3 Capacity Assurance

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Capacity Assurance 4-6.doc

CAPACITY ASSURANCE

Objectives

Maximize th e retu rn on avera ge net a ssets (ROANA) th rough cont inuousimprovement in equipment productivity a nd asset utilization.

To achieve these objectives we will attempt to:

Maximize through-put

Optimize capital investmen t for production capacity.

Mana ge Capacity Assuran ce cross-functionally within th e T.B.W.S.

Minimize operating expenses for production equ ipment .

Align quality out put of production equ ipment with cust omer

expectations.

Minimize the a mount ofma terial inventory requ ired for pr oduction

Appl i ca t ions

Any line or work st at ion h aving mechan ical equipmen t.

I n t r o d u c t i o n

Capacity assur an ce is the Cumm ins Engine Compa ny business strat egy tha t

ensu res our pr oduction equipmen t m eets or exceeds its capability to produce

good products for our cust omers on t ime, every day at th e lowest life cycle

costs.

Key Defin i t ions

Availability -- A mea sur e of th e degree to which m achiner y/equipmen t is in

an operable and comm itta ble stat e at a ny point in time. Specifically, th e

percent of time th at m achiner y/equipmen t will be opera ble when n eeded.

Availability equals loading. (SAE)

Blocked A condit ion occur ring when a m achine or operat or can not releas e

its pr oduct because d ownst rea m pr ocess(es) are down or ar e slower.

Corrective M aintenan ce T im e - (un schedu led, un plan ned, repa irs) All action

as perform ed as a r esult of failur e, to restore a m achine t o a specified

condit ion. Corr ective ma inten an ce can include a ny or a ll of the following


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steps : localization, isolation, disas sembly, inter chan ge, re-assembly,

alignmen t, an d checkouts. (SAE)

Down tim e The elapsed t ime dur ing which a m achine is not cap able of

opera ting t o specificat ions. Total downtim e equa ls scheduled downtime plus

un scheduled downtime. (SAE)

Life Cycle Costs Costs incu rr ed over th e lifetim e of a p roduct or piece of

equipment.

Loadin g Tim e Equa ls total available time m inus planned downtime. (SAE)

Perform an ce Efficiency = Per forma nce efficiency ans wers th e qu estion How

close to design ra te did your ma chine ru n wh en it was a vailable?

Productivity -- 1) An overall measure of the ability to produce a good or a

service. It is the actual output of production compared to the actual input of

resources. Productivity is a r elative measu re a cross time or aga inst comm onentities. In the production literature, attempts have been made to define

total productivity where the effects of labor and capital are combined and

divided into th e output . One example is a r at io th at is calculated by adding

the standard hours of labor actually produced plus the standard machine

hours actually produced in a given time period divided by the actual hours

available for both labor and machines in the time period 2) In economics,

the ratio of output in terms of dollars of sales to an input such as direct

labor in terms of the total wages. This is also called "partial productivity

mea sur e." (APICS)

Overall E quipm ent Effectiveness (OEE) The pr oduct of th reemea sur emen ts: Percenta ge of time th e ma chiner y is ava ilable (Availability)

times h ow fast th e machiner y of equipmen t is run nin g relative to its design

cycle (performance efficiency) times percentage of the resulting product with

qualit y sp ecificat ions (yield). (SAE)

S tarved Occur s when a ma chine or process cann ot get th e product becau se

an ups tr eam processes is down or is slower.

T.B.W.S. Team Bas ed Work System An organ ization st ru ctur e in which

work tea ms a re r esponsible for decision m ak ing an d perform an ce goals.

Th roughpu t -- 1) The tota l volume of production th rough a facility (ma chin e,

work center, department, plant, or network of plants). 2) In theory of

constraints, the rate at which the system (firm) generates money through

sales. (APICS)


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Unschedu led (Unplan ned) Down tim e - The elapsed time tha t th e machine is

incapable of opera ting t o specificat ions becau se of un an ticipa ted

breakdowns.

Uptime - Tota l time th at a m achine is on-line (powered u p) an d capable of

producing par ts.

