IMPROVING EQUIPMENT PERFORMANCE
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Equipment downtime is a major cause of productivity loss for manufacturers. Poorly maintained equipment leads to reduced output, lost revenue from missing production targets, and high inventory levels. It also causes confusion on the shop floor. Most manufacturers, especially small ones, rely on a breakdown maintenance approach rather than proactively maintaining equipment. This puts them at risk of losing control over their equipment performance. The document provides tips for both short-term and long-term improvement of equipment management, including measuring overall equipment effectiveness (OEE), addressing bottlenecks, preventative maintenance, and total productive maintenance (TPM) initiatives.
IMPROVING EQUIPMENT PERFORMANCE
- 1. E quipment Downtime isthebiggestsourceof productivity loss for most manufacturers. If the equipment sets are not able to produce as much as what the customer wants on a daily basis, this leads to a cause of lost revenue. Badly maintained equipment use up much money on repairs. Typically erratic equipment performance is also the cause of high inventory build-up in the shop floor. Manufacturers have no choice but to run expensive overtime production to catch up with customer demand and shipments. It is also the cause of much confusion, debates and misunderstanding between different groups of shop-floor crew. Equipment improvement is an urgent need for most manufacturers. But to the contrary most manufacturers just don’t maintain their equipment and many don’t realise that they are not 1. Do you miss customer commits due to equipment breakdown more than once a month? 2. You have not heard of or measure an important equipment management metric called Overall Equipment Effectiveness (OEE)? 3. You measure OEE, but it is less than 70% 4. Your bottlenecks keep shifting. Today it is this machine and tomorrow it is another 5. You usually batch large production sizes of similar product to reduce equipment changeover. Equipment set up time is very long and unpredictable in length and reliability. 6. Your equipment are causing Quality rejects and rework 7. Your technicians and production crew have frequent misunderstanding in the shop-floor on missing production targets? NO. QUESTIONS YES NO maintainingthemeffectively.Thetypicalmodeespeciallyamongsmallmanufacturers is what is called as Break-Down Maintenance. This is the attitude of “if it isn’t broken, don’t fix it; if it is still running just keep running”. This popular attitude has led many manufacturers to a dangerous situation where they are not in control of their equipment. Take this seven points test: • If you answered YES to more than two of the above points: You do not manage your equipment in a systematic manner. Your machines need attention • If you answered YES to more than 4 of the above point: Your equipment are in danger zone and in need of immediate attention. Your equipment may me making you bleed money. Here are some short term tips and proposed long term strategies to manageyourequipmenteffectively. SHORT TERM TIPS 1. Start with the simple OEE It is important for us to understand which is the bottleneck capacity equipment or set of equipment first. A bottleneck equipment is one where the total Daily Output performance is below the daily customer demand. Once known we can use a key measurement called Overall Equipment Effectiveness (OEE) to study equipment performance. OEE has a complex formula using three Equipment indicators called Availability Rate, Performance Rate & Quality Rate. The compound effect of rate of these losses will show how much your equipment is losing in performance. Here we shall introduce a simple method (called Simple OEE) of estimating OEE without having to use the complex OEE formula. It will be a very good estimate but will not show which category contributes to the biggest losses. Simple OEE is calculated as follows: • Determine how many parts the equipment is supposed to be producing in 24 hours with the assumption that there is no downtime, no changeovers, the machine was running at its optimum speed and created no rejects • Simple OEE is the ratio of how many parts were actually produced to the number determined above • Example: An equipment is supposed to have produced 6500 pieces in 24 hours assuming it had no downtime, ran at optimum speed and there was no rejects. However the equipment produced only 3,200 pieces in 24 hours. Simple OEE is 3200/6500 which is only 49.2% OVERALL EQUIPMENT EFFECTIVENESS (OEE) STANDARDS A world class OEE standard is 85% and above. In my experience most manufacturing organizations in Malaysia who have not optimized their equipment perform at a rate of below 60%. Interested manufacturers may contact writer at jrvictor@amckaizen.com for a complimentary excel template with complex OEE formula and calculators. 62 63 MIB MAR 2014 MIB MAR 2014 MANUFACTURING CONSULTANCY MANUFACTURING CONSULTANCY J. Ramesh Victor is Principal Consultant of AMC Kaizen, an internationally acclaimed operational improvement consulting firm, helping large and small companies all over Asia, improve their productivity, since 2002. jrvictor@amckaizen.com IMPROVING EQUIPMENT PERFORMANCE Mar 2014.indd 62-63 16/2/2014 12:03:12 PM
