Sunday, June 26, 2011

Bottom-part of Capital Investment - What to optimise

Companies are used to grow by their expanding sales turnover and new ventures. Its require to invest on capital equipments to achieve the higher sales goal but unfortunately, they have comparatively small capital budget with contrast of one year vision and have lack of vision in contrast of 5/7 years from now. This allows the organization not to rush research on what the best or most appropriate equipment they need.

So, most of the investments are not well optimized. The difference between well optimized investment and Bull purchase investment is proactive versus reactive capital investment plans.
Let me explain my words,

Suppose, I need to purchase a mobile phone. Now I can opt for two options,

1.    The shortest way is, I can carry a bucks of money and enter in to a mobile shop. Can ask for a mobile with in the budget I decided for and happily came out with one. What I would like to call BULL PURCHASING.
2.    Another option is little bit lengthy, where first I will  -
a)    Define the area of uses .(example :mobile projector is require for me or not, document viewer is require or not etc.)
b)    Decide the require features suitable for my uses I am looking for right now
c)    Decide the life span I am looking for (To go for another mobile )
d)    Features I expect / require over the life span
e)    Easy scope of up gradation during the life span to meet my changing need.
f)    Select few models
g)    Information on Maintainability, and prone to fail (based upon past data / user feedback ) and prompt service
h)    Finalize the best value for money
AND  Go to shop and purchase the decided one within the budget with affordable tolerance limit

I believe, most of us follow this proactive model when we have to purchase a mobile for own use BUT,

unfortunately when it comes to capital investment for a company, we follow the 1st model with miserably balance requirement with product quality and capacity. On a long run again we need to invest to increase the capacity.
And putting all together – it’s a big mess with untidy shop-floor with restricted Man- material flow, higher ownership cost for individual installation cost, individual maintenance cost, Total breakdown cost (TDC ) etc.
 For solving the issue, How it will be if
-  A proper future layout plan including equipment and  Man- material flow will put on paper. It will show the constrains to achieve optimum balanced flow with reduced MUDA.
Toss the plan on debate in a fear free environment ( Again, Dictatorship kills Idea and unfortunately, dictator thinks that “It’s the best option” ) and the best solution will come out
-  Stick with the solution and optimise capital investment size in terms of quality and low ownership cost (Bottom of the ICEBERG )  but not only on visible part of investment cost (Tip of the ICEBERG
Realise the investment as it require to meet corporate goal not only to meet current demand.
One difference between organizations that are leading and ones that are lagging in Lean improvement efforts is proactive versus reactive capital investment plans. Putting my above model into business model

(Source curtsy : savemoneywithgates.com )

Tuesday, February 15, 2011

When TPM has chance to meet TITANIC Fate

Now a days, Every industry  wants to implement TPM . BUT , if you believe on statistics, every second attempt of TPM implementation in Europe failed. I believe , not all the companies implement TPM as their survival needs but as an indirect obligation to satisfy their customer. AND so, they have a tendency to retain or go back to old stream to sustain customer's product demand. (As new shoes give trouble for few days before to get easy ! ) So, they are unable to rip the benefits of TPM in full moon as by superficial implementation and finish anywhere in between TPM and present culture.

There are so many contribution factors which lead to failure, The most important points are,
1. On which platform it is planted to grow :  If it is on the environment of dictatorship and non-motivated team, then it surely to be collapsed. In demands a professionally transparent work culture, fairly good motivated team to take the torch and a fear free environment to propagate it.
(please read my earlier post Employee Involvement : What Really Motivates an Employee to perform and Employee Involvement : Long working hour gives poor environment for improvements . It is very common in many of present industrial environment that the defaulter is blamed beside to dig on the failure causes. Finally, man tries to hide the faults to come to the surface and so, potential improvements lies hidden. And a dictatorship leads a potential team to perform at lower level because of none to hear others voice.

2. Leadership and acceptance of leadership – Generally the key change element is installed in middle and so, acceptance level in upstream becomes low. To overcome this we need to hire a consultant who has acceptance level throughout the management tree. Injecting the change element in between the tree is a common fault. The element is generally unable to convince the upper level as the acceptance level is low.

3. Effective accountability and performance measuring system for process as well as individuals – Wrong way of measurement may show a rosy picture which is far from reality. So, the measuring system need to be well planned and well discussed before the implementation. Cause It have very high potential to create job dissatisfaction to data capture and analyzer.
          A strong and effective appraisal makes the environment “ transparent and easy to perform” where everybody have honest chance to show their performance.

