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True Cost of downtime
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Machine Downtime, cost justification information, six sigma, lean manufacturing, total quality management, project management, change management, manufacturing training, quality manual, proccess mapping, OEE

True Downtime Cost (TDC), A Leaner Lean Manufacturing... 

Leaner Lean Manufacturing with TDC

TDC Action Plan - How To Reduce Production Cost

Top Down:

For change to succeed, you must start from the top, down. Start by asking your plant manager or corporate manager to review a copy of this book. Letting the manager know you would like to put together a team to create an action plan best suited for your facilities situation. Also mention you would like the manager’s input and welcome involvement.

Select a Team:

If you are an individual company, select a team size that is right for your particular situation. As it is well known in world class establishments, you want at least a machine operator, a maintenance person and some one from management.

If you are a corporation implementing this action plan, you will need “a reasonable sample” of employees from the companies under you. You should start your plan and team building with one of your companies as test.

Then have a corporate team analyze the process of implementing TDC, the results and refine the SOP. Then you would implement the new action plan on all companies within your corporation.

Set a Goal:

The team’s first assignment is to set a goal that is right for your company. My advice is “it is better to have a goal that is too high, than one that is too low”. Remember to insure solid monetary methods of measuring success as one of your goals.

Also the fact that you are implementing a methodology that will enable you to better monitor monetary value, sets you up for success too. As an example, if your goal was to your two most costly lines and automate True Down Time cost for them, you should see the displayed downtime cost go down, or equipment be down less, indicating a dollar value saved to report to all involved. With goals in place, your can develop a roadmap to profit from TDC knowledge.

Develop a Plan:

Next you need to create a plan to reach your goal. As with any solid plan, it needs a time line and contingencies. Also, don’t forget to “Plan to Plan”, a time to analyze progress, address issue and plan accordingly. What ever level you chose, your plan will be two parts, the first being the TDC implementation plan and the second half being the TDC Utilization plan. Both are equally important to your over all success.

Below I will recommend a plan for minimum implementation and utilization. Below the plan template is an example plan. You can always start out small and let the success be the drive for further implementation throughout your facility.

*      Goal

o   Area of implementation

o   Method of implementation

o   Time to be completed

*      Define technical steps and targets

o   Evaluate area of implementation defined in the goal.

o   Determine steps

o   Place steps in time line template

o   Apply methods of  implementation in accordance with time line

*      Determine roles and resources

o   Request from the different groups, department or individuals, what need be done of them.

o   At the same time, brain storm on methods for your organization to benefit from the TDC knowledge gained by reaching your implementation plan.

*      Once the TDC implementation plan has succeeded, record benchmark base line of TDC, and move on to TDC Utilization plan below.

*      Implement you reaction plan based on the new TDC tools available.

o   This may be as simple as managers making better decisions.

o   Every week or month, survey those involved and reports to assess the current monetary value that has been earned/saved by utilization of the new TDC knowledge.

*      After 3,6 or 12 months, interview all above to summarize report on much how money the TDC knowledge has saved your company.

o   Make this known to all, from the top down.

 

 

Example of a Plan:

*      Goal

o   Area of implementation – One assembly machine

o   Method of implementation – Write program to utilize existing HMI to display TDC, “money saved in last month” and “money saved year to date”.

o   Time to be completed – 1 Month

*      Define technical steps and targets

o   Evaluate area of implementation defined in the goal.

§  Evaluate each TDC cost metric as it relates to assembly machine.

·         Scrap parts cost, start up cost, man-hour cost, etc.

·         Hourly wage of operators, maintenance, QC, management, etc.

·         The TDC per minute arrived at will need re-evaluated at a later date because you will have learned during the first implementation project. (After you are experienced, it is important to stay with the original TDC value calculated, else it loses it’s value as a benchmark tool.)

o   Determine steps

§  Define TDC cost per minute for assembly machine.

§  Define what is to be displayed on HMI for all to see.

§  Request maintenance/engineering add to existing machine program.

§  Define how each plant personnel will use TDC data displayed

·         Operator motivated to reduce scrap, keep the machine running, so all can see the savings.

·         The same will hold true for maintenance. Scheduled downtime that does not conflict with scheduled production will not affect the TDC, and be preferred by maintenance.

·         When cost justifying repairs or improvements, maintenance will use the TDC value for effected area.

