Lean Manufacturing Management Work Processes

Unleash Your Plant’s Hidden Potential

EP Editorial Staff | May 16, 2016

Valves at gas plant

Equipment effectiveness is key to meeting desired production levels, lowering costs, improving quality, and, ultimately, boosting profits.

By David Rosenthal, P.E., CMRP

Production time is a terrible thing to waste. Sadly, manufacturers across continuous-process and discrete industries are doing just that. They’re not addressing the “hidden plant” that holds great potential for higher production rates and lower costs. As an example, consider the situation that the dropping oil prices caused in many operations.

To consumers, low oil prices may be a blessing. To manufacturers that depend on demand for their oil-based products and the price of incoming raw materials, however, it’s a dual-pronged challenge, i.e., ensuring that fixed and variable costs are minimized and production rates are maximized to attain desired margins. Addressing this situation is a good example of where the “hidden plant” comes in—and every site has one.

The “hidden plant,” which no one can see, represents the part of an operation that helps generate profits, but not through the production of saleable product. Fortunately, there are numerous tools and methods available to help unleash your “hidden plant.” It all starts with Overall Equipment Effectiveness (OEE).

Importance of OEE

Overall Equipment Effectiveness is crucial to all industries, regardless of sector. It points to waste in terms of equipment breakdown, slower running times, and making off-specification material. Such waste causes enterprises to become less competitive in their respective marketplaces. It manifests as higher operating costs, unsafe equipment conditions, missed customer orders, heightened uncertainties in meeting marketplace demand, and lower return on investment for stakeholders.

OEE is essentially the ratio of fully productive time to the total time available to the facility for manufacturing. It contains factors for availability, performance, and quality.

Availability takes into account operational losses and is the ratio of actual operating time (uptime) to total time available for production. The performance factor covers the losses of not running at your ideal cycle time. These speed losses are represented by the ratio of actual run time to the ideal, or design, run time for the process. Quality represents losses from not making saleable product. It is represented by the ratio of time spent making saleable product to the time that all product is produced. Accordingly, OEE is calculated as:

OEE = Availability x Performance x Quality

This calculation is expressed as a fraction from 0 to 1 or as a percentage from 0% to 100%. Values for top performers for availability should exceed 90%, while values for performance and quality should exceed 95% and 99.9%, respectively. OEE should then be expected to exceed 85% for most process and discrete-parts manufacturers.

Revealing the ‘hidden plant’

The chart in Fig. 1 depicts the concept of the “hidden plant.” The amount of production time represented by A is the total time available for product manufacture. It can be the entire year or the fraction of time in which production is required. Be careful here, since only non-demand time can be subtracted from an entire year to represent the fractional production year.

Fig. 1. As depicted here, planned, availability, performance, and quality losses all represent the “hidden plant,” i.e., the part of the plant that doesn’t produce the products needed to serve customers and generates losses to all other stakeholders. Such losses translate as risks to the business in terms of higher costs and possible environmental, health, and safety consequences.

Fig. 1. As depicted here, planned, availability, performance, and quality losses all represent the “hidden plant,” i.e., the part of the plant that doesn’t produce the products needed to serve customers and generates losses to all other stakeholders. Such losses translate as risks to the business in terms of higher costs and possible environmental, health, and safety consequences.

The difference between production span A and B represents planned losses, as in the case of batch operations for cleaning time. However, these deductions should be carefully reviewed for the opportunity to be eliminated or minimized.

The production span difference between B and C represents downtime due to mechanical breakdown and other operational losses. Other operational losses can result from less-than-optimal resource allocations, longer-than-needed setup times, and unavailable raw materials. This represents availability losses in the OEE calculation.

The span difference C and D represents performance losses from running equipment at lower speeds than designed. This can result from getting “sloppy” with time-cycle management or accepting equipment performance that falls below its design requirements.

Finally, the production span difference between D and E represents quality losses from producing non-saleable product. This product cannot be sold and must be either discarded or reworked, representing wasted time.

