Operational Excellence, Part 3: AM/PM and Focus Improvement

Ed (00:00.44)

Hello there. I’m Ed Ballina. Hey, how are you buddies? Alvaro Cuba here. Good to see you again, Alvaro. Another run at the podcast episodes. And as you know, I was on vacation last week up in Maine and I had a great time fishing, Bar Harbor, et cetera. Picture, my amigo. We had a great time. But I have to point out, I am wearing a special shirt today. Okay.

So this is, thank you, that I am Cuban and very proud of my heritage. But I’m also celebrating my buddy Alvaro Cuba. So yeah, it’s a double header. And, the last piece that I’ll close with is, I took some fly fishing lessons. I had never done that before. And I happened to meet a gentleman up there who is part of an amazing, amazing organization.

That goes by the name of Healing Waters. And, it is an organization that is formed by fly fishermen to help veterans with PTSD. And, I’ll tell you what, just really, I mean, I can’t wait to get involved with them. Unfortunately, I still hook my shirt, so I’m not ready. But, if you get a chance, watch the movie Mend the Line. It’s on Netflix. My wife turned to me onto it and it is about an African American vet suffering from PTSD and how learning how to fly fish just helped him with his recovery and his therapy. No plugs here. I’m not getting paid by Netflix, but what an amazing movie and it really has inspired me. So, Healing Waters, just an amazing, amazing organization. I’m going to, a little bit different. I’m going to pass with that. I watched the movie and, amigo, you have to take me in your next fishing trip.

Please. Absolutely. On my side, I came back from Europe. It was a very nice trip. The experience in food and nature in Europe is outstanding. So I had all that and I spent the weekend checking the Olympics. It’s so amazing. Well, besides the sport and inauguration and all the fuss about it.

Alvaro (02:25.742)

But more close to our hearts is all the innovation and the sustainability. I was reading the the short in the aquatic center made of timber completely. entire roof is solar panels, so it’s 100% self -sustainable.

It can regulate the amount of people depending on the sport. Fascinating stuff on technology and tied to sustainability. I don’t know if you heard, but all the beds of the athletes are cardboard. Details like that, hundreds. Very, very interesting.

What a great opportunity, right? Once, you know, once every four years to, you know, explore new technology and, let’s face it, those multi-billion dollar investments now become part of the infrastructure for the whole city. And, you know, it, it, becomes just a great new venue. So that’s gotta be so exciting. I’m thrilled that, I hope one year I get to attend the Olympics. Actually have a next-door neighbor who is on the AAU Junior Olympic team for field hockey. She’s one of the best in the U.S. and I told her, said, if you make it to the Olympic games in four years, I will be there to watch it. I don’t care what that ticket costs. So great. I want to do the same, but with the soccer World Cup. So incredible experience.

So friends, welcome to the Manufacturing Meetup Podcast, the show where we kick back, have a few beverages, coffee or beer, depending on your taste or any other beverage, but it’s where we kick back in our downtime and we get real about the shop floor and what goes on in our facility. Join us.

Alvaro (04:40.75)

Great. guys, we always do a couple of news to start the podcast. On my side, we were talking about the Olympics. So the news that caught my attention is Olympics venues using digital twins. So I went and checked. And yeah, they have recreated for every venue identical 3D digital twin. And they have used it for things, incredible things that broadcasters can by watching in their screen, they can know exactly what position the camera should be, what they will be filming. And then they pass the time and then the sun, the effect of the weather and the sun and how the shadows move. They can plan everything in the computer even before going and putting the cameras in the venue. One of the climbers, the rock climbers, inside wall climber, he was watching an exact reproduction of the wall that he has to climb and he was getting mentally ready even practicing at home, watching the computer. And if you happen to go to one of the venues, you can check what is your seat, what are you going to be seeing, if you are going to be receiving sun or not. So amazing technology and all done with drones and robots in robotics. what…

What I was reflecting is, imagine if now we translate that technology into a production line. And then we can see the line, how it’s going to work. We can check the security things. We can interact virtually. We can check process changes. We can check set points.