Step -by-Step App r oach

1) In Capa city Assu ra nce we use O v e r a l l E q u i p m e n t E ffe c t i ve n e s s

(OEE) to meas ur e our progress in redu cing th e big losses. The form ula

for OEE calculation (See dat a collection an d calcula tion sh eets la ter in

th is module) is:

Overa ll Performance

Equipment = Availability X Efficiency X Quality

Effectiveness

Key to measu ring OEE is availability. Fr om t he a vailable time, dedu ct

un plann ed downtime such as:

Breakdowns

Setup an d adjustment losses

Tooling losses

L o a d i n g t i m e - D o w n t i m e

Ava i la b ili t y = Loa d in g t im e

where:

L o a d i n g t i m e = T ot a l a v a i l a b le t i m e - P l a n n e d d o w n t i m e


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D o w n t i m e = Un e x p e c t e d lo s s e s

I n e s s e n c e , a v a i la b i l it y i s t h e p e r c e n t o f t i m e y o u r m a c h i n e o r

p r o c e s s r a n w h i le i t w a s m a n n e d .

P e r for m a n ce = Ou t p ut x Act u a l Cycle Tim eX

Idea l Cycl e t ime

E ffic ie n cy Loa d in g t im e - Dow n t im e Act u a l Cycle t im e

Per form an ce efficiency ans wers th e qu estion How close t o design ra te

did your ma chine ru n wh en it was available?

To increa se per form ance efficiency you can:

Reduce equipmen t idle time

Reduce m inor equipment stoppage

Run equipment at optimum speed

Anoth er factor t ha t redu ces per form an ce efficiency is when a line is

Blocked or Sta rved. If a pr ocess cann ot get a ny ma ter ial from th e

previous operat ion or can not move ma ter ial to th e next st at ion, it is the

sam e as th ough th e process down broken down.

Qu a li t y R a t e = Nu m ber of good p r od u ct s

In u t

Qua l i t y :

Decrease defects

Decrease star tu p losses

Defects in process ar e scra p or items requ iring rework. Any par t th at did

not ru n t hr ough th e machine or process without non-valu e added labor

is a defect.

Sta rt -up losses are th e kind of losses th at occur after a shift cha nge,

weekend or h oliday shu t down when t he equipment just wont r un a

quality part.

Any par ts t ha t scrapped due t o set up a nd tu ning the line are coun ted

as pa rt of the qu ality sta rt up losses.

OEE indicat es th e overall cap ability of a pla nt .


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2) M aj or Ac t i v it i e s o f OEE I mp r ovem en t s :

Increase productivity by reducing breakdowns; assure safety and

delivery

Increase productivity a nd reduce invent ory by reducing setup an d

adjustment t ime

Impr ove qua lity an d redu ce losses by cons ta nt ly monitoring

equipmen t p recision Reduce cost by conser ving mat erials a nd en ergy

Increa se existing equipmen t effectiveness a nd prolong life spa n

through improvement activities

Edu cate employees to ra ise mora le an d keep pace with increas ingly

sophisticated equipment

3) Define big losses . Thes e may be:

Breakdown losses

Two types of loss a re cau sed by brea kdowns:

Tim e losses, when p roductivity is redu ced

Quan tity losses, caus ed by defective pr oducts

Spora dic breakdowns sudden , dra ma tic, or un expected equipment

failur es ar e usu ally obvious a nd ea sy to correct. Frequen t or chronic

minor brea kdowns, on t he other ha nd , are often ignored or neglected

after repeated un successful at tempts to cure them . Becau se sporadic

brea kdowns a ccoun t for a large per cent age of tota l losses, factorypersonn el invest a great deal of time a nd effort sear chin g for ways to

avoid th em. Elimina ting th em is very difficult. St udies to increase

equipmen t reliability mu st be conducted an d ways found to minimize the

time n eeded to corr ect p roblems wh en t hey occur .

To ma ximize equipmen t effectiveness, however, all break downs mu st be

redu ced t o zero.

S etup an d ad justment losses

Losses dur ing setup a nd a djustm ent result from downtime an d defectiveproducts t ha t occur when pr oduction of one item ends a nd the equipment

is adjusted t o meet th e requirement of an other item. Working from an

industrial engineering perspective, setup time can be reduced

cons iderably by mak ing a clear dist inction bet ween internal setup t ime

(operat ions th at mu st be performed while th e ma chine is down) and

external setup time (operat ions t ha n can be performed wh ile th e ma chine

is still run ning) an d by reducing intern al setu p time.


