The Capability of Meeting Objectives as Observed in Many Organisations - Research Paper Example

Process Improvement Introduction A radiator and heat exchanger manufacturing company has provided tube machine data for analysis. Process improvementincludes removal of waste in the process. The steps that it should undertake and the sequence have been described. Process improvement should begin with the identification of inefficiencies and wastes. The overall equipment efficiencies and fishbone diagram have been illustrated in appendices A and B. This is followed by the redesign of workplace; processes; and structure to achieve six sigma level of performance. Management commitment and responsibilities have been discussed. The Seven Wastes The seven wastes include motion; transportation; waiting time; overproduction; inventory; processing time; and defects. Other common wastes are energy; untapped human resources; and by-products. Motion and transport are related to layout; organisation; and engineering. Waste arises as motion and transport does not always result in useful work. In the current case study, motion and transportation includes rearrangement of storage areas that are temporary before and after manufacture or product components; and movement associated with searching fixtures, jigs, tools, equipment, materials, etc. Movement allows an opportunity for product damage during handling and movement; poor space utilisation – large distances between stages or large gangways or storage areas; higher labour cost from low productivity; large batches waiting for transport – large inventories, long leadtimes, low responsiveness. Waiting time, overproduction and inventory are related to scheduling; setups; communication; quality; skills; reward systems; breakdowns; and layout. Waiting time could be caused by material; machine; or labour. Lack of material could be caused by scrap; breakdown; poor schedule; or poor supplier. Machine unavailability could be caused by breakdown; setups; large batches; or unavailability of tools, jigs, fixtures, etc. Skills shortage, absenteeism, or operating or supervising more than one machine could cause skill shortage. Overproduction could be a case of too much or too early. Too much is when there is more production than needed. This could be caused by setups that are long, improper scheduling for EOQ, or inadequate design of processes. Too early includes production earlier than required. This could be caused by lack of machine capability, subcontracting of operations, long in-process delays, or long leadtimes. Overproduction could also be caused by unbalanced material flow; cushion storage; safety storage; and lot delays. This results in high cost and low service levels. Processing time is related to engineering; training; training; organization; maintenance; design; and materials. In the current case processing time is influenced by low operation rates due to tool, jig, or machine condition or specification. Insufficient monitoring of processes or lack of operator skill or knowledge, oversized materials, additional operations due to poor finishing, and minor stoppages are influencing production time. This is resulting in lower labour productivity caused by higher labour cost; higher machine cost; or higher product cost. Reduced capacity is caused by wasted business opportunity and lower return on capital employed. This results in high cost and low business performance. Defects are related to maintenance; levels of inventory; reward systems; skills; organization; setups; materials; responsibilities; design; or engineering. Defects result in low direct and indirect labour productivity; machine capacity underutilization; ineffective material usage; inventory levels; equipment and space requirements; complex production control system; and reduction in delivery of reliability. This results in high cost and low business performance. The overall impact of defects could be upto 10 times the level of scrap. Other common wastes include energy, untapped human resources, or by-products. Energy includes light, heat, or power. Resources such as engineering and commercial capabilities are not directed to solve problems. Scrap materials, recycling-oil, coolant, etc are by-products. Improvement in Overall Equipment Effectiveness Overall equipment effectiveness (OEE) is given by the expression: ; OEE for the given setup has been illustrated in table 1 – 5. It ranged from 63% to 67% through the week. OEE is directly related to the six big losses including breakdown losses; setup and adjustment losses; idling and minor stoppages; reduced speed losses; and reduced yield. Breakdowns and setup adjustment result in downtime losses. Idling, stoppages and reduced speed result in speed losses. Process defects and reduced yield affect valuable operating time resulting in reduced yield. Breakdowns are caused by chronic and sporadic breakdowns. Sporadic breakdowns are easy to correct, while chronic breakdowns are more difficult. A large percentage of total losses are caused by breakdowns, which is why eliminating breakdowns is desirable. Equipment effectiveness could be maximised by increasing reliability; and reduction in time for correcting problems. The objective for reductions in breakdown should be nil. Setup and adjustment losses result from downtime and defective products. This occurs when production of one item/component is completed and the equipment has to be adjusted for meeting the