How to Reduce your Throughput Time? (with multiple examples)
A lean, reduced throughput time has been every manufacturer’s dream. However, in reality, reducing throughput time is not a one-stop process but requires step-by-step progressive planning and the participation of every partaker.
In this blog post, we will discuss the importance of throughput time, explain the common mistakes of throughput time reduction, and, most importantly, how to improve throughput time with a measurable and long-lasting result.
What is throughput time?
In short, throughput time is the actual time of the value-adding process of an article – from raw material to finished goods.
Check this blog post for more about throughput time and its differences from lead time and cycle time.
Why is tracking throughput time important in manufacturing?
In almost every subsector of manufacturing, whether metal, garment or food processing, customer retention is always the first critical factor: Every customer wants their order fulfilled as soon and punctually as possible. And if you cannot provide your customers with a repeatedly stable delivery rate, or your production time is taking longer than your competitors, you would lose your customers or, worse, the business profile that your company established.
The second critical factor that manufacturers fear the most is production cost. Production is an expensive process: the longer the goods stay in production, the longer your machines and employees work – and of course, the higher the cost.
These two factors often intertwine, for example:
To win an order from a customer, you give the shortest delivery time possible but later find out your factory line would not fulfil it on time with regular scheduling.
So you are forced to add extra working hours and night shifts to complete the order. At the end of the day, your profit could not break even with your production costs.
This has been a recurring nightmare for many manufacturers, and that’s why manufacturers have been looking for ways to best track and reduce throughput time in their production process.
The benefit of reducing throughput time
A well-tracked and well-managed throughput time can help manufacturers find the optimal balance between customer retention and cost reduction.
By reducing the throughput time, manufacturers can:
Lower production costs
As mentioned, the longer the throughput time, the higher the costs. Once manufacturers are able to track and reduce the throughput time, they can cut down hefty production costs without sacrificing the quality or the on-time delivery rate.
Improve customer retention
Tracking throughput time can show why the on-time delivery rate is unstable. As a result, manufacturers are able to provide accurate delivery dates estimations to customers and fulfil orders on time. The shorter and the more accurate the waiting time, the more happy customers it gets.
Improve Planning Flexibility
Often, to combat frequent delays, many manufacturers would build in some “pseudo-time-buffers” within the planned throughput time, so it would appear “according to plan”. These would unnecessarily block out time and resources, stopping production planners from a suitable plan. With throughput time reduced, time for unfinished goods would be shorter on the factory line, providing more flexibility in production planning.
Increase Production efficiency
Clear tracking of throughput time provides an accurate and transparent depiction of what was happening during the production process. Putting this information into future production planning enables manufacturers to know what more they could achieve when using the same production resources, unlocking the true production power of shop floor.
Refine Supply Chain and other business processes
With the production running in an optimal state, manufacturers would have more resources to refine their other business processes, such as inventory, supply chain, procurement, R&D, as well as customer relationships and sales.
How to Reduce your Throughput Time?
Step 1. Analyze Your Production
The most efficient way to conduct production analysis is to ask the right questions. And to ask the right questions, we need to categorize our questions. The category of questions is as follows:
- Employees
- Machines
- Work Steps
- Information
Employees
Employees are the powerhouse of your entire production process and possibly the ones you should ask these questions first:
- How familiar are your employees with the process?
- How familiar are your employees with their upstream/downstream process?
- Do your employees have enough skills and knowledge to finish the jobs within the required times?
- Are your employees equipped with sufficient knowledge and equipment to solve the problems they may encounter?
Machines
Machines can perform a task at a constant speed and quality – only if they are well-maintained and well-utilized. So, we need to ask questions such as:
- How regularly have you planned your maintenance?
- How high is the defect loss of your machines?
- How much are you getting from your machines? (Capacity Utilization)
- Do you know how many resources (e.g. person, tool, or mold) the machine consumes?
- Do you have troubleshooting procedures and channels when your machine hits a disruption?
Work Steps
Work steps are the cores of a value-added chain. If one fails to deliver the required output – everything fails. That’s why we need to ask questions like:
- How much do you know about your output on every work step?
- How often do you deliver on time on every work step? (Schedule Adherence)
- How well are your work steps connected?
- Do you have any unnecessary steps or idle time?
Information
Information is what connects you, your employees, and your production. We should ask ourselves about:
- How quickly do you receive information on your shop floor?
