Successful Lean Implementation Through Strategic Selection ... · 1STEP INITIAL CLEANING OF MACHINE...

Successful Lean Implementation Through Strategic S l ti E ti d C ti I t

Martin Nazareth & Mark Keneipp

Selection, Execution and Continuous Improvement

pp

AA

Topics

Introduction Alcoa & ABS Overview

Autonomous Maintenance (AM) – What & Why

Introduction – Alcoa & ABS Overview

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Autonomous Maintenance – Where to Focus

Overall Equipment Effectiveness (OEE)

Summary & Discussion

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Alcoa Global Primary Products

North America:Smelting 2.8M tonnes

Europe:Smelting 0 6M tonnes Key Facts (2006)Smelting 2.8M tonnes

Refining 2.3M tonnesSmelting 0.6M tonnesRefining 1.3M tonnes

Key Facts (2006)•26 Smelters on 5 continents

9 refineries on 4•9 refineries on 4 continents

•3.6 mmt Aluminum Production 11% of

Latin America:Smelting 0.3M tonnes

world output

•15.1 mmt Alumina production – 23% of world output

RefinerySmelterRefinerySmelter

Refining 2.6M tonnesAustralia:Smelting 0.4M tonnesRefining 7.8M tonnes

world output

•$8.9 billion in 3rd

Party Revenue

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Stand-alone bauxite mineStand-alone bauxite mine

Alcoa Business System (ABS)

GOALS: GOALS: Best Quality Lowest Cost Shortest Lead TimeKEY IS:KEY IS: Thorough Elimination of WasteThorough Elimination of Waste

JUSTJUST--ININ--TIMETIME AUTONOMATIONAUTONOMATION(“Jidoka”)(“Jidoka”)

• Continuous Flow• Pull System • Machines Stop Pull System• Takt Time and notify of

Abnormalities

• Separate Man’s work & Machine’swork & Machine s work

LevelingLeveling(“Heijunka”)(“Heijunka”)

StandardizedStandardizedWorkWork

Continuous ImprovementContinuous Improvement(“Kaizen”)(“Kaizen”)

StabilityStability(e.g., Equipment Reliability, Stable Processes, Quality Materials)(e.g., Equipment Reliability, Stable Processes, Quality Materials)

PEOPLE4

PEOPLE

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Why Focus on Autonomous Maintenance• One of the keys to creating a culture of execution and

achieving successful & sustainable ABS deployment is “Engagement & Ownership”“Engagement & Ownership”

• Autonomous Maintenance (AM) is one of the Lean Manufacturing tools used at Alcoa to drive engagementManufacturing tools used at Alcoa to drive engagement and ownership

• In addition, AM helps reduce equipment relatedIn addition, AM helps reduce equipment related breakdowns, accidents and defects which is key to Alcoa’s success

• Hence, the focus of this presentation: – Strategically selecting focus equipment, operation or problem

combined with strategic execution and engagement results in

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combined with strategic execution and engagement, results in sustainable implementation and continuous improvement

7 Levels or Steps of AM

7 STEP

PRACTICE FULL SELFContinuous Reduction of All Losses S lf Di t d

5 STEP

6 STEP

QUALITY MAINTENANCE

SYSTEM

Address Quality Losses

PRACTICE FULL SELF

MANAGEMENT

Standardization

Self Directed

3 STEP

4 STEP

GENERAL EQUIPMENT

GENERAL PROCESS

INSPECTION

Expand to CompleteProcess & Systems

SYSTEM

Establish BasicTrain Operators

.2 STEP ESTABLISH INITIALCLI STANDARDS

GENERAL EQUIPMENT INSPECTION

Visual management1st 3 steps

MAINTAIN

Train Operators

Lubrication

Equipment Condition SUSTAIN

Reduce Time to CleanImprove access to check points

1 STEP

INITIAL CLEANING OFMACHINE

Basic Cleaning and Tagging of Defects RESTORE

CONTAMINATION& INACCESSIBILITY

IMPROVE

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MACHINE Tagging of Defects

At Home – and At Work!!!!

AT HOME

Fuel

AT YOUR PLANT

ACheck air pressureFuel

Check oil & coolant level

ACleanliness

Check hydraulicspressure

Tire Pressure

Check lights Cleanliness Check lubrication

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Why Clean???

CLEAN TO INSPECTCLEAN TO INSPECT

INSPECT TO DETECTINSPECT TO DETECT

DETECT TO CORRECTDETECT TO CORRECT

CORRECT TO PREVENTCORRECT TO PREVENT9

Potential for F il i

Asset Health and the PF CurveFailure is

Introduced

Ultra

PdM Target = 15% Diagnostic + 35% Corrective Work = 50% Total OEE

Losses and Cost t R iUltra

Sonic Waves

Vibration Infrared

The equipment will ll h i i h i

Oil Analysis

$ x 10to Repair

Can Hear Ittell us that it is having problems before final

failure, if we are listening.

