Author Archives: USCCG

 

There are a lot of terms used by organizations to describe their mid to long range strategic planning discipline.  Whether your organization calls it Integrated Business Planning (IBP), Sales and Operations Planning (S&OP), Sales, Inventory and Operations Planning (SIOP) or something else, the key message is that abbreviations are not important – results are. Strong strategic planning discipline orchestrates sales plans, operations constraints, and financial objectives while giving guidance to short-term scheduling for execution. At USC, we call this discipline SIOP due to the strategic importance of inventory to smooth supply and demand fluctuations to maintain customer service levels.

Survey Says!

Businesses find S&OP beneficial because it helps balance supply and demand, it improves communication between sales and other departments, leads to better decision-making with everyone on the same page, and it ultimately results in better efficiency. Most organizations refer to their planning process as S&OP, but we think it’s incomplete. Inventory needs to be part of this process to unlock greater levels of operational efficiency and customer service rates.

Planning Process Name Chart

Most companies have less than five years of experience utilizing a SIOP discipline and significantly, fewer than 50% of all companies integrate financial objectives into their monthly planning process. The result is the organization’s annual plans are disconnected from the monthly “replanning” SIOP process. Managers are typically held accountable to their annual plans which are increasingly out of date as the year progresses and better plans are known resulting in sub-optimal decision making based on old assumptions.

Annual Operating Plan Chart

Furthermore, since most companies rely on static models such as Excel and Access to as their primary analytical tools, the planning process can be labor intensive, time consuming and more prone to human error. Integrating decision support systems with operations data, procurement data, inventory data, and customer demand improves simulation and scenario analysis capabilities. Integrating with advanced predictive analytics can further augment planning knowledge.

Primary Data Analytics Chart

Sales, Inventory and Operations Planning

We tell our clients that SIOP is making sure you’re having the right conversations about the right things at the right time.

SOP vs SIOP Chart

Sales, Inventory, and Operations Planning is a holistic process that integrates customer-focused demand plans with production, sourcing and inventory plans and results in improved tactical and long-term business decision making capability.

Keys to Implementing a Successful SIOP Process

But Why the Added Focus on Inventory?

Inventory tells a story about a business’ operational efficiency. Inventory accounts pool the collective decisions and market forces affecting the company, telling stories of sales forecasting accuracy, manufacturing efficiency, planning effectiveness, supply chain disruptions, and quality control. Lean inventories reveal robust planning systems and culture, integrated ERP systems, and good governance. Excess inventories can be a short-term benefit to sustain high customer service levels during times of uncertainty, however they come with high obsolescence and carrying costs.  Inventory is a strategic lever to smooth operations, procurement, and sales fluctuations. The right level of inventory is different for each company, and changes based on current consumer demand, supply chain disruptions, and strategic decisions.

Benefits of SIOP

Interested to learn more about how adding inventory to your planning can make you more efficient? For more information on how SIOP can help your business read our eBook, “Sales, Inventory and Operations Planning: It’s About Time.”

David Newman

David Newman

*This article is written by USC Consulting Group’s Supply Chain Practice Leader, David Newman.

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In today’s competitive business landscape, keeping labor costs under control is a constant concern. However, this pursuit of cost-efficiency must never come at the expense of safety. Here’s how businesses can strike a balance between these two priorities.

Standardization and Management

Standardized labor processes are the cornerstone of a safe and productive work environment. By establishing clear, well-documented procedures for each task, companies minimize confusion and errors, while also ensuring consistent quality. This translates to increased efficiency, reduced rework, and ultimately, lower labor costs.

Complementing standardized processes with a robust training program further strengthens this foundation. Comprehensive training, encompassing both initial onboarding and ongoing professional development, equips employees with the skills and knowledge necessary to perform their duties safely and effectively. This not only reduces the risk of accidents, but also empowers employees to identify and address potential issues before they escalate into costly problems.

Labor costs can be further optimized by taking a strategic approach to staff management. Reviewing staff schedules regularly and adjusting them based on actual workload can prevent unnecessary overtime and ensure employees are not overscheduled. Additionally, exploring options for part-time positions or flexible work arrangements can contribute to optimizing labor costs.

Technology and Lean Practices

Investing in automation technology can be a strategic move towards reducing labor costs while maintaining safety. Automated equipment can handle repetitive or hazardous tasks, freeing up employees to focus on more complex activities. This not only improves overall productivity but also reduces the risk of workplace injuries associated with repetitive motions or exposure to dangerous materials.

Lean manufacturing principles, which emphasize eliminating waste and maximizing value, can also offer significant cost savings. By taking a critical look at existing workflows and identifying areas for improvement, companies can reduce wasted time and resources, leading to a leaner, more efficient operation.

Choosing the Right Tools

The right tools for the job are not just essential for efficiency, but also for safety. For instance, opting for quality-assured scaffolding components like a ringlock modular system, compared to a cuplock system, can significantly impact labor costs in the long run. Ringlock systems generally require less assembly time, facilitating faster project completion and reducing labor hours. Furthermore, their robust design often translates to fewer repairs and maintenance needs, further reducing overall costs.

Implementing advanced software programs can also significantly improve various aspects of business operations, ultimately impacting labor costs. Digital tools can optimize scheduling processes, enhance production visibility, improve communication among teams, and streamline training programs.

