The Origin
Vilfredo Federico Damaso Pareto was an Italian civil engineer, sociologist, economist, political scientist, and philosopher. Among his many accomplishments, he is best known in engineering circles for his contribution of the Pareto chart and the 80-20 rule.
Within the manufacturing universe, the Pareto chart predominantly identifies constraints by severity. Scrap by quantity or downtime states by the accumulated duration or by frequency.
In production, the 80-20 rule is used as a prioritization metric for which operational tasks should get more attention based on the return, measured by throughput, delivery statuses, or another critical metric. Each of these tasks produces, in the end, profit for the company. Therefore, the speed with which these tasks are accomplished will ultimately affect cash flow. However, production management is constrained by the assets and human resources on the shop floor. More precisely, the efficiencies of these assets.
Applying The Rule
If one were to step out to work on the business instead of in the industry, they would face yet another level of constraints requiring the same severity categorization. At this level, the stakes are much higher because the direction will determine the wholeness of the business for years to come. Decisions regarding capital spending on facilities, machines and resources, HR investment, supply chain logistics, distribution, etc. A myriad of considerations and issues, all interrelated and vying for attention in the long-term plan and capitalization. When considering manufacturing and the shop floor, one is faced with the capital expense for upkeep and replacement of heavy machinery. What drives the decision to the acquisition of new machinery? Growing service issues, lack of Capacity, obsolescence, inability to control scrap, underperforming throughput, and the addition of automation. Ultimately, these weighted considerations initiate the purchase of costly machinery. However, when these considerations are mapped into a Pareto, what would be considered the obvious response, buying new equipment, may be the wrong decision. For example, if a Pareto showed that a shortage of Capacity was the major constraint to the factors driving profitability, the initial belief is to purchase more machinery. However, this also requires floor space, additional labour and materials to produce more output to meet the capacity shortage and delivery time. A much more viable solution to capacity limitations is a MOMs solution. A ”MOMs,” a Manufacturing Operations Management System, is designed to connect and make visible the shop floor. It will provide analysis tools and real-time alerts to emerging conditions. It will identify constraints and efficiency impairment within the operation. It will support the validation of equipment purchases and determine hidden Capacity.
Employing a MOMs solution costs only a fraction of purchasing new equipment. It requires no additional real estate, floor space or HR resources. Efficiency metrics will prove that all machines on the shop floor only operate at 50% (or less) of their potential Capacity. By employing MOMs, each enrolled machine asset or work center has a real, attainable potential to improve its throughput by 10 to 50%. MOMs will extend the life of all the machinery on the shop floor. It will drive throughput at manual work centers and improve quality and output. The same MOMs deployment will also validate when equipment is no longer viable. It will validate the purchase and deployment of automation. It will capture operational tribal knowledge before it disappears. It will also prove that the plant is not performing as well as reported. It will make some people nervous because it will threaten the status quo. The same system can validate new equipment purchases by providing a baseline throughput compared to vendor-specified performance estimations. The data will help establish the adoption of new manufacturing processes, such as additive machining.
Coming To Terms
Industry 4.0 is here to stay. The inarguable proof that performance, availability, and quality can all be improved through accurate data should be the motivating factor in pursuing a highly cost-effective method of supercharging the shop floor and bringing accountability to the operation. Yes, you can work on 80 percent of the issues, which will garner a minimal return, but the top 20 percent will reap the most significant value for time, money, and effort. The top 20 percent should never be myopically addressed through expensive CapEx acquisitions. Rather ongoing technology adoption will make each process on the shop floor accountable. Throwing mud at the wall to see what sticks, the accepted method of operation, can no longer be considered viable. Rising costs have seen to that. With a rapidly shrinking pool of skilled talent, adding people to boost operational efficiencies is not an option. The opposite is true, whereas manufacturers are trying to move toward entire automation/lights-out operations. But that is prohibitively expensive and is not feasible in all areas. An aggressive move to consolidate facilities to reduce operational and logistic costs adds even more stress on existing operations to produce. Old thinking has value but not when used as a barrier to modernization. As younger, more tech-savvy managers become, senior, technology adoption will become easier. Technology has two ditches into which prospective adopters can fall. The “easy to use,” simplistic monitoring systems, which are SaaS with never-ending costs, are guaranteed to leave many users with a bad experience because data appears wrong or there is no flexibility in the system to meet a manufacturer’s unique requirements. The other ditch is full of stalled, costly, poorly manned projects based on “build from the ground up” tool sets requiring months to deploy with services in the 5x range of software cost. Most of such systems are thinly veiled SCADA systems looking for a new lease on life in a new market. Even when a system in this ditch is finally deployed, it’s a snowflake that will require expensive ongoing services. Otherwise, it will be obsolete quickly because it is, by design, inflexible.
