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Smart Information System For HMLV Manufacturing Cost Reduction

Technology Overview

Pricing of Products may make or break the business. Therefore Product Costing and ROI management are critical data every CEO, CFO and COO follows closely. Currently such data are produced days or weeks after Production is completed instead of at the end of each Production Lot / Batch / Part. This is a limitation of traditional or ABC (Activity-Based Costing) Accounting Management Solutions.

Difficulties emerge in Hi-Mix Low-Volume (HMLV) environments as different products may perform very differently in terms of production time, quality issues and unplanned downtimes and on different occasions thus often making traditional and ABC accounting solutions error prone.

Currently OEE and Utilization reports may be difficult for top management to understand, so our solution converts them into Cost. The ROI Management function fulfills this need and provides timely actionable reports to support investment decisions and routine process improvement and optimization projects.

Technology Features & Specifications

  • Product Cost is dependent on several factors including the Quality Yield %, capability and condition of production machines which may vary over time, occurrence of unplanned events, wastages of raw materials, and the accurate allocation of overheads which may comprise a large component of total costs. 
  • As Hi-Mix Low-Volume production runs, our dynamic real-time technology takes the Total Cost Data from the General Ledger to merge with machine-level performance indices (including the OEE-Overall Equipment Effectiveness) to give Product Costing & ROI Management AI-empowered infographics on the go in real-time.
  • Using AI principles, the solution learns and recognizes new changes to Processes, Products, Materials and adds them to its knowledge database. Hence there is no need to re-program the solution software once setup is done.
  • It is able to predict the financial impact on product cost for any changes in operating costs or operating conditions.
  • Infographics provide timely actionable advice for process improvements and cost optimization. With security and confidentiality features built in, management can be assured only the right people have access to the right information on a need-to-know basis.

Potential Applications

  • Hi-Mix-Low-Volume Manufacturers looking to move Product Costing & ROI management into the Industry 4.0 era
    • All types of manufacturing MNCs and SMEs
    • MES solution providers invited as co-development partnets
    • Precision Engineering smart lines

Customer Benefits

  • Helps CFOs automate Product Costing in Hi-Mix-Low-Volume environments, releasing precious time for more strategic work. Product costing is less error-prone and carried out in real-time.
  • Provides Operational Management with a tool to identify high impact losses and track the ROI or improvement projects accurately.
  • Addresses the following questions:
    • Where are the losses and what cause them?
    • What % of my product cost is wasted?
    • How to reduce costs to meet my budget goals?
    • What is the ROI of proposed improvement projects, TPM, OEE, Lean 6S projects?
    • Accurately track and report Improvement Teams’ Project ROI based on baseline month conditions , eliminating “noises” thus improving team’s morale.

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