White Paper

How to build a Paperless Factory

The creation, distribution and maintenance of paper documents on the shop floor creates an abundance of work for manufacturing personnel, as well as a number of headaches. From the release of a shop order, several hands will be required to create the appropriate shop order documents, to print the routing sheet and traveler, find and print the appropriate process documentation, ensure the proper revisions are included with the job packet and finally, release the shop order to the floor.

After the order is released, manufacturing personnel are required to follow the status of the order, update the appropriate documents on time spent on the order and quantities completed on the order and finally, to report to a master scheduler the expected finish dates for the finished goods. With all of this work required just to release and track an order, imagine the amount of work required when a problem is found with a document already released to the floor. Or better yet, a change is made to the entire shop order and someone now has to find the packet, update it and ensure that no product has gone out the door using the old information. In all of the above cases, valuable resources are being utilized for non-value added tasks. Inefficiencies in production are built into the system; therefore, it is impossible for the plant to truly operate in a best in class manner.

The bottom line here is that personnel dedicated to the maintenance of paper documents on the shop floor should not be spending time on the distribution and reporting of the information, but instead reviewing and analyzing ways to improve their current processes. This whitepaper is dedicated to discussing the problems with paper on the shop floor and ways to improve your facility by eliminating it all together.

What Resources are required to create the "Paper Trail?"
It is sometimes overlooked in a company, but the amount of "labor hands" required to provide and release a shop order to the floor in a paper environment can be staggering. Review the following example and see if any of the following steps fit your current environment. At the end, estimate to yourself what time it takes your facility to perform each task.

  1. Your ERP or MRP system releases a shop order, WO123, to produce Part XYZ, with a given quantity, routing, release date and due date. A document is printed out and supplied to an expeditor or factory scheduler to schedule the newly released shop order.
  2. The factory scheduler must contact operators, supervisors or other manufacturing personnel to determine the current orders in progress and their current status. This requires a review of each paper traveler at each work center to truly know the real-time status of the shop floor. Based on this feedback and review, the factory scheduler can determine the appropriate areas to schedule the job to (if options for the processes are available).
  3. The factory scheduler now begins to assemble the job packet for this newly released shop order. The scheduler looks at the bill of materials, looks for process documentation, contacts engineering and determines what documents are associated with a given part. The scheduler finds the documents at various sources, tries to determine if the revisions are the appropriate revisions for this shop order, obtains all of the quality and inspection documentation required for this part and eventually will print these documents for storage in the job traveler. The order is now readily available for work to be completed or initiated. How much time has been spent already just to allow work to begin?
  4. Your facility is now ready to begin the required work to complete the shop order. A supervisor assigns an operator or operators within a given area to initiate the first operation. The operators work on the order and complete the first operation. They update a quantities sheet and a job card to record their time on the order and on the last operation. The parts are passed on to the next operation at the next work center. No system is in place to notify the downstream operator that the parts will be coming from the previous operation or to notify them of what (if any) setup is required for the upcoming job. Documents for the job are only provided to the next operation when the traveler arrives.
  5. Eventually, all of the operations will be completed for this shop order and the job will be considered complete. At that point in time, a supervisor or quality representative will have to review all of the documentation, quality results and inspections to ensure the job is actually completed. They can then provide a notification to the ERP or MRP scheduler that the job and its associated operations were completed. The ERP or MRP scheduler finalizes the order in that particular system.
Now, the question at this point is how much of the above is true for your factory?

In terms of time, how many hours/days/weeks are wasted in the non-value added (NVA) tasks mentioned above? Based on customer feedback and surveys completed, we have determined that for a given shop order, at least 3 hours of time is NVA based on the above scenario. Take that amount of time and multiply that by the number of work orders your facility completes in one year and then use the cost of your labor for determining true NVA dollars per year. The number you find is true savings potential with your existing labor and later we'll consider the numerous other areas for cost savings that can be obtained.

Going Paperless
Now that we have reviewed the typical situation in the shop environment, lets now review the paperless solution and see how the scenario will change.

  1. The ERP release. In the paperless world, the release or modification of a shop order at the ERP/MRP level would immediately trigger an entry into the MES layer to create and schedule the newly released shop order. This shop order can immediately be scheduled by a finite scheduler to prepare a truly optimized schedule or it can be added to a set of work orders to be completed in a given work center queue (or priority). All driven by the true routing and the relevant shop order information.
  2. The status of the existing work centers/shop orders. In the paperless environment, the exact status of operators, work centers, shop orders, operations, etc. is all easily retrieved and reviewed on a real-time basis. The scheduling process becomes dynamic and no additional review or "walk-a-rounds" are required to schedule new orders or understand the current state of your facility.
  3. Assembling the job packet. Again, in the paperless environment, the factory scheduler no longer needs to create the traveler or job packet. References for each part, operation step and work center have been created associating the appropriate documents, revisions and quality data collection for each shop order. The operator on the shop floor will access documents electronically for a given operation. The documents are dynamic to allow for on the fly modifications, but at the same time, can be restricted to ensure edits are protected. Operators are given tools to view the documents and "mark up" the documents as necessary. The actual releasing of the shop order becomes inherent. If documents and appropriate shop information has not been attached to the shop order, the interface between the MES and ERP layers can create the association automatically. In essence, the creation of the job packet and the potential for using the wrong revision of a document both go away in the paperless world.
  4. Assignment and tracking of work flow. Operators are only notified to log in to a given work center. Based on that log in, the operator is provided the next job to work on. Operators are provided the tools and documents necessary to complete the job and store the appropriate data. Quantity updates and activity logging become inherent. The use of physical job cards goes away. Operators in downstream operations can see the status of the job and review documents or relevant information to be prepared ahead of time.
  5. Job is completed. When the job is completed, the paperless system conducts the review of data to ensure data was captured according to the original plan. All operation steps have been completed, signed off, quantities entered. The final notification to the ERP/MRP system occurs dynamically throughout the process and at the end of the job. Details such as status of the shop order, quantity good, quantity scrapped and logged activity hours for the shop order, among others, are sent to the ERP level to be stored with the shop order.
As you can see, eliminating the hands from the paper trail eliminates a great amount of NVA work and eliminates many of the potential errors that can occur. The process becomes simpler, a dedicated system becomes the normal course of business and inefficiencies are corrected. We will now explore other advantages of the paperless environment.