requirements of another item. Single minute exchange dies are an example of technology for the reduction of setup and adjustment losses. Adjustments cause double expenses in lack of good product and use of material. Stoppages occur when production is interrupted by temporary malfunctions. Idling occurs when machine is sitting waiting for either material or manpower. These are minor problems and could have a large impact on OEE. These problems are often easy to correct; difficult to detect; and hard to quantify. When automatic production is deployed, no minor stoppages should be allowed. The difference between equipment design speed and actual operating speed is the reduced speed. Reduced speed is typically overlooked, and the largest obstacle for equipment effectiveness in several operations. Reasons for slow running could include mechanical problems, defective quality, history of past problems, fear of overtaxing or abuse of equipment, or lack of knowledge of optimal speed. Increasing operating speed could reveal latent defects in equipment condition. Process defects result in losses in quality. These include sporadic defects and chronic defects, and complete elimination of defects is desirable. Reduced yield include yield or startup losses, which are quantity losses that occur during early stages of production. This includes the beginning to stabilization period. Yield losses could vary with suitability of manufacturing conditions; maintenance level of equipment and tooling; and technical skill of operators. Often yield losses are high. Total Productive Maintenance Total productive maintenance (TPM) also known as total preventive maintenance aims at no breakdowns; evolved from preventive maintenance and has characteristics in common with total quality management. Effective TPM practice requires an organization with culture; commitment; teamwork; systems and tools. TPM requires an extension of boundary consideration from machine to include operators; products; processes; and the environment. TPM aims at prevention of breakdowns; spreading the load from specialist maintenance function; making maintenance and problems visible; and management by facts. TPM aims at gaining productivity, and not merely maintain. TPM has similarities with TQM and JIT; relies on thinking worker, aims at waste reduction, and emphasizes simplicity and visibility. TPM encompasses energy, management, safety, education and training. Concepts central to TPM include 5S/5C/CANDO; initial careful consideration; visibility; labelling of red tags; visual checklists; use of senses; ownership; bottlenecks; failure modes and scheduled maintenance; condition monitoring; information systems; design, administration and benchmarking. Setting up a 5S System The agenda for 5S is to take pride in the workplace and ownership of maintenance responsibilities, while moving away from the thought that maintenance is somebody else’s responsibility. Initial careful consideration is required for TPM as the process is not yet capable of delivering quality; standard procedures have not been developed; failsafe devices have not yet been added; operating and failure modes are unknown; losses have not yet been measured; and vital elements are not yet visible or monitored. Visibility includes making what’s happening clear for all; maintenance records; problems noted on charts; replacement of solid metal guards with transparent guards wherever possible; and making leaks or drips visible. Red tags are a form of implementation of TPM. This includes inclusion of maintenance concerns on Red Tags, hung on prominent board/s on the shop floor; and remaining on the board until action is taken. These include concerns that operator’s cannot handle. Visual checklists allow monitoring in TPM. Statuses are compared with written standards. These checklists are developed by operators, and include photographs or drawings. The effectiveness of checklists is more important than good looks. Use of senses includes encouraging operators to think and use all senses including smell; hearing; touch; sight; and vibration detection. Humans are good at detecting changes and should report; record; and act on changes. Ownership principles include creating a sense of ownership. These include pre-flight checklists at start of flight; performing simple maintenance tasks; and keeping stock of inexpensive consumable parts; lubricating; keeping records, etc. Time saved in bottlenecks is directly proportional to profits. Bottlenecks should get first priority for analysis; and maintenance activities. Good maintenance records are useful for bottlenecks. The “bathtub” curve represents classic preventive maintenance. These result in routine maintenance activities before major expected upturns. However, some equipment may have high earlier failure rate; some may have sudden wear out; some may exhibit continuous incline, etc. There is a need to know failure mode/s for planning the maintenance for preventing it. This required talking to operators as they are aware of failure modes, and the aim should be for improvement and not just merely maintain. Condition monitoring is a specialist function in TPM, and an important means to reduce costs is several environments such as heavy, rotating machinery, etc. Methods include vibration detection; temperature monitoring; bearing monitoring; and oil analysis, etc. Often IT systems are helpful in TPM by recording of workplace data. Scope increased from machines to include operators; safety; and energy issues. Design, administration and benchmarking could be seen on the manufacturing floor. This includes tidying the workspace, filing cabinets, break rooms, etc. This is an extension of TPM practices that are often confined to product design and development. Benchmarking often serves to compare with best practices and develop competence within the firm. Extremely high levels of competition in industry require businesses to cut costs for growth and survival. Preventive controls are required to stop the generation of defects and poor results before they can develop. Value addition occurs at the machinery during every successful cycle. The focus of TPM is on the machinery, while the focus of 5S is around the machinery. 