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Crafting Operational Excellence in Engineering Sector

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This post is a prelude to our research paper on ‘Growth Drivers for Engineering Industry.

Background

The Indian Engineering sector has witnessed a remarkable growth over the last few years driven by increased investments in infrastructure and industrial production. The engineering sector, being closely associated with the manufacturing and infrastructure sectors of the economy, is of strategic importance to India’s economy. While large scale production in the segment is organized, the sector in India is also home to a vast, unorganized, mid-scale operations setup, which feeds this large scale production.

However, the next couple of years may remain challenging for the engineering and construction companies. While execution pace is slowing down due to various internal as well as macro issues, margins have also come under pressure due to feeble demand, rising competition and over capacity in a few sub sectors. Thus, unless the macro-environment improves overall growth will continue to remain sluggish in the near term.

Further, in the light of recent event of demonetization there are some repercussions, which are likely to hit the manufacturing sector. Furthermore, we take the various purchasing manager’s indexes as a good indication of where the economy is going. The manufacturing PMI for India which has fallen might be taken as a sign of how demonetization is affecting the Indian economy.

Hence, the operational excellence and building competitiveness are key to sustenance for the industry.

Building Competitiveness in Engineering Sector

The highly competitive and dynamic environment, market competition forces organizations to improve productivity and enhance their competiveness. Consequently, the matter of assessing and improving competitiveness in different industry of several countries has received increased attention in recent times.

Building Competitiveness, Zero Defects and Zero Effects, Skill Analysis & Development is a three pronged approach required to bring about a holistic development. While implementing efficiency improvement solutions at several leading engineering manufacturing companies in India, Faber Infinite created breakthroughs in building competitiveness and leveraging the hidden potential of the organization. The focus was on implementing various drivers of building competitiveness. It also encompassed the study of all activities to find out non value adding activities (NVA) e.g. search time, material availability, setup change time, etc. To eliminate all NVAs various fundamental tools such as SMED, Kanban, 5S, layout design, logistics management and systemic changes in organizational design were rolled out.

Implementation of Tools

In addition, it has been observed that engineering industries need to focus and invest more on operational improvement and optimization. Value adders/ operators play a key role in operations in spite of the application of machinery and equipment. As per challenges raised by the industry, few listed are low productivity, over staffing, poor labor relations, inefficient handling of operator challenges, high wages and lack of trained or skilled workforce. It can be inferred that all these issues are fallouts of lower manpower productivities and, hence, scientific approach towards efficiency improvement is the need of the hour.

Further implementation of focused approaches like Total Productive Maintenance (TPM), Value Stream Mapping (VSM) and Time and motion study in the existing system can give phenomenal results in domains of machine performance, material flow and manpower productivity respectively. There by addressing 3Ms of operations.

Efficiency Improvement Parameters

Auto industry is mature and leader in efficiency parameters across the globe and same in India as well. Reducing material cost and increasing manpower productivity is considered to be must have to survive the competition and are no longer drivers for higher profitability. However, it has now become imperative for them to look at basic stability of all 3Ms of operations and the 4th M – Methods (man – method – material – machine).

The Faber Infinite framework has improvised the scope of progress in terms of cost and productivity improvement and it can be further enhanced by sustaining the existing methodology. Phenomenal results have been realized through the design, implementation and refining of systems and processes. Insights from the real experiences, solutions deployed and further research findings have been covered in the research paper.

Please reach out to us on publishing@faberinfinite.com for further details.

Written By: Faber Mayuri Pandya and Faber Devna Chaturvedi

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