- 2. 2. Use Bottleneck Management techniques: Bottlenecks that don’t perform to standard needs to be managed in a specific way. Form a bottleneck management team which will meet 3 times a day for 20 minutes each at the shop-floor. Create a large visual board showing on key figures such as output, downtime, rework, no-material etc. The team is to ensure that there are no unnecessary losses on the machine and when there is a breakdown it is attended to immediately. Make sure that technicians know that repair on bottleneck equipment is top priority 3. Short Term Equipment Restoration: Make a short term equipment restoration effort. This is where a task force identifies worn out parts (e.g., seals, gaskets, bearings, belts etc.) that can cause breakdowns as they reach the end of their life. Check that these parts are in good condition and replace any worn out parts. This task force also makes a daily cleaning of the equipment. While cleaning they can spot leaks and further wear and tear on machine 4. Create visibility and accountability: The supervisor of bottleneck equipment need to track hourly performances of the machine. This is displayed on the visual board placed beside the machine. Hourly following up with operators, technicians and other relevant staff for about two minutes in front of this visual board creates great awareness and urgency on consistent performance LONG TERM TIPS All the short term things suggested above costs almost nothing in terms of money. It is merely a focussed approach on exploiting equipment performance. By just doing these things I have seen manufacturers producing up to 20% more output from the same set of equipment. However long term equipment improvement strategies have to be planned. Failing to do that will only mean that the equipment don’t get systematically improved in terms of performance and quality. Some proven long term equipment improvement strategies are as follows: • Make an equipment diagnostics using a complex OEE formula and other equipment losses studies • Reduce Equipment Changeover Time: Quick Changeover Methodology is very effective here. It is a method where typically changeover time can be systematically reduced by about 50%. I have witnessed several Quick Changeover projects where even large machine setups taking as long as 3 hours being reduced to about 30 minutes. Even high tech complex semiconductor industry machine setups have been reduced from 2 hours to a mere 40 minutes. • Consider Total Productive Maintenance (TPM) initiative to address chronic and frequent losses and Down Time at the machine. The scope of TPM goes far beyond Down Time. It includes a complete set of tools and processes for eliminating waste and addressing all of the six major equipment Losses. It aims at increasing equipment OEE to world class standards. Its three main aims are Zero Unplanned Downtime, Zero Defects & Zero Accidents • There is a big difference between working reactively (repairing when they breakdown) and working proactively (putting in long-term fixes). Improve Maintenance efforts though proper study of it. TPM concepts such as Preventive Maintenance and Predictive Maintenance move a set of machines from being in Break-Down Maintenance mode to Zero Unplanned Down time anywhere between six months to two years. Skills on the long term proposed methodologies may be acquired through Training and external consulting from reliable service providers. Reliable equipment leads to predictable delivery, faster cycle time and cost reduction. Taking equipment management lightly or ignoring it is not an option in today’s highly challenging manufacturing environment. I would urge all manufacturers to take a closer look at one of your most important investments-your machines. Are these machines helping you make money? Or are they causing loss of productivity and unnecessary stress in the shop-floor. You may find the above mentioned tips very useful because they are all proven methods. I have seen it working again and again in my 20 over years of experience in manufacturing operational management. “TPM…includes a complete set of tools and processes for eliminating waste and addressing all of the six major equipment Losses. It aims at increasing equipment OEE to world class standards” 64 65 MIB MAR 2014 MIB MAR 2014 GLOBAL INDIAN TRADERS ADDRESSES GITA LOG ON TO www.indiantoday.net gita@charu.com.my PJ Office: Suite 3A52, Level 3A, Block A2, Leisure Commerce Square, Jalan PJS 8/9, 46150 Petaling Jaya, Selangor Tel/Fax: 03 7865 7320 E-directory GITA brings together Indian businesses from all over the world and allows them to showcase and promote their products and services to millions of customers. Call us now and list your company and acquire more customers and profits. GITA is my favourite e-Directory JB Office: No. 6-01, Jalan Bestari 4/2, Taman Nusa Bestari, 81300 Johor Bahru, Johor Tel / Fax : 07 3582320 MANUFACTURING CONSULTANCY Mar 2014.indd 64-65 16/2/2014 12:03:13 PM