In today’s difficult economy, with ultra competitive pricing, demands for fast turn times, and the availability of cash and credit severely restricted, companies must do their best to get the most out of what they have, and that includes their people, raw materials, and equipment. A company’s ability to continuously improve could mean the difference between making profits and making painful cuts.

“A Lean enterprise is one that continuously strives to eliminate waste, and waste is anything other than the minimum amount of equipment, materials, parts, space, and workers’ time, which are absolutely essential for adding value to the product.” (Shoichiro Toyoda)

Of special note is the word “equipment.” Many take this to mean the number of pieces of equipment that it takes to add value to a product, but it also means how much time each machine takes and how well the machine functions. To be more succinct, it’s about whether or not equipment is both available and capable of producing what you need, when you need it, at the rates you need, and will yield the quality that you need in order to sell it without having to rework it or scrap it. This is where Total Productive Maintenance, or TPM, comes in.

The term “total productive maintenance” was first used by the Nippondenso Company, which itself was spun off from Toyota in 1949. Now known as the Denso Corporation, Nipponsdenso had begun a plant-wide continuous improvement effort with the theme “productive maintenance with total employee participation.” In 1961, Nippondenso received the Deming Prize, considered Japan’s most prestigious award for quality. In 1971 it received the Distinguished Plant Award (the PM Prize) from the Japan Institute of Plant Maintenance (JIPM).

Seiichi Nakajima, then a vice chairman with JIPM, would become known as the father of TPM because of his tireless efforts to promote “productive maintenance with total employee participation.” He describes TPM as “productive maintenance carried out by all employees through small group activities.” TPM, he says, “is a plant improvement methodology which enables continuous and rapid improvement of the manufacturing process through use of employee involvement, employee empowerment, and closed-loop measurement of results.” (Nakajima, 1989)

The key theme here is that TPM involves all employees and not just those with the word maintenance in their job title.

Six major losses

It’s commonly agreed that there are six major areas or losses associated with equipment. These are:
1.Breakdowns
2.Setups and adjustments
3.Minor stoppages
4.Speed (less than ideal)
5.Rejects
6.Scrap

Breakdowns

It has been shown that between 70 and 80 percent of equipment breakdowns are caused by either poor lubrication or by contamination, which lead to overheating and excessive wear. Both of these conditions are preventable if a proper 5S program was in place.

5S is a critical precursor to effective TPM. 5S involves thorough inspection through cleaning, so if machines are being inspected and cleaned properly, leaking equipment can be repaired before any serious damage is done, and dirt, dust and other foreign contaminants are removed before they work their way into gears, motors and sensitive electronics. Simply put, there’s no excuse for such a high level of breakdowns being caused by heat and contamination, but companies ignore these basic warning signs of impending failure.

It has been estimated that 75 percent of equipment failures can be detected and prevented by trained operators.

Setups and adjustments

It may seem strange to link setups and adjustments with proper maintenance, but not when you consider that effective TPM keeps equipment available and capable. If your equipment is in less than ideal operating condition your operators will have longer set up times and will constantly be making adjustments to keep product within spec.

Minor stoppages

Constantly stopping to inspect printed product is a red flag that your equipment is not capable of doing the job you need it to do. It could be equipment related, or it could be that you’re trying to get something out of your equipment that it just wasn’t designed to do.

Speed

Running equipment at less than ideal speeds happens everywhere. What doesn’t happen is finding out why the equipment is running slower than it should. Most times the operator is blamed, and we’re left to think that the operator isn’t qualified to run the equipment at its fullest speed. Well, if that is indeed the case, that’s a failure of training, not the operator, and training falls squarely on management’s shoulders.

More often than not, though, the reason that equipment is running slower than it should is that it hasn’t been maintained. Belts are loose, gears clash, drives slip, and webs walk, and the operators have no choice but to slow the machine down to keep these problems at a minimum. These problems go unnoticed or ignored because the machine is at least running – until it breaks. Now, instead of a quick preventive maintenance task that may only take minutes, you could end up with a machine that’s down for hours, days, or even weeks.

Rejects

Whether the product is rejected internally or by your customer isn’t the issue. Why it occurred in the first place is the issue, and the reasons are usually the same ones that cause your operators to run at slower than ideal speeds – and something got by them.

