Changeover time loss reduction is compelling need for organization- why?

When the manufacturing facility produces a different component of same of the different family, it needs time between one component to another component change in the equipment or facility. The time required between two components production is called change over time or setting time.

To be specific on the definition of changeover or setup time is the time elapsed between last good piece of component  A to the first good piece of component B.It comprises Preparation Time before setting + Actual setting in the equipment + Quality proving the new component as per specification.

Why is there a compelling need for changeover time loss reduction initiatives?

In external socio-environment, there had been a shift in customer's preference, lifestyle, affordability, and expectation of spot delivery or short lead time and so on. This change in external leads to the following challenges to the business internally.

1. Frequent new product launches and reduced shelf life  of the product

2. Increase in variety with moderate/high volume

3. Meeting delivery commitment  

How the external scenario affects the organization capability on changeover time loss reduction?

Unlike it is justifiable to have dedicated equipment/facilities, the organization has to produce all varieties of the same family group in the same equipment/ facilities. If the changeover time is high, it will affect the organization in the following ways

1.Utilization loss to the equipment/facilities

2.Loss of capacity

3.Increase in manufacturing cost as all the losses would be accounted as manufacturing overheads only

4.o counter high changeover, if the organization goes for higher lot sizes, it will affect regarding higher WIP / FG inventories, possible rejections/ rework/planning cumbersome and other communication issues.

on the contrary, if the organization is continuously working on reducing changeover or setup time loss, it will  help

1. Faster delivery leads to customer 's acceptance and possible sales volume growth

2. Better manufacturing cost, in turn, product price

3. Quality improvements due to coordinated and standardized work during setting 

4. Improves the morale of the working people as they are mostly affected due to unorganized changeover process.

5 Short changeover time brings flexibility to the organization to produce variety and at the same time, not losing the utilization and people efficiency loss.

Going forward, those organization who are specialized in variety handling with minimal production cost would be fittest to survival.

One of the competitive advantage for the organization is that developing the capability to reduce the changeover continuously and increase the flexibility in meeting the customer's requirement

Important Steps in OEE Improvement Process

ü  Identify the facility or equipment or line to be measured

ü  Understand the current OEE  level

ü  Collect shift wise/ day wise data for specified period

ü  Identify the loss pattern

ü  Classify the losses in each category

ü  Prioritize the losses

ü  Choose the right lean tool for elimination or reduction of losses

ü  Implement the solution

ü  Monitor the OEE trend and loss 

Overall Equipment Effectiveness ( OEE) -Introduction

What is OEE?

Overall Equipment Effectiveness (OEE) is one of the best METRICs used for monitoring and improving the Efficiency of manufacturing processes.

The manufacturing processes can be machining, fabrication, assembly line etc

OEE is a simple, holistic, and powerful metric.

OEE takes into account the typical sources of manufacturing productivity losses and groups them in THREE categories like AVAILABILITY, PERFORMANCE, and QUALITY. By grouping so in different categories, it distills the complex manufacturing losses into simple metrics .It helps us to understand the losses with clarity and helps to choose the right lean tool for each loss. In addition, it helps us to verify the effectiveness of action against each manufacturing productivity losses

 Elements of OEE :

Availability:

It measures manufacturing productivity losses from down time .i.e. the events that stops planned production like machine breakdown, changeover, material not available, operator not available etc.

Performance:

It measures manufacturing productivity losses from slow cycles .i.e. the factors that cause the process to operate at less than the standard or possible speed.

Quality:

It measures manufacturing productivity loss from manufactured parts do not meet the specification or quality requirements.

Together all three measure like Availability, Performance and Quality combine into one FACTOR as OEE

Score .This one complete measure OEE reflects the manufacturing efficiency and effectiveness.

OEE provides simple, consistent, and proven way of measuring the effectiveness of any productivity initiatives or lean manufacturing programmes or TPM programmes

World class OEE for discrete manufacturing process

Generally, world class OEE for discrete manufacturing process is considered 85 % or greater than 85 %

It is arrived from Availability (90 %) * Performance (95%) * Quality (100 %) = 85 %

Generally, from the study, it is indicated that average OEE score for discrete manufacturing process is around 60 %.If we aim for excellent OEE standard of 85 %, then we can realize that there is so much opportunity to move from 60 % to 85 % through loss elimination or reduction initiatives.

  

Calculating OEE :

OEE is calculated from three categories like availability, performance, and quality

OEE = Availability * Performance * Quality

Pl note that OEE is not calculated as addition or average of three categories, it is calculated by multiplying three categories

For example

Availability = 75 %

Performance =90 %

Quality = 89 %,

Then

OEE= 75 % * 89 % * 90%

       = 60 %

Availability:

Availability is the ratio of actual operating time to planned operating time ….

It measures the downtime loss

Availability = Operating Time / Planned Operating Time

Operating time = planned operating time – downtime loss

For example

Availability =Operating Time (300 min) / Planned Operating Time (400 min)

                   =75 %

Planned Operating time:

Available time per shift – planned shutdown time

Available time per shift

Say 8 hrs i.e. 8 * 60 = 480 min

Planned shutdown time

It is planned shutdown for valid reasons like morning meetings, lunch break; refresh break, scheduled maintenance check etc

For example

Morning meeting – 10 min

Lunch break – 30 min

Refresh break – 20 min

Scheduled maintenance check – 10 min

Hence planned shutdown time = 10 + 30+20+ 10

                                                       =70 min

Hence, planned operating time is 480 -70 = 410 min

Actual Operating Time

Planned operating time – down time

=410 – 110

=300 min

Break up  of down time (110 min ) can be

Machine breakdown -20 min

Operator not available – 30 min

Material not available – 10 min

Changeover loss – 50 min

Hence,

Availability = actual operating time / planned operating time

                   =300/ 410

                  = 73 %

Performance:

Performance is the ratio of actual qty produced during operating time / standard qty can be produced during operating time.

From above example,

Actual operating time = 300 min

Say std time per piece = 3 min

So standard qty can be produced during operating time = 300/3 =100 pieces

Suppose, in a given operating time, actual qty produced is 270 pieces, then

Performance = 270 / 300

                       =90 %

Quality:

Quality is the ratio of good qty produced to total qty produced.

For example,

Total qty produced = 270 pieces

Good qty = 240 pieces

Quality = 240 / 270

             =89 %

How effective are you on managing assets?

         One of the factors for profitability is how you are managing the assets effectively. The assets can be your machines, buildings, facilities and of course your people. Let us discuss the depreciating assets like machines, equipment, and facilities. Effective utilization of asset helps you to serve your customer on time and best cost.In turn, it ensures the profitability. If you are not managing the assets well, you are incurring overhead cost of capital depreciation as well as on revenue expenses like maintenance, consumables, and power. It is the prime responsibility of business leaders to ensure he gets a high return on asset investment.

        Some of the pitfalls in managing the assets effectively

1. Only concern on utilization, not on efficiency
2. Not  much attention on basic maintenance activities
3. Poor management of spares and consumables
4. Idle time taken as granted as way of working
5. Lack of training on usage of assets

Some of the indicators of poor asset management

Ø  Frequent breakdown

Ø  A Long machine idle time for setting up of tools / fixtures

Ø  More accidents and unsafe practices in and around  facilities

Ø  Actual production  output not matching with standard output

Ø  More rejection on produced output

Ø  Not able to release the facility for preventive / regular maintenance

The solution is that first understand where you are  in the overall effective utilization of facilities, then  understand the causes for the losses and write counteractions. Be aware of your revenue generation capability  per hour from your facility in line with market condition. That will bring many insights!