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16 big losses for manufacturing and services

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This presentation will provide information on what the 16 Big Losses are. The module will also introduce to a first-time connect of the 16 Big Losses to a service context.

Publié dans : Business

16 big losses for manufacturing and services

  1. 1. 16 Big Losses – Manufacturing and Services 1 The School of Continuous Improvement (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0
  2. 2. Foreword 1. This presentation on 16 Big Losses has been prepared by C. Vishwanathan with reference to original literature from TPM (Total Productive Maintenance). 2. Any reference to any companies is purely coincidental, with the purpose of illustration only. To protect confidentiality, company names are masked. 3. This module should be used only for purposes of learning and implementation. Selling this module/ re-selling/ reproducing in any form is punishable. (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 2
  3. 3. What is 16 Big Losses? 1. Toyota follows a strict protocol in their operating systems known as Total Productive Maintenance. As per Total Productive Maintenance, factors that combine to impact productivity in an organization are tagged under 16 various points. These are known as 16 Big Losses. 2. Names of these losses could be different in organizations, but broadly you would find these categories existing in any organization. 3. These 16 losses add up to produce a negative impact on productivity and quality of the products produced by the organization. 4. Although TPM has strict manufacturing contexts, a variant of TPM known as TSM (Total Service Management) has been introduced in this module. (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 3
  4. 4. 16 Big Losses – The Big 3 (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 4 16 Big Losses Labour effectiveness losses Resource consumption losses Equipment losses
  5. 5. Labour Effectiveness Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 5 Labour Effectiveness Losses Management loss Line Organization Loss Internal Logistics LossMotion Loss Measurement and adjustment loss
  6. 6. Labour Effectiveness Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 6 Management Loss in Manufacturing 1. Meeting 2. Setting up reports 3. Reporting 4. Waiting for materials 5. Waiting for instructions Management Loss in Services 1. Team meetings 2. Quality Assurance Feedback 3. Delay in On the Job training 4. Delay in moving associate to operational role from training (Learning curve) Management loss highlights the productive hours lost by an organization due to waiting for instructions and materials.
  7. 7. Labour Effectiveness Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 7 Motion Loss in Manufacturing 1. Equipment shutdown 2. Equipment maintenance 3. Inadequate calibration of equipment 4. Slow machines 5. Incorrect maintenance procedure/ Inadequate maintenance staff Motion Loss in Services 1. IT Downtime 2. Lack of SOPs/ Inaccurate adherence to SOPs/ Uncontrolled SOPs Motion loss highlights the productive hours lost by an organization due to equipment performance, methods and procedures and skill gaps.
  8. 8. Labour Effectiveness Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 8 Line Organization Loss in Manufacturing 1. Manual data collection for reports 2. Lack of automated downtime/ defect flagging mechanism 3. Offline training for operators Motion Loss in Services 1. Data entry 2. Cumbersome procedures to capture information flow 3. High training time Line organization loss highlights the productive hours lost by an organization due to lack of automation/ failure to automate and poor organizational practices.
  9. 9. Labour Effectiveness Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 9 Internal Logistics Loss in Manufacturing 1. Wasteful movement of goods in the factory 2. Wasteful work in progress inventory 3. Unnecessary forklift movement 4. Waste due to excessive container/ pack sizes Internal Logistics Loss in Services 1. Unnecessary information flow 2. Resources moving from one place to another seeking approvals 3. Transactions moving from one place to another in form of departmental hand-offs. Internal Logistics loss highlights the productive hours lost by an organization due to inefficient methods of movement of material through the organization.
  10. 10. Labour Effectiveness Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 10 Measurement and adjustment Loss in Manufacturing 1. Inaccurate and not precise measurement systems 2. Data recording errors 3. Bad calibration of measurement systems. 4. Excessive inspection Measurement and adjustment loss in Services 1. Lack of reports. 2. Data entry errors. 3. Insufficient capture of information by existing reports. Measurement and adjustment loss highlights the productive hours lost by an organization due to frequent measurement and adjustment done by the organization.
  11. 11. Labour Effectiveness – An Example 1. Total shift time = 540 minutes  Working Hours 2. Meeting times + Lunch Breaks = 90 minutes  Operating hours 3. Idle time + Waiting time = 60 minutes 4. Net working hours = 540 minutes – 90 minutes – 60 minutes = 390 minutes 5. Logistics + People movement time = 10 minutes 6. Effective working hours = 390 minutes – 10 minutes = 380 minutes 7. Measurement errors adjustment = 20 minutes 8. Value added production hours = 380 minutes – 20 minutes = 360 minutes Labour effectiveness = 360 minutes/ 540 minutes = 66.67% or 360 minutes/ 480 minutes = 75%. Thus, the organization loses approximately 33% of its time due to ineffectiveness in the way how its workforce operates. (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 11
  12. 12. Resource consumption losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 12 Resource consumption losses Energy loss Consumables loss Yield Loss
  13. 13. Resource consumption losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 13 Resource Consumption Loss in Manufacturing 1. Startup heating of furnace to reach ambient temperature. 2. Thermal dissipation as a natural property 3. Overloading of equipment causing breakdown/ energy loss Energy Loss in Services 1. Loss due to accumulation of files in server space resulting in slow working of systems. 2. Overtime in organizations resulting in intellectual burnouts in resources. Energy loss highlights the productive hours lost by an organization due to startup, overload or any other mechanical characteristics of an equipment.