The infographic below delves deeper into each of these strategies, providing a comprehensive roadmap to reducing labor costs while prioritizing safety. Remember, a safe and well-trained workforce is a productive one. By implementing these strategies and fostering a culture of safety and efficiency, businesses can create a win-win situation for both employees and the company’s bottom line.

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Effective risk management, strategic planning, and operational excellence are crucial for minimizing NPV losses and maximizing project value.

Recent studies and industry reports suggest that a significant portion of mining projects may face challenges that impact net present value (NPV) negatively. Estimates range from 20% to 60% or more, highlighting the inherent risks and complexities involved in the mining industry. These challenges may include cost overruns, schedule delays, geological uncertainties, regulatory changes, and market fluctuations, among others.

In fact, in other reports, McKinsey says as many as 4 out of 5 mining projects come in late and over budget by an average of 43%. EY found that 64% ran over budget or schedule with the average cost overrun sitting at 39%, after studying 192 global mining and metals projects worth more than $1 billion.

How can mining projects improve project execution when it comes to budgets and timelines? Mining companies must grapple with many pain points – cost overruns, schedule delays, operational risks, supply chain disruptions, and geopolitical uncertainty.

One of the most critical areas involves owner-contractor relationships and creating a “culture by design” right from the beginning. Many owners outsource their projects to EPCMs that have historically operated in mining and are typically very engineering focused on getting the design as accurate as possible to maximize outcomes and benefits. While important, it only represents 35% or 40% of the total cost of a typical project and that’s not where we tend to see issues. The other 60%-65% of the scope is construction.

Organizational culture can significantly impact projects in several ways:

  1. Risk Management: prioritizing safety, compliance, and responsible resource management can lead to better risk identification and mitigation strategies, reducing the likelihood of costly incidents and delays.
  2. Employee Engagement: creating a positive and supportive culture to foster employee engagement, morale, and retention, leading to higher productivity, better teamwork, and lower turnover rates, which are critical for project success.
  3. Decision-Making Processes: promoting transparency, collaboration, and innovation can lead to more efficient decision-making processes, enabling quicker responses to project challenges and opportunities – maintaining “single source of the truth”.
  4. Adaptability: encouraging flexibility, learning, and continuous improvement enables organizations to navigate changing market conditions, regulatory requirements, and technological advancements more effectively.
  5. Stakeholder Relations: valuing relationships with stakeholders, including local communities, governments, and investors, can enhance trust, collaboration, and support for mining projects, reducing the risk of opposition or regulatory challenges.

In summary, positive mining capital project performance, characterized by effective organizational culture, cost management, revenue generation, risk mitigation, and optimal capital expenditure allocation, can enhance NPV by increasing cash flows and reducing project risk.

USC partners with your organization and coaches your people to significantly impact performance outcomes and get your capital projects over the line on-time and within budget.

USC works with Owner Teams to execute capital projects and prepare for operational readiness during the early stages of the capital project development process, typically prior to the start of the construction phase. Operational readiness activities should be integrated into project planning and execution to ensure early adoption of the desired project culture while building buy-in from the various project stakeholders. There are three key elements to successful projects and capturing NPV.

Culture: Corporate culture is the shared values, attitudes, and practices that define the owner’s project, operation and interactions with its employees and various stakeholders. Culture clashes often occur when people from different backgrounds are assembled.

In capital projects, this often occurs when stakeholders are not aligned around a common set of goals and priorities, potentially resulting in the creation of an unsafe environment and/or low productivity and poor-quality execution. The imperative in this situation is to align stakeholders and define a “culture by design” at the top and instill the culture from the bottom up – deliberately starting at the work activity level.

USC works with successful owner teams to begin this journey from the outset of the project, and usually with a high sense of urgency.

Governance: While most recognize the need for establishing a robust governance framework, with a measurable set of metrics, many fail to execute. Typically, governance frameworks include everything from policies, regulations, functions, processes, procedures, and responsibilities, as well as how project progress and execution performance are tracked and reported.

It is not uncommon for EPCs and sub-contractors to use their own processes and systems to track performance – leading to various versions of the truth on the project. Inconsistent and inaccurate information results in inaccurate project execution planning, ineffective execution, and inaccurate status reporting which in turn results in schedule slippage and costly overruns.

USC works with project stakeholders to ensure governance goes beyond the decision-making of a single project, by developing a “Truth Center” where priorities are set, planning is done, performance is integrated, measured and communicated. By creating a single source of the truth and defining detailed work activities, including who is responsible for what and when, stakeholders can avoid the typical project execution pitfalls. By providing consistency, certainty and coordination, owner teams add to the stability of the project.

Readiness: How many projects are delayed due to poorly defined feasibility studies, engineering delays, late recruitment of key personnel and/or procurement delays? These early delays are difficult to overcome during the project and have a severe impact on NPV.

Many organizations are unclear when to start working on operational readiness – long ramp up times and slow operational start-ups are NPV killers, even for well executed capital projects. Key operations personnel should join the project early in the engineering phase to ensure the operability and maintainability of engineering designs. Additionally, they should play a role in defining and designing the culture for the project. Initiating the design of the operational processes and defining operational system requirements no later than the beginning of the construction phase and completed before starting the commissioning phase.

USC brings 55+ years of experience in shaping organizations and designing and implementing management operating systems and processes to assist owner teams in mitigating start-up risks and unlocking hidden-value to accelerate ramp-up success.

