Bill Gaw's Triple-Step, World Class, Lean Manufacturing Training Program
World Class Manufacturing

Increase the effectiveness of your
Lean Manufacturing Training Program
Lean Manufacturing Simulation Game 

Case Study: Bringing It All Together

It can be difficult to move from benchmarking data to an understanding of which "Best Practices" need to be strength­ened. It is just as difficult to select a focused set of "tracking" performance measures that will concisely re­flect whether progress is being made. In a "real-life" benchmark analysis conducted recently by Jones, a co­author, a plant moved through the benchmarking process, to strategic planning, then to reassessment of its ongoing performance measures. What follows is a summary of that journey.

A chemical plant in the Northeastern United States had recently been through a detailed benchmark analysis—not just for the plant, but for its seven business units as well. The comparison data was collected for each of the units as well as for the total site. As you might expect, the units shared a number of practices that needed improvement. However, since each business unit was unique, their re­spective strategic plans were all somewhat different.

The units' dilema: Do we all have to have separate measurement systems as well as separate strategic plans? At that stage, a site-wide network of unit representatives met to discuss and design the performance measures. They emerged with a set of measures that met the following design criteria:

• Measures are balanced: business and functional mea­sures
• Measures are simple and credible
• Minimal additional measures. The plant already had 40 measures.
• Utilize capabilities of the Computerized Maintenance Management System (CMMS)

The performance measures they selected are simple, prac­tical, and available. More importantly, they are well-aligned with the practices they wanted to improve and strengthen. They now measure:

Leadership/Organization Management:

In the belief that the business impact of the maintenance function is tied to equipment reliability and maintenance costs, the plant measures and plots the following on two separate charts (the uptime is plotted separately; the others on a single chart):

• Total cost of manufacturing
• Total maintenance cost
• Total product shipped (pounds, gallons, etc.)
• Unit "uptime"—a specific calculation of total equip­ment output

Planning and Scheduling:

• Planned hours worked/Total hours (%)
• Scheduled work compliance (%)
• Percent planned work by contractors
• Goals for percent planned and schedule compliance These are measured and plotted on a single chart.

Preventive/Predictive Maintenance (PM):

• PM hours/Total hours (%)
• Overdue PM's (%)
• Goal PM hours (%)
Reliability:
• Mean time between non-PM work orders (Days)
• Labor/Material ratio
• Goals for both
• Overtime (%), as well as degree of fluctuation

Overtime is plotted separately. The others are plotted on a single chart.
Material Management:

• Inventory/Replacement Investment ($) (%) » Inventory turnover (Annual)
• Goals for each
These are plotted on a single chart.
Contract Maintenance:
• OSHA injury rate

The data are plotted monthly as a composite of all contrac­tors. In addition, each contractor's separate data are tracked, and a monthly "Rogues Gallery" is posted promi­nently in the plant. This practice has proven to deliver immediate results.

As a plant continues to execute its strategic plans, it has a simple practical set of measures that constantly provide feedback on the effectiveness of changes.
Summary

The goals of growing a garden and operating a business are the same—to produce a profitable yield within specifica­tions on schedule at lowest cost. Maintenance and weeding the garden are means to the end of getting results—not an end to themselves. Maintenance is moving from being more than a "dirty" word, liability, necessary evil, and fixed cost perception in business. To support its rightful place as an executive-level function, maintenance will require trans­formations at operational and strategic levels.

Performance management will require information for timely, accurate, and profitable support and decisions. Performance measures and benchmarking will provide the numbers to quantify performance gaps, progress toward goals, and the degree of overall business success.