Scrap

Setup, if you remember, is the time between the last good piece from the previous or current job until the first good piece from the next job. In this case a good piece means a saleable label. Your setup isn’t done until you have saleable product. Constant adjustments made on the fly are an indicator that something’s not quite right, and that something could be your equipment.

Overall equipment effectiveness

A good way of determining how well your equipment is performing is a measurement called “overall equipment effectiveness,” or OEE. OEE gives you an indication of your equipment’s availability and capability and is expressed as a percentage. The higher the percentage, the better you are.
OEE is calculated in a similar way to a rolling throughput yield. You multiply the equipment’s availability, performance efficiency, and quality rate to obtain its OEE percentage:

OEE = Availability x Performance x Quality

Availability is determined by dividing total run time (not including set up or downtime) by the total net available time. Net available time is scheduled time less planned downtime for lunches, breaks, etc.
Performance is calculated by dividing the actual output by the desired output, and quality is good product divided by the total produced. Total produced includes scrap and rework; rework is not included with good product regardless of whether or not it is sold – this would lead to a false number.

For example, if you run an 81⁄2-hour shift (7 am to 3:30 pm), with a half-hour lunch and a 15 minute break, you have 73⁄4 hours of available or net operating time. If you have two setups, each taking one hour, and you run the machine for the balance of the day, your availability would be calculated as follows:

(73⁄4 hours net available time − 2 hours setup) ÷
73⁄4 hours = 74%

Performance ratings can be calculated several ways. For ease of use I would start with the simplest method, using the machine’s rated speed. Continuing with the same figures that we used above, for availability, let’s assume that we have a press that is capable of running 150 feet per minute, or 9,000 feet per hour) and at the end of the day we’ve produced a total of 40,000 feet of material.

(40,000 feet) ÷ ((73⁄4 hours net available time − 2 hours set up) × 9,000 feet per hour)) = 77%
Quality is simply the sum of good parts (not including rework) divided by the total run. Again, using the example above, if we ran 40,000 total feet and ended up yielding 35,000 feet of finished product, our quality rating would be:

35,000 ÷ 40,000 = 88%
Our overall equipment effectiveness, then, is:
OEE = 74% × 77% × 88% = 50%

A 50 percent OEE is not a terrific number, especially when you consider that if a facility runs 90 percent of its available time, runs at 95 percent of its rated speed, and has a quality yield of 99 percent only has an OEE of 85 percent!

So what does this mean, an OEE of 50 percent? We need to look at each number and determine why they’re so low. For example, why is your availability only 74 percent? Are you having minor machine stoppages that are only a minute or two here and there, but happening many times and adding up to major losses? Perhaps you feel that setup time is too long and you are able to cut that in half. This adds another hour of available time and improves your availability rating to 87 percent, bringing your OEE from 50 percent to 59 percent. Good, but not great.

What about speed – why are you only running at 77 percent? Did the operator have trouble with a particular material and, if so, what were the performance ratings for previous runs of this product? It could be a material issue and not an equipment issue.

What about quality? Why only an 88 percent yield? What if the number were 98 percent? If your quality rating in the original example was 98 percent your OEE would still be low at just 56 percent, yet many companies home in on the quality of the product and feel that if they could only improve this number they will reap huge rewards. In our original example, even a 100 percent quality rating would still only yield a 57 percent OEE. If you’re an owner or plant manager with near perfect quality and still can’t figure out why you never can seem to get ahead, take a look at the other components that make up your OEE and I’m sure you’ll be surprised at what you find.

The Bottom Line

What does this all mean in dollars and cents? Let’s take a look. If a plant has an OEE of 50 percent and annual sales of $15 million, what would an OEE of 85 percent mean?

The bottom line is that it makes good financial sense to keep your equipment in top operating condition instead of running it until it breaks. You do this by training operators to be knowledgeable about how their equipment operates and how to properly maintain it, by continuously doing 5S activities, by inspecting while cleaning, and by fixing or replacing worn or broken parts.

You can pay a little now or you can pay a whole lot more later on. When the economy rebounds, and it will, will you be ready? More important, will your equipment be ready – will it be available and capable?

Tom Southworth is a Lean Consultant with CONNSTEP, Connecticut’s Manufacturing Extension Partnership (MEP). He is a Senior Member of ASQ, an ASQ Certified Manager of Quality & Organizational Excellence, and is a SME Lean Bronze Certified-sensei. He can be reached by email at [email protected].