Ramp-up: building a sound operational base for steep ramp-up

Ramp-up period definition: a term used in economics and business to describe an increase in firm production ahead of anticipated increases in product demand. Ramp up often occurs when a company strikes a deal with a distributor, retailer, or producer, which will substantially increase product demand. A ramp up is typical in early stages of firm or market development.

Innovation-driven companies always hope their technology will be a huge success. Yet when this happens, they can be faced with the equally huge challenge of having to rapidly transform into large-scale industrial producers. With the support of operation management experts from Industry Consulting, it can be done.

Production ramp-up: where to start?

When it is ramp-up time, there are many things that can be done when – and need to be done – to quickly transform a relatively small venture into a larger operational organization: one that has the infrastructure and business processes capable of world-class, round-the-clock production. But such change is impossible to achieve all at once. How and where do you start? In the long run, that is up to the company to decide.

Ramp-up plan: define, align, prioritize…

Every ramp-up plan will be different, but our process always begins the same: interviewing stakeholders to define, share and align what they see as priorities. We then use our own insights, modeling, and data-crunching expertise to mirror back various scenarios based on possible alternatives. This ensures you clearly grasp all factors and options involved, and can make the most well-informed choices possible when pinpointing the focus areas, which are:

1. acceleration
2. maximized quality of output
3. predictability of deliveries
4. reduced costs

We translate your request into an assignment to increase the capability of critical business processes in the areas of logistics, production, and reporting. A multi-disciplinary team of operation management professionals with combined expertise covering all these fields is assembled to create the best ramp-up plan suiting your business.

Increase the absorption and ramp-up time

The speed at which change and improvements can be made at a company during a ramp-up period greatly depends on its ability to absorb and internalize new ways of working. When you first begin delivering your technology, you often go from a lab to a production environment very quickly. Very often, you do not have time to develop competencies and controls which create feedback loops that enable continuous learning and improvement.

The result is a lot of ramp-up time spent on ‘firefighting’ – which makes it difficult to increase productivity in any way. From the moment collaboration begins, an overall priority is to support you, in increasing the internal level of absorption, and capacities for self-improvement and decrease overall ramp-up time.

Establishing the foundation for production ramp-up

It is clear that effective meeting processes and good management-control systems are required to facilitate better interaction, oversight, and information-flow throughout the organization. We generally first work on solving the most pressing bottleneck supply issues that management constantly have to deal with (e.g. increasing deliveries).

This provides the necessary ‘breathing space’ to focus on communication, coaching, and structural planning. The results are not only clear definition of dashboards, reporting formats and lagging/leading KPIs. Defining these systems and process also make the organization one that is better aligned and ready to tackle the ramp-up in a more disciplined, systematic way.

Work in the ‘now’ to take action on the ramp-up plan

A critical factor when trying to make great change happen quickly is to focus only on initiatives required to achieve the immediate goal. Long-term thinking must be put on the back burner. In every field and at every stage of successful steep ramp-up, we ensure there are precise day-to-day action plans that are made as visible as possible to everyone involved. These are supported by close and careful monitoring of KPIs and short-term goals in each of the key focus areas.

• Improving supply chain: We often see that the logistics setup is not very coherent. This makes it difficult to get a good grip on planning cycles – which is a key requirement of world-class production. Together, we develop an optimal supply-chain blueprint and a road map for getting there. A dedicated OpEx dashboard tool can also be produced to aid in demand analysis and track progress in production. The insights this delivers in queue locations, expected lead times, etc. lead to great improvements in inventory and component planning. Most importantly, it adds crucial predictability to your production.

• Stopping the blocks: During production processes, materials can be blocked due to ‘red flags’ that may originate from the technical, procedural or operational side. On the one hand, it is crucial to solve such issues as soon as possible. On the other hand, when production systems and processes are not highly standardized and mature, such red flags can too often be ‘false alarms’ that unnecessarily slow or even stop production. We propose to establish a material review board (MRB) to reduce these occurrences and create clarity in handling valid blocked lots quickly and effectively.

• Widening the bottleneck: Equipment determines a facility’s output – or bottleneck. And there is a real science to optimizing the equipment’s product processing, which increases the capacity of the bottleneck. This has to do with machines, but also with the people involved – how they load, monitor, maintain and offload. We generally implement significant steps in bottleneck management which lead to great improvements in delivery and predictability.

In each of the above-mentioned areas, the goal is to implement not only improvements but also built-in scalability that will enable you to continue growing effectively in the future. 

On to the next phase

Even as we focus on achieving the initial phase of the ramp-up period, our team remains alert for opportunities to seed small structural business process improvements in other areas, such as product development and customer relations. This is paving the way for you to reach the next phase of the ramp-up period and gain organizational efficiency and effectiveness.

For more information about industrial engineering, making the move to volume production and ramp-up plans contact:

Jos Hens
Senior Consultant Lean, Operations Management
Industry Consulting, Philips Engineering Solutions