5S is based on the philosophy of eliminating non value-added activities; focus on root causes and not simply symptoms; use total participation to check process; and provide structure to sustain system. 5S includes the systematic method to organize, order, clean and standardize the workplace and maintain the status quo. 5S include sort; set in order; shine; standardize and sustain. 5S provide a foundation for achieving employee engagement; cost reduction; improving work flow; and no accidents. 5S empowers the workforce and is a process that does not end. 5S does not allow wandering or searching; waiting or delays; obstacles or detours; extras; injuries; and waste or red ink. The vision of 5S includes a work environment that is self explaining; self-regulating and self improving with the aim that planned activities occur as planned consistently. 5S allows a clean workplace; avoid searching hassles; reduce defect rate by early detection; improvement in preventive maintenance problems; use of space; and elimination of accidents or injuries. The 5S system provides benefits that energizes the workforce; improves safety; improves efficiency; improves quality; and allows the workforce to think. This results in reduction of waste and reduction in cost. The 5S visual workplace is more than a brigade of brooms, buckets, posters and signs, providing a compelling imperative to meet daily production goals, reduce waste, reduce lead times, and accelerate flow. Power levels of 5S devices are passive; assertive; aggressive; and absolute. Passive levels include addresses; ID levels; directions; instructions; maps; and displays. Assertive levels include lights, alarms, visual displays, control boards, etc. Aggressive levels include kanban, shelf height, shelf width, bon size, pallet size, aisle width, etc. Absolute levels include sensors, limit, guide pins, templates, etc. Wastes have been classified as missed opportunities; material handling; making inventory; over-production; motion; over-processing; delays; and making defects. These comprise 95% non-value adding wastes. Implementation of visual order has resulted in over 60% reduction in floor space; 80% reduction in flow distance; 70% reduction in accidents; 68% reduction in rack storage; 45% reduction in number of forklifts; 62% reduction in machine changeover time; 50% reduction in annual physical inventory time; 55% reduction in classroom training requirements; 96% reduction of non-conformance in assembly; 50% increase in test yields; and 15% increase in throughput. HP enjoyed improved levels of communication and information sharing, and reduced training cycle; while Boeing enjoyed lower safety incident rates and improved morale. 5S benefits include no changeovers resulting in product diversification; no defects resulting in higher quality; no waste resulting in lower costs; no delays resulting in reliable deliveries; no injuries resulting in safety; no breakdowns resulting in better equipment availability; no complaints resulting in greater confidence and trust; and no red ink resulting in corporate growth. The first stage includes SORT, where all items from the workplace not needed for production are removed. Problems and annoyances in the workflow are reduced, communication among employees is improved; product quality is improved and enhanced. Waste leads to errors or defects. Unneeded inventory or equipment results in quality defects; makes designing equipment layout more difficult; creates extra inventory-related costs; requires extra pallets/carts for unneeded transportation of power. This makes it difficult to sort needed inventory from unneeded inventory. SORT allows avoiding overcrowded workplace; storage items blocking communication; wasted time; inventory that it costly or unneeded; excess stock-on-hand hiding production problems; or stagnant process flow. Red-Tagging is a simple method for identification of unneeded items in the factory, allowing evaluation of usefulness, and appropriate methods for dealing with them. Evaluation for red-tags should be as necessary or unnecessary. The holding area for red tag could be classified as central or local. The steps involved are: launch of project; identification of red-tag targets; setting of red-tag criteria; making of red tags; attaching of red-tags; evaluation of red tags; and document the results of red tagging. The second stage includes setting in the order. This includes arrangement of needed items making them easy to use, and labelling items making them easy to find and place. The idea behind orderliness is a place for everything, and everything being in place. A location should be determined for identification of needed items; a