Revolutionize Manufacturing: Smarter Decisions, Better Results

Hi everyone. Welcome to today's webinar, revolutionize manufacturing with smarter decisions and better results. Before we begin, I wanna go over some housekeeping items. I'd like to remind you that this is being recorded for you to review later and share with others. It will also be on demand, and you'll be notified via email. We store webinars on our website. And you can, go ahead and full screen the webinar so that you can interact with polls throughout the presentation. Feel free to to use the q and a box to let us know if you have any questions. We'll be answering those at the end or any comments or feedback. And we invite you, of course, to participate as much or as little as you want. I'd like to introduce today's speaker. It's Ronak Makwan. He's a manufacturing subject matter expert at Brightly Software, a Siemens company. With over a decade of hands on experience in both maintenance and engineering roles, Ronak brings a wealth of expertise in GMP, HACCP, and BRC programs. Ronak's experience includes lead manufacturing, total quality management environments, maintenance management and fast paced environments, and a deep understanding of building automation, PLC systems, and equipment integration projects. Driven by innovation and a passion for process improvement, Ronak is well versed in non value added elimination principles and has demonstrated successful project management skills in a manufacturing plant spanning initiation, execution, Monitoring and controlling and closing. He's a professional engineer with his red seal journeyman electrician ticket and has a p m p certification He joins us from toronto. So go ahead and get started ronak Excellent. Thank you for the great introduction, Stephanie. Hello. Welcome, everyone. Good afternoon to those who are joining from the Eastern Standard Zone, and good morning, everybody, who are joining us from the Pacific and Central time zone. So as as Stephanie mentioned, I come from the working from the manufacturing industry. I have worked in the manufacturing for almost ten years, worked in maintenance, engineering, and operations prior to joining Brightly. So today's topic, it's very near and dear to my heart because I'll be talking about data driven decisions and how KPIs and by leveraging KPIs and real time data can help improve your day to day operations as well as your maintenance operation. So without further ado, let's continue the webinar. I'll make sure that next thirty to forty minutes, I'll make it more insightful for all of you. So without further ado, let's get into the details. So as I said, we have a jam packed agenda for the next thirty to forty minutes. So we'll start from understanding what exactly is KPI, how to define KPIs, what are some of the importance that KPI can bring on the table when it comes to the day to day operations and maintenance, What are some of the best practices that we can follow while establishing KPIs? And last but not least, I will go through some series of different KPIs that every manufacturers should and must follow in order to understand their day to day operations and end to end business visibility. Okay. So what is KPI? KPI stands for key performance indicator. Some companies might go by key performance index, but the real form is called key performance indicator. So let's try to understand what are some of the major benefits that KPI can bring. So KPI is a quantifiable target that measures so many different things. So as you know, manufacturing industry, we have so many different internal stakeholders such as production, maintenance, engineering, sanitation, finance, procurement, warehouse, distribution. So they all have their own set of goals that they are measuring and tracking in order to see their success on a day to day basis because they all have their given target. In order to achieve that target, they need to have these measures in place. So for example, by measuring overall equipment efficiency. So this is a major major KPI that every maintenance and engineering department should and must follow in order to understand how their assets are performing both their production assets as well as their facilities asset. Second, optimization of operations. So this is dedicated to the production team. So production team's main target is to understand what is their production attainment because they are all given the daily, weekly, and monthly target to achieve. So in order to understand how they're optimizing their operation, especially their production operation, this is the very key target that they should follow and they should track in order to understand their day to day operations. Benchmarking for comparison to competitors. So as you know, right now, we are in twenty twenty five. There is a lot of competition going on in the market. So how to understand the let's say, for a company a, how is it trending alongside with the company b and company c. Right? So for that, we need to understand that how we are doing dealing with our, warehousing, and how we are doing with our distribution space. Because right now, space constraint, warehousing, raw material, and even to store the finished wood. Those are some critical area that every manufacturer should keep that in their back of their mind to understand, hey. Do we have enough space? Hey. Do we have enough raw material? And based of that, based on that information, we can go ahead and do the production schedule and attainment. And last but not the least is productivity and performance. So as you know, the key goal for any department is how to improve your overall productivity and performance. So in order to improve your productivity, first, you need to know where you are trending. Then second would be where you want to achieve or what are your reference or achievement goal. And based on that, you need to create