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Member You - TPM and Lean Production, is It Worth the Effort?
Each week, small business owners gather in droves to the equivalent of the office water cooler – the networking event. Dressed in our most impressive garb, we make our way through the crowd anxiously preparing to answer the inevitable question, “what do you do?” While some enjoy the hunt for new connections others would rather spend an afternoon with a dentist drill than introduce themselves to someone new. Whatever camp you reside in, the #1 most effective way to get the word out about your business is networking. It’s inexpensive, and when executed correctly, your best means of advertising your brand. Power networkers abide by
10,000*80/50 = 16000
units in the same facility without investments and with the same manning as before.
Can the increased capacity be used to increase sales?
One important question is if there is a market for expansion. If so, the increased capacity may be used for increased sales. It is common that the company's market share might grow after implementing TPM or Lean Production. This is possible as improved delivery accuracy and shorter lead times make more sales possible even if the market is stagnant.
If expansion is not considered possible, the increased capacity may instead be used to lower the production co
Recruiters, commonly called headhunters, are business professionals who get paid by client companies to find people for positions. They have their monetary interests aligned with their client companies, not with the candidates. Although you might think that recruiters are out to help candidates, for the most part they are simply polishing candidates up for sale. Recruiters need candidates and search high and low for people with desirable and marketable skills. Candidates can use recruiters to enhance their career moves. They can work together. Here are a few suggestions on how you can most effectively partner with a recruiter and find a great job as a res
"We should implement Lean Production and TPM in our plant", he says. "This will make our production more reliable and increase our delivery accuracy".
The MD is paying attention but is not yet convinced. He wants to put the ideas to a test.
"Looks interesting", he says, "Please come back with a good calculation of the Return on Investment so that we can see if it fits into next year's budget."
This is where the story might end. How could you possible estimate costs and benefits from such advanced management techniques as TPM and Lean Production? These concepts are known to be difficult to plan in advance, and they require a mind-shift for everybody in the facility.
Well, it may be difficult but you have to do the calculation anyway. Arguments as "we have to do this" or "everybody else is doing it" are just not convincing enough.
A change project must be looked upon as an investment that will come with initial costs and hopefully bring something back in return. This is no different from any other investments. If you can not give an educated guess on its financial impact, there is a big risk that the project might not be given the necessary resources for what it needs to succeed. Even if the financial impact of important factors such as shorter lead times and better delivery accuracy are not known, we need to describe how this project will raise profits in the company.
To give an answer to these important questions we have put together some simple guidelines for you to use, and if you prefer, a free calculation tool that you may use to do your own estimations.
What will the costs be?
The main cost will consist of:
Training and Consultancy
No successful implementation of TPM and Lean Production has succeeded without the help of experienced professionals. You will have to train your employees and you need support in your project team. A good estimation is a yearly cost of $100.000 per 100 employees involved
Increased initial maintenance costs
Elimination of manufacturing wastes and implementation of improvement ideas are likely to increase the maintenance costs. Expect maintenance to increase up to 20% the first year, but with it stabilizing at a level less than today after one to two years.
Project team members
You will need people to run the project. Project management and coaching equals to about one full-time coordinator per 100 employees in the facility
Benefits
Increased Overall Equipment Efficiency (OEE) is the main factor that may be used to approximate the return on the efforts. Simply speaking, the OEE is the ratio of the facility's actual output compared to the theoretical output that would be possible if the machinery was run at full speed every minute, without break-downs, lack of raw material, quality losses or set-ups. As the OEE-ratio is a direct reflection of your plant's capacity, it may be used to calculate the future productivity after improvements.
An example: A plant produces 10,000 units per year with an OEE-ratio of 50 percent. After improvement, the project team estimates that it will be possible to reach an OEE-ratio of 80 percent. This means that they will be capable to produce
10,000*80/50 = 16000
units in the same facility without investments and with the same manning as before.
Can the increased capacity be used to increase sales?
One important question is if there is a market for expansion. If so, the increased capacity may be used for increased sales. It is common that the company's market share might grow after implementing TPM or Lean Production. This is possible as improved delivery accuracy and shorter lead times make more sales possible even if the market is stagnant.
