What is production optimization and what can it achieve?

Mitä on tuotannon optimointi?Production optimization is a process in which a manufacturing company uses various means to improve production efficiency. Often, the aim of optimization is either financial or time savings, but human and environmental considerations are also important factors.

Production is optimized at many different levels. It may be something small, such as a change in the organization or scheduling of a single resource, but there is no limit on the extent of optimization. The efficiency potential and a reasonable level of ambition of optimization depend, among other things, on the scale and complexity of the company’s production, the industry and the prevailing market situation.

Production can be optimized in many different ways. This could be, for example, changes in scheduling, optimization of batch sizes, run cycle and sequencing optimization, more efficient quantity calculation, or even better planned changeover times. Many also use lean thinking methods to make the change, by removing the unnecessary from the workspace and processes, and focusing on the essential.

→ Read: Pinja’s Lean training helped KGN Tool get rid of unnecessary work and increased mutual interaction and transparency.

Production optimization typically proceeds in steps as a process, where an increasing number of production aspects are added to the scope of optimization, and the level of optimization is refined over time. The implementation timetable depends on the company’s resources, willingness and investment capacity, among other things. To assess the return on investment, a payback period for an investment in optimization is provided by a benefit calculation. Powerful tools and systems are also available to optimize production.

Production optimization – a tool to achieve a wide range of objectives

Optimizing production can bring financial, time management, organizational and environmental benefits to a company. Factors that typically influence the setting of objectives include the company’s resources and investment capacity, customer requirements and the general market situation in the industry.

Time-use benefits

Time-use benefits are usually linked to faster production lead times and delivery times, for example, so they often impact customers directly. Within an organization, the benefits can be seen as more controlled and predictable use of time, for example, and in time freed up from production that can be spent on other tasks. Optimized production arrangements can save working hours for several groups of staff, from floor-level personnel to production planners and procurement, among others.

Financial benefits

The financial benefits of optimizing production are typically realized not only through the aforementioned working hour savings, but also in terms of overall resource efficiency and waste minimization. This means that optimizing production also has a direct impact on the profitability of the business. Faster and more efficient production also creates a competitive advantage, which translates into higher customer satisfaction and a stronger position in attracting new customers. In the food industry, for example, optimizing production can often have an impact on the shelf life of products, which is a key competitive factor in the sector.

→ Read: The optimization of stock levels and shelf life brought clear cost savings for Snellmann.

Organizational benefits

The human, or so-called organizational, benefits of optimizing production include all the positive changes that make work easier, more meaningful and more manageable. By optimizing manufacturing processes, scheduling, sequencing and tooling, for example, staff can anticipate their own work further ahead, have access to more user-friendly tools and streamline their overall workflow.

Environmental benefits

Environmental benefits have also become a focus for more and more companies. Production optimization is an effective way of looking at resource efficiency, material waste and stock levels, among other things. Once the current situation has been mapped, informed decisions can be made on the optimization measures to be taken and their prioritization.

Synergies

Since everything affects everything in a manufacturing company, the combination of the above benefits and the synergies they create should not be underestimated. For example, when a company can calculate a certain delivery time for a particular consignment in advance, this provides a competitive advantage that helps it win deals and thus increase sales. Optimizing stock balances is not only an environmental act, but also an economic act that balances the amount of tied up capital.

Successful changes create a virtuous circle

If often happens that once you have embarked on the path of production optimization, the development work expands beyond the initial objective. When you dare to look at your business with courage and an open mind, you learn more and more, and your hunger grows as you eat. So, you may end up reforming whole processes after you started by modifying calculation logics.

All in all, production optimization offers a powerful way for companies to improve the predictability of workloads, resource utilization and capacity, and thus also create a foundation for informed, data-driven decision making and production prioritization. Optimizing production is therefore an investment that strengthens and supports the core of the business, regardless of the company’s sector.

 

Read more: 

Blog: The APS system pays for itself - financially and humanly
Success story: Adds precision and transparency to Metsä Fiber's production planning
iPES by Pinja - Production planning and supply chain management system

Antti Halonen

Antti Halonen

I’m a Senior System Architect at Pinja, very much involved in the customer interface. I’m responsible for system deliveries and I support the customer through the whole lifespan of the system, from initial configuration to maintenance. In my free time, I stay at home to watch over the shenanigans of two small humans.

Read more from this author