage reports.

3. Problems with Pre-Production/Product Development

The current trends of reducing lead times, product development tasks increasingly being handled by suppliers and more complex products creates further headaches in ensuring production starts on time.

Often samples and other approvals are completed in the wrong sequence or are not coordinated with the availability of materials, so the plan has to be changed away from the most efficient and effective plan.

The reasons for this are the same as discussed in item 1, that is, pre-production targets are typically based simple rules and because in most factories, the pre-production and purchasing team are separate so do not naturally work together to the same priorities. Some orders have all approvals but missing materials and other orders with all materials available but approvals outstanding.

Example of Bottleneck Management for Embroidery & Print Driven from the Latest Sewing Plan.

Example of WIP shortage warning.

“We have improved the operational efficiency in our shirts production by 7.1% over 2 years. These improvements have been possible because Fast React provides:

• Clear visibility of the status of all orders and load on the factories.

• The ability to keep pace with dynamic situations and quickly re-plan.

• Transparency of information across the different business departments so we work more effectively as a team.”

Madura Garment Exports - Bangalore, India

3






Fast React’s Evolve provides clear targets for each product development and pre-production event, based on a “pull” system from the latest production plan. This ensures that clear priorities are set quickly and easily matching the production plan and material availability.

Fast React’s Evolve can then be updated with expected and completed dates. This allows the planning team to coordinate easily between merchandising, purchasing and production to ensure on time start and the best plan for efficiency and delivery.

Pre-Production view show status of each activity and problem areas with full drill down to the detail.

“Fast React has given us full integration of our planning and pre-production activities as well as much improved visibility on WIP and potential delivery issues. In 2008 we have seen a 3.5% improvement on factory efficiencies due to improved planning and the ability to react quickly and earlier to supply issues, thus avoiding unnecessary line idling. Our first quarter of 2009 has seen a further 3% improvement in factory efficiencies – The proactive warnings that Fast React provides in advance of a problem has been key to managing this process more effectively.”Crystal Martin - Sri Lanka

4


4. Lack of fast and accurate data to support Decision Making due to Manual Systems

Most fashion manufacturing businesses have an ERP system to handle purchasing, inventory and finance etc but struggle with a number of different manual systems to plan and control the latest order book and status. For example multiple spreadsheets are used to manage sewing capacity and production status, embellishment and washing schedules. Pre-production/product development status is often managed in email. The planning team then have a difficult job to pull all the required updates to get a total picture.

As the different departments are not connected, considerable management/staff time is wasted in numerous meetings, emails and phone calls to consider and communicate the frequent changes in the plan. Too much time and effort is spent in simply identifying the problems in the first place, leaving far too little time to solve them.

Even when problems can be seen in advance, with current methods, management are unable to quickly test out different “what if” scenarios. Late delivery is simply not an option due to the cost of airfreight or discount, and because of the constant pressure to keep the sewing lines busy, quick decisions have to be made and often these will impact on factory efficiency (style change) or manufacturing costs (overtime, subcontracting, air freight of inbound materials).




5


High Level Management and Merchandiser View Shows Order status.• Grey is good • Blue is late • Red outline is WIP/Production problem • Yellow /Orange is a lead time pre-production issue.

Capacity by factory by week. Green is good and other colours show over or under load.


Highly visual and easy to use, the Fast React Evolve solution consolidates capacity, material availability product development and the latest production status into one system providing a central point of reference for all departments and ‘a single version of the truth’. As all the key factors are in one system (capacity, lead times, material availability and current production progress against the plan). Fast React’s Evolve allows the planners to quickly consider the “knock” on effect on the whole plan. For example, if a sample is rejected and needs to be resubmitted, the planner can assess in just a few minutes how this will affect start date and therefore delivery, also consider what orders can be pulled forward to maintain production in the sewing lines.

The end result is fewer urgent cases with fire-fighting to achieve delivery, a smoother plan and more efficient production. Management time is available for productivity improvement activity such as staff training, method analysis, line balancing and lean projects to further boost productivity.

“Our businesses have witnessed significant growth, and the investment on Fast React has enabled us to establish and maintain a vibrant planning function without having to increase our headcount in planning. The significant shift that we have been able to make from manually prepared sources of information to extracts from our systems has helped us make better informed business decisions.” Brandix Group - Sri Lanka

Business

Productivity improvement management brief fast_react_evolve