Bringing It All Together
Similarly, as subject matter experts in a company evaluate every technology employed in new hardware, equipment and automation, the same level of scrutiny should be used in selecting a MOMs system. A manufacturer would never put all their eggs in one basket, purchasing a massive do-everything machine to fulfill completely different operational functions, yet, they look for the one-size-fits-all ERP, MRP, MES, MOM solutions because they think that bolt-on software added to what they already bought makes things easier. Rarely does the do-all software even remotely deliver on its promises. Finally, even when a good prospect for a MOMs solution is found, one critical aspect, if not addressed, can cause the project to fail. Accountable champions.
In the same way that a company will hire capable, skilled operators to run the latest additive manufacturing systems, they need to select and even hire a qualified person to champion MOM integration and use of the MOM system. A good MOM (Manufacturing Operations Management) system ties in the collecting machine and work center operational events, operator interaction and ERP job data. Three converging data streams. The champion needs committed resources from engineering, QC, maintenance, operations and rank and file. He needs to be qualified in Continuous Improvement methodologies or have help at his disposal.
In the end, Pareto expects us to focus on the top 20 percent. That would be issues, plans, projects and technology that improve throughput, delivery and profitability. The personnel in each area, department and shift must be taught to look at everything to improve it. Everyone can contribute from poke-yoke, Gemba, Kaizen, Kanban, material acquisition, resource management, and machine and technology adoption. But the most significant impact now and in the future is the accurate, actionable data from the three convergent data streams to make critical decisions. Decisions to adopt manufacturing methodologies, hire personnel, consolidate resources, and validate equipment engineering and buying decisions require data. A MOM system is a manufacturer’s best friend when correctly chosen, deployed and managed.
MERLIN can help you with your personnel challenges
/in Blog/by Tim SmithIt is a common complaint that personnel shortage impedes operations significantly.
Retirement transitions tribal knowledge out of the company. The loss of tribal knowledge disrupts operations.
Personnel leaving for other positions. Whether the personnel are team members with time vested in the company or relatively new hires transitioning through your company, both wreak havoc on maintaining a competent workforce on the shop floor.
Everyone would agree that there is a dramatic shortage of skilled labour in the current market. Operators with experience in machining, setup, inspection, tooling, etc., are hard to come by, and poaching other companies’ personnel becomes commonplace.
The critical challenge is that the availability of skilled labour is shrinking, and the availability of experienced management, engineering, and QC technicians is not keeping pace with demand.
What technologies exist today to help reduce your reliance on human resources? New machinery and automation, including robotics, can drive unattended manufacturing where it makes sense. Augmented reality can drastically reduce dependence on skilled labour in assembly and fabrication work-centers. New CI tools can minimize reliance on engineering expertise to drive manufacturing efficiencies, throughput, quality, and delivery.
Aside from the cost, the challenge to adopting and implementing new technologies is the ability to assess its successes to qualify for wholesale adoption.
How does MERLIN help to mitigate these critical challenges? MERLIN connects all operations on the shop floor. Machines, cells, FMS systems, production lines, fabrication cells and work centers. It connects and enables operators, supervision, management, engineering, and QC through unencumbering technologies. It adds value without impact to strained resources.
