Tag Archives: TPM

Lean Audits drive action – but is it the right action?

This blog is the second in a series written by Jeremy Praud, Head of UK & Europe at Lauras International.

TPM-SixSigma-LeanIn my last blog I mentioned that Marks & Spencer’s, who pioneered the Quality Audits, have introduced a Lean Audit into their Plan A.

So lets look at whether ‘Lean’ will deliver in the food industry what is clearly hoped of it by the retailers. The objective of course is to lower manufacturing costs – so of the three main approaches to continuous improvement, is Lean the right one, and is it what is needed in FMCG?

Lets consider the other two approaches – TPM and Six Sigma
If we look at the relatively low asset cost required in FMCG manufacture, the spend required to achieve exceptionally reliable equipment – the fundamental reason for a TPM approach – rarely gives a value return. This means that reliability of 96% is generally quite acceptable, except for a few notable exceptions, and the requirement to spend big on predictive maintenance just isn’t there as it is in other industries.

Meanwhile, Six Sigma is fundamentally about eliminating variation – 6 standard deviations from the mean and all that (actually 4.5, but that’s another story). For FMCG, with low unit cost (and permissible variation of around 1 sigma due to the average weight legislation) again the high-end techniques of Six Sigma have limited value return.

This means that a Lean Approach is in the driving seat
However, Lean did not originate in FMCG – it comes from automotive, with an entirely different asset base and set of base assumptions. This means that whilst many areas of Lean can deliver real value for FMCG, we must be careful in its application. What is taken for granted in automotive is not always true in FMCG – thus the success of the Lean Audits in reducing cost within FMCG will ultimately come down to how well adapted they are for the FMCG sector.

Taking one example (and there are many more); Constraint Theory as outlined in Eli Goldratt’s “The Goal” is of huge applicable benefit within FMCG, but classic Lean either ignores it completely, or allows the contraction of ‘Unnecessary WIP’ to merely ‘WIP’ to drive exactly the wrong actions.

Having experienced the misfortune of this type of misapplication, one FMCG factory owner was heard to remark “I’d rather have taken a million pounds in cash out the bank and used it to fuel a bonfire in the car park – it would have been less painful than what happened”!

So – the future is sure to be Lean Audits – but the companies that succeed from using them will be the ones that are wise to prioritizing what delivers rapid bottom line benefit – and uses an approach to continuous improvement tailored specifically for FMCG.

Tune in next week for the next blog in this series, or hear more on this topic by registering for Food Manufacture’s Lean Audit webinar (11am, 26th April).

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5 Ways to Prioritise Asset Maintenance

Written by Jason Gledhill, Head of Reliable Maintenance, Senior Consultant at Lauras International.

At the beginning of a new year, we often look at the regimes in our life to decide whether they need a shake up – and it’s often a good time to examine the practices we have in place at work as well…

Most Maintenance Managers will say that they have a maintenance regime that covers the majority of their assets and keeps them in the best possible condition.  When we talk maintenance however, we don’t ask what a factory’s Planned Preventative Maintenance (PPM) regime covers, we ask how the assets are prioritised, and which are the business critical machines within the plant.

From our experience in the FMCG sector, businesses prioritise maintenance based on the following:

1. New kit – When new machinery is purchased, PPM’s are often created in line with the manufacturers recommendations. Although this can be an effective method it can also be a lengthy process to implement a regime that incorporates the entire factory.  After all, how often do you purchase new items of machinery?

2. Production line or unit – Having purchased new kit recently or not, the majority of businesses will have a proverbial cash cow, the production line that delivers the most amount of profit. The maintenance department will often focus on maintaining these machines at all costs. This focus can frequently change as the business priorities shift, adding pressure on the maintenance department to do the ‘right thing at the right time’

3. Breakdown and Outages – Then there’s the PPMs that are put in place following major breakdowns (AKA the knee jerk method). These are often implemented quickly without a true understanding of the root cause outage and can often result in a number of ineffectual routines that involve a check and inspect type PPM that exhausts valuable maintenance time.

4. Business Pressure – The other approach we see a lot of is to place emphasis on the department that shouts the loudest and longest. But pressure to ensure a regime is in place can result in the wrong focus for the wrong reason and doesn’t necessarily utilise maintenance time for the optimum benefit or true value to the business.

5. Criticality Factors – Thankfully a more sustainable method exists that ensures that right maintenance is carried out at the right time for the right reasons. At Lauras International we advocate prioritising assets with a subjective view, incorporating business needs and maintenance response as criticality influencers. Within these influencers are a number of factors that need to be considered:

  • The business will be concerned with customer service levels. If a process fails with loss of output, will it affect customer service? What quantity of quality defects will be generated should a failure occur and what is the value of these quality defects?
  • Waste and rework can add substantial hidden costs to a product that eats away at the profit margin. Finally, is there a risk to food safety and employee safety? Can your business afford a product recall or lengthy litigation because a member of your team has sustained an injury?
  • The maintenance team will also have their prioritisation process. Mean Time To Repair (MTTR) will be factored into the equation. An asset that takes 8 hours to repair will take priority over an asset that takes less than one hour to repair. Mean Time Between Failure (MTBF) will then come into play. Equipment that has a higher failure rate will require more planned maintenance than others with lower failure rates.
  • Cost to repair major outages will also have a huge bearing on the prioritisation process. Maintenance budgets are stretched at the best of times and consequently unplanned expenditure on maintenance events needs to be avoided.

Scoring all these factors will result in machines receiving a grade ranging from AA (could interrupt manufacturing throughout the factory, typically assigned to 5% of factories’ assets) through to C rated machines that will have little effect on business outputs. The maintenance team is then enabled to create a planned PPM regime focusing initially on the AA ranked business critical assets, through the rest of the grades until all assets have a comprehensive maintenance regime.

Asset prioritisation is the first step; we now know which machines have maintenance priority. So how do we create a value adding PPM routine?  I’ll be sharing my insights in this blog over the coming months…