Manufacturers are wasting millions of pounds through ignorance of their shopfloor equipment. Few of them take the trouble to understand how their machinery and equipment behave in practice. As a result, most machinery operates at a poor level of overall efficiency typically as low as 40%.
Many managers believe maximum productivity occurs soon after the plant is commissioned. But this should represent the minimum level of productivity. From then on, all efforts should turn to squeezing more out of the equipment through equipment improvement.
Companies using total quality and just-in-time approaches have long realised the importance of Kaizen continuous improvement and standardisation in driving down costs. Just as lead times can be continually reduced and quality improved, so we should expect our equipment performance to improve rather than degrade over time.
The key to Kaizen is investment in people and training. The problem is that investment in people is hard to put on the balance sheet. But it is only investment in people which will generate consistent, long-term improvement.
The return on this investment will not be made overnight: changing attitudes that have been ingrained for decades takes time and effort. World class companies recognise that it’s going to take five years at least before they can judge such an act of faith as a success.
Most companies prepared to take this risk are those which have been exposed to the environment from where Kaizen originated: Japan, and the Japanese motor industry in particular. But it has to be driven from the top of the organisation. Nothing short of board approval will keep this activity in train.
Equipment improvement incorporates much of what people might already know as total productive maintenance (TPM). TPM simply applies the elimination of waste to the equipment itself. However, in so doing, it demands a fresh view of waste. For example, a company may view long changeovers as productive time, excusing the delay by saying ‘that’s how long it takes’. In contrast, the Japanese will question why it needs to take so long, and go on asking this question to establish the root cause and eliminate what is, to them, nothing other than waste.
Plant breaks down when you least want it to. The less attention it’s had in the meantime, the longer it takes to fix. It also costs a lot more real money through lost production, adversely affecting delivery time and customer relationships.
The answer is simple: look after the machines and ensure that you wring out the maximum productivity from them before you consider investing in new plant. In this way, you double your return because the existing kit is functioning to the best of its ability and any new kit will incorporate all the lessons already learnt. The result is operational consistency and a plant that can if you want or need it to operate at its full installed capacity and to the desired quality of output.
However, reaching this goal calls for sacrifices and a considerable shift in attitudes. Much of what is required is common sense and widely known. It’s just not widely practised.
First to be slaughtered is the ‘I operate, you fix’ mentality still beloved by so many in industry. The brick wall between production and maintenance has to be destroyed.
It is the operators who work with the machinery and it is they who are best placed to know how well it is working. They are also best placed to keep the machines clean and carry out routine service actions, leaving the more complex activities to the skilled experts from the maintenance departments.
Increased ownership among shopfloor employees goes hand in hand with teamwork, flatter organisational structures and managers who lead and coach rather than tell others what they already know they have to do.
Chasing technology to increase output is often the first response, but is risky. When the production director is asked to raise productivity a typical reaction is to put together a justification for capital investment in new high technology.
This response ignores the basic premise that most equipment only achieves 40% of its potential. Rather than look for technology to, say, double current output, the company should first find out if the desired output can be achieved on the current equipment. Only when the economic limit is reached should new plant be considered.
The common sense embedded in work practices which make up equipment improvement, coupled with the benefits released through employee participation, can and does deliver results.
Malcolm Jones is managing director of Productivity Europe, a training consultancy specialising in Japanese working practices.