- How accurate is the received information? Does it cost you extra steps to ask around?
- How quickly can you inform the shop floor?
- How fast can you and your employees react to problems?
Step 2. Identify Production Bottlenecks
By getting answers from your production, we can pinpoint the production bottlenecks. Here are a few examples.
- Example – Employees
You installed a new double-column hydraulic press, but your production still suffers delays. After interviewing the press operator, you discover that that copy of the user manual was missing a chapter, leaving no clues about what to do.
- Example – Machines
One of your titling presses has a higher defect loss than others. And you discovered this machine had not been greased and maintained for the past 10 months.
- Example – Work Steps
The delivery date is near, and your Packing Department is still not working fully. You discovered the QC department put their checked products elsewhere.
- Example – Information
During an urgent order, you receive an email from your shop floor informing you that one of the heavy-duty grinders has stopped working. When you arrived at the scene, you were then told it had been running slowly since last month.
Step 3. Disruptions, Gap and Maintenance Management
Disruptions are always a scary thing in production. It could be a machine breaking down, a deformed tool, emergency maintenance, an emergency stop, and many more. They can put the whole production line on hold, and when it takes too long, it can cause planning conflicts.
Gap management is always tough; miscalculating someone’s holiday and leaves, especially people who are critical for a Work Step, could lead to serious production delays. Regular maintenance is how a manufacturing company stays in top shape. Using the information received from the shop floor to plan your maintenance is critical for every production planner.
To reduce throughput time, you need to juggle these three. A good tip is to look for a production planning system that can clearly show the list of those production gaps and maintenance and place them in planning. With such a system, you can plan your maintenance when the machine is not in use; and, most importantly, analyze those “scary” disruptions in production.
Modern production planning solutions can dissect which disruption occurs the most frequently, when, by whom and how. This helps manufacturers identify the weakest link on the shop floor, prioritize which problem to solve in the long run and drastically cut the throughput time.
Step 4. Transparency and Shop Floor Data Collection
“Shop Floor Data Collection” may sound intriguing initially, but it is about learning more about your shop floor and making your production transparent. You can determine what took too long in your throughput time when you clearly understand what is happening on your shop floor.
With a Shop Floor Data Collection (SFDC) system, you can record what was happening on your shop floor, like cycle times, yield/scrap and the work steps’ current status (e.g. scheduled, started or interrupted), and turn them into understandable data. Thanks to the widespread of intuitive devices like smartphones and tablets, as well as Industrial Internet of Things (IIoTs) systems like sensors and actuators, capturing shop floor data is unprecedently straightforward.
Step 5. Pinpoint the Solution you need
Before you rush to Google and search for the magical solution that claims to solve all your problems, you must first pinpoint which kind of solution do you need. Mainly, there are usually 4 solutions you might be looking for to reduce the throughput time:
- A Spreadsheet Template
- An ERP with a Manufacturing Module
- An MES System
- A Production Planning and Control (PPC) Solution
A Spreadsheet Template
For many manufacturers, a spreadsheet template is the first thing they think of. It is dirt cheap, versatile, and seemingly easily accessible – but only at first glance.
When the manufacturers start making changes in their production process, like adding a new employee or switching to a new work step, everything has to be rebuilt from the ground up. Catastrophes are also prone to happen when an employee makes a tiny error, like filling in the wrong cell or a typo in the formula.
Choosing spreadsheet templates is like buying a cheap old car. The price is very attractive, and you can get the car keys right away. But it is a nightmare to maintain, and you might end up dumping in way more money and time than you wanted to.
An ERP system
Numerous Enterprise Resource Planning (ERP) systems promise they can reduce your throughput time via their manufacturing modules. However, ERP and Production Planning have vastly different approaches to tackling problems. ERP solutions analyze the manufacturing business from a financial standpoint, and Production Planning focuses on the reasons behind it by analyzing the production.
Without help from a manufacturing solution, ERP cannot shorten throughput time with a measurable, repeatable, and transparent result. It is like getting an RV for muddy terrain – it is not built for that, and you will expect everything to fail without warning.
An MES System
A Manufacturing execution system (MES) is an excellent solution for tracking your current production process. It provides real-time feedback from your shop floor and shows how your production is performing now at the moment.
