The manufacturing industry and its missed opportunities
What is going wrong with the flow of goods between the warehouse and production floor?
Production departments and warehouses in the manufacturing industry often work with the most advanced machines and modern technology available. But strangely enough, the actual coordination between these two departments is a rather old fashioned, paper-based process. So what are the opportunities that the manufacturing industry is missing out on? In this blog, I will illustrate some of these opportunities by giving a few typical examples from current practice.
I’ve been involved in the supply chain world for quite a while now. Years ago, I worked at a company that manufactures food products. It was at the time when the demand for ecological products rose sharply and we wanted to respond to this with a special line of products. Suddenly, in addition to the ‘regular’ raw materials, our production floor had to start working with ecological raw products. This adjustment didn’t occur without the odd stutter. Once the production workers used the ecological raw materials to produce a batch of non-ecological products. Not necessarily a disaster, except for the waste of money. But if it had happened the other way round, it might have led to a legal violation.
I’ve also been involved in a company that produces components. There the production department faced the problem of having a lack of space in the warehouse; the storage area for finished goods was completely full. The production staff solved this by moving all of the finished goods from the storage area to the corridors of the warehouse. But this led to complete chaos in the warehouse. Which pallet was part of which order? And which batches had already been assigned to customers and which had yet to be stored?
The manufacturing industry knows how to get things done
I think everyone in the manufacturing industry tends to fall back on the classic anecdote that wherever people are at work, mistakes are bound to be made. But if one thing stuck with me during my time in the manufacturing industry, it is that the industry certainly knows how to get things done. Problems will always be solved and smaller fires will be put out before they escalate. However, this is not always achieved with the right long-term structural solution. And actually, wouldn’t it be better if there were no fires to extinguish in the first place?
Back to the cause.The fires resulting from the above two anecdotes could have been prevented if there had been better coordination between the warehouse and the production floor. If the warehouse staff had placed the right ecological raw materials at the correct workstation, and with the right batch, there would never have been any confusion at all. And if the production department had immediately reported that some batches were ready, and the warehouse staff had received real-time messaging about it, the improvised storage would not have been necessary.
Modern + modern = traditional?
The manufacturing industry is well ahead in terms of technological innovations. Often the production floor and the warehouse are equipped with the most advanced machines and technologies available. So it is a pity that organizations only make use of half of the value of these technologies. Because what is the use of all that modern, technological ‘power’ in the warehouse and the production floor if the coordination of the flow of goods between these two departments still is organized traditionally? What is the added value of having two departments working separately from each other with technological and modern tools if the mutual communication about the supply of materials or raw materials and the ready reporting of end products between these two departments still takes place through the use of lists and paper orders?
This traditional way of working hinders companies in their attempts to offer the customers what they expect these days: fast deliveries and a smooth process. And it also causes a lot of unrest internally, as a result of which the answers to the following questions remain unclear:
• Will there be enough materials in time, so that the production process won’t experience any unnecessary stops?
• How do you avoid the chaos and confusion caused by having a situation where the production materials of multiple batches are deposited at one workstation?
• Are the right materials at the right workstation?
• Do the end products have the right quality trademark?
• What should happen with production materials that are left over?
• Will the finished products be removed in time?
• What should the warehouse employee prioritize: the removal of reported end products, the picking of customer orders, or the unloading of incoming goods?
• How do you get a real-time insight instead of e.g. per shift?
• How do you ensure that the time between the end of production and the availability for delivery is as short as possible?
The solution is…
In my next blog, I will give some tips to optimize the processes, goods flows, and the communication between the warehouse and the production floor. How do you build a smart factory? How do make optimum use of your production time? And how do you easily meet the customers’ wishes? Keep an eye on this blog for the answers!
Do you want to know more?
Save the date: On Thursday 20 September the webinar ‘The dream of every business manager; the ideal world for the operation’ will take place. During this webinar, we will discuss the coordination and the flow of goods between the production floor and warehouse. You can register now!