your roadmap. And based on that information, you can start tracking your KPIs. So this is the first basic understanding of what is KPI and how KPI can relate to those individual departments. Moving on to this visual rep representation, I love this slide because it tells you the entire story of what is KPI and how you can track the KPI. So I will give you a very, very generic scenario. So let's start from the objective. First, you need to define what is your objective. So in first case, let's understand if you are a maintenance supervisor or if you are a maintenance manager. Your goal is to have a thorough understanding about your assets, how your assets are doing on a day to day, on a monthly basis. So for example, your production as well as your facilities assets. So that becomes your first objective. Now second moving on the second, which is your scorecard. So now you know your objective. You need to know how your production and your facility assets are performing. So now what different measures you can track or start tracking in order to get to your objective? So for example, PM compliance rate, that is one of your first objective. So that can become your first quarter. Then you go to your PM to correct your maintenance ratio, inventory usage, your your equipment downtime, or your unplanned equipment downtime. So these are some of the basic scorecard that you can start tracking in. So that becomes your second piece, which is your scorecard. Now third phase is evaluation phase. So now you know your objective. Now you know how you will match and measure your objective based on the scorecard information. Now third phase is evaluation. Now we need to evaluate. So for example, if you want to evaluate your PM compliance rate, you need to know. So let's say for right now, as of twenty twenty five, the world class PM compliance rate is anywhere greater than ninety five percent. Ideal is always hundred percent, but if you're achieving your goal greater than ninety five percent, you are still meeting your world class standard. But, hey, if you don't have any information, if you don't have any data that how you will track, let's set a standard. Let's say eighty percent. You set set up a standard, eighty percent, you want to meet your PM compliance rate on a weekly basis, eighty percent. That's your first goal. So the next phase after evaluation is, as I said, strategy and measurement goes hands in hand. So now you're measuring against your goal, which is your eighty percent on a weekly basis. Now Now I need you to come up with the strategy. So let's say if you start measuring it as of today, so let's say three weeks or four weeks by now, you have some significant data that you can go back and look and measure. So let's say if you're trending, let's say, seventy percent at the moment. Right? You are only able to achieve seventy percent of the target on a weekly basis. But, hey, you your your goal is to meet eighty percent. And remember, your world class is greater than ninety percent ninety five percent. So you still have a long roadway to go and achieve the target. So now next step that comes in your way is strategy. Now you have to strategize based on the information that I'm at seventy percent. My goal is eighty percent. How do I make changes? Hey. Is it the equipment availability which is causing the issue? Hey. Is it the maintenance resource which is causing the issue? Is it the labor resource? Or is it something totally different that I'm not aware of? So that's where you have to go. You have to do talk with your maintenance, peers. You have to go back. You have to talk to your blue collar workforce, or even talk to your internal stakeholders such as production to understand where is the gap and why you are not meeting your eighty percent target. And based on that information, the next step comes as optimization. So now you know what are the gaps, start optimizing those gaps, start minimizing those gaps. So in optimization phase, you go and fulfilling that target so you can achieve from seventy percent to eighty percent. And the next is performance. And when you are making that goals and making those achievement, what happens? You are performing to your expectation, which is your eighty percent goal. And one month from now, two month from now, now you are building you are compounding that historical data that can help you to achieve your target, which is the end goal, which is the success. Right? So if you are visualizing this, this is the entire journey of how individual KPI should work first, how it should originated, and how it should work in the entire closed cycle. So, again, as I said, very, very, good representation of the entire key performance indicator slide in this video. Okay. So the next step is let's understand how to define a KPI. Right? So I did talk about how you can go and do the entire visual journey, but what are some of the key points that we should always remember when you are establishing KPI? So the first and foremost is accurate, preciseness. Whatever the KPI you want to achieve so let's say if I talk about production or if so production, the very first KPI that come in my mind is what is your production run rate? Right? Every company, regardless of, let's say, if you're food and bio, plastic industry, steel manufacturers, automating parts, your main goal is what is your run rate? How much finished products are you produce producing on a hourly basis or on a daily basis or on a shift basis? So let's make sure that whatever the KPI you want to measure, it is accurate, and it is holding important to your dedicated department. Next is it should have a measurement. Right? Quantifiable and achievable. So any KPI that you would like to measure in your dedicated department should have a realistic target. Like, let's not put something that you are not able to achieve. You need to make sure, as I explained in my