Missing Link The Manufacturing Sector and Industrial System Management

Industrial System Management is a way of using industrial engineering principles to solve industrial inefficiency, ineffectiveness, and the lack of operation safety. An example would be using facility design to improve facility layout in order to maximize the efficiency of the production process; or using lean manufacturing to eliminate waste and ensure effectiveness in production areas, and using Six Sigma to statistically control and ensure the quality of products. The main components in any manufacturing establishment are humans and machines. Industrial system is, therefore, the bridge that connects them, and ensures they are working closely together to achieve the final goal – producing the best products efficiently.

Most modern factories in Japan used industrial system management since World War II. Toyota Car Manufacturing Company for example, has beaten the United States’ giant General Motors by applying such manufacturing methods. Nowadays, lean manufacturing principles are applied in most American factories due to the significant efficiency improvements seen in Japanese industries. Developing countries like China are also using such methods to handle their huge demand and to increase their production capacity.

Industrial system management hardly exists in Ethiopia

There are many obstacles in the manufacturing sector in Ethiopia, especially in the bottling water sector as I have observed working with several of these companies. The power supply is unstable, which affects manufacturing efficiency and the quality of products. The supply chain is so incomplete that companies can not get parts required for production within the country. There is also lack of dedicated distributors; hence, producers need to distribute their products by themselves. More importantly, there is a strong need for modern management system in most factories.

The first stage in the industrial evolution of the world is the craftsmanship industrial era. It takes a long lead time to produce one product, and the cost of production is relatively high. Craftsmanship was no longer able to supply the large demand for items such as guns for warfare. Interchangeable parts were then invented to increase the convenience of products (if two guns are broken, you can combine the good parts of the two to make a good one). Then mass production was introduced to supply the huge demand in a short time during the World War II. Under mass production there is low variety since everything is produced in an assembly line. This has changed the scope of manufacturing in general.

After the war, the Japanese focused on the car manufacturing sector; and created a system called Lean Manufacturing. The idea centred on highly efficient, top quality, and engaged workforce production system. It is, in other words, the combination of the flexibility and quality of craftsmanship, and the low cost of mass production.

Ethiopia is now at the stage of mass production mixed with craftsmanship. In the bottled water business for example, it is important for the bottlers to produce as much as they can to satisfy the high demand of their products. However, in most cases, the production lines are running only at 50 to 60Pct of their capacity. This low efficiency is a result of a combination of factors such as lack of focus on the side of the management which is usually busy on solving issues at hand (example: electricity failure) to have production. Moreover, machine operators are not trained well enough to operate efficiently, and safely.

In addition, the facility design in several factories brings inconvenience for operators and managers; and affects the efficiency of production. These have contributed to the low overall equipment efficiency (OEE) in the country.
Industrial system management method can solve such inefficiencies in several factories in Ethiopia. The first step for increasing factory efficiency and effectiveness is to have logical and lean facility design. This means proper arrangement of the positions of the machines, tools, and stores for both finished products and raw materials. Furthermore, offices and other facilities must also be organized in a way that materials and information flow smoothly. In the bottled water business for example, it is important for line engineering to be logical. Before the line is built, every component must be designed to fulfil the specific need of the factory.

The next important step to increase efficiency in industry is to have good technical guidance. This includes procuring the right machines, and having good technicians for installation and commissioning. It is also very important to have appropriate factory management. By setting up standard operating procedure (SOP), a step by step procedure for selected operators (with professional recruitment process) to follow will ensure that they are doing the right job effectively. This helps to prevent machines breakdown by operators’ mistakes. It will also ensure workers’ safety and increase production efficiency. To ensure that SOPs are followed, it is useful to set up a Key Performance Indicator (KPI) programme to measure the operators’ performance. The company can reward or punish the employees depending on this performance. Furthermore, the SOPs can be transformed into training manuals, and combined into a Knowledge Management (KM) system. So, if any worker leaves the factory, the knowledge will remain within the factory.

It is necessary to perfect the supply chain by setting up a quality control system. This helps to control the quality of the raw materials.

Last but not least, it is significant to set up an effective maintenance programme for each and every machine in the factory. Based on the type of machines, there are several methods of maintenance, such as conditional maintenance (adding cooling water to machines when appropriate), systematic maintenance (running 3,000 hours and then changing lubricant oil), and corrective maintenance (fixing upon breakdown of low cost parts). In addition, there should be an annual budget for procuring spare parts to ensure on-time delivery when spare parts are really in need.

Take machines as hardware, and industrial system management as software. A computer without the proper software will significantly reduce working efficiency. The Ethiopian manufacturing sector as a large industry lacks such software. The result is inefficiency.

Without adding any more machines into the factories, the efficiency in many factories in Ethiopia can easily be improved by 20 to 50Pct. This will be possible, among others, through the implementation of industrial system management.

It is becoming a trend that Ethiopia will become the next world manufacturing factory. In order for this to happen, a more efficient system needs to be put in place. Improving efficiency through industrial system management requires trial and error but results will be well worth the effort. It is the time for the Ethiopian manufacturing sector to bloom; let’s be ready for it.

2nd Year . November 2013 . No9

Howard T. Chen

got BSc in Industrial and System Engineering and BA in Mathematics from the State University of New York. He is currently an industrial management consultant, at Maticiline Ethiopia PLC. He can be reached at howard@maticline.com

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