USC Helps You Tackle Key Challenges

Do you want to understand how prepared your company is to manage project risks while accelerating work execution and operational ramp-up and what the key focus areas that will contribute to improved net present value?

Want to find out more about how USC can help you uncover the hidden-value lurking in your capital project?

For more information, let’s talk it through with a no obligation meeting with one of our executive team members. Email info@usccg.com to arrange a call.

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Warehouse operations are critical to any manufacturing business. From holding inventory to delivering items, the process must be as swift and efficient as possible. Earlier practices such as document management and communication have been a significant step, but growth and progression in the supply chain call for more.

The rise of the Internet has been a key event in improving warehouse operations. As technology progresses, there are even more ways to optimize the supply chain, and ensure every item or employee is included.

The Need to Streamline Warehouse Operations

Warehouse operations offer many opportunities for error while meeting tight deadlines. Brand owners must recognize these areas for improvement and see what can be done to reduce mistakes. Streamlining translates to more accurate and faster processing, which equates to higher customer satisfaction.

Warehouse operational efficiency also translates to long-term time and cost savings. Next-gen technology can streamline warehouse operations using fewer minutes and dollars resulting in increased productivity.

Remember to include workers when integrating these new electronics. Forty-two percent of workers fear job loss from automation and new technologies. However, the reality is humans are responsible for tool management and strategy execution. Train them to work with these items rather than against them.

Vital Next-Gen Technologies in the Warehouse

Some facilities may incorporate multiple next-gen technologies, while others only incorporate one. The most important factor is to assess what works best for a specific set of operations and makes sense investment-wise.

Automation and Robotics

Certain warehouse operations are rather repetitive. It can be the same cycle of picking out a product, packing it, adding a shipping label and sending it off. Automating these processes with robots can take care of these mundane tasks, shifting focus to more pressing concerns in the facility.

Smaller establishments can still find ways to introduce automation. For example, installations like conveyor belts move items along the facility. Automated labeling machines can transfer the necessary information.

Certain equipment can also improve staff safety. For example, about 70 worker fatalities occurred in forklift-related accidents across different sectors. Self-operating forklifts simplify warehouse transportation and prevent hazardous contact.

Blockchain Technologies

Blockchain technology is a key database streamlining data storage and information sharing. Warehouse management entails plenty of information about product quantity and delivery. Many parties — like suppliers, manufacturers and distributors — are involved.

The blockchain ensures information is accessible and interconnected. What’s ideal about this next-gen ledger tech is it keeps data under wraps. Each block is secure in nature because it requires verification and permission.

Thus, blockchain technology is ideal for various financial transactions. If a distributor pays a manufacturer for production, they should process the transaction through this network. It has a suitable layer of encryption while executing those actions.

Internet of Things

The Internet of Things (IoT) is a flexible alternative to blockchain technology. By employing this network, a warehouse can generate connections between products and machines through sensors and software. If one product is removed, the system will detect it and send an update.

The IoT enables warehouses to receive real-time data about the movement of their shipments. This cuts down the slower steps in inventory management and prompts communication between devices so all parties in the supply chain can stay up to date.

It is possible to fuse both next-gen technologies in warehouse operations. The blockchain establishes trust, while the IoT improves connectivity, refining the process of sharing information among multiple parties.

Artificial Intelligence

Multiple industries are utilizing artificial intelligence (AI) in business processes. While most people find its use helpful in customer service, 40% of business owners use AI for inventory management and 30% for supply chain operations. Warehouses can use their programs to collect and organize data in the long run.

AI can also generate different presentations and reports based on the data it receives. Manufacturers with multiple facilities can upload their information and send a prompt to receive specific information about their inner workings.

AI can also provide business recommendations on streamlining operations with predictive analytics. However, these programs’ output depends on the data set given, and there are limits to the predictions they can make depending on the amount of variation.

The next best thing to do with this output is to conduct a comprehensive data analysis. Use the information to set metrics for evaluation in the future. If one area is faltering, make actionable decisions to influence processing in the facility.

Cybersecurity

As effective as next-gen technologies in warehousing are, new problems arise. The Identity Theft Resource Center found supply chain attacks impacted more than 10 million people in 2022. Each facility and its streamlined performance are vulnerable to these cyber threats.

Focus on preventive measures to maintain the order of operations. Investing in a firewall adds a layer of protection to warehouse information. Add intrusion detection systems to alert business owners of any breaches.

Physical security installments can also protect warehouses. For example, surveillance cameras log who accesses company computers during and outside active hours. Biometric technology is also a good touch for tracking and access control.

Optimize Warehouse Operations with Digitalization

Speed and effectiveness are crucial in warehouses. Next-gen technologies have made great strides in equipping facilities with these attributes, so take advantage of them to strengthen operations.

*This article is written by Jack Shaw. Jack is a seasoned automotive industry writer with over six years of experience. As the senior writer for Modded, he combines his passion for vehicles, manufacturing and technology with his expertise to deliver engaging content that resonates with enthusiasts worldwide.

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Mining and metals companies are implementing a range of strategies to enhance asset management and equipment reliability.

In today’s market, many senior executives leading natural resource companies hesitate in making additional capital investment and instead focus on what can be done to squeeze higher performance out of current assets. Consequently, companies are increasingly looking for ways to improve performance and returns with existing infrastructure.

