Process manufacturers run unique, equipment-centric operations, which means they’re challenged to find meaningful performance benchmarks for best practices, improvement methods, tools and techniques.
That’s finally changing.
Performance Solutions by Milliken (PbySM) recently completed the PbySM Process Industries Performance Study, which captured data from 153 U.S. process plants (entirely process operations, mostly process operations, or a combination of process operations and discrete operations). The study closely examined activities related to the 4Ms — Manpower/human resources, Methods, Machines, and Materials. This research not only established benchmarks critical for the clients we serve — more than 350 operations in a variety of industries — but also uncovered worrisome trends across process industries.
First the good news.
Ninety percent of process plants report improvements to their operations performances over the past two years (16 percent reported improvements of more than 15 percent). For many, the positive changes are driven by improvement methodologies (55 percent of plants use Total Quality Management and 50 percent use lean manufacturing) as well as the use of documented performance management systems (88 percent). Many process plants also recorded stellar performances in the past year for critical measures:
- Safety: one-third reported OSHA recordable incident rates of 1 or lower.
- Environmental performance: 43 percent of plants reported 0 reportable environmental incidents.
- Quality:18 percent reported scrap and rework rates of 2 percent or lower.
- Delivery: 24 percent reported complete-and-on-time delivery rates of 97 percent or higher.
- Machine uptime: 10 percent reported machine uptime rates (as a percentage of scheduled uptime) of 97 percent or higher.
- Profitability: 30 percent reported gross margins of 45 percent or higher.
Now the bad news.
Many plants, even some that use lean manufacturing, don’t implement best practices typically associated with lean and other improvement methods. For example, only 45 percent regularly pursue waste elimination, just 26 percent use 5S workplace organization, and a paltry 16 percent conduct value-stream mapping. A core concept adopted by many of PSM’s most successful clients — zero-loss thinking — is used by only 15 percent of process plants.
These missing best practices and improvement techniques almost certainly contribute to inferior performance metrics at many process plants:
- Safety: 23 percent reported OSHA recordable incident rates of 20 or higher.
- Environmental performance: 24 percent of plants reported 10 reportable environmental incidents or more.
- Quality: 30 percent reported scrap and rework rates of 20 percent or higher.• Delivery: 31 percent reported complete-and-on-time delivery rates of 70 percent or lower.
- Machine uptime: 41 percent reported machine uptime rates (as a percentage of scheduled uptime) of 70 percent or lower.
- Profitability: 28 percent reported gross margins of 15 percent or lower.
These findings represent just a fraction of the insights uncovered by the PbySM Process Industries Performance Study. Performance Solutions by Milliken will be sharing more of the research and benchmarks in future blogs, and will be releasing an Executive Summary of all findings in the weeks ahead. If your process operations are trying to move further toward operational excellence (the good) or struggling with these performance measures (the bad), sign up to receive more study news and analysis and to learn how Performance Solutions by Milliken can help your organization improve .