If expansion is not considered possible, the increased capacity may instead be used to lower the production cos
Substation operators, also known as switchmen, are in charge of the monitoring of the machinery that distributes electricity to residential, business and industrial areas. They operate in electrical substations monitoring equipment that increases or decreases voltage. They have to check the electric substations throughout the country to check charts, oil levels in equipment, temperature changes, load conditions, oil leaks, and any irregularities. In addition, switchmen have to operate switchboard levers to control the flow of electricity in and out of the substations. They are working closely with power generation operators and transmission engineers in o
Well, it may be difficult but you have to do the calculation anyway. Arguments as "we have to do this" or "everybody else is doing it" are just not convincing enough.
A change project must be looked upon as an investment that will come with initial costs and hopefully bring something back in return. This is no different from any other investments. If you can not give an educated guess on its financial impact, there is a big risk that the project might not be given the necessary resources for what it needs to succeed. Even if the financial impact of important factors such as shorter lead times and better delivery accuracy are not known, we need to describe how this project will raise profits in the company.
To give an answer to these important questions we have put together some simple guidelines for you to use, and if you prefer, a free calculation tool that you may use to do your own estimations.
What will the costs be?
The main cost will consist of:
Training and Consultancy
No successful implementation of TPM and Lean Production has succeeded without the help of experienced professionals. You will have to train your employees and you need support in your project team. A good estimation is a yearly cost of $100.000 per 100 employees involved
Increased initial maintenance costs
Elimination of manufacturing wastes and implementation of improvement ideas are likely to increase the maintenance costs. Expect maintenance to increase up to 20% the first year, but with it stabilizing at a level less than today after one to two years.
Project team members
You will need people to run the project. Project management and coaching equals to about one full-time coordinator per 100 employees in the facility
Benefits
Increased Overall Equipment Efficiency (OEE) is the main factor that may be used to approximate the return on the efforts. Simply speaking, the OEE is the ratio of the facility's actual output compared to the theoretical output that would be possible if the machinery was run at full speed every minute, without break-downs, lack of raw material, quality losses or set-ups. As the OEE-ratio is a direct reflection of your plant's capacity, it may be used to calculate the future productivity after improvements.
An example: A plant produces 10,000 units per year with an OEE-ratio of 50 percent. After improvement, the project team estimates that it will be possible to reach an OEE-ratio of 80 percent. This means that they will be capable to produce
10,000*80/50 = 16000
units in the same facility without investments and with the same manning as before.
Can the increased capacity be used to increase sales?
One important question is if there is a market for expansion. If so, the increased capacity may be used for increased sales. It is common that the company's market share might grow after implementing TPM or Lean Production. This is possible as improved delivery accuracy and shorter lead times make more sales possible even if the market is stagnant.
If expansion is not considered possible, the increased capacity may instead be used to lower the production co
If you are knowledgeable about e-business in general and the way the online market place works, then you may want to consider a career as an internet marketing consultant. Even if you are relatively new to the online world, but have a marketing background to call on, you can actually still become an internet marketing consultant. All it needs is just a little bit of work. But that's true for any career. But to be a consultant you need to make sure your knowledge is varied and is solid.In order to turn yourself into an internet marketing consultant and be able to market yourself, you need to first take stock of your internet marketing skills and kno
What will the costs be?
The main cost will consist of:
Training and Consultancy
No successful implementation of TPM and Lean Production has succeeded without the help of experienced professionals. You will have to train your employees and you need support in your project team. A good estimation is a yearly cost of $100.000 per 100 employees involved
Increased initial maintenance costs
Elimination of manufacturing wastes and implementation of improvement ideas are likely to increase the maintenance costs. Expect maintenance to increase up to 20% the first year, but with it stabilizing at a level less than today after one to two years.
Project team members
You will need people to run the project. Project management and coaching equals to about one full-time coordinator per 100 employees in the facility
Benefits
Increased Overall Equipment Efficiency (OEE) is the main factor that may be used to approximate the return on the efforts. Simply speaking, the OEE is the ratio of the facility's actual output compared to the theoretical output that would be possible if the machinery was run at full speed every minute, without break-downs, lack of raw material, quality losses or set-ups. As the OEE-ratio is a direct reflection of your plant's capacity, it may be used to calculate the future productivity after improvements.