It provides targeted feedback on constrained resources so you can focus your limited human resources on the most beneficial corrective action. In addition, MERLIN provides real-time alerting to emerging trends and disruptive events so that you can effectively marshal your people.
MERLIN provides product-specific work instructions for operators at the machine where they need them. Access to up-to-date, accurate electronic instructions generated by any world-class documentation system and routed by MERLIN. Such documents as work instructions and drawings.
MERLIN provides ongoing feedback through checklists to guarantee adherence to procedures. MERLIN partners with and integrates Augmented Reality systems like Arkite to provide operator guidance systems, electronic guided training, QC process adherence, reducing assembly errors, enforcing procedures, and instructing new personnel through integrated partnerships.
MERLIN provides critical operational, maintenance, and quality metrics to baseline and milestone your improvement initiatives.
Through innovative continuous improvement tools, your engineering and QC teams can do and achieve far more with fewer personnel.
All levels within the organization have accurate shop floor information through the automated generation and delivery of critical operational reports.
MERLIN support “lights out” production by monitoring and alerting key personnel to any deviation from the operational process. MERLIN can monitor and respond to issues in complex flexible manufacturing systems, nested lasers, multi-axis machines, welders, robotics, and any other processes on the shop floor.
MERLIN can assist in validating new processes and introducing new machines, equipment, and follow-on automation, catching unseen anomalies before they are adopted as part of everyday work. In addition, MERLIN can provide rapid feedback to determine if the planned output matches the actual output.
MERLIN supports integration to your ERP system for pushing work orders, jobs, and product standards into the MERLIN for accurate job tracking on the shop floor. In addition, metrics can be used to calculate capacity availability to validate scheduling and resource planning.
The critical data from MERLIN will provide value in production-costing by identifying lost production dollars and poor performance and utilization.
MERLIN comes as a fixed-price project with rapid deliverables and unlimited user configurations to support how you do business. In addition, MERLIN can be rapidly deployed for quick ROI.
For the foreseeable future, we will experience human resource shortages. You can leverage the most out of your personnel by employing MERLIN without adding stress. You will foster a team approach with healthy competition. In addition, MERLIN will provide a skill-levelling process by which you can improve throughput and quality even in the face of human resource challenges.
The 80-20 Rule Will Drive Technology Adoption
/in Blog/by Tim SmithThe Origin
Vilfredo Federico Damaso Pareto was an Italian civil engineer, sociologist, economist, political scientist, and philosopher. Among his many accomplishments, he is best known in engineering circles for his contribution of the Pareto chart and the 80-20 rule.
Within the manufacturing universe, the Pareto chart predominantly identifies constraints by severity. Scrap by quantity or downtime states by the accumulated duration or by frequency.
In production, the 80-20 rule is used as a prioritization metric for which operational tasks should get more attention based on the return, measured by throughput, delivery statuses, or another critical metric. Each of these tasks produces, in the end, profit for the company. Therefore, the speed with which these tasks are accomplished will ultimately affect cash flow. However, production management is constrained by the assets and human resources on the shop floor. More precisely, the efficiencies of these assets.
Applying The Rule
If one were to step out to work on the business instead of in the industry, they would face yet another level of constraints requiring the same severity categorization. At this level, the stakes are much higher because the direction will determine the wholeness of the business for years to come. Decisions regarding capital spending on facilities, machines and resources, HR investment, supply chain logistics, distribution, etc. A myriad of considerations and issues, all interrelated and vying for attention in the long-term plan and capitalization. When considering manufacturing and the shop floor, one is faced with the capital expense for upkeep and replacement of heavy machinery. What drives the decision to the acquisition of new machinery? Growing service issues, lack of Capacity, obsolescence, inability to control scrap, underperforming throughput, and the addition of automation. Ultimately, these weighted considerations initiate the purchase of costly machinery. However, when these considerations are mapped into a Pareto, what would be considered the obvious response, buying new equipment, may be the wrong decision. For example, if a Pareto showed that a shortage of Capacity was the major constraint to the factors driving profitability, the initial belief is to purchase more machinery. However, this also requires floor space, additional labour and materials to produce more output to meet the capacity shortage and delivery time. A much more viable solution to capacity limitations is a MOMs solution. A ”MOMs,” a Manufacturing Operations Management System, is designed to connect and make visible the shop floor. It will provide analysis tools and real-time alerts to emerging conditions. It will identify constraints and efficiency impairment within the operation. It will support the validation of equipment purchases and determine hidden Capacity.