Alvaro (06:59.072)

Not we can train the people in that line even before getting into the actual line. And it can be clearly a game changer. And the last reflection on this is all that with what we have been talking in the previous episodes, which is the new generation.

That new generation is fascinated with the computers, the digital twins and all that. So they will feel like in their home and in their environment doing these fun things and having their line in digital twins. So I cannot wait to see that becoming mainstream in the manufacturing plants. I’m sure you will all enjoy that in the very near future. What do you think about this Ed? Well, two thoughts that came to mind. First of all, that’s amazing. I can just imagine being able to play on a simulation, making changes to center lines.

Brings to mind when I was graduating from college, many, moons ago, I actually got to play with a simulation of a small distillation plant. I blew it up, but you could actually, it was the neatest thing ever. You know, I saw like these line joints on a screen of a pump and a pressure gauge and the, know, and I was like, we need more product. And that was many, moons ago.

Fast forward to I bought an Oculus quest, you know, a virtual reality set, to be honest, I think I’ve used it once. it’s mostly for my bribe for my grandson to come over and he uses it playing the games, right? I’m not beyond that. But I’ve used it a couple of times. My goodness. The reality, right? You literally think you’re going to trip over things. So, it’s exciting news and it appeals to our, new workforce, right?

Ed (09:13.536)

It makes training so much easier. understanding and engagement. So engagement fun. Yeah. Yeah. Yeah. It’s not all about drudgery folks, you know? Yeah. Yeah. Come on. Hey, Alvaro, you have to admit you’re not beyond playing a video game. Are you? I mean, come on now. Share starting. I’m starting. On. That is awesome. So, that there’s so much potential there. I’m just, I’m excited to actually play with some of this stuff. Know, it, it, will bring swagger to manufacturing with the, with the new, with the new hires and the new generations. What about you Ed, what news you have? Well, one, one piece that I wanted to focus on, was, reading over Augury’s, production health survey for, 2024.

And I’ve been watching these for the last couple of years and pretty interesting changes. I’ll start off with the subject, right? It was about 700 supply chain leaders of a hundred million dollar per year plus revenue company. So a pretty wide swath and really what I would say statistically significant number of people.

And the report runs about 16 pages. It’s an easy read folks. I would encourage you to, you know, go on our website and download it. You’ll, you’ll, you’ll breeze through it. A lot of graphics. and, but I took away a number of key points. First, what do these leaders believe are their challenges? And at the top of the list, it’s cost management specifically with materials and energy.

We have all seen the increase in raw material prices, right? Energy prices are starting to cool. I got diesel for 3.89 a gallon the other day. Was like, wow, that’s pretty decent. And the second challenge is capacity. Seems like we’re, we don’t have enough capacity out there. So interestingly enough though, when they asked the, the respondents, what, how well set are you to tackle this? Do you have enough capability in your organization?

Ed (11:30.702)

Like 60 plus percent of them say, yeah, we got, we’re good, right? We’re good to go. But yet they tell you that their issues are, they don’t have enough capacity. So I think we’re all guilty of this. Think our organization is always better than average, right? The truth is most of us are average. That’s how an average works, but anyway, not to be facetious, right? You have to have some that are worse than average and some that are above average for an average, statistical analysis.

It doesn’t take a stat degree to figure that one out folks. But they understand that they’re really starting to value the impact of AI. They mentioned, AI is going to create new jobs. AI is going to lead to better decisions because the analytics are better. And less downtime. They specifically called out AI’s impact on scheduled downtime.