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Idlin g and Min or S toppage Losses

A minor stoppage occurs when p roduction is interr upt ed by a t emporar y

ma lfun ction, or when a m achine is idling. For example, some work

pieces might block t he t op of a chu te, cau sing th e equipmen t t o idle; at

oth er t imes sen sors, alerted by t he pr oduction of defective products, shu t

down t he equipm ent . These types of tem porar y stoppage clearly differ

from a breakdown. Simply rem oving the obstr uction an d resettin g th e

equipment restores n orma l production.

Sma ll problems often ha ve a la rge effect on equ ipment effectiveness,

typically when r obots an d au toma tion are involved. Minor stoppages

an d idling, while easily fixed, ar e a lso overlooked becau se t hey a re often

difficult t o qua nt ify. If minor st oppages are t o be reduced, opera ting

condit ions mu st be closely observed a nd all slight defects mu st be

eliminated.

Reduced Speed Losses

Reduced speed losses r efer t o the d ifferen ce between equipmen t design

speed an d actua l opera ting speed. Speed losses ar e typically overlooked

in equipment operation, alth ough t hey const itute a large barrier to

equipmen t effectiveness an d should be stu died. The goal is to elimina te

th e gap between design speed and a ctu al speed.

Equipment ma y run at less than ideal or design speed for a variety of

rea sons, mechan ical pr oblems or defective qua lity, a h istory of past

problems, or fear of abu sing or overt axing the equipmen t. Often t he

optima l speed is not kn own.

Quality Defects an d R ework

Qua lity defects in process a nd r ework a re losses in qu ality cau sed by

ma lfun ctioning equipmen t. In genera l, sporad ic defects ar e eas ily an d

prompt ly corr ected by ret ur ning equipmen t conditions to norm al. These

defects include s udd en in crea se in qu an tity of defect, or oth er m ore

visible happen ings. The cau ses of chronic defects ar e more difficult t o

identify. Ad hoc mea sur es to ret ur n to stat us quo rar ely solve th e

problem, an d th e condit ions u nd erlying th e defects m ay be ignored or

neglected. Defects r equiring rework sh ould also be count ed as chr onic

losses.

Reducing chr onic defects r equires invest igation a nd in novative remedia l

action. Complete eliminat ion of defects is th e ma in goal.

Startup Losses

Sta rt up losses ar e yield losses th at occur d ur ing the ear ly sta ges of

production from ma chine sta rt up t o sta bilizat ion. The volume of losses


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varies with th e degree of sta bility of processing conditions, ma inten an ce

level of equipmen t, fixtu res, an d opera tor skills. In pr actice, the volume

is high.

Ther e are severa l reasons why we meas ur e the big losses. Losses as in

Kaizen improvement a ctivities are a form a wast e. Ea ch t ime a ma chine is

not producing a qua lity par t, it is defined as lost time

As in other facets of CPS, we kn ow th at in order t o impr ove (in th is case

redu ce lost time), we mu st tr ack or mea sur e our losses. By mea sur ing, we

can focus our at ten tion on specific ar eas r equiring improvement s. As we

ma ke improvements we can then better judge the success or failure of the

improvement activity.

By elimina ting wast e or m inimizing it, we can get an immedia te

improvement in equ ipment effectiveness, in qua lity or productivity. These

improvements dr ive our average retu rn on n et a ssets, one of th e key CLQ

objectives.


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THE OEE IMPROVEMENT CYCLE

Stabilize

Action

Analyze

MEASURE

OEE Data Collection Sheet

OEE Calculation Sheet

Pareto AnalysisCross FunctionalCommonProblem Solving

Tools

Make the

improvement


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Date OEE Data Collection Sheet Equipment

Start time Shift

Finish time Operator

Code Events Breakdowns(D)

Stoppages(D)

People(E)

Material(E)

# Parts Run(I)

NCM (L) Scrap(L)

TOTALS

Record the code, event and time for each downtime occurrence, in minutes.

Record the number of parts run, NCM and scrap count for production.