What Other Savings can be obtained?
In the previous section, we detailed the typical savings associated with the reduced labor needs required to manage the paperless environment. We will now explore other savings that can be obtained through the paperless factory by eliminating redundancies, overall time to market and waste.

The following areas are just a few of the targets for any company to explore. Each of the target areas has inefficiencies built in to the system and each costs the company true dollars. Any system that can help reduce the effort and dollars associated with these items should be explored. We believe that a paperless environment is a good start.

One of the keys to any manufacturing facility's success is understanding and reviewing shop floor data. The analysis of that data can be extremely beneficial to the company if improvements can be made. To get that data, however, reports are required. Some of the questions you should ask yourself are: What types of reports are completed manually today? Has anyone every explored the amount of time required to obtain standard production reports? What reports are "must haves" to do business?

Typically, what you will find is that most facilities are doing all of their reporting using off the shelf tools such as Excel or Access. Someone taking paper documents and transferring the appropriate data to these other ad hoc systems generates these reports. Reports are not dynamic and are certainly not real-time. In addition, hours of time by many people are wasted in developing and refining the reported data. At the end, you can only hope that the data generated and the reports being reviewed are accurate.

With the assistance of the paperless environment, reporting becomes quite easy. Standard reports showing the status of shop orders or the quality data collected on a given operation are available. In addition, since all the data and records assigned to a given shop order are stored at the MES layer, reports can be created using a variety of tools that access the data. Once reports are completed, querying and generating new reports is as simple as a few clicks. The reviewing of paper documents to actually get the data is no longer a requirement.

True cycle times:
In any manufacturing environment, it is difficult to accurately gauge the true cycle for a part from the first operation until it is completed. Even more difficult is trying to identify the true cycle for a specific part within a batch of parts for a shop order. In the paper environment, estimates can be established based on recorded dates and times by the operation personnel. This data is close, but is not exact. Having true cycles is more important to an operation than some may think. By having true cycles, you can accurately predict when raw materials are required, thus reducing inventory. You can better estimate your expected finish dates, assisting your end customer with delivery. In addition, you can begin to analyze areas that need improvement to help with reducing the overall cycle time.

When it comes to the paperless environment, obtaining cycles becomes inherent. Each time an operation is started, finished or updated, the database records who, what, when and where. At the end of operations or at the end of a shop order, it is quite simple to analyze the total cycle for the shop order or the total cycle for a given part in a shop order. In addition, it is possible to analyze one shop order for a given part versus another. Or analyze one operator running a part versus another operator doing the same part. The data is there and is ready to be analyzed.

Quicker response to the customer (shorter lead times):
As any business owner knows, the customer is the key to success for any company. Creating the ability to deliver to the customer in a more timely fashion or shortening the overall lead-time to produce a part is a goal of any facility. The example described earlier that discussed the "hands required for the paper trail" is a great example of lost time and therefore increased lead-time. If you were to take all of the time wasted in preparing and releasing an order, following up on that order and ensuring reports, documents and inspections were completed for that order, the number would add up to a large percentage of the total cycle. Again, this time can be classified as NVA.

Although, we have discussed the labor savings associated with the NVA in a facility, we did not discuss the true benefit of eliminating it, which are shorter lead times to the customer. The dollars associated with this shorter lead-time is tough to estimate for a given facility, but it definitely has a value. How much benefit is there to your company to be more on time with deliveries? What if you could shorten lead times, therefore producing more products with the same staff and equipment?

Decrease in waste (scrap)
Finally, a major area that can certainly cause lost revenues and profits to any company are wasted goods. Companies that have developed quality systems to ensure that products leaving a facility are of high quality and consistency are ahead of the game. In many cases, though, the quality that is built into the system relies on the appropriate documents and revisions of those documents are delivered to the operator at the right time and place. In the world of paper on the shop floor, mistakes can happen. Incorrect revisions of a drawing, the wrong part program for the latest part or incorrect quality specifications for this particular order. In any of these cases, the product that is manufactured is scrap material or lost dollars to the company.

One of the key intentions of a paperless environment is to ensure that the mistakes listed above can't happen. The latest revisions are reflected electronically for a given shop order. Last minute changes to a drawing are immediately updated and viewed by an operator. Old revisions of drawings are not stored in the desk of the operator and used on the next run. Instead, they use the electronic version of the documentation, which provide the last changes made by the manufacturing engineer.

The bottom line here is that the scrap rate your facility has grown to expect will be reduced. That reduction in this scrap rate is once again a true savings to your facility. Productivity improvements by outputting more quality product and a much higher Overall Equipment Effectiveness (OEE) ratio are obtained.

The intention of this document was to provide some additional insight into the typical world of manufacturing and how going "paperless" could affect your business. In today's environment, any competitive advantage that can be captured is a benefit to the company and its shareholders. Through our research and our understanding of the shop floor environment, we believe the paperless environment has many characteristics that can provide that key competitive advantage to your company.

It will take a commitment from management and key personnel to implement and maintain this type of system, but the benefits will greatly exceed the costs. As can be seen, the benefits include true savings to the company and assurance that products are manufactured with a high degree of quality.