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We are a $400 million medical equipment business company and our plant that produces products for the USA market.

 

The production line was losing parts that dropped on the floor. Our conveyor belts develop static electricity that makes the parts tick and not drop. Where they should. Various activities had been taking place to try to reduce the static, but it wasn’t given the desired result. We lost approx. $2000/week of products.

 

Using a Kaizen process, the team started to gather data to see where we had the biggest loss and we added video to the data collection to see what actually happened when they didn’t drop as they should. We tasked a couple of team members to read up on static electricity and ways to reduce or eradicate it. We studied the process for 4 days 24 hours per day and counted all parts in all defined areas. We made a graphical way of organizing the data. First the data was hard to understand since we didn’t know enough of static electricity. The two members who studied it came back with some knowledge and we learned about a type of equipment that is call ionizer and the effect they could have.

 

We set up a trial plan to establish some practical knowledge of the ionizer and was lucky enough to borrow one. Using a logging sheet and learning from the data we could see that with the correct angle of the ionizer we could completely eliminate the loss.

We mounted an ionizer and set up visual markings so it would be kept in the correct angle. We developed One Point Lessons and trained all operators to ensure the ionizer was set in the correct position in the beginning of every shift.

A detailed execution plan was finalized with sign off by the Management Team.   

 

This even didn’t take more than 2 weeks including the 4-day s of data collection and saved an annual amount of $100000.

 

We keep logging the loss of parts using our daily meeting system, Performance Control.

 

AskLDI Case Studies – Medical Equipment Production Kaizen

Analysis of the production system resulted in the identification of output from the manufacturing area is too low. Further drill down analysis identified that short stops was a chronic problem. Short stops made up to a total of 18% lost production with 50% of the short stops coming from raw material feed.

Extra sales were not realized since the customers could purchase more products then we can manufacture. The sales Team identified that all extra production could be sold immediately.

In my role as Chief Production Engineer I was given the task to reduce the short stops of the material feed by a minimum of 50%

We used a global team of internal stakeholders from Sales, Customer Service, Design, Quality and Production personnel.

My mandate was to use the tools and techniques that I learned thru my Practitioner Certification training. Also to utilize the PDCA approach to ensure that sustainability was achieved. We would also recommend where we could expand the improvements throughout similar processes.

We used the Process mapping tool and created a current state, and future state map. We found 11 opportunities to reach the future state VSM with a 90 day execution plan. One of the opportunities was reducing short stops in key manufacturing machines. We found that the material handling, shape and size of the raw material were the drivers for short stops. We increased the size to 40% more every feed. To ensure that works we created a fixture that keeps material in the correct form.

Short stops due to raw material feed reduced by 55%. Productivity increased by 7.5% and we realized a cost savings annually of $110,000

AskLDI Case Studies – Manufacturing Sector Short Stop Reduction

Our business was the manufacture of medical equipment. The output from the manufacturing area was not at expected levels and the product variation was high. More sales were not realized since the customers could purchase more products then we could manufacture. The business situation is very positive and all extra production can be sold immediately.

Our Teams goal was to increase the manufacturing output by 20% and reduce the variation to 3.5%

I was given the task to lead this initiative based on my Practitioner enrolment to achieve my certification.  We used a global team of internal stakeholders from Sales, Customer Service, Design, Quality and Production personnel.

I had to train my Team on the PDCA approach, and use the tools and techniques gained from my training. This would ensure sustainability and expand the process on a global level

We used the Process mapping tool and created a current state, and future state map. We found 11 opportunities to reach the future state VSM with a 90 day execution plan. One of those opportunities was the pacing output from the bottle necks (two machines working in parallel) so the workload would be more balanced. This enabled the following steps could focus on production and not on moving big batches of product to the next process.

By reaching the future state Process map, the results in the production step (after the bottle necks) increased their utilization from 32% to over 85%.

The product variation was achieved at 3.5%

AskLDI Case Studies – Manufacturing Sector Medical Equipment

This community owned non-profit system was having problems delivering support to the elderly people in their care. The elderly lived in their own homes and received a visit from a Nurse to provide medical, food, cleaning, etc. Typically a nurse was spending 2 hours out of 5 in their car driving around to their patients. They were stressing to get to them all and had very little time for every individual person.

 

My Team (I am a Certified Practitioner) was tasked with reducing the travel time the nurses took, and increase the value delivered to the patients, by ensuring enough time for face-to-face activities.  We were also tasked to improve the service and satisfaction for the patient and their families.

 

We used a Team of nurses and trained them in tools and methodologies that were learned thru the Get Certified Institute. We used the PDCA approach as well as problem solving techniques.

We were also given the directives that no head count increases was allowed, and all current health care standards had to be met or exceeded.

We out lined the current state to see where all the patients lived. The different nurse teams were identified with different colors.  We then put a colored pin for every patient corresponding to the Nurse Team color. We grouped and consolidated nurse groups whick meant less travel.

We visited with all patients to enable the change in nurses for them and promised a higher level of service.

The Nurse reduced their need cars since the distance between every patient was much shorter. Every nurse could now have an extra 20 minute personal time with every patient to ensure Face-to-Face time increased.

AskLDI Case Studies – Health Care Region Elderly Care

This community owned non-profit system was having problems delivering support to the elderly people in their care. The elderly lived in their own homes and received a visit from a Nurse to provide medical, food, cleaning, etc. Typically a nurse was spending 2 hours out of 5 in their car driving around to their patients. They were stressing to get to them all and had very little time for every individual person.

 

My Team (I am a Certified Practitioner) was tasked with reducing the travel time the nurses took, and increase the value delivered to the patients, by ensuring enough time for face-to-face activities.  We were also tasked to improve the service and satisfaction for the patient and their families.