Code Explanation Code Explanation

PM Preventive Maintenance BL Blocked - track/conveyor full

TS Tool change (scheduled) ST Starved - no parts from previous operation

TU Tool change (unscheduled) SA Subassembly incomplete

EL Electrical Failure NR No rough stock on castingME Mechanical Failure RA No raw materials

HY Hydraulic/Lube Failure OU Operator unavailable

CO Coolant Failure WS Waiting on approval -Supervisor

TA Tool Adjustment WE Waiting on approval - Engineering

SE Setup/Changeover WQ Waiting on approval - Quality

QC Qaulity check - gaging, etc. ET Equipment/tools unavailable

PA Part/FixtureAdjustment

RM Reset machine


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OEE CALCULATION

Equipment: _________________________________ Date: ________________

Part: ___________________________________ Shift: ________________

AVAILABILITY

A. Total Available Time: 1440 min

B. Planned Downtime: Minutes Lost 0 minPreventive Maintenance

Setups

Tool Changes

Shift Not Running

C. Net Available Time: (A - B) 1440 min

(Total Available Time - Planned Downtime)

D. Emergency Downtime: 0 min

(Taken from downtime reports) Minutes LostBreakdowns

Stoppages

E. Resource Downtime: Minutes Lost 0 min

People unavailable

Material unavailable

G. Operating Time: (C - D - E) 1440 min

(Net Available Time - Downtime)

H. Resource Availability:{(Operating Time / Net Available Time) x 100} (G / C x 100) 100% %

PERFORMANCE EFFICIENCY

I. Total Parts Run: parts(Good and bad parts)

J. Ideal Cycle Time: min/part

K. Performance Efficiency:{(Ideal Cycle Time x Total Parts Run / OperatingTime) x 100}

(J x I / G x 100) 0%

QUALITY RATE

L. Total Defects (Rejects & Scrap): parts

M. Quality Rate:{((Total Parts run - Total Defects) / Total Parts Run)x 100}

(I - L / I x 100) 0.00%#DIV/0!

OVERALL EQUIPMENT EFFECTIVENESS

N. Overall Equipment Effectiveness:{Resource Availability x Performance Efficiency xQuality Rate x 100}

(H x K x M x100)

#DIV/0!


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Analyze

Total

Time

After

Activities

Material

Handling

Time

Away

from

Machine

Schedule

Time

Quality Machine

Down

Tooling Prev.

Maint.

Set Up

Lamb

Study

62.00 11.00 10.00 5.00 2.00 3.00 7.00

Line A 56.40 21.00 10.00 2.00 3.00 7.50

Line B 51.00 4.40 23.30 9.10 7.10 0.62 3.75 0.67 0.00

Line C 76.90 0.00 6.80 4.00 3.57 0.00 0.40 0.00 8.30

0

10

20

Materia

l

Time

Schedule

Quality

Machine

Tooling

Prev

.

Setup

Lamb

Line B


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Tips fo r Su ccess

A) It

is a fact tha t to show progress you mu st ha ve a start ing point. The Big

improvements

B) Regar dless of how to your per form th is calcula tion, it

should be consist ent . Assembly, ma chin ing, pain t, and test ma y all

however, th ey should all calculate th eir OE E the sam e way

C) OEE ra tios ar e ut ilized to cha rt improvement of a

specific piece of equipmen t aga inst its baseline mea sur emen t. Be war y

OEE s of other opera tions, th ey will ha ve differen t ba seline

measurements.

D) T a r g e t e d t o T e a m s -- OEE is designed for t eam s t o record th e big losses

an d for tea ms to cha rt t he resu lts after improvements a re ma de. This

will allow tea ms to ident ify which improvement s h ave a significan t effect

on t he equipment an d which did n ot work as expected.

The tea m can use st an dard problem solving tools to react t o the dat a. By

its na tu re OEE an alysis is cross functiona l.

E) Don t co l l ec t w h at you won t u se! -- Successful application of this

technique provides meaningful information that requires action. If there

is no int ent ion t o ma ke impr ovement s, dont a sk t eam s to collect da ta .

Avoid over collecting OEE dat a. Tha t is once base line mea sur emen ts a re

established, make t he improvement, th en re-measure .

F) U se O E E i n c o n ju n c t io n w i t h o t h e r s t a n d a r d p r o b l e m s o lv in g

too ls -- The OEE calculation is not mea nt to define a bottleneck, or a

const ra int. Rat her it est ablishes wha t t he losses ar e at a specific piece of

equipmen t, an d allows a pla n t o be developed by th e tea m forimprovement . The use of a pa reto ana lysis is ma nda tory to ma ke th e

results of OEE meaningful.


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T r a i n i n g a n d R e s o u r c e s

Seven Step P roblem Solving techn iques. A tea m t ra ining to use th e tools requires

as litt le as one hour, but is best when proceeded by a kickoff program th at ties

Society of Automotive En gineer s, Inc.

400 Comm onwealth Dr ive

And

Na tional Center for Manu factu ring Sciences, Inc.

Ann Arbor, MI 48108

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