But what about in the future? Can you keep up your production in the next 100 days, three months, or even next year? Do you know you are on the right path to reduce throughput time for good?
It is like driving a car with no windows and no GPS. You know your car is moving, your engine is working well, and wheels are rolling smoothly – but you don’t know where you are going. If you keep driving, you may end up in the wrong way or even off a cliff – who knows?
MES might be the solution for your present, but you need something for your future.
A Production Planning and Control (PPC) Solution
A Production Planning and Control (PPC) solution is a set of strategies that plan the value-adding production work steps and other processes, such as procurement, R&D, sampling, and tooling. It helps manufacturers accurately estimate the lead time and the delivery date for upcoming production orders, analyze future throughput times, and, most importantly, evaluate their current production plan.
Step 6. Plan ahead of Time
An established PPC system includes fully interactive Gantt charts. Gantt charts in PPC systems are coming in a cost-effective, intuitive, and cloud-based form for manufacturers of all sizes.
Given you are keeping your current production plan, a forward-looking Production Planning System would also provide a dashboard that shows future KPIs in a foreseeable timeframe, such as Capacity Utilization, Schedule Adherence, and Process Efficiency in your next 100 days, months or a year.
These would help you identify your production conflicts before they become a reality. So the bottlenecks, as mentioned above, would hardly happen.
Step 7. Gain Employee Acceptance
Workers – the main driving force of a manufacturing business – must understand the reason behind the changes you made in the production process.
In manufacturing, many changes fail not because of the management but the low acceptance from the employees. Realistically speaking, it would take some time for your workers to get used to new production processes and procedures. However, this is necessary for a positive outcome in digitalizing the production through and through.
To ease the burden for manufacturers, industry-oriented solution providers would encourage managers to work with employees and participate in the implementation process. Only then would the employees acknowledge the importance of a shorter throughput time, which would drastically reduce their night shifts and extra work hours.
Step 8. Implementation and Deployment
Deploying and implementing a production planning and control system has never been easier.
Time:
Implementation of a Production Planning solution usually takes months or even years long. But nowadays, many projects usually take a couple of man-days.
Place:
Several decades ago, many production planning systems still required multiple on-site observations and installations just to get one production project to start.
Thanks to cloud technology, the deployment of a modern production planning solution are not strictly limited to in-person operations. The consultation and alignment between the production on the shop floor and the production planning system could easily be done online, with the on-site operation being the last possible step of deployment.
Expertise:
Having a production planning expert to improve the factory process was a luxury only big manufacturers could have. The consultation fee is hefty, and so are the occasional travelling and training fees.
Modern production planning and control system provides not only a software solution but also the methodology of digital manufacturing. Production planning experts would gladly walk alongside manufacturers in the entire implementation process to ensure a successful digital transformation and reduction of throughput time.
Step 9. Continuous Optimization
Production Optimization is what every manufacturer aims for. Many believe this is an end goal when everything runs seamlessly at top efficiency. It’s like a movie’s ending scene where everyone runs towards the sunset, happily ever after.
However, in light of modern production planning, production optimization is a continuous process. Every time a production process or an order is completed, its production data should be taken as output and put back in for future planning, which, of course, would be done in a way that does not cause more long-time troubles for employees and managers.
Conclusion
No magical solutions can reduce your throughput time in production overnight.
There are many cases when manufacturers believe they “just” need the newest digital manufacturing solution to solve their long-term problems without considering a digital solution’s underlying digital manufacturing methodology.
To improve throughput time, leadership must commit to following the modern methodology, keeping the course with a clear vision and working with solution providers and their experts. This relieves the resistance to change and ensures that changes are fully incorporated and well-accepted.
Here at planeus, we don’t believe in a magical solution that reduces your throughput time overnight. We believe in a comprehensive analysis of your production process, structured guidance to modern production planning methodology, and an industrial-proven, sophisticated, easy-to-use production planning and control system, all with a fraction of the cost and time of your next production catastrophe waiting to happen.
Click here for more about planeus.
Further Readings:
- Rensen, J.J. (2019) Reducing the throughput time of product A: by improving planning and control.
- Lucht, Torben & Drewal, Fabian & Nyhuis, Peter. (2021). Approaching Automation of Production Planning and Control: A Theoretical Framework. 1. 1-10. 10.15488/11127. DOI: https://doi.org/10.15488/11127
