Improve Equipment Effectiveness by Targeting 11 Major Losses

Jeff Shiver
Tags: maintenance and reliability, planning and scheduling, continuous improvement

Everyone wants a silver bullet to address the competitive environment pressuring profits and, ultimately, jobs in North America. Having transitioned from a controls engineer to a maintenance manager to an operations manager, I can attest to the quest for that silver bullet.

The reality is that few levers exist for you to pull that will radically improve the profitability of your organization. With global markets and price supports, commodity costs are generally fixed. The same applies to prices received for your company’s products or services. Labor markets and costs are somewhat fixed as well. With the exception of fuel surcharges, logistics costs are generally set.

As a maintenance or operations manager, your span of control is bound by the four walls of your site. With energy prices, some opportunities exist for cost reduction in pursuing energy audits and savings activities.

The largest opportunity is focusing your efforts on improving overall equipment effectiveness by targeting the 11 major losses. In targeting these losses, it’s not uncommon to return more than 400 percent and improve employee engagement in the process.

The 11 losses are divided into four major categories: planned shutdown, downtime, performance efficiency and quality losses.

Planned shutdown losses: This category is not often considered a loss, and it can be a hidden opportunity to produce product.

Downtime losses: This category includes the following areas of loss:

Performance-efficiency losses: This category includes losses where equipment speed, output or capacity is not met.

Quality losses: These losses make up the final category. Quality products can’t be made from poorly maintained equipment nor can quality be maintained from equipment that is consistently out of specification. If the equipment is running at design rate and is available on demand, yet it is not producing quality product, it’s just making waste at rate. Not only do you lose capacity and labor, you lose the material costs.

Armed with this knowledge, challenge yourself by walking around your site and determine where the opportunities for improvement are available. You might be surprised when flipping over the unturned stones.

Stop these losses by developing a program of maintenance for your equipment to assure capacity. Require support from all groups involved with the daily use of the equipment and solicit input from employees at all levels within your company. Using these engaged employees, create a passion for performance and provide quantifiable results.

“CPMM Review Book, 2nd Edition”, AFE
“Total Productive Maintenance in America”, SME
“Successfully Installing TPM in a Non-Japanese Plant”, Hartman
“Practical TPM – Successful Equipment Management at Agilent Technologies”, Leflar