Process Plant Efficiency – The Key To Optimisation

Industrial operations of every type and size understand that in today’s business environment, effectively managing assets throughout their lifecycle can deliver real and on-going value, reducing the total Cost of Ownership and increasing process plan efficiency.

However a survey in 2005 by Michael L George (Author of The Lean Six SIGMA Pocket Tool Book) 50% of capital equipment was purchased to compensate for underperforming equipment!

Nowhere is this more noticeable than in the Pharmaceutical industry where despite many years of lean initiatives and operational excellence programmes, average process plant efficiencies are still significantly lower than is achievable.

The table below was published by the ISPE (international Society of Pharmaceutical Engineers) in 2011 and shows the low level of performance and the improvement potential for this industry.15802540+

So what needs to be tackled in these organisations and in any other manufacturing business in order to raise the level of process plant efficiency?

And why have years of lean and other initiatives not raised plant efficiency levels significantly?

The Key to Process Plant Efficiency​

The answer lies in the much ignored tool of loss management. Loss management is one of the foundation stones of all other manufacturing improvement activities. The loss management process involves the collection, analysis, and reviewing of production loss data. Informed decisions can then be made to improve overall productivity. This process is assisted by a structured approach to shop floor control and monitoring and management review.

The basic elements of a loss management process are:-

• A process for capturing production performance data
• An agreed standard measure of process plant efficiency and effectiveness
• A process for analysing production data to identify the biggest loss areas and identifying root causes
• A process for developing and implementing improvement actions
• A methodology for regularly reviewing process plant efficiency, losses and improvement plans

But we do this I can hear you say, we have done it for years! Well maybe you do record production data, maybe you review it every day but is there a structured process which drives productivity improvements, across all levels of the business every day? Probably not.

Few organisations genuinely have a robust and successful loss management process. A major Pharmaceutical company implemented an effective loss management programme in its Asia Consumer sites with a program driven by the regional operations director and saw its average OEE levels rise from around 40% to over 80% in a three year period, three years later this level of performance has been sustained and improved on.

So what did they do differently to everyone else? Well, as always it was little to do with the tools and techniques of lean or manufacturing improvement. It was about making the changes to the way people behave and in particular how the production management team behave.

Improvement programmes often focus on applying standalone tools such as rapid changeover, 5S, and OEE measures and ignoring the simple fact that if we want to drive efficiency we have to do something more than just apply a set of tools and techniques and have the operators doing something different.

We as managers need to act differently. It is a simple fact of life that low and static efficiency levels are the fault of the management team not the fault of the operators.

So what does a loss management programme look like?

There are a number of activities which loss management programmes need to have in place these include:-

A process for analysing production data to identify the biggest loss areas and identifying root causes

The most important aspect of the loss management process is not the collecting of data or the production of a performance measure but the analysis of the data using Root Cause Analysis techniques to clearly identify where and how the loss originated.

The process to be used is based around grouping the losses captured on the daily stoppage report into discrete sources of loss, we will use plant breakdown , changeovers, running speeds, minor stops, damage, yield loss and planned activities.

On a daily, weekly and monthly basis these sources of losses are subjected to a Pareto analysis and the biggest causes of loss are subjected to further analysis using suitable tools such as root cause analysis to determine root causes and to then develop corrective actions and improvement plans aimed at reducing the impact of the loss.

On a daily basis any event which has impacted plant performance should have a counter measure implemented to reduce the likelihood of the event occurring again before a permanent corrective action is put in place. Team leaders use the 3C’s (Cause, Concern and Countermeasure) to drive structured and rapid action to events which occur on their shift. The diagram below shows the structure of this process

A process for developing and implementing improvement actions

In order to drive long term sustainable performance improvement a process needs to exist to drive and manage operational improvement. The top sources of loss identified in the previous element are subjected to a process in which further analysis is carried out to determine the true root causes of the issue and then to develop and implement robust and sustainable improvements.

The model below shows the type of process we would envisage using;

In order to drive improvement in whole plant performance there is a need for a process which reviews plant performance, losses and improvement progress on a regular basis. Typically this would cover:

In essence this is about;

• Daily/Weekly reviews in which the Team review loss KPI to confirm impact of improvement tactics
• Monthly reviews where Middle management monitor/support trend towards the quarters goal
• Quarterly reviews where Senior Management gives recognition for results over last quarter and agrees priorities for next quarter to progress towards agreed target and where Operational, Technical and Commercial issues outstanding of manufacturing control but which impact on performance are raised.

A structured process for shop floor control and monitoring

The basic building block of loss management is shop floor control and monitoring. This works on the basic premise of best practice manufacturing that, the longer the interval between performance reviews, the harder it is to make quick corrective actions.

For example if plant performance is only reviewed on a weekly basis then a whole weeks performance has potentially been reduced before any corrective action is taken. However, when performance is reviewed on an hourly or two hourly basis as in short interval control, it is only an hour or two’s production that is impacted before corrective action is taken.

Short interval control also forms an integral part of any factory visual management approach since it gives an insight into current plant performance and issues as well identifying whether today is, a good day or bad day.

Supporting short interval control is the concept of supervisory monitoring which should form part of the supervisory role. In a best practice organisation there is an expectation is that the supervisor’s days are distributed in the following manner:

• Monitor Shop Floor 60%
• Improvement Projects 30%
• Misc. 10%

On its own a loss management process will not deliver improvements in performance, it requires the commitment and involvement of the people on the site to carry out the process on a routine basis such that it becomes a normal day to day activity within the business.

However there is evidence to suggest that in the long term, organisations which have a process of this nature and use it are more successful at driving performance improvement. Increases in the order of 5%-25% improvement in OEE are claimed by organisations with processes similar to those described here.

However the key is changing the behaviour and approach of all of the operations management team from site leader down to supervisor. This needs to be achieved through training and coaching interventions with the management team alongside implementation support to develop the loss management process.

It is not enough to implement an efficiency improvement programme without supporting it with management coaching if you do not provide the coaching and behaviour change you will fail!

Philip Tugwell joined MCP in 2001 after a successful career as a production and manufacturing manager with a number of UK based multi-national organisation in the food and drink, personal care and automotive industries. 

Specialising in Manufacturing, Operations and Asset Management, Philip has delivered improvement programmes in the UK, US, South Africa, Thailand, Malaysia, China, India, Japan and South Korea. A Certified Management Consultant and a member of the Institute of Management Consultancy, he has a BA honours degree in Management Science from the Open University and an MSc in Manufacturing Systems; Engineering and Management from UMIST.