·         Management will base their decisions on the TDC, not just man-hours of operators.

·         Overall, the facility will be cost driven, more so  than the typical production driven facility of the past.

·         On all levels above, percentages of improvement or comparison should also be used. This will help when comparing effects of TDC methodology to the bottom line.

§  Educate operators, maintenance, management, etc. on how to use new TDC display.

·         Brain storm with operators and department heads on ways they can change their day to day decision making process based on the new TDC information available to them.

§  Set dates to present progress reports showing the change brought about by the TDC knowledge.

·         1 month after implantation is complete (look for change)

·         2nd month after complete (look for improvements in utilization from previous month)

·         6 months after complete

o   Place steps in time line template

§   1 week, develop plan

§  2nd week, educate all involved

§  3rd week, implement physical changes (modify program)

§  4th week, educate all involved and show physical changes.

o   Apply methods of  implementation in accordance with time line

*      Determine roles and resources

o   Request from the different groups, department or individuals, what need be done of them.

§  Operator will provide typical numbers related to assembly machine.

·         current scrap rate

·         recent down times

·         process details (raw material delivered by forklift operator, etc.

·         Any repeat problems, set up time, breaks, number of shifts ran, etc.

§  Maintenance will provide estimate to have program changed, feasibility study and recommendations.

·         Also provides any additional machine history info.

§  QC provides test procedures and time related to machine, so cost analysis can be down for QC metric.

§  Engineering does the same.

§  Management will provide scheduling and other details about the machine and process.

·         Personnel involvement when the machine goes down, reports, rescheduling, etc.

·         How many people are involved when machine goes down, maintenance, QC, plant manager, etc.

o   At the same time, brain storm on methods for your organization to benefit from the TDC knowledge gained by reaching your implementation plan.

§  As well as better informed decisions, other changes that might be brought about.

§  Set up reward systems, that actually put money back in the pockets of those involved. (It’s all about money, that is our true bottom line)

§  Don’t forget to mention the improvements in process brought about by the knowledge gained while implementing the TDC project.

·         Example, maintenance never realized (or could cost justify) a new plant air compressor until they learned the cost when it goes down is three times what it would cost to replace it with the best on the market.

*      Once the TDC implementation plan has succeeded, record benchmark base line of TDC, and move on to TDC Utilization plan below.

o   Assembly machine cost $15.56 per minute down, $933.60 per hour, $14,937.60 per day (2 shifts normally ran) based on studies above.

o   Last week it was down for 2.5 hours during normally scheduled production.

o   Last month it was down for a total of 8.3 hours

o   In the last year, it was down for 4.5 days (16 hour days for two shift operation.)

Note: The benchmark step is another built in success factor to TDC methodology. By focusing those involved on cost, and displaying it on the machine for all to see, a cost driven social environment will be created. When dollars being lost are seen by all, someone will be held accountable for every minute. The initial bench mark above will only be based on info those involved though important enough to record. not every minute of downtime. If you are using automated data collection system like we are in this example, every minute will be accounted for. Over a years time, the numbers above could be doubled with un reported downtime, a few minute here, a few minute there.

*      Implement you reaction plan based on the new TDC tools available.

o   This may be as simple as managers making better decisions.

o   Every week or month, survey those people involved and the reports to assess the current monetary value that has been earned/saved by utilization of the new TDC knowledge.

*      After 3, 6 or 12 months, interview all above to summarize report on much money the TDC knowledge has saved your company.

o   Make this known to all, from the top down.

Repeat this process with other machines, lines, areas in your facility or with companies in your corporation. The example above is not complete, but enough to get you started on the road to success. Implementing the hardware part of the TDC project is actually the least time consuming. It will take about a couple hours for additional rungs of ladder logic to be written, and HMI program to be modified. I used an Allen Bradley PanelView in this example.

Planning takes a little longer, extracting all the cost metrics from your facility and individuals will be the most time consuming. But these numbers will not change and most of them can be used again on your next TDC project. So the more times you implement this, the less time consuming and costly it becomes./p>

You may choose to use the TDC methodology on even a smaller scale, such as cost justifying a new piece of equipment. In that case, implementation would be just doing the cost analysis using the TDC metrics (cost centers).

Don Fitchett

Feel free to copy and distribute this article in it's entirety as long as you let us know, maintain all credits/ links and it is free.

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