Which means more output and because of that also better quality, right? They cited a couple of barriers: cyber security being one which, listen with everything you hear that goes on look look what just happened, you know to the airline industry, you know just to name one, right, with and with the the Microsoft issue. And, and second though is resistance to AI so, every once in a while you hear a story where they paint AI as a, you know, careful, it’s going to take over. It’s going to decide that human beings are really not good. We’re like the plague on the planet. And, but I think we can manage that. but clearly their objective in AI is to drive up capacity in a big sense. And that’s why 85 % of the respondents said we expect to increase our input in AI.

So, Alvaro, give me your, your, know, your take on those. I was reading, was checking, you, you, you know, we are in, the stock exchanges, is in the given results, quarterly results, not so most of the companies and food and beverage has been this week and will continue.

Alvaro (13:51.342)

Two trends that start to appear, one is, and you said it, cost. No, it’s always a challenge. And the second one, the demand is going down in some SKUs and going up in others. No, it’s kind of, the demand is shifting and supply chain needs to be ready for both.

Needs to be ready to react on volume and needs to be ready to react on cost. And actually better if we don’t react, but if we plan in advance. And it’s exactly what these leaders are saying in the survey. So those are our key challenges. Sometimes we don’t trust so much AI, or we are still a little bit concerned about how to deal with it. But more and more people are saying, I am going after it. Even my fears, I’m going after it. And it’s what they are saying. I can tell you that leaders that are one step ahead on this are starting, are reaping the benefits so go for it. We, Ed has seen significant examples, me too, and It’s I think it’s starting to be proven technology Running into mainstream. So go for it guys. Agreed just the one warning I saw in an article. I was trying to give the contrarian view there’s a number of companies that have been walking away from AI because it’s a tremendous amount of work and it’s not reaping benefits because truthfully, believe that way too many companies embrace the AI without having real real, Put it this way:they were selling vaporware, right? And, so be true, be, know, be choosy, be careful who you partner with for this journey because your mileage may vary.

Ed (16:10.264)

Technology is there and the benefit is there. We need to be careful. You need to be careful on who you choose, how you go, in what order, in all those things. But it’s really encouraging to have the technology available these days. Absolutely. Okay. So let’s jump into the main topic today. Ready, my friend? Let’s do it. Let’s do it.

As you know, guys, we have been talking in the last three episodes about operational excellence. We have done a little bit of an umbrella about it, what it is, what we do, pitfalls, success stories. And then we dive in into three of the pillars, critical pillars, safety, quality, and people.

Those are the base, no? That and compliance, Ed said it in the last episode, are the base and should be first, and you shouldn’t move from there until you have those really under control. But then there are the next two pillars, and we are going to close the series with these two pillars, are AM/PM, so all the maintenance part and the new ways of, of maintenance. And the second one is focus improvement, continuous improvement. So let’s start with the AM/PM. Ed, what, what are you seeing on that? What’s your take as as a pillar and, and a component of the operational excellence. So I have a big, big, part, the thing about these pillars folks is they’re all almost equally important.

And you you can’t build a strong roof with pillars of different length, right? That’s not how the Greeks built the Pantheon. Were they the Romans or the Greeks? Sometimes I get confused, but I think you’ll get, Probably both. Applies to everyone. But in the simplest terms, it is about making the maintenance and state of the equipment everybody’s job. So autonomous maintenance is taking the traditional maintenance work and expanding to operators to QC and even to management. So you may see set up an AM event or autonomous maintenance event on let’s say a labeler on a bottling line. And that essentially means you have a work list.

Includes a lot of deep cleaning, right? So areas where you’ve got grease buildup, contaminant buildup, you’re in there, arms deep in grease, cleaning it, which enables you then to find defects, things that were covered by the dust or the cardboard. And you learn about the equipment and you may wind up finding loose bolts or missing bolts. It’s an opportunity to, do CIL, right?