PM Target = 15%

Diagnostic + 15% Corrective

Work = 30% Can Smell It

Can See It$ x 5

Total

OEE Losses

and Cost to Repair

Temptation to Avoid: Using PdM & PMs

processes but then optimizing a run to failure

philosophy

Failure Occurs

Can See It$ x 1

Target = < 20%

to Repairphilosophy

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“Time from P to F” can be Weeks, Days, Hours, or MinutesPlenty of Time for

Excellent Planning & Scheduling

Little to No Time for Proper Planning &

SchedulingUnplanned-Unscheduled R&M work is 7 times more

expensive than planned-scheduled work!

Why do Autonomous Maintenance?

90

100Operations PhaseStart-Up

Phase

AM/TPM equipment4 5 6

70

80"normal" equipment

1 2

50

603

OEE

20

30

40

1. Historical performance of badly maintained equipment2. Rebuild or major overhaul of equipment (costly, loss of

production)3. Early wear-out, shortened life

0

10

20 3. Early wear out, shortened life4.

5.

6.

Improve new equipment, bring up to design/constructionerrors (TPM-MP/FI).Maintain equipment at it's highest level of performance(TPM-PM/TPM-EW) and extend it’s useful life.Reduce consequences of wear-out, replace worn parts, etc. (TPM-FI/PM).

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0 1 2 3 4 5 6 7Time

ABS & AM - AM Impact

Labor“Ice Berg” Effect

Reported Costs

LaborMaterials

Downtime

Safety Customer Complaints

Emergency PurchasesSafety

Lost Business

Customer Complaints

Missed SchedulesScrap

Ripple EffectCrisis Management EnergyRipple Effect

Unreported CostsStart-up/Set-up/Clean-up

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Unreported Costs

AM – Benefits to Maintenance

Add "High Tech""HIGH TECH"

O

Maintenance Departmentfrom "Low Tech" to "High Tech"

Add "High Tech"work:

Equipment:- Improvement- Overhaul- Monitoring

WORK

Delegate "routine"work to operators (after training)

g

Major PM,including:

PredictiveMaintenance

MAINTENANCEDEPARTMENT

men

t

Equipment:- Cleaning- Adjusting- Lubricating- Set-up- Inspection (most)- PM (some to most)

New EquipmentDesign

Training of tena

nce

Dep

artm

- Minor repairs (some)g

Operators

"ROUTINE"(Approx. 30%)

Exis

ting

Mai

nt13

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Identifying the Critical Operation (Contd.)

Supply DemandSupply Demand

P C S

OEE?OEE Loss? OEE Loss?

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Identifying Solutions• Once the critical operation

has been identified and focused cleaning and

Hi

improvement events take place, there will be several opportunities identified for i Th l C

ost

“Long Term”“Reevaluate”

improvement. The natural tendency is to:– Request for investment

especially those that have been mpl

exity

/Cespecially those that have been rejected over the years

– This will be a major issue in achieving success

Com

“Immediate Reduction of Losses”

“Immediate & OngoingDaily Management”

• Hence, recommend classifying the solutions based on value and cost or

Lo

HiPotential ValueLo

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complexity and selecting those with high value & low cost

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OEE As A Measure of Effectiveness• OEE is a simple powerful tool for finding waste:

– It is designed for operators on the shop floor to track performance and improve their work

– It is a key measurement of equipment stability – It is used to break down large capacity problems into small, controllable losses

that can be solved on the shop floor

• OEE losses are often referred to the six big losses and are broken down into three categories:– Availabilityy

• Breakdowns• Setup & adjustment time

– Performance• Idling & minor stoppages• Reduced equipment capacity

– Quality

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Qua ty• Process scrap• Quality scrap

Types of OEE Calculation & Issues• Two ways to calculate based on time:

– Total time approach (for snap shots of Utilization or TEEP)– Scheduled time approach (Recommended for ongoing OEE)Scheduled time approach (Recommended for ongoing OEE)

• Two ways to calculate based on elements of OEE –either approaches are OK to use

C it h– Composite approach– Elemental approach

• Several deficiencies are apparent in the way we pp ycalculate OEE:– Purpose and location of measurement/calculation is not clear

C l l ti i t i t t Eff ti i f d ith– Calculation is not consistent – Effectiveness is confused with utilization

– Calculation and improvements are not connected to financial results

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OEE Calculation• Composite Approach (Also referred to as “Unit Based”):• Actual Good Units Produced• OEE = x 100

