Industrial consultancy
Industrial consultancy might refer to a variety of industries. Some of these include the automotive industry, textile industry, pharmaceutical industry, IT industry, agricultural industry and hotel/catering industry.
The organization should ensure that there is an explicit need for availing the consultancy in a particular area: becoming competitive, reorganization of activities.
The consulting assignment should cover various aspects:
- Need of consultancy
- Aim of the consultancy assignment
- Approximate duration
- Total fees along with other expenditure
- Resources needed
- Implementation responsibility
The aim of the consultancy might be at the business level or plant/technology level or micro level. In order to understand a company/industry macro-level scenario may also be helpful.
When we make estimations, we should check:
- Interaction of global scenario and industry-level performance
- National scenario
- Comparison of companies in a similar industry
- Learning from different sector/industry
- Benchmarking
When looking for performance parameters, we can check:
- Competitive price
- Good-quality product
- Desired input item used for the finally manufactured products
- Shorter total lead time
- Low domestic demand
- Favorable currency scenario
- Government policy
We can in general talk about two types of business. Production operations and services consulting.
Production:
- Manufacturing
- Chemical processing
- Textile
- Product assembly
Service:
- Banking
- Administrative
- Educational
- Hospitals
For the production operations we can talk about raw material that enters toward facilities for the different production processes, and a finished product is available after the last facility process.
Some examples of optimizing production:
- Raw material store
- Quality control
- Utilities
- Packaged medicine storage
In a case in which a certain investment is needed in shifting the machinery and departments, a suitable cost-benefits analysis may be provided.
Energy auditing is one potential analysis. Some areas are total power consumption. How much power is purchased from an external source? Where are potential opportunities for energy savings?
Material flow analysis is helpful for an ease in handling the product/material or enhancing the flow speed.
While considering the productivity at an organizational level, two factors are usually taken into account in general, that is, an output level and an input criterion.
Lead time is the time span between the point of time when actual services are performed and that when an order was placed for services.
In order to finalize the consulting, elaborate the following issues:
- Need for consultancy
- Aim on the consultancy assignment
- Approximate duration
- Total fees along with other expenditures
- Resources needed
- Implementation responsibility
Location and facilities criteria
A basic and primary factor is location of an organization in general. Also, the layout in that location significantly impacts organizational processes.
Many old plants need suitable advice in order to improve their layout for smooth material flow.
Possibilities for a location consideration:
End Consumer Interaction (Indirect, Direct) and Type of organization (Production, Services).
Factor affecting layout: type of industry, product type, demand projection, vacant space, production rate, material handling, persons’ movement, facility maintenance, material storage, office space.
In the manufacturing industry, various facilities may be installed in the sequences of operations to be carried out on the raw material/input item for standard products in substantial demands. What is the state the product is in at various stages of manufacturing is also important? Because that influences requirements for sage and smooth flow of materials. Some states: solid, liquid, gas, gel, pasta.
Inefficiency is the unnecessary movement of persons and materials. Movement of material happens in retail locations as well as in production layouts.
Depending on the industrial operations, different raw materials may include steel, aluminum, wood, glass and rubber. Raw material storage should be such that the space is utilized efficiently and also material is not spoiled.
With an objective of improving the layout along with a suitable arrangement of facilities, an analysis of material movement and handling is necessary.
Material flow analysis is helpful for ease in handling the product/material or enhancing the flow speed.
Generally speaking, change in the layout for improvement in material handling, among other objectives, involves a certain expenditure; therefore, a rigorous cost-benefit analysis is also needed for final approval.
Productivity consideration
Productivity consideration deals with an effective utilization of resources, among other issues. Such resources may include facilities, manpower and energy. Generally speaking, productivity may be perceived as a ratio of output and input. A related nature of function may be concerned with the type of organization, such a manufacturing, educational, publishing and project.
In a case in which both the output and input have varied, three possibilities emerge for productivity improvement. When output and input both are increased, however output is increased more as input. When both decreased, however output has decreased less than input. When output is increased, but input has decreased.
When several jobs with different requirements are queuing up before machines, then appropriate sequencing of jobs is also useful for an enhanced specified output level or desired goal.