Clean, inspect, lubricate. And to me, the real big win here is when you have everybody involved. I have a shout out to a guy that worked for me as a plant director in the Philadelphia plant. His name is Todd Kelly and he’s currently also a plant director in Gatorade. And I watched him arms deep in a Sidel labeler covered in grease and dust and hot glue, cool, of course, everything was very safe. And to me, that’s the epitome of leadership, right? When you have somebody that is willing to stop all the work that I’m sure Kelly had worked, Todd had waiting for him in the office to go in and be a role model, this is what you do. And the operators were in there with them and so were the mechanics and having that autonomous maintenance approach really drives a lot of capabilities but it also changes the game for maintenance and, you know, in predictive. So Alvaro, how about the predictive side of this? Well, first I’ve been in those events, several of them, and, and, and it’s, it’s part of TPM is part of operational excellence. No, everything starts once you have the base of your part and on, which is people training and culture. And then you go to the first pillar and

Alvaro (20:56.792)

you stop the line and everyone goes in and everyone chips in, management and operators, mechanics, everyone, and you put the line apart, put it back again, as you say, arms deep in grease and in dust and all that. But we all learn from the machine and then the journey starts. And as I said, was saying, before, remember, the mechanics were running all around because everyone was calling, hey, lubrication here, hey, I hear this small noise here, hey, I have this small detail. And they were all around the plant and they were not focused on the really important stuff of maintenance. So the big change with autonomous maintenance was to put all that in the hands of the operator that is in the line all the time and can fix the small things, can check the small things. And that means that in a PM site, you can have the mechanics now focus on the work that is going to come on planning, on doing it the right way. And at the same time, they start to evolve. They were reactive. Now they have the time to start being predictive.

Then they go even to the next stage. And these days with AI, you can even go just in adjusting time repair, no? Because the sensors, artificial intelligence is going to tell the mechanics when the machine is going to fail, why the machine is going to fail, and most probably what elements. So you can order the parts just in time. You can plan for the…most convenient moment in the line, then you can even use the models to plan and to practice about it and then go and do the work right away. So I think it has helped a lot on roles and responsibilities and allow both sides to focus and both sides now to work together.

Ed (23:18.2)

To me, two big takeaways or two big topics that you drive. One is you’re letting people know that cleaning is everybody’s job. When I first started in industry, in some locations, there were still cleaners. People whose job was to clean the line. And I’m not talking about night sanitation. I’m talking about on an ongoing basis. Was in a bottling plant that’s out of the U.S. where they literally had, the place was spotless, right?

They literally had a cleaning person associated to every operator on the line. I’m walking through this. I’m like, wow, this is impressive. And then I realized they had essentially four operators on the line and four cleaning people. So the operators never had really a lot of ownership for cleaning. Was like, yeah, that’s somebody else’s job. And item number two, or the other things that it drives, how many times have mechanics walked up, getting a call from a line, the line’s down, they walk out.

And the first thing they have to do is spend half an hour cleaning the area because it is covered in whatever product you’re having to be making. So there’s enough opportunities for either side. There’s the operator who’ll tell me, I call the maintenance guy over and he just kind of grunts at me, kicks the machine and says, well, you don’t know how to run this. But many operators also know how to fix it. Be an eternal. Yeah, eternal fight.

That’s why this stuff is so important folks where I roll in this together and you know what? The functional wars never help anybody. All figure out how to lose individually. How about let’s win together. I think is a, you know, is, is, is a better way of going around it. It drives better understanding of the equipment too. When you’re in there and you have your hands in the equipment and you can see how things work. It’s like, you know, I’m a picture guy. Yeah, I can, I can learn from books, but show it to me. I get it. Right. And it also shares responsibility. Now everyone is responsible for the maintenance. No. Right. Also allows everyone to focus on the areas that they do better. And it has a lot of benefits also on the engagement part, not because now I am the owner. Now I

Alvaro (25:40.654)

not only need to see the product running, I can be responsible for things, I need to learn new things, I can even teach those things. So it’s very good. And once you get that, the benefits we talk about, imagine the benefit of a line that stops every 10 minutes and goes to stop every four hours, which is normally the goal of a TPM effort. Imagine that every stop of the line is more time of the operators, is a safety problems. Every restart is quality and waste and reprocess and all that. So if you don’t need to touch the line in four hours, imagine the benefits in  up time, in cost, in cash, in everything. So a critical pillar for sure.

