By Eddy Azad
Continuous improvement is a journey, not a destination. It is more than a set of steps to follow - it is a culture that, when embraced by the entire company, results in significant business value. Effective use of programs such as lean manufacturing, Six Sigma, and OEE (overall equipment efficiency) yields results that are too valuable to ignore. But where do you start? Here we have compiled our "Nine Habits of Highly Effective Continuous Improvement Teams" to help you get started.
1. Don’t fall into the “high efficiencies” trap
This may sound contrary to the popular opinion, but you may be stifling your continuous improvement team with the metrics you are using. Businesses inherently want to see high efficiency numbers reported for their annual reports; however, using these same metrics on the factory floor may be hiding areas for improvement. Oftentimes these metrics do not consider availability losses such as changeover, sanitation, or preventative maintenance in the calculation. Instead, they are considered an unavoidable but necessary cost of doing business. In order to improve efficiency you have to measure it correctly without avoiding the factors that would make the numbers look bad! You have to adopt a methodology that provides unbiased, consistent, and real measurement. For example, you could consider OEE as a proven metric for productivity improvement: it measures inefficiencies related not only to equipment but also consumables, infrastructure, and personnel in one comprehensive metric.
2. Assemble cross-functional improvement teams
There is no doubt that operations, engineering, production, quality assurance or maintenance departments can each assemble a continuous improvement team that produces results. However, manufacturers receive exponentially more value when the continuous improvement team members are from cross-functional disciplines. These teams meet regularly to discuss issues and opportunities, prioritize them, and recommend solutions. This way the members of the team agree on the solutions to the issues before they are implemented, thereby minimizing any negative effects that the change might have on another department. This is a missing ingredient in many continuous improvement programs today.
3. Define focused and achievable goals
You do not have to tackle the whole factory at once. You can begin with those areas, systems, lines, or disciplines that will result in the most dramatic improvement in overall productivity. You can do this by evaluating ways to improve the constraint or ways to reduce production losses on the most profitable products.
It is paramount to have a clear understanding of the current performance level so you can set challenging, yet realistic, improvement goals. Consider a system that is currently running at 30 percent OEE. Management wants to increase the OEE, so they institute a 10 percentage-point improvement goal for the year. It must be understood that improving OEE from 30 to 40 percent is the equivalent of asking production to increase output by one-third in a year. Depending on the industry, state of current assets, resources and infrastructure, this may not be reasonable in that time frame. A better way is to set specific goals for each of the OEE Components (availability, performance, and quality) based on the starting point. For example, the manufacturer above may consider improving Availability by 5 points from 50 percent, performance by 3 from 66 percent, and quality by 0.5 from 97 percent. Achieving these goals would improve OEE by 5.0 percent and provide the ability to either increase the output, or reduce production time, by over 15.5 percent. While challenging, it’s an achievable goal that would result in a significant return on investment.
4. Use automated KPI-based metrics
Providing your line-of-business managers and operators with real-time and accurate information about performance is crucial to their effectiveness. Consider the value of a 1 OEE percentage-point improvement to your company. Many manufacturers using real-time performance management software have improved OEE consistently and significantly by collecting, analyzing, and reporting the right KPIs. Armed with the right information at the right time, team members can effectively respond to events that affect performance, and eliminate the root causes of inefficiency.
Using a manual production event monitoring system (e.g., clip-board and stopwatch) allows you to only capture some of your production loss events. Manufacturers that have migrated to automated systems have discovered that there were many more loss events than previously captured by their manual techniques. The significantly enhanced and consistent information about the various production loss events will lead to the identification of areas for improvement. By analyzing the root causes of these loss events, you will find effective ways to correct and minimize them.
One of the most overlooked areas for improvements highlighted by the OEE metric is availability losses. This is an area that yields rapid rewards for many manufacturers through systematic review of the automated event monitoring and analysis. Some ripe-for-the-picking opportunities include operator training, changeovers, sanitation, preventative maintenance, and starvation due to bad planning.