N b f G d U it t St d d C l Ti• Number of Good Units at Standard Cycle Time

• Elemental Approach: (Also referred to as “Component Based”)

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OEE Application – Inclusions & Exclusions

• Planned maintenance >= 7 days• Waiting due to no orders, store full, no pull• Regularly scheduled meetings

Exclude – Should not Impact OEE• Changeover/Setup• Tooling not available• No or short crewing

Include – Will Impact OEE

• Regularly scheduled meetings• Load/Unload time @ standard time• Improvements in standard time• Lunch/Breaks – Unrelieved• Planned scrap

• No or short crewing• Waiting on material• Product not meeting specifications• Late start and Early shutdown• Planned maintenance < 7 days (Unplanned)• Extended PM/downtime past planned PM time

• Rules of Thumb:Does the calculation expose problems in particular the problems related to the– Does the calculation expose problems, in particular, the problems related to the business problem you are trying to solve?

– Is the calculation easy to understand and calculate on the shop floor?Are the problems within the operators’ control? Things not in the operators’– Are the problems within the operators control? Things not in the operators control:

• Planned scrap (e.g., side scrap)• Machine design leading to long manual load/unload times (however

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• Machine design leading to long, manual load/unload times (however, standard load/unload times are still required, and times exceeding them are OEE losses)

OEE Dashboard Liked to Financial Results

Overall Equipment Effectiveness Dashboard 2008

Jan-08 Feb-08 Dec-08 2008

OEE Gap $ Value to

Close Base to 2008 Goal

Annualized OEE $ Gap

Value Achieved for

2008

Definition at 100% OEE

How much

Baseline2008 (1st

Half)

Previous Year

Actual

OEE$ / 1.0 OEE Pt Per Yr

OEE Gap $ Value to

Close Base to 100%

Annualized OEE $ Gap

Value Remaining

Current Year Goal

Department

2007 Goal 61.0% 61.0% 61.0% 61.0%

$346,154 ($148,846)

can be produced at 100% capacity and what equipment determines the pace

56.0% 61.0% $2,626,700 $2,775,546

XYZ

$69,231 56.0%

Actual 53.8% 53.9% 53.9%

2007 Goal 100.0% 100.0% 100.0% 100.0%

($756,818)$1,125,000$1,125,000

the pace

How much can be produced at 100% capacity and what $40,909 72.5% 45.0% $1,881,818 Process

ABC 100.0%

Actual 43.0% 65.0% 54.0%

Total Value $3,751,700 $1,471,154 -$905,664 $4,657,364

and what equipment determines the pace

ABC

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Creating Your Dashboard• Dashboard is better done for long term tracking at a

process or department level • Creating your dashboard should reflect your own

business case, hence, do not copy• Steps:

– Identify the target processes and departments based on business caseCalculate the OEE to $$ equation (1% OEE = ?? $$)– Calculate the OEE to $$ equation (1% OEE = ?? $$)

• Define the 100% OEE• Calculate the savings’ potential (amount left on the table)• Develop the equation

– Set a baseline and target OEESetup the dashboard

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– Setup the dashboard– Develop a reviewing, problem solving and reporting cadence

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Creating a Culture of Execution through Successful & Sustainable Deploymentp y

• Identify the most significant opportunities• Focus on no more than the organization’s capability to quickly turn

aro ndaround• Ensure engagement

– Everyone knows Why, the Business Case, and is passionate about it– Understand the Current Condition and focus Where it is strategically most

beneficial– Develop a quickly achievable Target Condition with hi-value low-cost

solutions on How to fix itsolutions on How to fix it– Follow through on Actions to completion and – Celebrate the accomplishments

E t i t i l f ti i t t• Ensure a system is put in place for continuous improvement, to Measure effectiveness, expose problems and fix them

• Ensure continuous focused improvement – Fix and go back to the fi t t

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first step

Summary• What have we covered:

– Successful approaches at Alcoa using ABS and AM to demonstrate creating a culture of execution

– Identification of the most strategic opportunities– Engaging employees through Autonomous Maintenance– How OEE is used in combination with ABS and AM to:

• Drive overall productivity improvements• Drive overall productivity improvements • Drive toward zero breakdowns, accidents and defects

– How to encourage continuous improvement through OEEHow to encourage continuous improvement through OEE and the dashboard

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Questions

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Closing Slide

• Presenter name: Martin Nazareth• E mail: martin nazareth@alcoa com• E-mail: [email protected]• Successful Lean Implementation

Thro gh Strategic Selection E ec tionThrough Strategic Selection, Execution and Continuous ImprovementN b VS5 07• Number: VS5-07

• Please return your completed session survey to the room host.

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