An example: A plant produces 10,000 units per year with an OEE-ratio of 50 percent. After improvement, the project team estimates that it will be possible to reach an OEE-ratio of 80 percent. This means that they will be capable to produce
10,000*80/50 = 16000
units in the same facility without investments and with the same manning as before.
Can the increased capacity be used to increase sales?
One important question is if there is a market for expansion. If so, the increased capacity may be used for increased sales. It is common that the company's market share might grow after implementing TPM or Lean Production. This is possible as improved delivery accuracy and shorter lead times make more sales possible even if the market is stagnant.
If expansion is not considered possible, the increased capacity may instead be used to lower the production co
A moment of silence worth $15 million.Here’s the story.A growing diagnostic reagent manufacturing business had a bottleneck in its key manufacturing process. The line was running ‘flat out’ and the production team leader was under pressure to make more to supply a growing market. His boss called in an industrial engineer from the company’s central business services group. He arrived and spent time with his stop watch and notebook. This sounds very ‘60s thinking but it is still worth doing, and by the end of the day had enough data to come to a conclusion. A quick analysis convinced the engineer that there was at least 25% spare capacity. So,
Project team members
You will need people to run the project. Project management and coaching equals to about one full-time coordinator per 100 employees in the facility
Benefits
Increased Overall Equipment Efficiency (OEE) is the main factor that may be used to approximate the return on the efforts. Simply speaking, the OEE is the ratio of the facility's actual output compared to the theoretical output that would be possible if the machinery was run at full speed every minute, without break-downs, lack of raw material, quality losses or set-ups. As the OEE-ratio is a direct reflection of your plant's capacity, it may be used to calculate the future productivity after improvements.
An example: A plant produces 10,000 units per year with an OEE-ratio of 50 percent. After improvement, the project team estimates that it will be possible to reach an OEE-ratio of 80 percent. This means that they will be capable to produce
10,000*80/50 = 16000
units in the same facility without investments and with the same manning as before.
Can the increased capacity be used to increase sales?
One important question is if there is a market for expansion. If so, the increased capacity may be used for increased sales. It is common that the company's market share might grow after implementing TPM or Lean Production. This is possible as improved delivery accuracy and shorter lead times make more sales possible even if the market is stagnant.
If expansion is not considered possible, the increased capacity may instead be used to lower the production co
One of the most important things to do now that you’ve started a business is to TELL THE WORLD! But HOW? It can be very expensive and time consuming if not done properly. Here's some inexpensive publicity and marketing ideas to help you get recognition for your new venture.You've picked a great name for your company, made a list of your potential clients, incorporated your business and you're ready to go. What next? Well, you need to find as many ways as possible to tell people you're in business, and why they should do business with you!One of the first things to do is to get business cards printed up and carry them wherever you go. Hand
10,000*80/50 = 16000
units in the same facility without investments and with the same manning as before.
Can the increased capacity be used to increase sales?
One important question is if there is a market for expansion. If so, the increased capacity may be used for increased sales. It is common that the company's market share might grow after implementing TPM or Lean Production. This is possible as improved delivery accuracy and shorter lead times make more sales possible even if the market is stagnant.
If expansion is not considered possible, the increased capacity may instead be used to lower the production costs. This is possible through
- less overtime
- fewer shifts
- fewer parallel production lines maintained and operated
The direct labor costs for production will therefore decrease as the OEE-ratio increases.
Your present and future OEE-ratio
Do you know your plant's present OEE-ratio? If so, is it accurately calculated? Often we see that some downtimes are deducted when OEE is calculated. This might be stops for planned maintenance, set-up times, and lack of personnel. The end result will be an OEE-ratio that looks better than reality.
If you do not know your present OEE-ratio, the easiest way to determine it is to use the free OEE - calculator at wcm.nu.
Then estimate what you consider a possible OEE-ratio after improvements. World Class companies reach 80-95% OEE, what is a realistic level for you?
Use the present and future OEE to calculate the future benefits. If you don't want to do the calculations by hand, try instead the free TPM and Lean - calculator at wcm.nu.
Et voil?! You have your Return on Investment calculation to present to your stake-holders!
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