While many in the service industry grouse over Sarbanes-Oxley’s demand for transparency, one of manufacturing’s enduring buzzwords is visibility. In the early days of the industrial revolution, the foremen carried the information about worker productivity, and perhaps supply levels, to the boss. Today it can all be automated on the plant floor.

Through the analysis of over 150 plant floor data management initiatives, Aberdeen Group‘s recent “The Enterprise Value of Plant Floor Visibility” benchmark report correlated very specific business capabilities to best-in-class operational performance.

For the purposes of the study, Aberdeen evaluated and classified manufacturers based on five key performance indicators: on-time delivery, average number of stock outs, overall equipment effectiveness (OEE), direct material usage variance, and throughput. Results show that best-in-class manufacturers:

• Are 26 percent more likely than other manufacturers to be providing plant floor data to executive decision makers;

• Are 31 percent more likely than other manufacturers to have integrated plant floor data with ERP; and

• Are four times more likely than other manufacturers to be utilizing Manufacturing Intelligence/Manufacturing Process Management (MI/MPM) and 40 percent more likely to have real-time plant floor data capabilities.

More than 150 manufacturers participated in the study, including Ford, Intel, Unisys, Bose, Merck Pharmaceutical, Bombardier, Pfizer, Kraft Foods, Inc. and The Washington Post.

Why do the manufacturers with executives who can see what’s happening on the plant floor do better than the others? Well, there’s no filtering of the situation by middle managers who don’t want to be associated with bringing problems to the fore. More important, though, the executive is attaining precise and accurate information that he or she can’t ignore as insignificant. Further, the executive will want to act immediately to threats to productivity and quality. As he or she has full authority, there will be no second-guessing about what needs to be done to boost productivity and enhance quality.

Matthew Littlefield, a manufacturing research analyst with the Aberdeen Group, noted:

Best-in-class manufacturers are 15 percent more likely to be utilizing plant floor data that has been collected from an automated source. This data is 40 percent more likely to have been collected in real time and 31 percent more likely to have been integrated with ERP.

Moreover:

Best-in-class manufacturers, in regards to enterprise organization and knowledge management, are 13 percent more likely to manage plant floor data initiatives at the corporate level and are 26 percent more likely to give executive decision makers plant floor visibility.

There’s nothing etched in stone stating that only executives should benefit from visibility.

Supply & Demand-Chain Executive recently pointed to Informance International, for instance. The provider of enterprise manufacturing intelligence (EMI) solutions believes “companies that achieve the highest levels of productivity and quality find ways to involve the entire team, including those with the most immediate impact through the plant — the line workers.”

S&DC Executive explains that up until recently, line and plant staff had to rely on end-of-day, -shift or -week performance reporting on bulletin boards, white boards or delivered during meetings, “creating a significant lag time to take corrective action.” The company pointed to its research that showed “best-in-class [manufacturers] identified 99.5 percent of operating losses against their key performance metrics and have processes to quickly react to key performance indicators that deviate from acceptable levels.”

As well, based on the “The Enterprise Value of Plant Floor Visibility” report’s findings, Aberdeen Group recommends the following for action:

• To solidify corporate buy-in and ownership of plant floor data management initiatives, collected data should be integrated with ERP;

• Manufacturers should utilize an automated visualization and analytics solution to provide plant floor visibility to executive decision makers;

• Manufacturers should utilize an automated plant floor data collection solution to provide real-time plant floor data visibility; and

• Consider adopting MI/MPM solutions and utilizing the technology to implement the aforementioned three recommendations.

“Businesses can’t wait until they’ve produced a big batch of bad product or missed a key delivery date; they need to be able to detect changes and correct them quickly,” KnowWare International Inc. recently noted, describing additions to a software that aims to simplify the charts, graphs and documentation in Lean Six Sigma.

More to come in next week’s IMT newsletter issue on smart business and manufacturing intelligence.