previous slide, if the world class standard for PM compliance is greater than ninety five percent, hey. I don't wanna go and reach to ninety five percent. I would start from eighty percent, make my way up to ninety five percent. Right? So that's the theory and that that I always followed in my previous work life. So that's and that's what always helping. Right? Because now you're learning from your own mistakes and that you are going back, learn, and then you achieve your own time. Next is applicable. So any KPI that you want to follow, that should align with your overall business strategy and goals. So in my previous slide, as I talk about the strategy piece, if you're a maintenance manager, maintenance supervisor, if you're a production supervisor or a production manager, or if you're a quality personnel, you must know what your company is going to do, what is your company's desire, what is your company's goal in next three to five years? At least have a vision for next three years. So you know, hey. I'm sending right now in a million pound cases on a monthly basis, but my company wants to reach one point five million pounds in three years from now. So based on that information, start achieving your KPIs. So now you are not running behind, but you are running ahead of the curve. Next, time sensitive. So making sure that any KPI that you want to follow or you want to achieve have a timeline attached to that. If there is no due date or if there is no timeline attached, there wouldn't be that sense of an urgency for the individual who are part of your achieving that KPI. So always always make sure that any of your KPIs that you want to achieve have a realistic goal alongside with the due date. Okay. So we did talk about the how to define KPIs, how to achieve, and how to objectify KPIs. So now let's try to understand what are some of the importance of KPIs or what are some of the benefits you can have by leveraging KPIs in order to run your day to day operations. So first, it supports supports your overall business goals and strategies. So for example, I just give you I can give you a different example. So let's say in my previous life, I was given in twenty twenty two, I was given a task that, hey, By twenty twenty six, we want to achieve ten percent more production outcome. So okay. So I know in twenty twenty two, I need to have a ten percent production output more in four years. So now based on that, I will start achieving my KPIs. I will start, forecasting for my capital project that can help me achieve ten percent more production volume in four years time frame. Right? So understanding KPIs, leveraging KPIs can certainly have in supporting your business goals and your overall strategies. It provides a great insights into a company wide trends. So let me give you another real time example. When I was working in maintenance and my goal was to run, entire operations, at the time, I didn't understand how production work. I didn't understand how quality works. So I used to go to quality manager. I used to go to production manager to understand, hey. What type of KPIs are you measuring and are you tracking so that you know that your quality department is is achieving success? So understanding insights through company, we call end to end business knowledge. Right? So what does that mean? End to end business knowledge includes everything. That includes your supply chain, that includes your raw material, procurement, production, maintenance, finance, and at the end distribution and warehousing. Right? So by leveraging KPIs, you can gain a very depth of a knowledge about any different stakeholders team that you would like to learn and understand. It supports your employee performance management goals. So if I look a very high level, there are three core tenants when it comes to the KPI. One is financial, where you track all your financial. Second is your employee performance, which is a huge part to your overall productivity and your success. And third is an operational KPIs, which I'll be discussing in my further slide. But I just wanted to emphasize this employee performance management goals because right now, as you as you can see that there are we have a labor shortage as everyone knows. We have, skill shortages, everybody know. We have enough mechanics, but they don't know how to fix all of your new advanced technology. Right? So by tracking KPIs, you can see where your employees are performing and how you can leverage KPIs to improve your employee for per performance in near future. Innovation. Historical data. As I said, historical data, real time data is invaluable in current scenario. Guesswork, talking to your veterans, mechanic on the floor, learning from them and doing some capital project is no longer days. Right now, we always follow and make data driven decisions. So where do you get that information? Anything historical. Right? So as I explained, once you start tracking, for example, again, going back to the PM compliance rate. Right? So now if you're tracking it for last two years, you have a rich data of your assets for last two years that you can go back and study to understand how your assets are performing, what are some of the assets which are taking more time, which have more corrective repair that was done in last two years. So now you know based on that information, we can do a informed decision, and you can make a really good forecasting for your capital project based on the historical data which is available to you via tracking KPIs. And last but not the least, it enhance your decision making power. Right? So now, as I said, now you are not making decision based on a guesswork. You have a real data. You have a historical data that supports your decision. For example, if you're planning for f five twenty six capital planning, you'd have this historical data that you can attach with your capital planning