Employing a MOMs solution costs only a fraction of purchasing new equipment. It requires no additional real estate, floor space or HR resources. Efficiency metrics will prove that all machines on the shop floor only operate at 50% (or less) of their potential Capacity. By employing MOMs, each enrolled machine asset or work center has a real, attainable potential to improve its throughput by 10 to 50%. MOMs will extend the life of all the machinery on the shop floor. It will drive throughput at manual work centers and improve quality and output. The same MOMs deployment will also validate when equipment is no longer viable. It will validate the purchase and deployment of automation. It will capture operational tribal knowledge before it disappears. It will also prove that the plant is not performing as well as reported. It will make some people nervous because it will threaten the status quo. The same system can validate new equipment purchases by providing a baseline throughput compared to vendor-specified performance estimations. The data will help establish the adoption of new manufacturing processes, such as additive machining.
Coming To Terms
Industry 4.0 is here to stay. The inarguable proof that performance, availability, and quality can all be improved through accurate data should be the motivating factor in pursuing a highly cost-effective method of supercharging the shop floor and bringing accountability to the operation. Yes, you can work on 80 percent of the issues, which will garner a minimal return, but the top 20 percent will reap the most significant value for time, money, and effort. The top 20 percent should never be myopically addressed through expensive CapEx acquisitions. Rather ongoing technology adoption will make each process on the shop floor accountable. Throwing mud at the wall to see what sticks, the accepted method of operation, can no longer be considered viable. Rising costs have seen to that. With a rapidly shrinking pool of skilled talent, adding people to boost operational efficiencies is not an option. The opposite is true, whereas manufacturers are trying to move toward entire automation/lights-out operations. But that is prohibitively expensive and is not feasible in all areas. An aggressive move to consolidate facilities to reduce operational and logistic costs adds even more stress on existing operations to produce. Old thinking has value but not when used as a barrier to modernization. As younger, more tech-savvy managers become, senior, technology adoption will become easier. Technology has two ditches into which prospective adopters can fall. The “easy to use,” simplistic monitoring systems, which are SaaS with never-ending costs, are guaranteed to leave many users with a bad experience because data appears wrong or there is no flexibility in the system to meet a manufacturer’s unique requirements. The other ditch is full of stalled, costly, poorly manned projects based on “build from the ground up” tool sets requiring months to deploy with services in the 5x range of software cost. Most of such systems are thinly veiled SCADA systems looking for a new lease on life in a new market. Even when a system in this ditch is finally deployed, it’s a snowflake that will require expensive ongoing services. Otherwise, it will be obsolete quickly because it is, by design, inflexible.
Bringing It All Together
Similarly, as subject matter experts in a company evaluate every technology employed in new hardware, equipment and automation, the same level of scrutiny should be used in selecting a MOMs system. A manufacturer would never put all their eggs in one basket, purchasing a massive do-everything machine to fulfill completely different operational functions, yet, they look for the one-size-fits-all ERP, MRP, MES, MOM solutions because they think that bolt-on software added to what they already bought makes things easier. Rarely does the do-all software even remotely deliver on its promises. Finally, even when a good prospect for a MOMs solution is found, one critical aspect, if not addressed, can cause the project to fail. Accountable champions.
In the same way that a company will hire capable, skilled operators to run the latest additive manufacturing systems, they need to select and even hire a qualified person to champion MOM integration and use of the MOM system. A good MOM (Manufacturing Operations Management) system ties in the collecting machine and work center operational events, operator interaction and ERP job data. Three converging data streams. The champion needs committed resources from engineering, QC, maintenance, operations and rank and file. He needs to be qualified in Continuous Improvement methodologies or have help at his disposal.