The key approach to this challenge lies in upgrading and improving asset management capabilities. Many organizations have failed to deploy optimal asset management practices. This is surprising given that asset spend frequently represents 30% to 50% of the overall operating expenses. Shifting to a best-in-class asset management program will consistently deliver improved plant or equipment performance, lower operating costs, extend asset life, and generate a higher return on capital. Most recently, companies have sought to implement a range of strategies such as:

  1. Implementing Asset Management Systems: Utilizing robust asset management systems to track equipment performance, maintenance history, and lifecycle costs, allowing for better decision-making regarding repairs, replacements, and upgrades. Digital technologies like IoT sensors, AI-driven analytics, and automation further optimize asset management.
  2. Enhancing Maintenance Practices: Implementing proactive maintenance strategies like conditioned-based monitoring and reliability-centered maintenance to address issues before they cause failures. Utilizing data-driven insights, mining companies can optimize “time on tools” by identifying patterns and trends in equipment usage, maintenance needs, and performance. This allows for more precise scheduling of maintenance tasks, reducing downtime and maximizing the time equipment is operational.
  3. Investing in Training: Providing comprehensive training programs for front-line management, maintenance and operations personnel to ensure equipment is used and serviced properly, reducing the likelihood of breakdowns due to human error and that access to equipment is available. Training personnel to utilize data-driven insights enables management to make informed decisions impacting “time on tools” and leading to improved equipment utilization and overall operational performance.
  4. Improving Supply Chain Management: Ensuring timely access to quality spare parts and materials to minimize downtime caused by equipment breakdowns and repairs. Some are adopting blockchain for transparent supply chain management and better tracking of assets throughout their lifecycle.

The level of performance improvement companies can realize by implementing key strategies such as enhancing proactive maintenance practices, investing in training to improve skills and capabilities, improving supply chain management, and leveraging digital technologies and data-driven insights varies depending upon factors like current operational efficiency, the scale of implementation, and industry conditions. However, many can expect significant improvements in:

  1. Safety: Proper training programs and proactive maintenance strategies contribute to a safe work environment by reducing risk of accidents and equipment failures.
  2. Productivity: Proactive maintenance and digital technologies can reduce downtime, increase equipment availability, and optimize process execution, leading to higher productivity levels.
  3. Cost Reduction: Efficient equipment usage and maintenance practices can lower operational costs by minimizing unplanned downtime, reducing repair and replacement expenses, and optimizing resource utilization.
  4. Quality: Improving the essential management skills and work place practices result improve the quality of maintenance execution.

Overall, these strategies can result in substantial performance improvements, enhancing competitiveness and profitability for mining and metals companies.

USC Consulting Group partners with your organization and coaches your people to significantly impact performance outcomes and accelerate Asset Management and Reliability Excellence.

USC’s experience helping clients to shift asset performance by transforming and optimizing asset management capabilities and processes has repeatedly demonstrated the need to focus on the key levers and enablers to asset management and reliability excellence. Our asset management framework is designed to be pragmatic rather than conceptual, thereby leading to accurate, practical decisions about a client’s assets and aspirational outcomes.

The primary goal of USC’s asset management framework is to help our clients to implement and execute of a robust set of integrated processes and tools to manage and maintain their operational assets at the targeted service levels while optimizing life-cycle costs and asset life. This is accomplished by recognizing the needs to:

Our asset management and reliability framework helps clients identify an organization’s asset management maturity level and the areas and gaps that need to be addressed, by evaluating their strategic, tactical and operational levers and the enablers that comprise each.

Asset Management Triangle

Strategic (Lifecycle Management): A tailored maintenance program for each piece of equipment translates overall strategic objectives into executable plans for equipment upkeep. Our framework helps to structure and prioritize critical assets while defining a baseline operational ‘plan of action’ by determining strategies for maintaining equipment based on analysis of equipment capabilities, required performance levels, failure frequencies, and cost objectives. Optimal maintenance strategies are frequently a blend of preventative, predictive, operator-maintained, and run-to-fail options.

Tactical (Business Processes): Business processes bridge the gaps between the initial, ideal plan and the reality of ‘day-to-day’ operations, so the maintenance and reliability organization can make adjustments. Historically, many maintenance organizations have been poor utilizers of labor resources that result in low “time on tools” and excessive delays in repairing down or poor performing equipment.

Operational (Enablers): Enablers help to identify needed support to manage assets throughout their lifecycle in alignment with organizational aspirations. Leading asset management teams have also made changes in their organization structures and management practices to foster more action-oriented leadership that focuses on operational excellence, which usually requires a culture shift that must be relentlessly supported by the leadership team over the long-term. A heavy emphasis on management behaviors and company culture can help organizations make this difficult transition.

USC Helps You Tackle Key Challenges

Do you want to understand how prepared your company is to drive needed asset performance and reliability improvements and what the key focus areas that will contribute to lower operating costs?

Want to find out more about how USC can help you uncover the hidden value lurking in asset portfolio?

For more information, let’s talk it through with a no obligation video conference call or a meeting with one of our executive team. Email info@usccg.com to arrange a call.

How to Improve Asset Management and Equipment Performance to Enhance Reliability CTA

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“Time is really the only capital that any human being has, and the only thing he can’t afford to lose.”  – Thomas Edison

There are many skills a quality leader should have — good communication skills being one of the most important — but perhaps the second most important skill that can help elevate the workplace is time management.