determination should be made as to how many of each item should be stored in each location; setting height and size limits; enabling users to find, use and return items; use standard equipment and set limits. Standards for orderliness include address signboards; limit and location lines; and labels. Limits include height lines and standard container size. Danger could be indicated by tiger tape; and use of signboards for communication. Promotion of good order involves sorting things needed and not needed and developing a plan and layout according to application. The use of maps for 5S can make the process effective. This includes documentation of workplace layout on chart and posted in work area; use of cards (blue) for documenting improvements and ideas; review of ideas by responsible people and improvement action; and promotion of teamwork by the effective use of 5S. Implementation of set in order prevents waste of motion; searching; human energy; excess inventory; defective products; and unsafe conditions. This essentially leads to standardization of: where things are kept; machinery; operation; drawing; clerical processes; inventory; and communication. Visual controls are communication device used in the work environment for at- a-glance information. Appropriate locations should be determined for location of items in the workplace based on the frequency of use; storage of items together that are used together and storage in sequence; and use of “just let go” arrangement of tools suspended within reach Good practices require storage spaces that are larger than items stored; and elimination of a variety of jigs, tools, and rollers by using ones that serve multiple functions. Tools should be stored according to function or product. Elimination of waste is achieved in a motion economy, by location of paper, equipment, machinery, and tools in the best possible locations. Operation improvement includes radical improvement and motion improvement. Radical improvements include finding ways for eliminating whole procedures, resulting in the removal of the operation along with inherent waste. Motion improvement involves elimination of unnecessary motion from existing operations resulting in removal of waste inherent in the operation. Principles of motion economy allow design of working area resulting in elimination of waste. The 5S map can be used to evaluate current locations of inventory, tools, equipment and machinery. The 5S map allows creation of a “before” map and an after map. As ideal locations are determined, these locations should be identified to determine locations to enable everyone know what went where and how many of each item belonged to each location. Simple strategies for location of indicators include signboards; paintings; colour coding; or outlining. Signboards have been used to identify names of work areas; inventory locations; equipment storage locations; and machine layouts. The main types of signboards indicate location; items; or amount. The painting strategy is a method that allows identifying locations on floors and walkways. Types of divider lines include cart storage locations; aisle direction; door range; place markers; or tiger marks. Colour coding strategy involves the use of colours to denote appropriate use of inventory, tools, or equipment. The outlining strategy involves the use of drawn outlines of jigs and tools for proper storage position. Shine is another core process that involves ensuring that everything in the factory stays clean. Standardization is the fourth core process, that helps maintain the first three processes. The fifth core process is to sustain by making a habit of properly maintaining correct systems and procedures. This allows keeping everything in top condition in preparation for use. The process is believed to relieve stress and strain. Shine helps eliminate poor morale or work efficiency; overlooked defects in the dark or messy workplaces; slipping in puddles of oil or water; swarf injuries or shavings; inadequate check-up maintenance; or defects from dust and debris. Cleaning an area involves indirect inspection of machinery, equipment, and working conditions. Shine involves five steps: determination of targets; determination of assignments; determination of methods; preparation of tools; and starting to shine. Targets include warehouse; equipment; and space. Shine assignments include 5S assignments and 5S schedule. Shine methods include selection of targets and tools; performance of 5 minute shine; and creation of standards. Preparation of tools includes application of Set In Order to cleaning tools. Starting to shine includes sweeping floors; wiping off dust from walls and windows; floors; and cleaning foreign material from surfaces. Achieving Six Sigma Six Sigma is the application of six standard deviations for the control of variation. Application of six sigma in process improvement involves improving existing processes to achieve 99.99% efficiency in processes. Six Sigma is achieved by training schemes such as Greenbelt or Blackbelt training. Processes; people; tools and training are essential for achievement. Teams comprising of people are formed for training to achieve Green or Black best status. Tools include change management tools; data management tools; process improvement tools; and project management tools. A six sigma road map comprises of establishing management commitment; gathering information; training; developing monitoring