Posted by: productivityinc | June 7, 2010

Asset Depreciation

Imagine for a moment that you had a group of employees who sporadically slowed their work pace, or worse, randomly stopped working for hours at a time. Imagine running your facility never knowing whether you would get 8 hours, 5 hours or 5 minutes of work from them on any given day.

Imagine the production capacity that would be lost to their whims and the costs you would incur cajoling them back to work. Imagine the frustration you would feel day in and day out dealing with these temperamental people and imagine the challenge you would face attempting to accurately plan your production requirements.

Well, chances are that several of your most critical assets are behaving in just this manner each and every day and not only are you tolerating it, you are probably working around it, excusing it, and even justifying it.

Recently I was leading a kaizen event working with a team focusing on implementing visual controls and visual displays in a work cell. While at the work site I observed the worker changing the flow to run material through a piece of equipment that was positioned just outside of the actual cell. The machine was an identical match to one of the machines that was part of the cell. When I asked why they had an identical piece of equipment positioned just outside the cell they told me that the main piece of equipment broke down so often they weren’t able to run product through the cell with any consistency. They had an identical piece of equipment in the plant that wasn’t being used, so they had it moved over to the work area and alternated between the two pieces. When the “main machine”, the one in the cell was broken down, they would use the “off-line” machine until the main machine was repaired. I asked, “If the main machine breaks down that often, why don’t you just remove it from the cell and replace it with the other machine?” The worker explained that the off-line machine broke down just as often and that all too frequently, both machines would be down at the same time.

Two machines, both working only part of the time, attempting to do the work that one fully functioning machine could and should do. Imagine paying two full time workers to work only part of the time… never knowing when or if they would be available to work. You would never accept this.

By accepting breakdowns and minor stoppages as the “norm”… most organizations don’t have any idea just how much capacity they are really losing. But the truth is — unreliable equipment is silently and profoundly hurting your business.

And breakdowns and minor stoppages could just be the tip of the iceberg. Equipment reliability is likely to be at the root of other, seemingly non-related, issues that waste time and resources and have a negative affect on your business. For example:

•Safety Incidents – Are safety incidents increasing? Look at your incident rate, safety incidents could be a sign that equipment process reliability is declining.

•Quality Problems – Is your quality rate declining? Poor quality can often be tied back to poor equipment reliability. Use your quality rate (first pass yield or rework) to help assess your equipment process reliability. If one is going down, there is a good chance the other is too!

•Increased Costs – Are operating costs increasing? Increases in your operating costs could also be a sign of poor equipment reliability as increases in your kilowatt per hour usage could be tied to compressed air leaks and leaks in reservoirs – i.e. hydraulic systems, gear boxes, etc. lead to higher supply costs (i.e. absorbents) and higher waste disposal fees.

Workarounds are found and excuses are made for poor machine reliability nearly every single day. Why do you tolerate and excuse this behavior from your capitol assets, when you would never tolerate it from your human assets? Because temperamental equipment is viewed as a normal part of doing business…but it isn’t. If you are ready to get your equipment reliability issues in check, here are a few things you should be doing:

•Assess your overall conditions; you have to know exactly where you are in order to begin to improve. Use the TPM Scan or for a more detailed review conduct a TPM Assessment.

•Analyze leading metrics daily (i.e. overall equipment excellence, mean-time between failure, mean-time to repair) and take action based on what the data is telling you.

•Begin an operator based maintenance program (autonomous maintenance) to get front line operators more involved in the day to day maintenance of their equipment.

•Insist that your maintenance planning schedule is given as much priority as your production schedule. When you allow maintenance to do maintenance on a schedule you will see a positive impact on your production schedule (you won’t be running product on Saturday and Sunday that should have been run on Wednesday and Thursday!).

•Involve operators and maintainers along with engineering technical associates in the modification of existing equipment to make it more operator/maintainer friendly. Slight modifications to existing equipment could have a substantial impact on uptime.

Having consistently reliable equipment is possible and it should be your goal. It is a must in today’s competitive marketplace. Remember, asset depreciation doesn’t mean asset deterioration. As the economy continues to improve, demand for your products will increase. Be certain you are positioned to take advantage. It is time to put your equipment back to work – full time – and keep it that way? Now… imagine that!


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