The manufacturing performance gap widens

According to a new AberdeenGroup Manufacturing Performance Management Benchmark Report, manufacturing performance correlates directly to frequency of measurement. This comes as no surprise.

Good management practices in manufacturing disciplines are built upon the premise that you can't manage what you don't measure.  A similar study, conducted in late 2004, found best performers with not only more dramatic improvements in cycle times, throughput, schedule compliance and inventory, but also shifting attention outside the four walls, focusing on customer facing metrics and reaching back into the supply chain with collaborative efforts.

Eighteen months later, we expected to see close followers doing just that - following closely. Instead we found the best getting better and the rest marching in place. While these better performers are taking a balanced approach to integrated, closed loop performance management, supported by flexible IT solutions, the rest of the world is still attempting the heavy lifting through brute force efforts. Eighty four percent of manufacturing companies are still relying on spreadsheets. Many admit they may not be the best tools around, but they are "good enough" and easy to use. While most would love to measure in near real time, ad hoc performance monitoring is more the norm, in spite of the availability of mature and emerging technologies.

The most common obstacle standing in the way of manufacturing performance strategies 18 months ago was data collection. The exact same obstacle floated to the top in Aberdeen's latest study, implying little progress has been made. Yet while 58% say they are responding with simple and automated data collection, a full 60% are still primarily collecting data manually and less than 1 in 5 (19%) are answering the challenge by deploying IT solutions.  Better performers are getting better while poorer performers make little progress, so the performance gap is widening.

Integrated manufacturing performance management solutions have seen a resurgence over the last several years as a new set of vendors, along with existing vendors, have developed solutions that support methodologies such as Lean manufacturing. They do a much better job at modeling manufacturing operations, supporting problem resolution and providing performance analysis. However, there seems to be a decided lack of awareness of available manufacturing performance tools and technology among the masses.

At the same time, best in class companies reported using integrated manufacturing and operations intelligence platforms from companies like ActivPlant, Informance and IndX Software, a Siemens Company,as well as analytics and other business intelligence tools from the likes of Cognos, Business Objects and SAS. With these tools in hand they reduce operating expenses, increase factory utilization and operational availability. And most of all they increase product production. They provide managers with drill-down capability to detailed performance data to detect defects, root causes and variability. They reconcile differences between run rates and global benchmarks and analyze reasons for discrepancies. All tough to do with spreadsheets.

Is it possible to achieve superior manufacturing performance without these tools? Could you solve a complex physics problem today with a slide rule? Sure. But why would you?

to see report click - http://www.aberdeen.com/summary/report/benchmark/RA_MPM_CJ_3166.asp