Recently, we’ve heard reports of manufacturers waiting to begin technology and manufacturing software projects across nearly all industries.
These organizations soldier on with no real-time production visibility, error-prone quality control and production reports on departmental spreadsheets. These are common problems with the potential for creating critical stoppages. However, these companies believe their processes work well enough to hold off on an upgrade.
Unfortunately, these organizations are accumulating manufacturing tech debt that will have to be paid soon. In the meantime, waiting is increasing production risk and cost to unsustainable levels.
What is Manufacturing Tech Debt?
Tech debt, a phrase we’ve discussed before, is a concept first proposed by Ward Cunningham, a computer programmer credited with creating the first internet wiki. In programming, you collect tech debt when you program quickly to get a job done fast, rather than completing work slowly and correctly. In Cunningham’s view, you’ll have to pay that tech debt in future development to fix that “quick” programming into better, more stable design.
Developers can program quickly in the beginning to meet critical deadlines, but as long as they continue to fix the early design choices (and slowly pay off the tech debt) the project never flounders due to those early decisions.
Manufacturing tech debt works similarly. You can hold off correcting inefficiencies and production errors, but eventually you will have to pay your debt. Another homegrown computer system or departmental spreadsheet will keep production running, but it adds tech debt. Your critical data and processes are more inefficient, more disconnected, and the pressure on the shop floor to “make it work” even greater as you accumulate debt.
The cost of that debt is insidious. How much time and productivity is wasted searching for information on spreadsheets? How much scrap accumulates because the shop floor can’t find critical data during production? These costs quickly add up, growing your manufacturing tech debt. These homegrown solutions continue to silo and segment information in the company, and if the person who developed the solution ever leaves, that data may be lost forever.
As customer demands increase and the talent and labor pool shrinks, the cost of this debt will accelerate. It’s going to hammer many unsuspecting companies still clinging to spreadsheets and paper.
Increasing Efficiency by Paying Down your Manufacturing Tech Debt
Here’s the good news – paying off your manufacturing tech debt is easier than you think with modern tools and technology. Here are a few steps you should take as soon as possible:
- Identify your key needs. What inefficiency or problem has the greatest impact on production?
- Set an acceptable budget. Waiting is not an option. You don’t need a massive budget, but look at what you are wasting in time and production and set a reasonable budget for a solution.
- Assign a team to the problem. If you assemble key stakeholders, including someone who can manage money and assemble executive resources, you’ll kick start a solution.
- Select an area to test the solution. Many times, projects get bogged down with scope creep. Select a single area, or one old database, to update. Limit the initial project.
- Do something! The only way to pay down your manufacturing tech debt, improve efficiency, and eliminate the nagging problems holding back production is to take action.
Companies that invest in a project to eliminate their Manufacturing Tech Debt see an immediate return in increased efficiency, fewer errors, and increased productivity. Some companies report a 3 to 1 return on their investment in new manufacturing software within the first year ($3 in ROI for every $1 invested).
What Comes Next for Improved Production
One mistake many manufacturers make is considering only their existing software as a potential solution. They already have an ERP, and will try to enhance the existing system to meet their needs.
The ERP was never designed with production in mind, and can’t adequately support manufacturing. The ERP is a transactional system, and is perfect for HR and finance functions. It was never meant to support the workflow and process work of the shop floor, no matter how many modules you add.
Manufacturing tech debt requires a manufacturing solution.
Want to know more, or get a free evaluation of your shop floor with an Application Engineer, then contact CIMx today for a free shop floor analysis.