Spelling Lean O-E-E: The Next Day

This article is the second in a series on the marriage of lean and overall equipment effectiveness. Read Part 1: Lean and OEE Partner to Reduce Waste

Brian Kenny, the plant manager of Paulco Inc., had a good problem. As with most opportunities - and thunderstorms - this one came up suddenly and intensely. Paulco had a great opportunity at a sales upside of 15 percent this quarter if they could deliver quickly. The increased shipments were to start within a month.

There were only three little problems standing in the way:

1. He was maxed out on equipment output.

2. There was no time to buy equipment.

3. There was no time to hire and train new people.

Other than that, he was in great shape.

Brian consulted his plant lean principles expert, Linda Amoroso, on how to proceed.

Figure 1. Equipment priority diagram.

"OK, this is a tall challenge," started Linda, "but I'm sure we can find a way to meet the numbers. I just need to know two things and then I'll get right on it."

"Great! What two things?" asked Brian.

"Which tool set is holding us back and where is the performance waste?" she said.

"All right," said Brian. "Two answers: I don't know, and what in the world do you mean by 'performance waste'?"

"You know, waste related to the overall equipment effectiveness categories of availability, performance and quality," replied Linda. "If we significantly improve the OEE of critical tool sets by removing waste, we can significantly increase throughput for the whole site."

"Well, we don't really know any of that," answered Brian. "But there is no waste. We are maxed out, obviously! But to be sure, talk to our production, engineering and maintenance folks."

Linda went to see the floor leaders and then returned later that day to see Brian.

"Well, do you have enough answers on the problem equipment to get going?" spouted Brian.

"I've got answers, all right. Three of them," returned Linda. "One thinks the main problem is the Mollynizer XLs, one thinks it's the Finntronics and one thinks it's the Nickrogenics! And the capacity model says we have the theoretical capacity on all of those. We must be losing our actual capacity to unplanned waste."

"So, which tool set is the real problem?" asked Brian. "And, what are its wastes - those two things you mentioned before?"

"Well, the numbers and opinions aren't telling us enough," said Linda. "We need to see, touch and record . . . first hand. If we conduct a floor diagnostic, we can determine the main problem tool set and its issues. We must combine the power of OEE and its equipment focus with the power of lean and its eye on waste reduction."

Linda and her team conducted a continuous floor diagnostic over the next several days focusing on the three critical tool sets and their utilization, work-in-process (WIP) levels and performance time losses.

Figure 2. Mollynizer Performance Summary.  Figure 3. Finntronics Performance Summary.

Linda looked over the first data summaries from her team and plotted them on her whiteboard (Figure 1). She determined that there were two types of bottlenecks:

1. "Glass" bottlenecks are easy to break (those with high WIP but low actual utilization). These usually can be fixed through quick projects related to resource allocation, procedure, setup reduction or focused improvement. The Mollynizer fit this category.
2. "Iron" bottlenecks, on the other hand, featured high WIP but also high utilization. Thus, they were running hard and still accumulating WIP. These required a formal and comprehensive program, but are still breakable with the right focus. The Finntronics matched this description.

Based on the chart, Linda focused on the Mollynizer and Finntronics data and analyzed the detailed data of the diagnostic to determine which OEE area - availability, performance or quality - and which components of these factors held the biggest potential gains.

She burst into Brian's office. "I've got it! I've got it!"

"What have you got?" Brian stammered. "Is it contagious?"

"No!" replied Linda. "I've got the 15 percent!"

"What's the upside? How? Where?" replied Brian.

"Here," she beamed, "let me show you all of this glorious data. No? Are you sure? OK, well, let me summarize the findings then."

Linda showed the diagnostic data summary from the Mollynizer (Figure 2) and Finntronics (Figure 3).

"See, for the Mollynizer, the left chart, most of the time is wasted due to idleness - 28 percent! Our data shows that 17 percent of the total time, people are on break or lunch and the machines are stopped."

"Linda, if you think I'm going to cut out lunch times . . ." remarked Brian.

"No, not cut out lunch for the people, just for the machines," retorted Linda. "They don't eat! The Mollynizer is actually a simple machine. I know a lot of people started out on it and are crossed-trained. Now, these people have migrated to various areas. So, during the Mollynizer break periods, import in several people from other areas that aren't at critical tool sets, and then the six Mollynizers are always covered."

"Great," said Brian. "Then I've got my 15 percent?" "

"Well, no. Then the real work begins on the iron bottleneck," said Linda. "Notice on this Finntronics graph (top right) that there is a different problem - availability. Our utilization is already very high, so we are dealing with smaller grains of rice here. The big issues are availability waste, followed by speed waste. Both of these are heavily influenced by maintenance."

"I see it," said Brian. "I guess it's time to take a fresh look at availability and speed loss. I suppose your numbers tell us a story on these?"

"I suppose they do," grinned Linda.

Read Part 3: Lean O-E-E: The Quest for Uptime

Mike Verdin is a principal with Aveus, a global strategy and operational change firm located in St. Paul, Minn. Contact him at 480-231-3368 or at mverdin@aveus.com. To learn more, visit www.aveus.com.