Generative Learning and Event Focus

Imperial Sugar Explosion

2008 Explosion at Imperial Sugar in Port Wentworth, GA

Quoted in Making Common Sense Common Practice: Models for Manufacturing Excellence:

So long as they are focused on events, they are doomed to reactiveness. Generative learning cannot be sustained in an organization where event thinking predominates.

—Peter Senge

The Greatest Virtues

Bust of AristotleQuoted in chapter 4 of The Science of Success:

The greatest virtues are those which are most useful to other persons.

Aristotle

Predestruction Authorization Form

Good Choice, Bad ChoiceQuoted in Making Common Sense Common Practice: Models for Manufacturing Excellence:

Predestruction Authorization

I, (insert name), do hereby authorize premature destruction of the equipment being repaired under Work Order No. (insert number), because I have not allowed adequate time for the performance of certain maintenance and/or startup and commissioning tasks (insert task numbers). I understand that not doing these tasks is likely to reduce the life of this equipment and result in its premature failure. I also understand that it may also increase the overall maintenance costs and reduce the quality of the product being produced.

___________________
Signature

___________________
Title

In my opinion, the inclusion of the words “likely to” and “may” make this authorization too soft and squishy. However, it is a problem easily remedied for application in your facility.

Nevertheless, the creation and use of this form is rather ingenious. I can’t think of many operations supervisors who would sign.

Why Your Unit Production Costs Are Too High

Minimum and Total Cost of ProductionThere is an absolute minimum cost associated with any unit. This cost is equal to the per-unit sum of:

  • labor costs with zero wasted time
  • material costs with zero scrap, rework, or recycle
  • energy costs is the most efficient available technology
  • maintenance costs associated with proper preventive maintenance, lubrication, and appropriate scheduled replacements of wear items

Fixed costs (overhead) is not considered for this analysis: only variable costs.

Your total unit cost is equal to the minimum cost plus all associated waste:

  • design problems that cause downtime, excessive maintenance, or are less efficient that they could be in terms of labor, energy, and material required
  • purchasing problems such as excessive MRO inventory, or attempts to reduce costs by buying inferior parts and materials
  • storage problems such as storing parts outdoors that cause infant mortality
  • installation problems such as not using proper tensioning procedures or inadequate alignment tolerances that cause premature equipment failure
  • operation problems such as running equipment outside its designed context
  • maintenance problems such as too much maintenance, too little maintenance, or inadequate attention to detail

Overall Equipment Effectiveness (OEE) and Other Operations Metrics

Overall Equipment Effectiveness: Uptime, Quality, SpeedIf a manufacturing facility has immature processes and systems, one tends to see a lot of emphasis on total production or equipment uptime. More mature facilities will have a broader perspective including safety, reliability, quality, etc. along with production.

One best-practice metric for manufacturing lines is Overall Equipment Effectiveness (OEE), which is the product of

  • availability: uptime within the line’s control,
  • quality: percent good product, and
  • production rate as a percentage of ideal (or best proven) rate.

One advantage (depending on your perspective) of OEE is that problems are tough to hide. You can’t slow the machine down to improve uptime and expect to get away with it. You can’t slack on quality in order to improve rates. Any production problem will ultimately show up in OEE numbers.

OEE and Other Operating Metrics

There are many variations on operations metrics, but if you have the capability to measure OEE, you can learn from looking at other factors as well.

OEE can be seen in the context of many operational metrics in the diagram below. Definitions follow.

Operations Metrics: Utilization, OEE, Quality, Rate, Availability

  • Asset Utilization: % of ideal operating rate achieved. Would typically be used by business management, not operators, due to effect of market demand, which is mostly outside of their control.
  • OEE: asset utilization plus market losses. By adding market losses back into utilization, certain forces beyond the control of operators and maintenance employees are backed out. Therefore, OEE will be meaningful to a wide variety of operations, maintenance, and planning employees.
  • Quality Utilization: OEE plus changeover losses. Backing out changeover losses yields a metrics that considers downtime, production rate losses, and quality losses. Since retooling and changeovers are not considered, quality utilization is a measure of steady-state operations efficiency. If there are frequent changeovers, this will not impact quality utilization.
  • Potential Rate Utilization: Quality utilization plus quality losses. Backing out quality losses measures only downtime and production rate losses. This metric has limited application, but might be used if systems to measure quality defects are not in place.
  • Asset Availability: Potential rate utilization plus production rate losses. By subtracting only downtime (both scheduled and unscheduled), asset availability shows how much the equipment was available for production. This metric is commonly used as a measure of reliability.

