CONSULTING ROLE IN MANUFACTURING SECTOR

Manfacturing Consultancy

Manufacturing sector is the agglomeration of the industries engaged in chemical, mechanical or physical transformation of materials, substances or components into consumer or industrial goods. It has evolved as the fastest growing sectors in India. We can also define manufacturing as the process of developing raw materials into finished products to meet up to the consumer’s expectations.

Manufacturing sector comprises of 30% of the Indian economy. It contributes 16% of the nation’s Gross Domestic Product and provides employment to 6 million people. This sector includes textiles, capital goods, electronics, automotive, machine tools, food, cereals, etc. There are 2 types of manufacturing sectors:-

  • Capital goods
  • Consumer goods
  1. Capital Goods

This involves the production of the materials which are then used for the manufacturing of different products but are not incorporated into the product. This is the “mother” of all industries and is extremely important to the national security and economic independence.

For example: Industrial machinery, Electrical equipments, Textile machinery etc.

  1. Consumer Goods

This category represents the final product which are then distributed in the market for consumption and are bought for personal or household purposes.

For example: Apparel, Furniture, Sporting, etc.

India’s manufacturing sector has the potential to touch US$ 1 trillion by 2025. There is potential for the sector to account for 25-30 per cent of the country’s GDP and create up to 90 million domestic jobs by 2025. Business conditions in the Indian manufacturing sector continue to remain positive. This is why manufacturing sector is of major interest for the government to increase the profit by 10 folds.

WHY DOES THIS SECTOR NEED CONSULTING?

However, delivering the best quality of product with minimal cost of production thereby maximizing the profit is the major challenge faced by the industries today. Hence, to combat these challenges and contribute a surplus amount to the Indian economy, manufacturing sector needs advice. These advices are given by the consultants of the industry.

The reasons why they need consulting are:

  • To help compete with the ever-growing industry
  • Assistance for development of production strategy
  • identify product cost-savings worth hundreds of millions with ‘perfect cost grid’
  • To secure value from effective procurement
  • Achieve excellent performance in manufacturing
  • To re-invent manufacturing to deliver innovative new products
  • To develop products from concepts, through design and development and into manufacture
  • Create commercial advantage from technology and innovation.

By hiring a consultant, clients have access to deeper levels of expertise than would be financially feasible for them to retain in-house on a long-term basis. As well, clients can control their expenditures on consulting services by only purchasing as much services from the outside consultant as desired.

Consultants provide their advice to their clients in a variety of forms. Reports and presentations are often used. However, in some specialized fields, the consultant may develop customized software or other products for the client. Depending on the nature of the consulting services and the wishes of the client, the advice from the consultant may be made public, by placing the report or presentation online, or the advice may be kept confidential, and only given to the senior executives of the organization paying for the consulting services.

How do these consulting firms work? 

The consultants in the manufacturing industry adapt the “6-Sigma” policy to reach forecasted financial targets.

The term Six Sigma is derived from the maturity of a manufacturing process, or “sigma rating”, which indicates the percentage of defect-free products (or “yield”) produced. A 99.99966% defect-free yield, or 3.4 defects per million products, is regarded as the Six Sigma standard.

At its heart, the Six Sigma system is built on top of the older DMAIC management system.

DMAIC System

  • Defining the problems
  • Measuring key aspects of the production process
  • Analyzing the data to study cause and effect relationships
  • Improve upon the current processes to reduce defects and process variation
  • Control and modify future operations to reduce the likelihood of defects

The main focus of the Six Sigma system is to remove all production defects, consolidate fragmented variables in manufacturing and business practices, and to use standard quality and statistical management methods to improve the quality of finished products. Six Sigma training produces an elite group of employees within a workforce, operating in an internal hierarchy – comprised of “Black Belts”, “Green Belts”, and lower levels, who draft and oversee a Six Sigma project. Six Sigma projects are done strictly “by the book”, and must follow a defined sequence of steps to attain the desired financial results.

Six Sigma Doctrine’s Three Goals

  • The reduction of process variation leads to stable and predictable process results.
  • All manufacturing and business processes can be measured, improved upon and controlled with fixed variables.
  • The entire company must be committed – from the top down – to the Six Sigma doctrine for the implemented changes to have any measurable impact.

THE BENEFITS OF CONSULTING IN MANUFATURING SECTOR:

The consulting firms strive to help the manufacturing sector to achieve maximum profit by delivering best quality of goods to the consumers with minimal defects. This approach satisfies the customers and makes an infinite unsigned contract between the customers and the manufacturers.

The consulting firm also makes sure that the industry in making a profitable deal with the investors. Not only that, the firm analyzes all the brands which produce the raw materials and advice the sector to import from the best keeping in mind the budget.

Not only does this firm help with the financial advice, it also advices on transforming the product into more advanced and developed fashion so as to attract the customers.

They also help the “capital goods” industry to import the best raw material to make an efficient machine as these machineries will help produce the consumer goods with minimal defects.

Also, one of the major roles of the consulting firm in a manufacturing sector is risk management.  This includes the following factors:-

  • Market Risk– to check if the product is really needed in the market

For example: If a mobile phone with 512 MB RAM comes in the market, no one will buy it as the need has changed sue to smart applications.

Hence, consulting firm ensures the production of products happen only if they are needed in the market.

  • Investment Risk– to gaining maximum profit in minimum investment
  • Business Risk– to ensure maximum sales

For example: If the industry manufactures a phone worth 60,000 INR, it has to ensure best feature in order to convince the consumers to buy the product.

Thus, consulting firm again takes care that the quality and the cost are balanced so as to ensure maximum sales.

The role of consulting in the manufacturing sector is to reduce these above risk factors and give the industries the best advice to make a mark in the industrial area.

The benefits of consulting are supported by the following Case studies :-

Case study 1:-

A multi-product integrated chemicals company needed to improve its manufacturing processes due to pressure from competition and the increased demand of customer requirements.

Each of their 20 plants and businesses were analyzed and goals to achieve manufacturing excellence were established. Accordingly while 5S was used as a foundation along with VSM, in order to identify opportunities, asset care was implemented in a few of the plants on a pilot basis. The resulting improvement and cultural change acceptance that resulted has been well appreciated and the plant is on its way towards excellence.Potential for improvement was evidenced by over 30 percent in lead times and 20 percent in plant inventories.

Case Study 2:-

Translate Lean concepts successfully into high-speed production lines.

High-speed production lines can support Lean ideals.

Lean, or low waste, manufacturing became a popular business trend at the hands of Japanese automobile maker Toyota. But it’s a concept that’s not easy to translate into the volatile, micro-stop world of high-speed production. Simply trying to apply Lean concepts developed for a slow moving line to a fast production line that sees several hundred items per minute can have disastrous results.

A micro-stop strategy is a critical element.

High-speed lines commonly use components that are prone to stoppages — corrugate, shrink wrap and thin plastic. Even on a highly functional line, failures will occur approximately every five hours. Allowing for these stoppages means determining and understanding how to effectively implement buffers. With an efficient buffer, operators can deal with a jam while the line continues to run. That means only an abnormal condition will stop an efficiently buffered high-speed line.

Adding buffers is the key to applying Lean in high-speed environments.

The appropriate buffer can be calculated in a number of ways. For a line with normal material variance, a close look at Mean Time to recover, time analysis or simulations can all lead to development of a right-size buffer. While buffers challenge traditional Lean concepts, they pale in comparison to the cost of an inefficient, non-buffered high-speed line

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