Why Time Management is Such an Important Skill for Leaders in Business

Time management is about learning how to use time wisely and manage your employees effectively. When you push too fast too hard to get things done, it leads to burnout, which is the antithesis of productivity. Once you or anyone on your team starts experiencing burnout, it can be challenging to turn things back in a more positive direction.

Unfortunately, it’s not uncommon for people in the workplace to end up pushing themselves harder when they start experiencing burnout for fear that they aren’t doing a good enough job. This, however, can make things worse and lead to long-term burnout, which can result in severe mental and physical fatigue, a loss of motivation, a weakened immune system, and frequent mood swings.

This is why time management is so crucial a skill to have as a leader — because it helps protect mental bandwidth, which is another word for your executive functioning and cognitive capacity or the ability to exert mental effort. When you’re burnt out because your time is not well managed, it can have a significant impact on your mental bandwidth.

When a leader has mastered time management, however, they lead their team to make smarter decisions, which fosters efficiency and productivity. When your cognitive functioning is working at full capacity, it enables you to better plan out your day so that the right tasks get done at the right time. This is effective time management — not working faster, but working smarter by making smarter decisions.

Tips on How to Master the Art of Time Management

There’s no single right way to develop solid time management skills. It’s a combination of efforts and mindful behaviors that can teach you how to better manage your time and your team.

Set Personal and Professional Goals

Your personal and professional goals can impact your time management ability. For example, if you aren’t enjoying personal time, not getting enough sleep, or not making time for activities or hobbies you love, this can impact how you feel at work.

Part of learning to better manage your time and mental bandwidth is setting both personal and professional goals for growth, such as learning a new software or tool, getting better sleep, and learning to set better boundaries so you have more time for personal activities.

Automate Processes When Possible

One great way to find more time in your day is to go through all the repetitive and redundant tasks you or your team perform every day and see if those tasks can be automated. It might seem like a minor adjustment, but over time, when you don’t have to worry about doing small things, you reserve more of your mental capacity for bigger things that matter.

Delegate Wisely

Learning to delegate tasks to the right people is a key time management skill. If you don’t have enough people to delegate to, it’s potentially a sign that you need to grow your team and hire more people. Additionally, if any staff members are interested in growing into a management position, start delegating certain leadership tasks to them a little at a time to mentor them and help them grow.

Make a To-Do List of Top Priorities Every Morning

Even if you think you remember everything that needs to get done, get in the habit of sitting down each morning and writing everything down. Doing so can be a huge mental relief and help you create a better plan for your day or week. Highlight the top priorities so you know which things need to get done first to avoid wasting time on less important tasks.

Avoid Over-Commitment

Deadlines are important, but be mindful that you are setting and agreeing to realistic deadlines. Pleasing your customers is essential, but not if it means over-committing and burning out yourself and your team. The quality of the work you and your team do will be much better if you allow for the appropriate amount of time to get things done.

Allow for Flexibility

Your list of top priorities should act more as a guide for your day rather than a hard rule set in stone. You will undoubtedly have days where timelines shift and new things pop up that take precedence, and your ability to be flexible can make your day much easier when this happens. It is not the end of the world if something changes and throws a wrench in your plans. Simply go back to your list and move things around.

Allowing for flexibility also means allowing for breaks and space to decompress. This is critical for you and your employees if you want to manage stress in a high-volume work environment. Your days and weeks must allow time for self-care, both at work and at home. If you can tell your team is being pushed too hard, make them take a break. Go outside for a little walk, do some stretching, refuel with a snack — something to just allow the mind to get a little reprieve to avoid mental bandwidth being over-expanded.

Effective Time Management

To remind yourself and your team every day how to be most efficient with time, consider making a list of the “golden” rules of time management and keeping it posted where you can be reminded each day. This might seem silly at first, but writing things down and keeping them where you can easily see them is one of the best ways to remember something often enough that it becomes a habit. At the end of the day, healthier and smarter work habits and behaviors are key to effective time management.

*This article is written by Ainsley Lawrence. View more of Ainsley’s articles here.

Need more horsepower for your change management project

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The energy and utilities industry is in the midst of change.

Businesses are facing pressure from the government and consumers alike for more renewable energy while also balancing that with grid reliability and traditional energy sources. Meanwhile, electricity demands are expected to skyrocket. Other wild cards are supply chain disruption, labor shortages and more.

But within those challenges, we always see opportunities. Let’s take a closer look into the outlook for energy.

Continued focus on renewables. The demand for clean energy will continue to rise. Governmental regulations are mandating the focus on clean energy and decarbonization, including enacting green-friendly legislation and incentives for companies to transition to cleaner sources like solar and wind. The industry made great strides in solar power and the energy storage it necessitates in 2023, but more is needed and the focus will continue in 2024 and beyond. Consumers are demanding it as well, with climate change among people’s top concerns. All of it has led many companies to push the timeline to cut carbon emissions by 80% from 2050 up to 2030.

Energy storage. The push for solar requires an enormous amount of battery storage capacity to, in very simple terms, store all of that energy for times when the sun’s not shining. It means innovation in battery technology, and 2023 saw much of that, with storage capability doubling in 2023 and set to nearly double again in 2024.

Electricity surge. According to industry sources, the demand for electricity is expected to triple by 2050. It means planning now for this increased load on what is likely aging infrastructure, resulting in costs to shore up that infrastructure to ensure grid reliability. It’s also necessary to consider expanding the grid to meet that demand.