  14. 14. Resource consumption losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 14 Consumable Loss in Manufacturing 1. Cost of spare parts 2. Cost of producing spare parts 3. Cost of replacing spare parts Consumable Loss in Services 1. Cost of bad attrition 2. Cost of training associates 3. Cost of IT systems maintenance Consumable loss highlights the cost incurred by the organization by consumption of spare parts as part of the endeavour to keep machines running.
  15. 15. Resource consumption losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 15 Yield Loss in Manufacturing 1. Loss due to over-packing 2. Loss due to in-progress scrap 3. Loss due to inefficient methods of dealing with material Yield Loss in Services 1. Inefficient people performance as against benchmarked performance. 2. Inefficient system performance as against design Yield loss is the loss in dollars due to difference in input provided to the production line and the output of the finished goods.
  16. 16. Resource Consumption Loss – An example 1. Standard cost of operations is $10 per unit. 2. Furnace heated for 15 minutes extra - $3 per unit. 3. Thermal dissipation losses - $1 per unit. 4. Cost of spare parts - $9 per unit. 5. Bad quality loss - $3 per unit. 6. Revised cost of operations - $26 per unit As you can see, the resource consumption losses often contribute to increase the cost incurred by the operations to make the product. This is by far spoken about as the Hidden component to calculating cost of operations. Not a lot of factories pay attention to resource consumption loss. (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 16
  17. 17. Equipment Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 17 Labour Effectiveness Losses Breakdown loss Cutting Blade replacement loss Defect and Rework loss Setup and adjustment loss Startup loss Idling and minor stoppages loss Shutdown loss Speed reduction loss
  18. 18. Equipment Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 18 Breakdown Loss in Manufacturing 1. Electrical fault 2. Failure causing machine to be stopped completely 3. Pneumatic failures Breakdown Loss in Services 1. CRM systems downtime or failure 2. Power shutdown impacting working on the systems Breakdown loss is the loss of time in hours due to equipment shutdown/ systems shutdown, resulting in complete failure of operations.
  19. 19. Equipment Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 19 Setup Loss in Manufacturing 1. Changing packaging 2. Die and Knife changes 3. Feeder Belt rate changes Setup Loss in Services 1. CRM systems downtime or failure 2. Power shutdown impacting working on the systems Setup or adjustment loss is the loss due to changeover of products which results in changing the machine settings to make it ready for the next production run.
  20. 20. Equipment Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 20 Cutting Blade Replacement Loss in Manufacturing 1. Machine components wear out Cutting Blade Replacement Loss in Services 1. Replacing old IT systems. Cutting blade replacement loss is the time loss incurred by the company when a worn out component from the machine is replaced
  21. 21. Equipment Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 21 Start-up Loss in Manufacturing 1. Start of the day machine setup Start-up Loss in Services 1. Preparing a new trainee for production after training. Start-up loss is the time loss incurred by the organization needed to setup their equipment to a steady state so that manufacturing commences.
  22. 22. Equipment Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 22 Idling Loss in Manufacturing 1. Machine indexing 2. Mould emptying 3. Sensor faults Idling Loss in Services 1. Feedback sessions with Quality Department 2. System stoppages for less than 5 minutes fixed usually by rebooting or restarting. Idling loss is the time loss incurred by the organization due to minor stoppages to work due to certain machine faults/ service breaks etc.
  23. 23. Equipment Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 23 Speed reduction Loss in Manufacturing 1. Poor quality belts 2. Lack of maintenance of machine components Speed reduction Loss in Services 1. Low rate of procurement. 2. Increased turnaround time for processing a transaction. Speed reduction loss is the production capacity loss incurred due to machines running less than their design speeds.
  24. 24. Equipment Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 24 Defect and Rework Loss in Manufacturing 1. Out of specifications products 2. Poor surface finish 3. Incorrect labeling Defect and Rework Loss in Services 1. Transactions not meeting customer requirements. 2. Errors in transactions 3. Multiple work needed on same transactions. 4. Transactions looping back and forth in the value stream. Defect and Rework loss is the production capacity loss due to products that are made either out of specifications or products that needed rework.
  25. 25. Equipment Losses (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 25 Shutdown Loss in Manufacturing 1. Preventive maintenance schedules 2. Oiling periods 3. Periodic overhaul of machines Shutdown Loss in Services 1. Townhall meetings for all employees 2. Complete system shutdown due to network failures Shutdown loss is the loss of production time by completely shutting the equipment down to carry out periodic maintenance activities.
  26. 26. Equipment Losses - Clarification (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 26 1. There is a very fine line of difference between Breakdown and Shutdown loss and this needs to be understood clearly. 2. Shutdown loss happens as a planned activity, whereas Breakdown loss doesn’t happen due to planned activities. 3. Most of the times, factories plan their production targets around Shutdown losses. Example, if a factory invests 4 hours in a week as preventive maintenance schedules, these 4 hours will contribute to shutdown losses, but in essence, may consider beneficial for the factory. 4. Eliminating these losses should never be the target as factories may face one or the other issues. What every organization must do is to try and reduce these losses.
  27. 27. 16 Big Losses – A Summary (C) THE SCHOOL OF CONTINUOUS IMPROVEMENT 16 BIG LOSSES V1.0 27 1. Every organization should decide to collate losses measured under each of the categories discussed here. 2. Reports should be collected. For bits of data that are not available, a manual data collection mechanism should be set forth. 3. An organization should consider all modes of failure that have and can impact the organization in the future. 4. Each of these losses will have a contributing root cause. The organization must use tools like 5 WHY Analysis with Cause and Effect Diagrams to simplistically arrive at the root cause.

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