systems; selection of processes; and conducting six sigma projects. Management belief and support is essential. Training for achievement of Black and Green belt status by team member should be followed by the development of a monitoring system and selection of processes for improvement. The mature stage involves changes and improvements made by analysis and use of statistical methods. The DMAIC process includes a basic methodology for improving existing processes, which is used as a road map. Tools are introduced at each stage for measurement and analysis, followed by improvement by the use of appropriate tools. Appropriate tools are also used for control. The failure mode and effect analysis is tool allowing improvements in data collection; voice of customer efforts; and procedures. The technique identifies and ranks potential modes of design or manufacturing for prioritisation of improvement actions, and classifies the type, severity and ability for defects. Management Responsibilities Creating conditions to sustain 5S, TPM, and Six Sigma include awareness; time; and structure. Support is required from management for acknowledgement, leadership, and resources. Rewards and recognitions are required for efforts, which results in satisfaction and excitement as implementation involves more people. Roles in implementation include education of employees about concepts, tools, and techniques; creating teams; allowing a schedule; provision of resources; acknowledging and supporting efforts; encouraging creative involvement; creation of rewards; and promotion of ongoing efforts. Directors and area managers should be involved in regular audits; recognition and feedback. Supervisors and managers are responsible for sustaining the efforts by improving the quality of their own work; teaching by example; demonstrating the company’s commitment to implementation. Blitzes and meetings should be regularly scheduled for improvement; issue and progress should be pointed out; and minutes of meeting kept and shared with team and others. Tools and techniques for sustaining techniques involve slogans; posters; photo exhibits and storyboards; newsletters; maps; pocket manuals; department tours; and dedicated months. Expected Results A value analysis check on current manufacturing revealed that the proportion of time for which non-wasteful activities are performed is more than 10%. A throughput efficiency check indicated that the time for which non-wasteful activities are performed could be reduced. A reengineering effort would result in significant OEE improvement. Also, significant reduction in waste would be achieved. The organizational structure should be adapted to include the 5S system, TPM and Six Sigma process. Six Sigma strives to achieve 99.99 percent, and when properly deployed has the capability of meeting objectives as observed in many organisations. References Process Improvement Lecture Notes Appendix A: Tables Table 1. Overall Equipment Effectiveness (Monday) Stage Step Measurement A Gross Available Time (480 min/shift) 480 min B Planned Down Time 50 min C Running Time (A-B) 430 min D Downtime Losses 135 min E Operating Time (C-D) 295 min F Availability (E/C) x 100 68.6 % G Output during Operating Time 25 pieces H Theoretical Cycle Time 40 pieces I Performance Efficiency 91.21 % J Rejects During Operating Time 0 pieces K Rate of Quality Products 100 % L OEE (F x I x K) x 100 62.89% Table 2. Overall Equipment Effectiveness (Tuesday) Stage Step Measurement A Gross Available Time (480 min/shift) 480 min B Planned Down Time 45 min C Running Time (A-B) 435 min D Downtime Losses 118 min E Operating Time (C-D) 317 min F Availability (E/C) x 100 72.87 % G Output during Operating Time 21 pieces H Theoretical Cycle Time 32 pieces I Performance Efficiency 89.72 % J Rejects During Operating Time 0 pieces K Rate of Quality Products 100 % L OEE (F x I x K) x 100 65.37% Table 3. Overall Equipment Effectiveness (Wednesday) Stage Step Measurement A Gross Available Time (480 min/shift) 480 min B Planned Down Time 50 min C Running Time (A-B) 430 min D Downtime Losses 93 min E Operating Time (C-D) 337 min F Availability (E/C) x 100 78.37 % G Output during Operating Time 50 pieces H Theoretical Cycle Time 70 pieces I Performance Efficiency 86 % J Rejects During Operating Time 0 pieces K Rate of Quality Products 100 % L OEE (F x I x K) x 100 67.39% Table 4. Overall Equipment Effectiveness (Thursday) Stage Step Measurement A Gross Available Time (480 min/shift) 480 min B Planned Down Time 31 min C Running Time (A-B) 449 min D Downtime Losses 97 min E Operating Time (C-D) 352 min F Availability (E/C) x 100 78.39 % G Output during Operating Time 16 pieces H Theoretical Cycle Time 25 pieces I Performance Efficiency 80.82 % J Rejects During Operating Time 0 pieces K Rate of Quality Products 100 % L OEE (F x I x K) x 100 63.32% Table 4. Overall Equipment Effectiveness (Friday) Stage Step Measurement A Gross Available Time (480 min/shift) 480 min B Planned Down Time 76 min C Running Time (A-B) 404 min D Downtime Losses 123 min E Operating Time (C-D) 281 min F Availability (E/C) x 100 69.55 % G Output during Operating Time 19 pieces H Theoretical Cycle Time 30 pieces I Performance Efficiency 91.37 % J Rejects During Operating Time 0 pieces K Rate of Quality Products 63.54 % L OEE (F x I x K) x 100 63.54% Appendix B: Figures Figure 1. Bathtub Curve (Process Improvement; Lecture 7) Figure 2. TD Tube Fishbone Diagram Read More