Digital Shop Floor Management: Definition, Benefits, Implementation

1. What is digital Shop Floor Management?

Digital Shop Floor Management (dSFM) can be described quite well with the following sentence:

"The method or management framework of Shop Floor Management remains the same, but the tools for SFM change - they are digitalized or digitally supported."

The digitalization of the tools massively supports the method and thus the acting managers and employees. Efficiency in the application of SFM is no longer only promoted locally, but also in distributed or global value chains - even beyond production. The aim is to further optimize processes with the help of SFM and digitalization.

It is important to emphasize at this point:

• Leadership cannot be replaced by software! In other words, the use of software alone without the underlying method does not usually lead to complete success.
• The method should be learned and internalized by the acting managers and employees at the latest when the software is introduced.

The following graphic explains what constitutes digital SFM and how it differs from traditional, analog Shop Floor Management.

Source: Staufen.ValueStreamer GmbH 

The methodical part or the management framework of Shop Floor Management remains unchanged, namely (see upper part of the figure):

• the permanent improvement of the work system by working in the system
  
• the permanent improvement of the culture in the work system by working on the system
  
  

This also means that the classic stand-ups or morning rounds are replaced by dSFM. In concrete terms, this means that the joint face-to-face meetings at the respective locations involved will remain, but will take place in front of the digital board.

What will change significantly, however, is the targeted use of software to digitalize the instruments and support behavior.

1. Digitalization of the SFM instruments

2. Support of the behavior

...to create commitment in management.

• Support the planning of Gemba Walks or Genchi Gembutsu, e.g. to enable learning situations between employees and managers.
• Conduct gemba walks to analyze the source of disruptions and deviations with reference to reality, also possible over distance with mobile devices such as tablets or smartphones.
• Agree feedback and track it on the dashboard in real time.
  
  

2. What are the benefits of digital SHop Floor Management?

In summary, it can be said that digital Shop Floor Management helps to further improve efficiency, quality, flexibility, and agility in work systems (production, logistics or even in office areas).
This can lead to decisive competitive advantages for companies - from significantly increased customer satisfaction to cost benefits.

The benefits of dSFM result from extending the advantages of classic Shop Floor Management to include the advantages of digitalization. This enables companies to record, process and provide data more easily.
The concrete benefits result from

• Automation of data processing without media disruptions → Transfer of manual, error-prone work to the software
• Aggregation of KPIs in the cascade → Transfer of repetitive work to the software
• Generating information from data → through integrated analyses, evaluations, trends
• Real-time availability and use of data worldwide
• Digital visualization → Screens instead of paper boards

As a result, companies gain better control over their processes, react more quickly to changes and continuously improve the efficiency and quality of their work systems. It also enables them to make faster, better and fact-based decisions.

This is particularly advantageous in the context of global work systems, as conventional or analog Shop Floor Management clearly reaches its limits here. Collaboration is increasingly taking place across locations and more and more in networks. It is simply not possible to transfer a collection of analog data (e.g. on a paper board) to another location.

3. Reasons for the digitalization of Shop Floor Management 

Why should Shop Floor Management be digitalized?

To answer this question, we will first assume the classic application of SFM in the operational area (e.g. production, assembly, supply chain management, logistics, etc.). In this context, the following reasons for digitalization arise:

If the focus is extended beyond the operational areas to the processes and line functions of the entire company, there are further, very worthwhile benefits of so called "Office Floor Management":

• Traditional or analog SFM reaches its limits, as global transparency cannot be created with analog data and therefore a globally effective work system or network cannot be centrally controlled.
  
  
• Improvement of collaboration through SFM-based control in task management, which leads to greater reliability in cross-functional teamwork.
  Use cases for this could be:
  
  
  • New product development process
  • Ramp-up management or processes
  • Quotation preparation process in mechanical engineering; automotive system suppliers
  • Order processing process in mechanical and plant engineering
  • Multi-project management (automotive, mechanical engineering)
  • Large-scale project management (construction, plant engineering)
    
    

In office areas, digital Shop Floor Management leads to:

• significant reductions in lead times and
  
  
• higher project throughput with the same team due to efficiency increases à Degression of fixed costs
  
  
• simultaneously high adherence to deadlines and reliability
  
  
• Avoidance of sensitive penalties, especially in mechanical and plant engineering

dSFM also contributes to increasing the robustness and resilience of work systems against the backdrop of an ever-increasing need for companies to adapt to their environment.

4. Advantages of digital SHop floor Management

1. Increased efficiency

• Fast data collection, processing and analysis of process data makes it possible to identify bottlenecks. Through the targeted optimization of processes, companies can increase their productivity and efficiency by reducing unnecessary downtimes.
  The absence of disruptions is guaranteed, and employment losses are avoided.
  
  
  
• Real-time data processing and delivery/visualization enables managers to continuously monitor process status and performance and other relevant metrics, and intervene quickly when needed to:
  
  • resolve bottlenecks or problems
  • enable timely reduction of defect rates and non-quality costs (scrap, rework)

2. Reduced process runtimes

• Faster and more informed decisions based on excellent transparency
• Accelerated processes through better use of resources

3. Continuous Improvement

• Data collection makes it possible to identify weak points and implement targeted CIP measures/projects to optimize the work system dSFM-supported (via CIP process boards).
  