Steps to Measure OEE

  1. Select system boundaries. Managers need to clearly what lies within the responsibility of their areas.
  2. Define the output. For the sake of calculating OEE, inputs do not need to be known. Therefore, wasted energy, materials, and labor do not factor into OEE. If there are multiple outputs that can not be consolidated, then there will be more than one OEE number.
  3. Decide on loss subcategories. There are always three categories: downtime, rate reductions, and quality defects. In the example below, downtime is split into changeover time, scheduled downtime, and unscheduled downtime. Process rate and quality issues are not subdivided.  Depending upon the situation, management might want to split the “due to”s differently. Losses of any kind might be allocated to internal or external causes. Scheduled operator breaks might get its own category. It’s up to the management team to decide what is most useful and informative.
  4. Record losses. Record and track the data.
  5. Calculate metrics. As the data begins coming in, compile operational metrics on a daily, weekly, monthly, or other time basis.
  6. Benchmark. A world-class facility is supposed to be around 95% OEE. Where do your assets stack up?
  7. Improve. This is the most important step. Use the data to create a Pareto chart of operational losses and fix the problems.

Example Calculation

Widget, Inc.’s B line produced 1274 widgets in one day. Due to a lack of demand B line was only scheduled for one 12-hour shift. A lot of 75 widgets was found to be defective. Ideally, 200 widgets per hour are produced.

The shift log shows that 2.55 hours were down for scheduled breaks and a planned repair. 45 minutes down was caused by an unexpected actuator jam. 1.12 hours were used to change the size of the widgets being produced.

In the following table standard Excel cell formats are used: Standard Input Cell Format for input cells and Standard Output Cell Format for output cells. Calculated values are explained below.

Example Operations Metrics Calculations: Utilization, OEE, Availability

Initial Calculations

  •  Actual Production Rate = (Total Units Produced) / (Running Hours)
  • Process Rate Loss = (Ideal – Actual Production Rates) / (Ideal Production Rate)
  • Quality Losses = (Defective Units Produced) / (Total Units Produced)
  • Nonrunning Hours = Sum of Downtime Losses
  • Demand Hours = 24 – (No Demand Downtime)
  • Running Hours = 24 – (Nonrunning Hours)

Calculated Losses

  • Downtime Losses are calculated as hours down divided by the relevant time period, which is either 24 hours or Demand Hours.
  • Rate and Quality Losses are equal to the given percentage times running hours divided by the relevant time period.

Calculated Operations Metrics

Operations metrics are calculated as described above using the given numbers.

Plotting Losses

The losses in the example can also be plotted to show the relative impact of each loss type. A waterfall chart based on both 24 hours and demand hours would look like this:

Example Production Losses

Challenges in Measuring OEE

  1. Recordkeeping. OEE requires that all losses be recorded and correctly allocated. Depending on the complexity of the process, automated systems can help, but employees may need some convincing that correctly allocated losses will not simply become a stick to beat them with. The emphasis has to be on improving, not on placing blame. Once a system is in place, operators must be accountable for complete and accurate records.
  2. Subdividing Categories. Too many loss subcategories creates confusion. Too few subcategories makes data interpretation difficult. Dividing the loss types into categories should be done based on need.
  3. Analysis Not Performed. Data collection is a means, not an end. If the data is not used to set priorities and drive decisions, then it is wasted effort.

First Solve the Obvious Problems

This figure shows one strategy for improving operations and maintenance reliability: first, solve obvious problems, then proceed to standardization, and lastly look to continuous improvement methods.

Journey to Six Sigma: Fix Problems, Standardize Procedures, Perfect Processes

Ordering improvements in this manner has several advantages:

  1. Credibility is gained for the efforts in the eyes of operators and mechanics, who are then more likely to participate and support further improvement efforts.
  2. Standardization of tasks in the form of procedures institutionalizes best practices and spreads knowledge. Henry Ford’s take on standardization is the one to adopt here.
  3. You can’t improve a procedure if the procedure is not followed. Once procedures are in place and respected as helpful and informative, they can be systematically improved.

One method I’ve seen employed successfully is after a morning safety meeting, the supervisor hands a procedure to a millwright to read aloud. Then the supervisor asks “what’s missing?” As millwrights give feedback about the procedure, the supervisor writes it down and passes it along to the planners. The planner then adds missing steps and specifications and updates the plan in the system.

The Back of the Napkin by Dan Roam

The Back of the Napkin by Dan RoamBook Review: The Back of the Napkin (Expanded Edition)

One of the newer books out there on visual communication is Dan Roam’s The Back of the Napkin. This is a reader-friendly and un-intimidating book that makes a good introduction to drawing for the purpose of communicating and selling ideas.

Roam presents a systematic framework for approaching complicated problems with simple figures and drawings in several ways and then combines them into a large codex.