In cases in which the desired objectives such as production plan, can be fulfilled with a lower inventory level, this may be preferred.
Manpower is important resource and its productivity should be measured. When looking at human activity we can measure time consumed and resources needed.
The energy criteria may relate to its effective utilization in all forms. Energy auditing is usually a significant step in an organization to know the precise energy consumption at various stages. Energy-efficient ways of material handling within the organization have to be found.
Benchmarking relates to the comparison of an area or activity under consideration with that perceived to be the best.
Benchmarking can be applied to different areas:
- Procurement
- Logistic
- Production
- Marketing
- Finance
- Automation
A variety of performance measures can be developed for each activity:
- Human resources
- Production
- Machine
- Quality
- Maintenance
- Energy
- Environment
One performance measure can be inventory turnover ratio. Ideally, a high ratio is preferred. However, the prime objectives are customer satisfaction and fulfilling the order on time.
In the context of uptime and downtime related to maintenance aspects, it should be noted whether a certain benchmark is relevant with the existing facilities.
Input resources can be:
- Machine
- Storage area
- Inventory
- Human resources
Lead time objective
A major factor for competitiveness in the manufacturing as well as services industry is lead time. Lead time is the time span between the point of time when actual services are performed and that when an order was placed for services.
A suitable lead time depends on the customer and their desired objective in addition to the producer resources and constrains.
The lead time traditionally has had an important role in fabrication or production/manufacturing operations. Some activities that can be checked to see if improvement is possible are:
- Procurement of input items/raw materials
- Inbound logistics
- Production of components
- Quality test/inspection
- Subassemblies
- Final assembly leading to the finished product
- Final packing
- Outbound logistic
Existing lead time analysis should be done on selected types of products that company manufactures. Some of the following factors may be relevant for selection:
- Significance of the customer
- Value of the product
- Profitability of the product
- Contribution of the range of items towards revenue
- Effect of longer lead time on customer satisfaction
- Effect of longer lead time in terms of costs, space and disruption in the planned schedule
After understanding the existing process and recording the present lead time at various stages, opportunities should be explored to reduce the present lead time.
But when looking for optimization, we should be aware of interdepartmental conflicts.
The marketing function plays an important role in generating the requirements of customers and communicating them to the organization.
Outsourcing consideration
Almost every organization, whether industrial or business, faces the problem of outsourcing. The following terms are used in this context as these have a more or less similar meaning:
- Purchase or buy
- Externalizing and externalize
- Outsourcing and outsource
Before outsourcing any activity, the types of factors to be considered broadly are as follow:
- Cost factors
- Associated cost while insourcing
- Associated cost while outsourcing
- Non-cost factors
Associate cost while insourcing relates to the expenditure incurred when producing a product or service within the house in its entirety. We can talk about raw material connected costs and manufacturing connected costs. Regarding raw material costs, we can talk about raw material purchase cost (here you should also think about aspects like availability and quantity to be purchased) and transportation cost (distance, medium to be used for transportation). Regarding manufacturing, we can talk about manufacturing costs and material handling costs.
When we talk about non-cost factors, we should consider if an activity is of critical importance, it may not be outsourced.
If a final decision is in favor of outsourcing, then the relationship between buyer and supplier matters in many situations for attainment of a higher degree of success. A variety of factors should be considered:
- Price
- After-sale service
- Quality
- Quantity
- Packaging
- Distance
- Flexibility
Quantity is part of demand and it does matter. In general, packaging plays an important role in material handling and logistics. Flexibility relates to: quantity, lead time and design.
Before outsourcing an item, specification needs to be prepared. Some aspects of outsourcing:
- Specification
- Performance measure
- Contract
- Related parameters
Major elements of item specification:
- Material
- Dimensions
- Joining methods
- Design and drawing
A contract between two parties should be reasonably balanced.
Consultancy vision
The vision for consultancy may include a futuristic approach along with the influence of various factors. Such a futuristic approach naturally includes the role of technology.
Choice of location, layout, facilities and technology and people are affected directly or indirectly by the availability of infrastructure or potential infrastructure.
Some key aspects of industrial consultancy are:
- Industrial location
- Productivity
- Lead time
- Outsourcing options