Aging grids + extreme climate.  We all saw the worst-case scenario play out in Texas when their grid failed when the state experienced a rare deep freeze. But weather extremes are becoming the norm, with heat, wildfires and drought on the one hand, floods and record snowfall on the other. The industry is modernizing the grid, and made progress in that area in 2023, but reliability is still a large concern.

Supply chain uncertainty. The recent geopolitical unrest in Ukraine and the Middle East has underscored the need to reshore this nation’s oil supply.

Labor shortages. Like many industries today, energy is battling a labor shortage and facing the double whammy of their most experienced workers retiring and taking institutional knowledge with them, and having too few younger people in the pipeline to pick up where they left off.

It’s a full plate for the energy sector in the coming years, that’s clear. But within these challenges, we see opportunities to bolster processes, making operations more efficient and guard against supply chain snafus. Reducing operating costs, improving productivity and increasing efficiency will help the industry navigate these challenging times.

This is where USC can help

Management Operating Systems. A solid Management Operating System is a must for efficiency, time savings, employee productivity and so much more. For a real-world example on how USC helped an energy producer save time and money by implementing an MOS, read “Energy Producer Generates Savings with Smarter Labor Practices.”

Reskilling employees. All of this innovation and growth in renewables, not to mention AI entering the mix, requires more workers with new skills. This can be very good news for your current employees, who can move up the food chain with new training, and the ability to attract highly qualified workers.

Resource planning. If you know anything about our company, you know we are great proponents of SIOP – Supply, Inventory and Operations Planning. It gives companies a roadmap to the future, so they’re not reacting to events, they’re anticipating them. With the exponential growth of the energy and utilities sector in the coming years, solid planning for the resources needed for that growth, like increased storage capacity and grid strength, is a must.

Bottom line, delivering reliable, affordable and sustainable energy is the goal for the energy and utility industry. It takes efficient operations, a handle on resources, and a clear eye toward the future. Contact us today to find out more about how USC Consulting Group can help.

How reliable is your asset maintenance program

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Have you heard of a High Reliability Organization? The concept has been out there for several decades but it’s taking center stage again now. Let’s delve into what a High Reliability Organization is, why this concept is coming to the forefront again, and whether you should explore implementing the principles in your own organization.

Simply put, a High Reliability Organization (HRO) is a company that has a solid operating system of execution in place that emphasizes safety and strives to minimize risk across the business.

We’re talking about complex or hazardous industries like nuclear power, the Navy and other branches of the military, air traffic controllers and the mining industry.

The idea behind HRO is a basic one. Expect the unexpected. An HRO creates a number of operational systems and ways of working that promote consistency and keep the focus on achieving company goals while avoiding major errors. These systems not only make the HRO more nimble, responsive and functional than a non-HRO competitor, but they also deliver more efficiency and most importantly, safety.

Why being an HRO is vital today

The concept of HROs has long been a method of ensuring safety in hazardous industries, but it’s becoming more relevant today in mining and other industries because of a perfect storm of circumstances. The marketplace is changing dynamically. Shifting sands don’t exactly make for solid foundations. A few things happening now:

Natural disasters. We seem to be in a period of increased earthquakes, “storms of the century,” droughts, volcanic eruptions and more. It makes facilities vulnerable to disruption.

Cyber attacks. Another vulnerability. As the industry gets more dependent on technology, the vulnerability to hacking of control systems ratchets up.

Boomer retirements. The impact of this can’t be overstated. Baby Boomers make up nearly a third of the entire U.S. workforce. The U.S. Census Bureau projects that 4.4 million people will turn 65 (retirement age) every year from now through 2027. During the period from 2022 to 2030, 75 million Americans are expected to retire. Called the Silver Tsunami or the Great Retirement, it is the largest surge of retirement age Americans in history.

Loss of institutional knowledge. Those retiring Boomers represent your most experienced, knowledgeable workers. These are the people who have gotten the job done, and done safely, for decades. All of that know-how will walk out the door with them.

Lack of skilled workers. It’s a real problem for many industries, including mining. Talent acquisition and training is on the top of the list of concerns for mining CEOs, because when those Boomers retire, the mining industry needs skilled, experienced people to keep the operation moving.

Doing more with less. In this economy, it is incumbent on companies to do more with less, cut costs, trim staff and extend the lifecycle of equipment while also investing in AI.

All of these things are coalescing into a situation in which the mining industry is experiencing a great potential for increased risk. It’s easy to see why. Experienced people retiring en masse, less experienced people taking up the mantle but not having that deep institutional knowledge you just can’t get in a training course, and the need for constant cost cutting – it all adds up to risk.

And when you’re talking about operations in a mine, risk doesn’t just mean business disruption. It means people’s lives.

HRO core principles

It’s about more than just focusing more on safety. The core principles of HROs, specifically in the mining industry, include:

Preoccupation with failure. It’s vital to anticipate the potential for failure and put measures in place to stop a problem before it starts. Emergency response training, regular equipment inspections and maintenance, failsafe protocols. The goal here is to be ready to spring into action, to have that training kick in, when a potentially disastrous situation arises.

Sensitivity to operations. Everyone’s eyes need to be open, all the time. Much like the “see something, say something” campaign at airports, it means developing a culture of awareness among workers on the front lines and in the front office. Identifying processes and  ways of working that can be optimized; or potential issues or risks that could lead to disruption in the future.

