Lean Training Consultancy.


Why Factories Fail to Benefit From Loss Measurement

There are a number of reasons why factories fail to get a benefit from loss measurement:

1. Not setting out with a true measure of OEE.

2. Not setting Theoretical Speed targets for each product which cannot be exceeded. i.e. Theoretical Speed of 200 Parts per minute, when it is possible to set the line/machine to 230, which would give a performance of greater than 100%. This is physically and logically impossible.

3. Using a PLC control system to record the seconds lost due to a breakdown or stoppage, without capturing the real reason (usually human) for the loss. The real reason is far more important than a second accurate time. Using a paper system at the start is very cost effective, as the low hanging fruit (solving the simple losses) will give the biggest and cheapest payback against the investment of recording/transcribing the lost time into graphs. Using paper recording also has the benefit of allowing the operators to record the reasons in their own time, and not be rushed into selecting the first reason that appears on a computer menu list!

4. Not setting out to record reasons for Minor Stops, which can be more significant than all other downtime reasons, when added together.

5. Not engaging with the operators and using/abusing the measurement system by immediately challenging the reasons for a loss. It is far better to know the “Truth” and deal with it in other ways, through training, improved procedures and changes to the way the operators are managed.

6. Linking the loss measurement/improvement with productivity incentive payments. Operators will always find a way to get the money without giving you the benefit. Everyone wants a pay rise, however, investing in better working conditions for the factory and looking after the operator’s health is far more important, both for the factory and the operators. It is better for them to work for thirty years without injury than have a small pay rise for two years and then have a disabling accident in the factory.

7. Finally, and most importantly, not setting up a process whereby the losses are being analysed, root cause identified and solved by an improvement team/engineering. Frustration of the operators in seeing no improvement in a major loss will result in a serious loss of data accuracy.

When starting out with a measurement programme it is very important to remember that nothing will have changed from before the measurement was in place. In fact, there is some anecdotal evidence which suggests that during the first month or two of starting to record losses using paper sheets, sites have seen a 3-8% improvement, simply because there is serious and meaningful attention by management on the real issues.

So, whether we have a measured OEE of 30% or 60% it does not matter, this is where we are, nothing changed except now we are measuring it. We may not like the value, but it is real and it provides a sound basis for accurate production planning and a sound basis for an improvement programme. What is important is having enough depth of detail to be able to start attacking the causes of the losses and seeing that these losses are not simply being transferred and recorded against “Dump” codes.

In conclusion, measuring losses in a factory should have the same importance as recording financial accounts. They are both opposite sides of the same coin, with reduced losses leading directly to increased margin.

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