4. Wide scope and resources for Design of Experiment (DOE )


5. Inadequate and insufficient resources – Management should show their keen interest to change by extending their prompt support to the team with sufficient budget and manpower. It is quite normal that in initial days the cost goes up as basic restoration comes into picture. Manpower requirement also comes up to avoid messy responsibilities..

6. Detailed road-map with PDCA approach need to be worked out so that to take corrective action on plan as an when require basis. No exception of quick outcome so that people will not get demoralized and over strained, which further may lead to superficial implement. Though it is a cultural change, so it need to be rooted at the deep most level of the system (TPM to be incorporate in management system ) Work content, require time and expected outcome should be well illustrated.

7. No proper in-depth training on tools  so that the require activities and expected outcome to be well demonstrated and well understood.

8. Data capture points and methods are not so reliable to analise. ( it's my personal observation that we put tremendous effort to capture the data but very less effort to analise it.)

9. Basic education level of grass root employee.

. Others are...

1) Less departmental integrity (Low functioning of CFT or no existing at all )
2) Non-effective reward system – Leads less no. of suggestion and demoralization
3) Failure to start with operator-involved maintenance:
4) Inspections get too technical and too complicated too fast:
.... And adding on......

“If you are not sure about the destination then no matter which path you opt for, All will lead you to NO-WHERE. “

Thursday, December 23, 2010

Maintenance Process - Common Points For Improvement

The methodology of TPM  is all about eliminating machine related losses and to use the machine to produce good parts up to its possible design limit and to increase the limit through continuous improvements. 
Maintenance is one of the most critical business function which plays a crucial role in plant output, product quality and product cost. But unfortunately, it is one of the most negligible functions in most of the small and mid-size companies.
Because of Lack of resources, “operate to breakdown” and fix it quickly attitude (Band-Aid maintenance) put the whole department in to reactive mode,  which slowly becomes the part of organization culture. And due to lack of accountability and vision, it is hard to identify or address it.
Generally, in such companies, due to inadequate resources, non-reliable machines, gradually reduced  maintenance technicians,  quick fix maintenance is obvious and unavoidable(Which further becomes the mountainous work to restore it's basic condition). this is common practice to have the PM schedule in record and for record only. 
Quick fix maintenance  triggers frequent future breakdowns, which means, resources are more consumed by breakdowns, considering the budget, resources for PM shrinks, results more preventable failures.
 And the whole team goes in to reactive mode.

As in reactive mode, Employee morale dooms down, stops thinking of innovative ways to be pro-active and come up of backlogs. Finally, either quit or give them up to the situation and dis-engaged , don’t add any further value to improve the process.
Here are few  points to  reduce non-value adding activities from maintenance.

 Common Ways to reduce MUDA from maintenance process:

     1.  Operator reaction time, - Can reduce by Proper knowledge about abnormalities
     2.  Maintenance technician's lead time – Need adequate manpower,
     3. Diagnostic time – Arrange training on machine knowledge
     4.  Search for require tool time – Improve 5S, Try to keep require common tools near to machine and technician to come with special tools,
     5. Don't Leave breakdown solved but unattended – Every breakdown is a learning opportunity. Analyze it for root-cause and either eliminate it if possible or take action to detect it. Every diagnosis consist of other non-value added checking also. Eliminate it for future by making proper FTA .
     6. Off line maintenance – Wherever possible, try to replace the faulty unit rather than to repair it online. 
     7. Generalize the spares -  Same machine from different manufacturer means different spare for same functions. Go for modification to make common spare for all. It will reduce spare carry cost.

Operational Excellence - Go beyond the boundaries

1)  TPM – Make production people responsible for first line maintenance for the machine they use. Educate them to break the barrier. Go for TPM
2) Fix maintenance  strategy – submit the cost model for “operate to breakdown maintenance”, Time base maintenance and condition base maintenance and let all be commonly agreed on maintenance strategy and Then never let in down.
3) Periodical validation of PM points – I have seen few PM models which are static and have no change for a long time. Keep it dynamic. It need to be reviewed after every decided interval for its effectiveness.
4) Learn from breakdowns, Let other to learn – Lesson learning, fault tree analysis Make available. Initiate Kaizen. Make improvement ready for all new coming machines.
5) Alternate source of spare : Go for performance spare for imported or costly spares (In terms of money and lead time )

See you again..