Resilience. The ability to roll with the punches. Redundancies need to be built in. Clear protocols for disruptions or sudden change responses need to be automatic.

Shared understandings. Everyone in the organization needs a shared understanding of HRO principles, the role they themselves play, and are operating with the same road map.

Respect hard-earned expertise. Those Boomers who are retiring? They know how to get the job done. They’re carrying your organization’s institutional knowledge – the part of the job that can’t be taught in a training class. This knowledge needs to be respected, especially when decisions get made.

High Reliability Organization core principles in Mining

Why being an HRO matters

Why should mines focus on high reliability? Here are a few of the benefits.

Safety. Since the first canary went down a coal mine, this industry has been implementing safety protocols. It can be dangerous for people working in a mine, period. Anticipating risks and putting safety protocols in place will save lives and reduce accidents and injuries.

Efficiency. The focus on asset management minimizes unscheduled downtime and process disruptions, while getting everyone on the same page streamlines operations. It all works together to increase efficiency.

Equipment lifespan. One of the challenges today is doing more with less, and that means keeping aging equipment on the job. The regular maintenance and inspection of equipment adds to its lifespan.

Hiring and retention. That lack of skilled workers? It’s causing stiff competition for the skilled workers who are out there. Being a High Reliability Organization shows new recruits that you’re committed to safety, value their contributions and knowledge. In short, it’s a powerful recruiting tool.

How USC can help: Anticipate the Unexpected

One of the most vital components of transforming into an HRO is the integration of a solid Management Operating System that breaks down siloes between areas of the organization like engineering, maintenance, procurement and operations.

The end goal: Constantly anticipating the unexpected and executing in a consistent manner.

When USC begins the process, we start with an assessment of current operations. Then we do a deep dive. Some, but by no means all, of the areas we focus on:

Identify operational disconnects. Is everyone on the same page to execute the plan? Are priorities between departments aligned? Has production prepared access to equipment to be maintained? Are shift managers setting work expectations in the same way? How are variances to the plan addressed?

Close the gaps. This is about breaking down silos and getting everyone looking in the same direction, working in the same way, and managing departmental operations with a common vision.

Build in buy in. Like many projects that require change at all levels of the organization, this requires buy in from the corner office to the depths of the mine. In many instances, this requires a culture change, with people being used to doing the job one way now asked to shift their operations.

Make it transparent. Change can’t be foisted on people in a vacuum. The new initiative on transforming into an HRO should be a full team effort, with full transparency from the top.

Implement measures and metrics. It’s also important to implement accurate measurements and targets. Still, one assessment rises above all others: addressing overall organizational health. Organizational health is the softer side of the business that is frequently dismissed because it is often viewed as both difficult to revamp and even more difficult to measure.

HRO Checklist

Do you need to focus on High Reliability Organization? Here’s a quick checklist to help you decide.

Transforming into a High Reliability Organization doesn’t happen overnight, and many challenges exist in the process. It requires a cultural shift, training for both workers and management, investing in protocols, and commitment from the top.

But, in today’s volatile world, it’s a solid framework the mining industry can use to ramp up safety, increase efficiency, minimize risks and anticipate the unexpected. For help setting up your HRO, contact USC Consulting Group today.

 

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In the dynamic realm of industrial operations, downtime is the arch-nemesis of productivity and profitability. Every minute lost to equipment breakdowns or maintenance activities translates into potential revenue losses, increased operating costs, and compromised competitiveness. Amidst this relentless pursuit of operational efficiency, the emergence of low or no maintenance industrial machinery heralds a transformative era for industries worldwide.

High maintenance equipment has long been a staple in industrial settings, requiring regular servicing, lubrication, and part replacements to ensure optimal performance. However, the inherent drawbacks of such machinery, including frequent downtime, escalating maintenance costs, and operational disruptions, have spurred a quest for alternative solutions.

Enter low or no maintenance industrial machinery—an innovation poised to revolutionize the industrial landscape. Engineered with durability, reliability, and longevity in mind, these advanced systems promise to mitigate the adverse effects of downtime and high maintenance requirements, ushering in a new era of seamless operations and cost savings.

The detrimental effects of downtime on industrial productivity cannot be overstated. Whether due to unexpected breakdowns or scheduled maintenance activities, every moment of idle machinery translates into lost production opportunities and diminished output. Moreover, the ripple effects of downtime extend beyond immediate financial implications, impacting supply chain dynamics, customer satisfaction, and overall business resilience.

In contrast, low or no maintenance components, equipment, and machinery offer a beacon of hope for industries grappling with the specter of downtime. By incorporating self-lubricating mechanisms, wear-resistant materials, and advanced monitoring technologies, these innovative solutions minimize the need for frequent maintenance interventions and extend operational uptime.

The benefits of adopting low or no maintenance industrial machinery are manifold. Beyond the immediate gains in productivity and cost savings, these systems promote a culture of efficiency, sustainability, and resilience within industrial ecosystems. By reducing reliance on traditional maintenance practices, industries can reallocate resources towards value-added endeavors, enhance worker safety, and contribute to environmental stewardship efforts.

In this infographic from FLEXIM, we delve into the profound impacts of downtime and high maintenance equipment on industrial operations, while illuminating the transformative potential of low or no maintenance machinery. Through compelling visuals and insightful analyses, we aim to empower industries with the knowledge and tools needed to navigate the evolving landscape of industrial maintenance and usher in a new era of efficiency and prosperity.

