A slew of variables confound the control of even the savviest manager. The unexpected shutdown of equipment and an injury on the work floor are but two examples of unpredictable occurrences that can seriously impact the bottom line.
For companies seeking to mitigate risk – and to improve efficiency -- a powerful and effective technique that can lead to strides in production process as well as to welcome cost cuts is Root Cause Analysis.
Root Cause Analysis begins by identifying all the events of the previous year that resulted in an unexpected expense. These may include a disruption in the assembly line, damage or loss to raw materials and/or equipment, worker injury, and many others.
(In computing costs associated with these unexpected expenses, it’s important to keep in mind that the ancillary costs of employee injury or damaged equipment are always higher than the direct expense. For example, according to a study by OSHA, the indirect costs of employee injury, which can include recruiting, training and compensating replacement staff, investigating the cause of injury, and plant slowdown, can easily reach 4.5X direct costs. And when considering the opportunity costs, as well as potential fines from regulatory agencies, indirect costs can easily swell even higher.)
Once a list of unexpected events and expenses has been made, Root Cause Analysis focuses on determining the causal factors.
Let’s consider a case of employee injury due to exhaustion. The injured employee had worked a double shift. And why was that? Ultimately, as you can see, the investigation leads to a conclusion that the company needs to create manuals for new employees.
The beauty of this technique is that by fixing the root cause of the problem, a company often will realize multiple unanticipated benefits. In fact, the unforeseen benefits that derive from fixing the root cause are sometimes significantly greater than the expense caused by the original problem.
In the present example, where the company institutes user manuals, direct benefits that accrue to the company include lower recruitment costs, more empowered employees, and the freedom to participate in additional tenders.
As an engineer and entrepreneur focused on factory automation, I use Root Cause Analysis to guide and determine new product development.
Case in point. I was called into a plastics factory to help reduce labor costs. Observing the production process, I noted what appeared to me an excessively time-consuming and ineffective system by which workers cut and empty heavy sacks.
Utilizing insights gleaned from Root Cause Analysis, I proposed a robotic solution that would simultaneously cut multiple bags and empty contents into the hopper, eliminating completely the need for workers to lift, cut and empty.
The robotic LaborSave system is loaded with a full pallet of sacks via forklift or conveyor belt. Claspers are used to pick up the top layer of sacks, and to pull them over a set of specially manufactured blades which cut open the sacks without any risk of shedding metal pieces. The cut sacks are then shaken above the hopper, reaching an outstanding 99.99% success rate of emptying sack contents. After emptying, the bags are released into a storage container for disposal.
Following installation, the factory’s increase in net profit was found to be far beyond the costs saved in labor. In fact, by implementing the robotic solution, the company incurred fewer instances of machine downtime, fewer employee injuries, greater workflow efficiency, and a better use of raw materials.
Benefits of Introducing LaborSave
Less Machine Downtime
The cost of stopping any production line is high, but when considering contaminants which entered the hopper, the costs could be exorbitant. For the plastics industry this could mean a cigarette butt in the extruder, while for a food company this could mean a metal shaving from the knife mixed in with flour. Aside from damage caused to the machine, the raw materials which are in it of themselves very expensive oftentimes have to be disposed of.
The LaborSave system is as close as can be to reaching 100% effectivity at eliminating the risk of contaminants entering the hopper. By removing the human factor, commonly found contaminants such as cigarette butts, knife shavings, hair and germs are no longer a concern of entering the hopper. In addition, the company has set up specially designed sensors to detect wood splinters or nails that may have become attached to the sacks that were laying directly upon the pallet. And in the event that the raw materials are sensitive to airborne contaminants, LaborSave offers a hermetically sealed apparatus which prevents airborne pathogens from leaving, and also prevents the raw materials from escaping.
Overall, companies using LaborSave have found that contaminants entering the hopper is no longer the reason for machine downtime. And considering the potential loss involved, LaborSave is the only practical solution available today.