There is, you know, every time you start up a blow molder, you throw away as many as 180, 200 preforms that are, that are, that are going through the oven because you haven’t reached, you know, temperature time. Right. So, yeah, no, it’s, it’s a, it’s a huge, huge opportunity. So, now I think you’re going to segue us into FI and it’s not Fashion Institute of America. Yes.

Well, close, now this is FI focus improvement, continuous improvement. And the two first thoughts is one is the mentality of the never ending game, never ending journey. So what you have done today, it’s done. So you don’t want to stop there.

You have to continue to the next level. Have you guys heard your boss telling, Hey, this last year you gave your productivity. So this year you don’t have to give productivity. Well, in my 35 years, I never heard that. That happened is the past. I don’t remember. So now you’re 4 % productivity again.

Alvaro(28:10.752)

And again, and again, that’s continuous improvement. It’s not because once you have the base, which is all that we have been talking in the previous pillars, then it comes to continuous improvement journey. And, it’s, it’s for everyone. What’s your experience on continuous improvements? Well, it, it, keeps you sharp, keeps you on your toes because you’re, you’re right. What you did for the business last year was last year. And I think I used the term before that I learned from a GM, there’s nothing as silent as yesterday’s applause. That is the truth, right? It rings every single year. Now, every once in awhile you happen to get into a role where, you see a lot of opportunity, a lot of improvement, right? And I know of some supply chain leaders that will meter that in, if they can get six or 7%, they’ll be like, for this year.

And then I guess we, another three for the following year. So I got a plan in place, right? Fortunately, sometimes, you know, people like that get found out and they squeeze a little harder, but, you know, we’re all trying to play that continuous improvement game. Because if there’s nothing else that I’ve learned, not just in my almost 40 year career, but having been in business for myself for the last year and a half to two years is that barbarians are always at the gate folks.

They’re always coming. Okay. if you don’t remember that movie, you know, please watch it again. The barbarians that always have to get, and it could be your supplier, could be some of your more difficult customers. It could be something out of left field. but if you’re not constantly getting better, I can tell you that somebody is going to eat your lunch. Okay. Cause somebody is. And Alvaro, I’m sure you have stories of people gobbling up other companies that just stood still because they thought they were good enough. It happens every single day. Every single day companies are getting down or takeovers. I had to participate in every two years in my experience. There was some great cataclysmical event, know, a takeover, a split.

Alvaro(30:36.13)

Because the business is always needing a competitive advantage. The same that happens to us in the plants, it’s happening to the CEOs. They go to Wall Street. The stock goes down. If they don’t show the next year, they are going to improve. And improve is continuous improvement. They need to launch new products. They need to launch line extensions.

They need to show that they are going to save costs and they need to produce in a different way, more effective way. So for sure you have listened to your CEOs many times saying, I need my supply chain to be my competitive advantage. That comes as continuous improvement. And that’s on the business side. On the people side is the same. No? Right. Once you spend one year doing the same and the same and the same. It becomes boring. I don’t want to go to the plant. No, you want new stuff. You want to learn new things. So the next year guys, we are going to take the line from here to here. And for that, we need to train ourselves in this. need to learn better on consumers. We need to learn better in these materials, new materials, new ways to do things.

And then the brain continues to work, the people is competitive. We in the plants, we are always, we love competition, don’t we? And our operators, they compete even among each other in the lines. So if we can channel that competition into continuous improvement, it’s a win, win, win. It’s a game changer.

