Expert Q&A: Getting more from your existing machines
1000 words. 3 minute read.
This Q&A shares insights from Mukesh Jha, experienced Operational Excellence leader in the plastics industry with companies including Sabert Corporation, Berry Global, Johnson Controls / Rolls Royce, and Saint-Gobain.
Q: When you come into a new operation with the goal of driving profitability and results, what are some of the things you look for first?
A:
When I first joined the plastics industry, I was surprised to see how low the efficiency was. Most plants got much lower actual output from their equipment compared with what it was supposed to do (its theoretical output).
That difference between theoretical and actual output is profit the company is leaving on the table. So it’s important to start by understanding and quantifying that difference.
First, we start by looking at why we’re getting lower production from each machine. Is it because the machine was not operating when planned? Or not running at the right speed? Or running, but making defective products? Distinguishing between those aspects — the three pieces of OEE — is where we start.
I ask each plant to look at every production line, go through each component of OEE, and identify the gap compared to target. Generally in plastics, you expect uptime to be about 90%, speed to be close to 100% of theoretical speed, and quality to average 95% at minimum (allowing 2-5% losses). You want OEE around 85-88%.
Next, we align the gap we’ve identified with ownership. Who's responsible to act if the machine is not running? Is it a maintenance issue, or is the machine down due to not adhering to proper process control which is an operations issue? Same thing if it is not producing at the right speed. What is the reason? Is it because we have an operational issue, or a long-term maintenance issue that requires capital investment?
Once you align the ownership of each OEE component with the process owner, you see an improvement in root cause analysis and expedited execution of corrective actions resulting in substantial jump in OEE performance and increased output.
Q: Can you share a story of how this worked in practice?
A:
As an example, one of our facilities was performing at a much lower level than the others. We started by benchmarking the OEE for each production line and compared it against the beter performing plants. We saw that the gap was not in one specific line, it was across the plant. So, then we started looking at what was causing that gap.
The biggest difference compared to other facilities was in downtime. In our best performing plant, the downtime was about 11-12%. In our worst, the downtime was more like 30-40%.
Then we started looking at what could be the reason. We broke down the downtime into maintenance issues and operations issues. We saw half of the downtime was related to operations issues, and half was maintenance issues.
Then we followed the Four Disciplines of Execution process. We said, okay, maintenance downtime in one of our higher-performing plants is at about 5%. For this plant, maintenance downtime is at 25%. What is one plant doing that the other is not? Looking at the difference in the data opened up the conversation. We learned that one plant had a good preventive maintenance program. Every six-eight weeks they did a full preventive maintenance. They also had a good routine of performing predictive maintenance including vibration monitoring, oil sample analysis and thermal scans for hot spots by well trained technicians. The other plant wasn't doing that, and their technicians didn’t have the same skill level and training.
Based on that insight, we defined specific action items. We sent their technicians to the good performing plant to get them trained in the same skills. They started doing similar preventive and predictive maintenance. We watched the data and saw a substantial improvement in their machine uptime after that cross training and implementation of preventive and predictive maintenance procedures..
Next, we followed the same process for the operational downtime. We knew the operational downtime in the lower-performing plant was around 15%, versus 3% in other plants. We saw there was a difference in the tenure of the operators. Their operators’ tenure was less than six months versus 15 years in our other plants, and they hadn’t had the same level of training. Again, we did cross training between their operators and operators at the high-performing plant.
We just kept following that same process: Using the data to identify performance gaps and root causes, putting actions in place to address those root causes, and monitoring the results.
Q: How did you decide how much time and money to allocate to address root causes?
A:
We are very financially and numbers driven in those decisions. For example, we transformed that gap of additional 15-20% downtime related to operations — if these machines came up to target — to around $4 million. We saw we were losing $4 million in profitability because of this 15% additional downtime.
That $4 million is a lot of profit. If we know we can get that additional profit by addressing the operational downtime, what kind of investment makes sense? We made it a priority to hire better trained people. We invested in training them and then retaining them. We assigned a dedicated leader for operator training, another maintenance leader for providing training to improve maintenance technician’s skills and dedicated one training machine specifically for cross training. We created a matrix of individual items on 15 specific skill sets and 3-6 months later, we sent the team back again to the other facility for seven days. It was an investment in terms of cost, but our rate of return was less than a month on these improvement initiatives for the operator training.
Q: In your experience, how much can you typically improve performance through operational changes v. making new capital investments?
A:
In my experience, generally two thirds of the performance gaps are very low hanging fruit that you can address, improve by focusing and creating organizational alignment and ownership, doing RCA and implementing corrective actions. This is huge and can drive substantial benefit for the organization.
The rest is related to long term issues that can only be addressed through capital investment.