 

We used a Team of nurses and trained them in tools and methodologies that were learned thru the Get Certified Institute. We used the PDCA approach as well as problem solving techniques.

We were also given the directives that no head count increases was allowed, and all current health care standards had to be met or exceeded.

We out lined the current state to see where all the patients lived. The different nurse teams were identified with different colors.  We then put a colored pin for every patient corresponding to the Nurse Team color. We grouped and consolidated nurse groups whick meant less travel.

We visited with all patients to enable the change in nurses for them and promised a higher level of service.

The Nurse reduced their need cars since the distance between every patient was much shorter. Every nurse could now have an extra 20 minute personal time with every patient to ensure Face-to-Face time increased.

AskLDI Case Studies – Health care industry Surgery Supplies

We are a $60 million Food Production business company and our plant that produces meat packed for consumers.

 

The OEE (Overall Equipment Effectiveness) analysis showed us that changeover of a line was limiting our ability to produce the number of variants we needed. The changeover time was too long and the variation between operators around 80%.

 

Using the SMED process, our team (who now are Practitioner Certified) worked with the team of operators and followed the SMED process. We used the 8 step approach to make sure we didn’t miss anything and found the move internal to external to be very effective, as an example.

 

We used a Team Board to visualize our work and it helped us to stay on track. We had our Management visiting every morning to get support and to allow them to be informed. They helped us with the Team Letter and to set up the follow up as well.

 

Every step was followed even if it was hard to make sure everything got done and it paid off in the end. We have sustained the implementation well.

 

After completion of the action plans, the machine changeover for the chosen changeover type was reduced with 79% and the variation was +/- 5%. We saved EUR 390000 annually. We are very proud of the outcome.

AskLDI Case Studies – Food Production SMED

OFE is a Performance Indicator that is meant to put the focus of improvement activities on flow of material. With flow of material, we mean flow of products from incoming raw material to shipment of billable products. Focus on flow will lead to an improvement of business targets like:

  •      Improved On Time Delivery
  •      Decreased inventory days of supply
  •      Return on Sales/EBITDA
  •      Return on Net Assets, RONA

These business KPI’s are the result of the processes and can only be reached by reduction of losses.

Background

Historically businesses have focused on Overall Equipment Effectiveness (OEE and more about OEE later) as a Performance indicator that has a big impact on the business. In part that is correct, however, it has led to an unhealthy focus to improve OEE. It’s unhealthy in the way that companies have targeted set up time as one big and easy to attack loss, that has led to bigger batches. Bigger batches of products that sit in the house too long and in some cases, are finally obsolete and causes a cost when scrapped.

Running a business where machines are working in a flow to deliver the products means synchronization of the products must take precedence and the OEE focus disrupts that thought process. The disruption comes from the fact that running a machine with OEE focus makes you chose products that shouldn’t run now and batch size bigger than the customer need. Running a bigger batch, putting several customer orders together or adding a safety stock to the batch, is reducing the number of setups which gives you more time to produce and your OEE will increase. Doing that also means that you are producing products you can’t sell right now and that will lead to high inventory, low On-Time Delivery, and a lower financial result.

Definition of Overall Equipment Effectiveness

OEE=Produced parts of correct quality/Theoretical number possible.

A simple way to say this is; If you plan to run for 10 hours and your technical run rate (as fast as the machine can run) is 100 pcs/hour you should have 1000 pcs. If you, for example, have 650 pcs of the correct quality you have OEE=650/1000 =65%. There are many reasons why you lost 350 pcs during that time. The reasons are called losses. A loss is basically the difference between the perfect ideal state and reality. Examples of losses are; Set-up time, shortstop, breakdown, defects, speed loss etc. If you reduce a loss you will gain time in the machine and produce more parts or the time can be used for other things like setting up to a new order line. This is driven by the actual business need. Do you need more volume or do you need to run more exact to customer demand? All business wants both however at a certain point one is more important than the other.

What will an OFE focus lead to

A focus on OFE leads to a combination of OEE and planning for the customer need.

Definition of OFE

OFE=OEE*GPF

Good Production Factor is defined as the products you produce that can be sold within a defined time frame. The time frame is set by a good business standard for the respective industry you are in. GPF can be and should be, changed over time to create a base for continuous improvement.

Good Production Factor – GPF

For example, if your industry standard says that product should be sold within 30 days of completed operation, you can evaluate the percentage number of products that were sold within the time frame.

Example calculation

For a given machine the OEE is 65% and 50% of the products produced are sold within the time frame. OFE calculation gives OFE=OEE*GPF OFE=0.65*0.50 OFE=0,325 =32.5%

If we would reduce the batch size and do an additional set-up we will lose in OEE, however, we might sell a higher amount of product produced. In this example increased set up reduces OEE with 5% units but gives you a chance to run another order line and increases GPF with 20% units. This is just an example and reality is different.

OFE=0.60*0.7=0.42 OFE=42%

This means that we carry less inventory, deliver more order lines. It costs in OEE but if we still can deliver the volume and don’t have to hire more people to do that, there’s no real cost to it.

A higher OEE can lead to a better OFE as well if the GPF is constant.

If set-up time is reduced by actual improvements to the standard and the time saved is used for more setups to allow more orderliness through it will potentially keep OEE at the same level while improving the GPF. If you reduce other losses like shortstops, breakdowns etc. and OEE goes up a higher volume can be produced and the OFE will be better as well.

If the focus on OFE can be done over the whole production line the real output improvements can be tracked.

 

Johan Majlov

CEO, Lean Dimensions International. 2010-01-05

johan@askldi.com

 

Overall Flow Effectiveness – OFE

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To find out more on the culture of 5S, watch the video .

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