  
• Collaboration across locations is also possible, allowing improvements to be shared and effective worldwide.
  
  

4. Increased flexibility and adaptability Flexibilität und Anpassungsfähigkeit 

• Digital Shop Floor Management makes it possible to react quickly to changes in demand or process flows.
  
  
• The flexibility of the system supports adaptation to new requirements:
  
  • • Prevention of bottlenecks through the possibility of global resource balancing (e.g. in development processes) and enables an increase in the throughput of projects with the same team (à Fixed cost degression)
      
      
    • Faster market availability due to reduced lead times and accelerated processes
      
      

5. Better collaboration and communication

• The provision of real-time data on digital dashboards improves communication between employees and management.
  
  
• Information about the current process status becomes easily accessible, leading to better collaboration and coordination.
  
  

6. Simplified documentation and traceability

• All steps and activities on the Shop Floor can be recorded digitally, resulting in better traceability of production processes and histories.

5. How to create the basis for digital Shop floor Management - in 3 steps

1. Create management attention
Establish management attention with the highest-ranking manager in the SFM cascade. This person is the sponsor of the dSFM project and must be convinced of it.

2. Create a consistent basis for the understanding of SFM methodology
Everyone is on the same level in terms of understanding and applying the SFM methodology.
You can achieve this by taking these 5 steps:

• Ensure consistent unterstanding of the methodology
  Create a consistent, common understanding of the methodology with the help of training. Implementing software for digital Shop Floor Management without an understanding of the methodology will not be successful at all.
  
  
• Define board standards
  Design and define board standards for KPIs, lists & views per team to increase comparability with standards.
  
  
• Define KPI standards
  Standardize the KPIs and their calculation. Create clarity for all those involved as to how the KPIs are calculated and in which existing systems the associated (basic) data is available.
  
  
• Application of the method in the pilot area
  Establish a common level of maturity in the application of the method within a pilot area. The application experience of the methodology is necessary for dSFM - the methodology must be introduced with the software at the latest.
  
  
• Design of the digital boards based on paper/ analog Shop Floor Management method
  If paper-based Shop Floor Management is already in place, the design of the digital boards should be based on the existing design - otherwise you may have to expect resistance from employees.
  Note: a paper SFM is not necessary as a basis for the introduction of dSFM; you can also start directly digitally.
  
  
• Pilot installation und test phase of a digital Shop Floor Management Software

3. Define the project team, roles and, communication in the project
Finally, roles must be assigned, and all stakeholders informed.

• Define Key Users 
  Define the centrally responsible persons who are in charge of the administration of the SFM system (key users). This also applies beyond the implementation project.
  
  
  
• Clarify roles with TAR
  Clarify the roles in the various areas with TAR (tasks - authority - responsibilities) to safeguard the template management for the processes (product creation, order processing). This also applies beyond the implementation project.
  
  
• Communication with IT
  Coordinate with IT soon enough and clarify issues such as connections, single sign-on, infrastructure/hardware, etc.
  
  
• Communication with the works council
  Involve the works council in your plans timely and inform them accordingly.
  
  
• Communication with the employees
  Communicate constantly with the employees involved in order to allay any fears of the impression of permanent control.
  Note: (d)SFM only serves to improve the work system!
  
  
  
• User training
  Please note that as little time as possible should elapse between the user training sessions and the go-live; ideally, the system is configured and switched live in the context of the training.
  
  

6. Digital Shop floor Management with Office 365 – does it work?

We come across digital in-house solutions with tools such as Office 365, Excel Shop Floor Boards or other no-code or low-code solutions as well as BI tools in our consulting and implementation practice.

We have great respect for the ideas, the work and the efforts that are sometimes put into these solutions and the things that are sometimes possible.

However, when comparing these in-house solutions with the digital Shop Floor Management tools available on the market, it is clear that the snags should not be underestimated:

1. With such in-house solutions, critical administrability and maintenance usually depend on a single or a few employees; this can lead to very unstable situations. If the employee is not (or no longer) available, a house of cards collapses, and it is not uncommon for complete restarts to be necessary because no one can maintain/host the tool.
   
   
2. Poor multi-user capability; if an Excel or other Office file is edited by several users at the same time, this often leads to corrupt and inconsistent files or even data loss.
   
   
3. Deployability and consistency throughout the entire company reaches its limits, also in terms of user-friendliness and acceptance.
   
   
4. Finally, we often encounter dSFM tools that are no proper tools for the realization of the methodology Shop Floor Management. 
   

   Transparency-creating tools, such as BI or process mining tools etc., are far from being SFM tools, because:

   • • Creating transparency is a maximum of 20-25% of the functional scope of an SFM tool.
       
       
     • Shop Floor Management Tools start at the point where data is available in processed form and can be used to consistently, permanently, and system-supported improve a work system via integrated deviation management and continuous improvement.
       
       

For the reasons mentioned above, the combination of SFM tools with BI and/or process mining tools would create perfect synergies in this context.