process. So when it goes in front of the executive leadership team for an approval, that data supports your business case rather than going back with the guesswork. So it enhance your decision making, and even it makes more comfortable to those executive leaders so that they can make more informed decision because now they have this data that can support their decision. Because most of the time, oftentimes, all of those CapEx projects are big dollar bills, often upwards of hundred thousand dollars. And it improves your overall efficiency and productivity because what is the end goal for everyone who works across all the internal stakeholders team? Our end goal is to improve the overall productivity and your asset efficiency. Alrighty. So in this slide, as I explained, we'll talk about different types of KPIs. So as as I mentioned, we have three core types of KPIs. First is financial, where you think about your monthly cash flow, how you are doing, are you over budgeting on your maintenance cost, how is your production supplies going, how is your third party distribution cost are going, Cost per case. Again, this can vary case by case scenario, but what is the general term about cost per cases? Let's say, if I'm working in a Coke factory, if I'm making a twenty four pack Diet Coke, how much of that one pack of that twenty four packs Diet Coke is costing me? So that will tell me because that cost per case includes everything. That includes your maintenance cost. That includes your employee labor. That includes your mechanic cost. That includes your sanitation cost. So based on this information, now if I'm sitting in a, C level suit, I know exactly how Rona and his company doing. Just I'm giving you an example by just looking at this one KPI, which is cost per case. Customer satisfaction rate. This is a very, very important KPI when it comes to the sales department. Right? So by tracking customer satisfaction rate, I can tell or anyone can tell if our customers are happy or not. The company's previous companies that where I work for, always the customer satisfaction rate was offers of ninety seven percent. Ninety seven percent, ninety eight percent, that's what I have seen in my previous work life, and that is what we call as world class right now. Third party logistic cost. Everyone across North America, we have space constraint. Right? So that's where the third party logistic cost comes in place because we don't have enough space where we can store the raw material or we can store the finished goods. Right? So that's where we always leverage our third party logistic companies. So in order to understand how much money we are spending behind those costs, will be really helpful when it comes to the month end. And capital projects, as I mentioned, those are the most expensive, line in p and l for any companies because you are spending six figures dollar value for all those capital projects. Second, employee performance as as your expansion. So how do you track your employee performance? So employee logged hours with the asset repair. This is one of the case. So if you have a CMMS system, you can go back and you can track. Hey. If you have a mechanic, John, if he's working on a production line a for last week, out of forty hours that he works in the day force, how many actual hours mister John worked on in equipment? So this KPI will tell you, hey. John only worked for twenty hours on an actual equipment. The rest of the twenty hours, he was sitting in the shop doing nothing. So this is a very, very crucial KPI when it comes to the performance management. Because based on this KPI, we can go back and have a performance management discussion with John. Hey. You're only working twenty hours. What are you doing for the rest forty hours? Right? So, again, this is one of the example where we can go. Ranch time, another same example, and overtime labor hours. This is a very, very crucial again because as you know, every company due to the shortage of the budget, budget constraint, we only have, dedicated hours that we can work. Right? So if there is any overtime required for any labor to stay back and and support production, it has to get approved by the individual party. In this case, either maintenance supervisor, maintenance manager, or production manager or an operations manager. Last is operational KPIs. Equipment up trend ratio. That is, as I said, one of the most generic KPIs that every company, if not, should and must follow in order to understand what is your run rate. Right? So if you need to know what is your production run rate, you need to know what is your equipment uptime ratio. So let's say if you have an eight hour shift, out of those eight hours, how many hours that equipment was operating optimally and was able to perform and produce the finished goods. So that is the most crucial KPIs when it comes to the operational. Followed by OEE, which stands for overall equipment effectiveness. So by end of the day, by end of the eight hours, due to several reason, let's say your your product wasn't good, so you have to go back, check with the quality, you might have to make some changes in your recipe, have to rework that product prior to packing it as a finished product. So all that counts as part of the OEE, but most of the companies nowadays looks OEE as the reference line. Right? So world class standard, anything above sixty five percent OEE on a daily basis tells that company is is operating on a world class standard. Number of product quality complaints. Right? So, again, operational KPI, I did talk about the maintenance. I did talk about the production. So this is piece is, dedicated to the quality department. Right? So the quality, they measure by the customer complaint. Right? So how many customer complaints are you receiving on a monthly or or a quarterly basis? Right? Companies I've worked for, most of them had about