To learn more about best practices for asset management and reducing downtime, contact us to connect with our subject matter experts.

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Automobiles are becoming smarter thanks to advancing technologies and manufacturing practices. Nowadays, vehicles can communicate with each other, people and networks to increase safety due to artificial intelligence (AI) and machine learning (ML). What if cars on the road could communicate with everything? This technology is in the works through vehicle-to-everything (V2X) communication. Here’s a guide on V2X, its benefits and what it means for auto manufacturing.

The Role of V2X Communication

Automotive communication systems date back nearly half a century as manufacturers started designing systems to let vehicles communicate with each other in the 1970s — a concept known as vehicle-to-vehicle (V2V). V2V is still evolving, with Volvo and FedEx experimenting with automated platooning in Europe and pairing groups of trucks to follow each other on the highway.

Other types of vehicular communication include:

V2N will be critical as researchers continue improving 5G. With this system, cars will send information across networks through LTE and 5G. Experts say about 90% of American mobile connections by 2030 will be through 5G.

V2X in Auto Manufacturing

V2X is a critical technology because it combines all types of vehicular communication into one system. With this advanced mechanism, cars will be more intelligent than ever and could establish themselves as better drivers than humans. Auto manufacturers are trying to accomplish this feat with self-driving vehicles, but the industry hasn’t reached fully autonomous operations yet.

Improving V2X is essential in the race for self-driving vehicles, as this technology lets cars see and understand the world around them. An autonomous car or truck must be able to react quickly to traffic jams, emergency vehicles passing, animals crossing the road and other sudden events. Vehicles could work together and make the streets safer, thus creating a safer environment for autonomous machines.

V2X Applications

V2X offers opportunities to integrate all these technologies into one machine. This vehicular communication system exists in limited numbers currently but could soon make its way into more automobiles.

More recently, Toyota successfully tested its V2X technology in collaboration with Orange. The automaker equipped a vehicle with V2X capabilities and credited 5G and edge computing for its test track accomplishments. V2X technology warned drivers of emergency vehicles, helped them avoid collisions and accurately positioned the car.

What Are the Manufacturing Implications of V2X Communication?

V2X presents an incredible opportunity in the automotive industry to make cars smarter. What does this technology mean for manufacturing? Here are four implications to see as this concept evolves into the mainstream.

Advancing Technologies

Incorporating V2X in all auto manufacturing would make car assembly more advanced due to the AI and ML necessary for building. While some vehicles are simplistic with minimal technology features, these machines require onboard units and other devices to meet V2X’s needs. This change will require employees to understand the technology and how to include it inside the vehicles.

Standardization Needs

Automakers use vehicular communication technology like V2V, but these concepts only work with machines from the same manufacturer. For V2X’s success, auto manufacturers must standardize this technology so cars can connect seamlessly despite the logo on the front. Collaboration must also include semi-chip manufacturers, software developers and other professionals involved in advanced automotive technology.

Cybersecurity Risks

Integrating technology comes with cybersecurity risks, so automakers must ensure their V2X technology has robust security features to protect drivers. Otherwise, operators risk crashes, theft and other unwanted outcomes. One way to safeguard V2X-integrated vehicles is implementing security requirements with third parties to minimize the risk of data breaches.

Supply Chain Visibility

V2X technology can help auto manufacturers with their supply chain visibility — a critical component considering the modern economic climate. With advanced communication devices, automakers can help fleet owners with logistics management and increase transparency with suppliers. For instance, V2X’s enhanced route optimization can reduce lead time for parts, making manufacturing more efficient.

What Advantages Does V2X Communication Bring?

V2X communication is beneficial because it lets the auto industry take another step toward autonomous vehicles. What other advantages does this sector reap? Here are a few positive takeaways from V2X technology.

Driver Safety

With V2X communication, car operators can feel safer on the road. Vehicles communicate with each other to know when hazards lie ahead on the road or changing weather conditions. This benefit is even more pronounced with long-haul trucks, considering their role on America’s highways.

V2X technology in semi-trucks would let logistics professionals use autonomous trucks and reduce accidents and losses. Experts say driverless trucks perform up to 30% better than those with operators, so V2X would go a long way in promoting safety.

Environmental Benefits

Advancing vehicular communication technology also benefits the environment by cutting emissions. The transportation sector is responsible for 29% of all emissions, so reducing this output is essential. V2X can help the environment by mitigating traffic congestion, thus reducing idle time and wasted fuel in cars.

Smart City Integration

Rising urban populations mean cities will need to manage their energy grids better. V2X technology lets vehicles communicate charging needs and reduce strain on the grid. For instance, EVs could select optimal charging times — such as off-peak hours — to help the city’s energy grid and optimize efficiency.

Using V2X Communication for an Autonomous Future

Research on autonomous vehicles has surged as automakers race to be the first to debut fully self-driving cars. Reaching this level of driverless operations requires V2X devices that combine the best aspects of vehicular communication technology. These advanced mechanisms have implications for manufacturers and benefits for drivers, so the future has a lot of potential for this corner of the automotive industry.

This article is written by Jack Shaw. Jack is a seasoned automotive industry writer with over six years of experience. As the senior writer for Modded, he combines his passion for vehicles, manufacturing and technology with his expertise to deliver engaging content that resonates with enthusiasts worldwide.

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