Fewer Employee Injuries
Of all the possible workplace injuries, the most common injury by far is the back – followed closely by injuries due to lacerations. When considering the task of lifting, cutting and emptying sacks, this is arguably one of the most high risk activities that could be performed.
Consider an employee that weighs 80 kilo, who is tasked with cutting and emptying 25 kilo sacks. At 4 sacks the employee has already lifted more than his body weight. At 30 sacks, which is the average number of sacks on a pallet, the 80 kilo employee has lifted 750 kilo! Nearly 10 times his body weight. At this pace, it only a short amount of time for back strain to kick in, exhaustion to take effect, and mistakes with the knife to occur.
LaborSave almost completely removes the need for human intervention, short of the requirement to load the system with new pallets. By eliminating the need for human lifting and cutting, injuries drop dramatically. And considering the economic risk that comes with employee injury in today’s market, this is one of the key reasons why so many companies are choosing LaborSave’s solution.
According to studies which we conducted, the average employee is able to lift, cut and empty one 25 kilo sack in slightly less than one minute. This comes out to around 65 sacks per hour, taking into account no breaks or using the restroom. In the ideal, but unrealistic scenario with an 8 hour work day, of which only 1 hour is set aside for meals and breaks, the employee will have cut open 455 sacks. Or when considering weight, 11,375 kilo.
LaborSave automatically lifts, cuts and empties multiple sacks – without requiring any breaks. The LaborSave system is capable of processing 1,300 sacks per hour! Over the course of an 8 hour work day, LaborSave can handle 10,400 sacks, or 260,000 kilo of raw material.
The difference in efficiency is so staggering, that many companies are simply not capable of comprehending the possibility of such great throughput in place of what they are used to. In fact, factories which implement LaborSave in their workflow are often times caught off-guard by how much of a change will take place, and have to make significant adjustments to their scheduling to handle the increased capabilities.
Better Use of Raw Materials
Plastic manufacturers processing $300 sacks of raw materials are shocked when they hear how each day they are literally throwing away thousands of dollars worth of pellets.
As the employee cuts and empties the sack, a small percentage of the pellets will not make their way to the hopper. Instead, they will remain in the corners of the sack and be thrown out. On a generous assumption that the employee is able to empty 98% of the sack contents (some studies suggest the average employee only empties 96% of sack content), 2%, or $6 will be thrown away. Multiply the $6 by the 455 sacks which the employee cuts each day, and the factory has just lost $2,730. This loss quickly adds up to over $60,000 per month, and over $700,000 per year per worker!
LaborSave has been proven to empty 99.99% of raw materials. It does this by slicing the sack in 3-4 parallel rows, followed by a shaking mechanism which completely empties the sack contents above the hopper. Aside from preventing the loss of raw material, the saved raw material is translated into extra profit - which assuming a profit margin of 100% on raw material, the $700,000 which the single employee threw out can be turned into nearly $1.5 million in additional revenues.
Lower Labor Costs
In the U.S., the federal minimum wage is $7.25 per hour. Add in overhead, union, benefits, and the fact that many employees are earning several dollars above minimum wage, the average factory floor employee costs around $15 per hour, or $31,600 per year.
Considering the case of a typical factory using manual labor for their cutting and emptying with 2 shifts of 2 employees, the factory will have an annual labor expense of ~$125,000.
LaborSave removes this expense, or allows the factory to place the employees in other stations. By itself, LaborSave is capable of performing the work of 20 employees (assuming the employees are working at full capacity and emptying 65 sacks per hour).
What began as a narrow attempt to reduce labor costs in the plastics industry, has turned into a robust solution that has been proven to deliver many other cost benefits for multiple industries including food and beverage, pharmaceuticals and chemicals.
Companies which have implemented LaborSave within their workflow have experienced a complete ROI on direct costs in less than a half year. And when considering the indirect costs, we estimate that the factory is experiencing economic benefits by the second month.