The competition happens, right? How many times you walk into a break area and you get the folks in first shift kind of talking to the folks from second shift and it’s like, we hit a record today. Like, you guys going to show up for work one of these days. I mean, the ribbing that goes on is, is actually pretty cool. and then I think, you know, in your context of thinking about a company like Nvidia, Nvidia blew, has gone through the roof, right? Their valuation insane. I think it’s gotten trimmed back, but

Ed (33:00.142)

I’m thinking that CEO has got to be really, really like thrilled. You imagine what his compensation has done, but then comes next year and that’s your base, baby. How are you going to do that again? Right? Well, the answer is frankly, you can’t, right? But how do you manage the expectations going forward? Because it’s not forever. You can’t have double digit growth in somewhat mature markets for the, 10 years. It’s just, there’s too much competition. Yeah.

Think, think about IBM or Microsoft. GE. Microsoft was at the top and then it lose completely all their appeal. Their business disappear. Yes. It was not computers anymore. No, they need to reinvent themselves. Now they are again back on the peak. The same IBM. They had to change completely that the focus of their business.

The business they were in. Yeah. How about you may remember this. You remember Tom Peters “In Search of Excellence”? Yes. Okay. I ate that book up. Of ccourse, Procter and Gamble was in there. So I was like, that’s right. I worked for one of those companies, Yes. You know, and P&G continues to be a phenomenal company, right? But you go back and you look at those companies that he modeled, right? And that he called out.

And you look at the other one was the top hundred companies to work for in America. That was about the same time. And you go, I haven’t done this, but I’m going to go back and see how many of those companies are still considered that or even who they were. I bet you it’s a scary number. Is the Magnificent Seven? None of these companies existed in the list or were there before 2010. No. Continuous improvement is important in the plan. It’s important for the people. It’s important for the business and is the way to take us into the next frontier every year. And if you don’t think adaptation is important, ask the dinosaurs how it worked out for them. Yes. Yes.

Alvaro (35:23.628)

That’s a great way to finish the topic, to end the topic and to do a little bit of a wrap up. I would say what we have been talking, operational excellence, etc. Once you put the base, you need to have all the pillars the same and you need to be able to put the roof and the roof is exactly what we have been talking. Great KPIs, competitive advantage, benefits for everyone in the supply chain, the end supply chain, starting in the operators, finishing in the business. And that’s a journey. It’s a journey. It takes long. So you need to be patient. You need to pace yourself. It requires expertise. So bring some expertise from outside and take the journey. Learn every year and take it to the next level.

Yeah, no, absolutely. And you know what you make it fun. The great thing about all these things we’re telling you about, AM/ PM other, I thought you, you, you, you phrased it very well. Everybody wins, right? Everybody gets up skilled. The operator learns more about his or her piece of equipment. Maybe starts performing maintenance, you know, level one maintenance tasks that gets a foot in the door. If they want to be a maintenance technician.

The maintenance person is upskilling themselves, not just fixing what’s broken, but looking at predictive maintenance systems and looking at, you know, a way to design our failures. So everybody wins. And, makes it a lot more fun to be manufacturing. remember the slave is the machine, not us. That’s right. That’s right. You got that one right. Great. So take us home, Ed.

Thank you so much for joining us. This is Manufacturing Meet Up. And at some point in time, we got to get some swag, Manufacturing Meet Up buddies or something. But anyway, if you’ve enjoyed this episode, please follow or subscribe. Like us if you’re watching us on YouTube, leave us a review and just share with your friends. We need more Manufacturing Meet Up buddies to join the show. So, Alvaro? And guys, we need you to

Alvaro (37:50.872)

Join the conversation. We would love to have you guys join the conversation. Email us at mmu@augury.com. Find us on the Endpoint. You can leave us comments. You can let us know what you think. Give us your takes. Send us jokes. We’ll bring those to the show and do a little competition. We have been talking about…competition and continuous improvement. And you’ll see those links at the bottom of the screen. And see you next time. Take care, buddies.