The codex consists of two dimensions: the six ways of seeing, based on the six types of problems, and five characteristics of the drawing.

The Six Ways of Seeing

  1. Who/what problems and questions are best illustrated through portraits.
  2. How much problems and questions are best illustrated through charts. This is where most communication happens in business. While it is a perfectly valid tool, it is often overemphasized.
  3. Where problems and questions are best illustrated through maps.
  4. When problems and questions are best illustrated through timelines.
  5. How problems and questions are best illustrated through flowcharts.
  6. Why problems and questions are best illustrated through multi-variable plots. These plots are more complicated than the other drawings and might take more practice for the average user than the book provides. However, the book makes for a good starting point.

S.Q.V.I.D.: Picture Characteristics

  • S: Simple vs. Elaborate. For any of the above problems, a quick and bare picture can be drawn. Also, we could draw a picture rich in detail.
  • Q: Quality vs. Quantity. The picture could emphasize the subjective (quality) or objective (quantifiable, numerical) nature of the subject.
  • V: Vision vs. Execution. The picture could be of the end state (vision) or of the means of achieving the vision (execution).
  • I: Individual vs. Comparison. The picture could be of a standalone person or object, or it could be of the subject and other people and objects with differing characteristics.
  • D: Delta (change) vs. Status Quo. The picture could be of the change expected, or of the subject as it is.

Putting it Together

Most of the frameworks can be combined with most of the picture characteristics. (An exception is qualitative representation of a “how much” problem. It just doesn’t work.)

Generally, you’ll use the codex because you have a problem, so that’s the place to start. Pick which kind of problem it is, then try to draw a picture of it using circles, lines, words, and other simple shapes.

If you have difficulty, you refer to the S.Q.V.I.D. model to generate ideas.

The book contains detailed examples of the process, and is well worth a look. As a sort of “Visual Problem Solving for Dummies” book it will be most useful to people unacquainted with the subject. But if the exercises are performed and the content absorbed, the reader will not be a “dummy” on the subject for long.

Safety News: Man Beheaded in Wood Chipper

Martin Lara, Work-Related FatalityA man died yesterday morning in a work-related accident. Martin Lara, a tree trimmer, got entangled by a rope that was in some branches that were thrown into a wood chipper.

The full story is here.

Lara’s company, Bushwackers, had been hired to clear brush from a rural home outside of Nevada City when the line became wrapped around the professional landscaper’s neck.

The rope was attached to some wood and was dragged by the chipper, beheading him, CBS Sacramento reported.

His body was pulled towards the cone of the wood chipper, but a colleague stopped the machine before his body was dragged inside the rotors.

Here’s is an interesting reader comment:

As a supervisor in a tree service, I would like to know why the rope was still in the brush he chipping?! Before ANY chipping is done my guys must remove any ropes or tools or anything that might make the job more hazardous! There are enough dangers in this job, use your head and eliminate as many of those as possible!

—troy b, grand island, NE. USA, 13/1/2012 18:59

We don’t know what was going through Mr. Lara’s head. Was he rushing to get the job done fast? Was he distracted or frustrated thinking about something else? Was he complacent because he had done similar jobs a thousand times? Was he fatigued from the hard labor involved?

If you were a failure analyst or safety specialist, how would you approach the problem? How would you run your investigation? What questions would you ask the crew? What would you look for in company safety records?

Weekend Reading: Reliability & Training

Miscellaneous Classic Books (Weekend Reading)From Kepner-Tregoe:

Beyond Training: How to re-order the brain to achieve remarkable result

From Management Craft:

Meaning: The “wolf” of control in trendy sheep’s clothing? #leadership [It isn't clear from the title, but the link is contrarian advice NOT to try to make work meaningful for subordinates. H/T Rooted in Prosperity]

From Wikipedia:

Reliability engineering

Burn-in

Human reliability [See also: Human Factors Analysis and Classification System]

From VitalSmarts:

How to Eliminate Sarcasm [Unlike much of the web, many of the comments demonstrate great integrity and humility. Apparently this newsletter has attracted a quality following.]

From Rooted in Prosperity:

Ann Zerkle: What’s the Market Solution? ["There ought to be a law?" Maybe that isn't always the best way to get what you want.]

From Machinery Lubrication:

When is It Hot Enough for a Synthetic? [Despite the title, this article is a perfect example of the importance of "Asking the Right Question." Rather than "an answer," it provides "the right questions."]

You Don’t Do Things Right Once in a While

Good Choice, Bad ChoiceQuoted in Making Common Sense Common Practice: Models for Manufacturing Excellence:

You don’t do things right once in a while, you do them right all the time.

Vince Lombardi