The perspective on the future
The world around us is changing at a turbulent rate. The economy is in full swing, with the supply side having trouble fulfilling market demand. Increasingly, an obstruction factor is being able to recruit sufficient capable employees. Digitisation has taken off in a spectacular way. Big data, internet of things and smart industry are today’s tendencies. The value of a company is increasingly measured based on future earning capacity rather than based on statistical results. Future earning capacity is derived from the correct, forward-looking value proposition, which can be updated with high flexibility based on an agile organisation. The result is a flexible, forward-looking earning model with a matching cost structure. Executives support and embrace the course as described. But still, there is more...
Respect for the past
The flexibility set out above has resulted in increasingly frequent and faster demand for new earning models and associated cost structures without optimising earning capacity. In spite of the forward-looking perspective, statistical data are too often used to determine return rates. Past performance is still a basis for cost, sales prices and budgets. While budgets are achieved, it gives rise to the question if this is the highest achievable. Variation analyses show how and to what extent deviations from statistical performance emerged. But how about the statistical data? Is it possible that analysing such data and optimising based on such analysis could improve earning capacity? Could cost structures be optimised, retaining employment in the manufacturing industry in our region?
Link history to new technology
Based on increasing technology and digitisation rates, availability data can be recorded in a structured way, to be used as a basis for further analysis. Availability, production speed and quality of output can be calculated and monitored, allowing for determining the OEE (Overall Equipment Effectiveness). The OEE is traditionally at around 50% on average in our regions. This rate of 50% forms a basis for our cost, sales prices and budgets. Digitisation allows for an easy way to record both the performance and the disruption factors. This creates a basis for a process of continuous improvement. Known and new improvement methods to be used in the optimisation process enable OEE improvements by 10 to 15 percentage points. TPM, SMED, SGA and 5S are just a few of such methods.
Continuous improvement enables an OEE increase of 10 to 15%!
Such improvements are about to become visible within many facets of business operations: optimisation of earning capacity, reduced dependence on the limiting effect of the labour, increase in production output, more supply to the market. Recalibration of statistical data will contribute to a positive development of corporate profit.