The “blue” bar area represents production time in making saleable product. The planned, availability, performance, and quality losses all represent the “hidden plant,” i.e., the part of the plant that does not produce the products needed to serve customers and generates losses for all other stakeholders. These losses are seen as risks to the business from higher costs and possible environmental, health, and safety consequences.

What can your site do to reveal your “hidden plant” and unleash its potential for higher rates, lower costs, and safer operations? Consider the following strategies and tactics, based on loss type:

Planned Losses. Eliminating planned losses is essentially “low hanging fruit.” Management needs to address the issues and provide revision to policies and procedures that allow these losses. Sometimes resource scheduling needs to be altered. For example, automation and optimization techniques can help minimize planned losses from cleaning time. In some cases, accepted “myths” of why cleaning is performed and the order of products produced should be questioned. Campaign scheduling can also minimize the need for cleaning.

Availability Losses. Such losses result from mechanical unavailability. Several tools and methods can help to regain equipment, including:

  • controlling bad actors
  • revising asset-care plans
  • involving operators in asset care
  • optimizing preventive maintenance
  • determining equipment criticality
  • optimizing spare-parts
  • conducting reliability-centered maintenance
  • improving planning and scheduling
  • using predictive tools
  • performing downtime accounting
  • performing Pareto analysis of CMMS data
  • using third-party repair shops.

Performance Losses. These types of losses are from equipment and processes running at less-than-design rates. Remediating these losses begins with measurement and analysis, including:

  • re-evaluating maximum daily production rate
  • performing downtime accounting/Pareto analysis
  • reviewing design specifications
  • checking pump performance against curves for BEP (best-efficiency point)
  • using Lean techniques
  • eliminating waste
  • using predictive monitoring for fouling
  • sharing practices across networks
  • monitoring with distributed-control systems
  • performing time-cycle analyses
  • conducting Six Sigma projects
  • performing Poke-Yoke
  • performing theory-of-constraint analyses
  • performing operator line checks
  • optimizing batch-reactor time cycles
  • conducting in-plant testing
  • automating processes
  • performing video analyses of product transitions
  • redesigning work-processes.

Quality Losses. Making non-saleable product wastes time and resources. It can risk customer relationships and supply-chain reliability. Remediation requires commitment from production, process engineers, sales, and marketing, including:

  • emphasizing training
  • revising quality-control procedures
  • committing to quality
  • tracking mistakes
  • organizing quality circles
  • ensuring the right attitude with customers
  • understanding product end use
  • measuring performance
  • benchmarking competitors
  • building in quality
  • performing Six Sigma projects
  • implementing/emphasizing raw-material controls at the supplier
  • valuing employee and customer feedback
  • focusing on customer satisfaction
  • conducting surveys
  • avoiding testing for quality
  • connecting employees and customers
  • changing operating procedures
  • focusing on operational excellence
  • charting quality
  • communicating results through visualization boards
  • incentivizing employees.

Bottom line

There’s no excuse for not addressing the “hidden plant.” Its potential is too hard to ignore for most enterprises. The first step is to understand your operation’s Overall Equipment Effectiveness and downtime accounting. Once the data have been collected and turned into information, projects should be developed to address the highest-opportunity areas. MT

David Rosenthal is a reliability consultant and owner of Reliability Strategy and Implementation Consultancy LLC, Houston. Prior to this, he led the delivery of reliability and asset management practices for U.S. clients of Jacobs Houston Asset Management Services. A registered Professional Engineer and Certified Maintenance & Reliability Professional (CMRP), Rosenthal holds Bachelors and Masters degrees in Chemical Engineering from Drexel Univ. (Philadelphia) and the Univ. of Texas (Austin), respectively. Contact him directly at davida.rosenthal@prodigy.net, or visit reliabilitywithoutfailure.com.

learnmore2Improve Reliability through Policy, Principles & Practice

Drive Strategy with Performance Metrics

Uptime: OEE and “Balls to the Walls”


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