In the end, Pareto expects us to focus on the top 20 percent. That would be issues, plans, projects and technology that improve throughput, delivery and profitability. The personnel in each area, department and shift must be taught to look at everything to improve it. Everyone can contribute from poke-yoke, Gemba, Kaizen, Kanban, material acquisition, resource management, and machine and technology adoption. But the most significant impact now and in the future is the accurate, actionable data from the three convergent data streams to make critical decisions. Decisions to adopt manufacturing methodologies, hire personnel, consolidate resources, and validate equipment engineering and buying decisions require data. A MOM system is a manufacturer’s best friend when correctly chosen, deployed and managed.
Memex Inc. Reports Q2-2022 Results
/in Press Releases, Recent News/by MemexBURLINGTON, ON / ACCESSWIRE / May 26, 2022 / Memex Inc. (“Memex” or the “Company”) (TSX-V:OEE), a leader in Industrial Internet of Things (IIoT) manufacturing productivity software, released financial and operational highlights for its second quarter ending March 31, 2022. All results are reported in Canadian dollars. A complete set of its March 31, 2022 Condensed Interim Consolidated Financial Statements and Management’s Discussion & Analysis has been filed at www.sedar.com.
Summary financial highlights for the three-months ended March 31, 2022:
Summary financial highlights for the six-months ended March 31, 2022:
Management commentary:
“Delays in customer deliveries affected our top-line revenue and overall results,” said Memex CEO David McPhail. “However, we have re-organized our service delivery process, better positioning the Company to return to profitability. More prospects and customers are investigating onshoring strategies and enquiring about how Memex can improve potential future costs.”
Selected financial information:
* Working Capital = current assets – current liabilities less unearned rev
** Working Capital ratio = current assets / current liabilities less unearned rev
About Memex Inc.:
Established in 1992, Memex grew to be an industry leader in Industry Internet of Things (IIoT) through the development of MERLIN Tempus, an award-winning platform that delivers real-time, tangible increases in manufacturing productivity. Memex is on the leading edge of industry trends in computing power, machine connectivity, industry standards, advanced software technology, and manufacturing domain expertise.
Our persistent pursuit of innovative IIoT solutions led to a comprehensive understanding of the challenge’s manufacturers face. We made it our mission to, “successfully transform factories of today into factories of the future.” As the global leader in Machine to Machine (M2M) connectivity solutions, our hardware and software products create unparalleled visibility at all levels, from “Shop-Floor-to-Top-Floor.”
The MERLIN Tempus Suite provides effective quantification and management of Overall Equipment Effectiveness (OEE) by revealing hidden capacity using real-time objective data. Further, it offers sustainable benefits that enable world-class OEE such as reducing costs, incorporating strategies for continuous LEAN improvement, and boosting bottom-line financial performance. For more information, please visit: www.MemexOEE.com
For investor inquiries please contact:
905-635-1540
investor.relations@memexOEE.com
905-635-1540
investor.relations@memexOEE.com
Sean Peasgood, Investor Relations
647-977-9264
sean@sophiccapital.com
Neither the TSX Venture Exchange nor its Regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
_________________________________
i & ii These non-IFRS financial measures are identified, defined and reconciled to their closest IFRS measures, revenue and unearned revenue, within our Management’s Discussion and Analysis for the periods ended March 31, 2022, and 2021, in the section “Other Financial Measures.” That MD&A is available at www.sedar.com under our company profile.
[Blog] What’s a micro-stop, and how is it important to you?
/in Blog, Recent News/by MemexMERLIN Tempus provide this level of comprehensive flexibility right out of the box. The ability of a system to infer a state based on occurring states and standards removes a level of operator dependence. The antiquated operator-centric data collection approach is inherently inaccurate because events are recorded after the fact and are usually very subjective. Realtime operator classifications of machine impacting states are faster, simpler, controlled and accurate because the machine initiates the state change based on an autonomous event and applied logic.
[Webinar – 30th March] Data-Driven Manufacturing: Getting executive buy-in
/in Events, Recent News/by Memex