5. Selectively involve operators in the data collection
The line operators have the firsthand look at what is occurring on their equipment and can provide valuable insight in identifying and reporting efficiency losses. However, their main task is operating the line rather than collecting detailed performance information (i.e., recording/acknowledging/categorizing events and performing root-cause analysis) during production. Continuous improvement teams must have the ability to non-intrusively ask their operators for the vital information that will help to improve or eliminate production losses. This is what is meant by “selective” involvement. Typical process automation alarm systems are often ignored, but a system that requires minimal but effective involvement will be more readily accepted and used.
When you use a real-time performance management system that selectively involves the operator, it shows them you are serious about your continuous improvement program and that you value the positive role the operators may play in its success. Many manufacturers have realized significant percentage-point improvements for this very reason.
6. Root cause analysis of the production losses
Your critical production system is down. Do you know the real reason? Is it caused by an event upstream or downstream? Is it due to a machine failure, or perhaps caused by running out of needed parts/supplies? To be able to analyze and understand the root causes of your production losses, your continuous improvement team must have timely access to accurate reports and analysis that are typically available only from a real-time performance management system. The in-depth analysis and the availability of various reports make it possible to both quickly and effectively identify the root causes of loss events, and help devise solutions to eliminate them.
7. Recommend and implement changes that deliver sustainable production improvement
You must use cross-functional teams to analyze the root causes of production losses, prioritize the issues to be addressed, and establish consensus before implementing changes in order to improve your chances of success. But how do you do this? Some companies have weekly meetings for their cross-functional improvement teams. During the week, they enter the issues and suggestions into a database, which are then reviewed during the weekly meeting. Consensus is achieved before changes are implemented. Others have developed intranet sites where they record the issues that they would like the continuous improvement team to address. These methods are very effective because they keep the teams focused on those priority issues that will yield the most valuable results.
Once changes are made, it is important to measure the performance continually to confirm that the change resulted in a sustainable improvement. Remember, continuous improvement effort is just that: continuous.
8. Consider incentive programs to increase motivation
Your people are the key to your improvement speed. By using proven methods, your continuous improvement program will yield significant results for your company. In many instances, it is advisable to establish metrics-based incentive programs that will help motivate your employees and team members to achieve measurable and sustainable performance improvement. For example, companies have told Parsec that their operators were motivated by a bonus for achieving a significant reduction in a routine availability loss. We regularly witness significant reduction in productivity losses when the operators embrace a productivity-centric culture that rewards them for their efforts to improve their performance. It’s nothing short of amazing! You can be creative with the incentives; they do not always have to be monetary. Some companies hold parties or have their managers cook lunch for them, or have a team outing when they achieve their goals. Get to know what would motivate your team. You may be surprised.
9. Benchmark with others in your industry
What are the efficiency metrics for others in your industry? How do you compare to world class OEE in your industry? How many companies are running at world class? What are truly world-class companies doing to achieve and maintain their success? Is the textbook world class OEE of 85 percent achievable in your industry? For example, textbook OEE may be achievable for the food and beverage industry, but it may be unreasonable for the pharmaceutical industry, due to its complex regulations and constraints. It is important to know where you stand. For example, if you are running in a track race and you improve your time from a previous personal best of 5.5 minutes per mile to five minutes you have done very well. But how well have you really done if everyone else in the race is running a sub 4-minute mile? Parsec offers annual industry specific symposiums that allow executives to present their successes, discuss their continuous improvement journeys, and participate in roundtable discussions about relevant industry topics. The attendees have the opportunity to network with each other and take away practical ideas that can readily be employed. They have commented how they have gone from skeptics to believers in real-time performance management and metrics such as OEE, and how valuable it has been to learn about what others in the industry were doing. Attending this type of benchmarking event for your industry is of great value.
By applying these nine habits of highly effective continuous improvement teams, you will lay a solid foundation for success. Put together a cross-functional team, use accurate, real-time performance information to support these teams, monitor, implement, and control your corrective solutions, and you will take your continuous improvement program to new heights…guaranteed!
Eddy Azad is the president and founder of Parsec Automation Corp. Azad has been involved in various aspects of manufacturing since the early 1980s. Since founding Parsec in 1988, he has been busy with designing productivity solutions, consulting and guiding Parsec’s development of its real-time performance management suite, TrakSYS™. Azad holds a BS in Mechanical Engineering from University of Missouri – Rolla, and an MS in Controls Engineering from Stanford University.
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