The Ultimate Guide to Hidden Factory (Part 2): Expose Unseen Waste and Realize the Full Potential of Your Manufacturing Business

In the last blog, we delved into the concept of the hidden factory and revealed how it can prove detrimental to your business. In this blog, we’ll take a close look at what the hidden factory looks like in action, the benefits of uncovering it, and how you can overcome its menace.

Examples of the hidden factory at work :

• Having multiple versions of specifications, increasing the chances of using an outdated version while increasing the time it takes to update the right one
• Operators reworking parts at their station, taking extra steps that others don’t know about (which causes problems when that operator is away from work or leaves)
• Line supervisors speeding up cycle time to catch up when they’re behind, not realizing it’s causing hidden part damage
• Sorting mix-ups that allow defective products to reach the customer
• Lag time in reporting quality data that allows problems to get worse
• Making it difficult for people to share ideas and improvements 
• Operators not carrying out preventive maintenance on machines leading to hidden part damage and future machine failure

The benefits of uncovering the hidden factory

Discovering and addressing the issues associated with the hidden factory will unlock many advantages for your manufacturing business such as:

Enhanced equipment ROI

Capital expenditure costs are one of the most expensive undertakings for manufacturers. If capacity is hidden, a company may be forced to spend additional money on a piece of equipment to increase production.

By unlocking this capacity using digital transformation, you can better utilize your existing equipment, reduce the costs associated with new purchases and increase ROI from your current assets.

Improved customer experiences

Unlocking the hidden factory is a sure-fire way to delight your customers. Manufacturers can produce goods more rapidly, shorten lead times and lower the overall costs of production. 

Unlocking higher capacity through the hidden factory also allows companies to innovate and create new product varieties, empowering their customers with a wider range of products to choose from.

An outstanding competitive edge

If one manufacturer in an industry suffers from the hidden factory in safe to assume that others do too. 

By unlocking capacity, companies can outsmart their competition by doing more with less. This makes them the low-cost producer, increases their agility to respond to disruptive market forces, and deliver more value to their customers. 

Greater process improvement

Lean and Six Sigma have done wonders to the world of manufacturing over the last few decades: they’ve helped improve processes and lower costs.

But many of these initiatives were implemented with a company’s hidden factory still lurking underneath.

Unlocking an organization’s total capacity through a digital transformation using automation and IIoT factory monitoring platforms allows Lean and Six Sigma programs to dig deeper. 

With real-time, accurate data, these methodologies provide structure and process gains in manufacturing when the hidden factory is revealed.

Unsiloed Data

Siloed data, reporting, and processing can be eliminated by discovering the hidden factory. 

With new capacity at their fingertips and accurate data in hand provided by a machine data platform, managers can easily allocate resources accordingly. 

This can increase value by producing accurate KPIs, giving a clear picture of the actual costs, and creating greater collaboration between departments.

How to discover and address the hidden factory :

The hidden factory lies just beyond the existing way in which your business is measured. The problem is that in many cases the information reviewed to understand the performance of the shop floor is highly inaccurate. 

This may include inaccurate cycle times, poorly developed work standards, and flawed performance benchmarks based on incorrect assumptions.

Without accurate production data, managers simply cannot hope to find the hidden waste on the shop floor. 

To solve this problem, smart manufacturers are leveraging solutions that collect, aggregate and standardize production data autonomously. 

With this data in hand, accurate benchmarks can be set and areas of hidden capacity, as well as waste-generators, can be far more easily identified.

Calculate Rolled Throughput Yield

One excellent tool for identifying the hidden factory is Six Sigma’s Rolled Throughput Yield (RTY), which is a calculation that shows what your yield is for all products. 

Knowing this helps you zero in on the worst process performance to develop strategies for continuous improvement. The first step is to identify the Defects Per Unit (DPU).

The formula then determines the yield by using a mathematical constant of e, equal to 2.718 and expressed as e raised to the power of negative DPU or e^ -(DPU).

Waste Generators

Once you know your yield, you can focus on specific processes to tackle waste. Typical waste generators include:

• Waiting (Delays)
• Process Workarounds
• Non-Value-Added Work
• Plant Layout
• Inventory Errors
• Training
• Defective Products
• Over-Processing
• Quality Fallout

By mapping out RTY and classifying which waste generator it belongs to, teams can overcome it by deploying the respective remedial processes.

Machine monitoring can be an effective solution for identifying the types of waste your operation is producing.

Running a Capacity Analysis

Once accurate machine and production data is collected, hidden capacity can be found using a capacity analysis. For brevity, here is a quick summation:

Benchmark Data: Benchmarking includes determining existing capacity. Machine speed, quality losses, and downtime by categories – such as breakdowns, changeovers, and performance losses – must all be measured to determine the current capacity.

Analyze Downtime: Once a manufacturing operation has benchmarked its data and understands its true utilization, a downtime analysis must be conducted. 

By answering how much downtime is occurring and what category the downtime falls under, steps for improvement become more clear.

Rollout Process Changes: Managers are now equipped with accurate and verifiable data that drives real change at this point in the capacity analysis. 

These changes can be used to tackle the most significant capacity constraints, reduce costs, and nurture a maintenance program that works in sync with changeovers and other operating conditions. 

In a nutshell

The concept of unlocking the hidden factory is an exciting and challenging journey. To truly reduce waste and inefficiencies, however, unlocking the hidden factory should go side by side with digital transformation. 

Data gathered by connected equipment with edge devices and IoT sensors deliver incredible value by providing a source of real-time, accurate information with which to search for areas of concern.

If you’re looking to partner with a best-in-class digital transformation and IoT services company to uncover the hidden factory and scale your manufacturing business, look no further!

With over 16 years of skin in the game, we leverage a holistic combination of devices, cloud computing, analytics, and custom applications to connect, monitor, and manage your assets on the go.

Our solutions can empower you with complete visibility of your shop floor, boost operational performance and skyrocket growth. So, what are you waiting for?

Schedule a free consultation and talk to us today!