VISCOUNT Plastics wanted to be able to bench mark its factories against international best practice and needed a way to cost effectively monitor and manage key performance indicators such as reject rates, machine cycle efficiency and equipment utilisation.
Here's how Viscount and partner Production Logistics NZ developed and deployed a real-time scheduling and production monitoring application that provided production staff with a single source KPI monitoring tool supplying real-time up to the minute information and total visibility of performance.
Viscount Plastics has eight manufacturing plants in Australasia and a further five in South East Asia. Several years ago Viscount Head office set a goal to achieve World's Best Practice within the Plastic Moulding Industry. In the past six years Viscount has been extremely successful in moving toward best practice in Occupational Health and Safety. Improving manufacturing efficiency was the next step.
The business objective
The UK organisation, Process Industries Centre for Manufacturing Excellence, identified in its report on the competitiveness of the UK process industries in 2002, that the UK's overall performance is average. The study found that on average UK process industries were not using 28% of the capacity of their plants. The study estimated that an improvement of 11% in Overall Equipment Effectiveness (OEE), an international measure of plant efficiency, would yield a £7,000/year per employee increase in capacity. The report referred to this unutilised capacity as "hidden plant".
Although no comparative study has been done in New Zealand and Australia it is probable that industries in these countries performed similarly. With this information in mind the strategic thinkers at Viscount set about devising strategies to achieve ongoing improvements in productivity. With the goal of achieving international best practice in a Lean Manufacturing environment Viscount decided to:
* Establish and train operational improvement teams. The teams consisted of operators, supervisors and engineering/technical personnel. The teams' very closeness to the process has meant they have been able to deliver improvement very quickly.
* Set specific KPI objectives. With international best practice data available in OTIF (On Time In Full), Overall Equipment Effectiveness, Changeovers, Finished goods stock and raw materials stock known company wide targets could be set.
* Empower staff and foster ongoing improvements in performance. With skilled staff in place armed with the necessary tools and KPIs defined, the management team only needed to provide encouragement, support and time as the main resource.
Phase 1: Establish teams and KPIs : During the first phase of this initiative a project/process improvement team was established at each factory. Key performance indicators were defined and the staff trained in data gathering and analysis methods. The Overall Equipment Effectiveness (OEE) KPI was set as the key measure of production efficiency. This measure became very important for production staff as they began to monitor OEE at a 2 hourly interval.
Phase 2: Automate data gathering and analysis. It soon became apparent to production staff that to improve OEE accurate measurements of the three components that make up OEE are required.
OEE is defined as follows; OEE = %Availability x %Performance x Quality = fully productive time/production time. This is where Production Logistics NZ's real-time OEE production monitoring and scheduling application, Aspect PL, came in. This application was able to accept works orders from Viscount's MRP system, schedule jobs against machines and measure progress in real-time and monitor availability, performance and quality to give OEE by minute, hour, day, week, job, machine or whole factory. With the power of this tool Viscount were able to constantly monitor in real-time production performance and to react quickly to problems as they occurred.
Phase 3: Ongoing improvement. With the teams and systems in place the challenge before Viscount is to continually improve performance by tapping into their production staff expertise and enthusiasm. With staff being now largely free of the data gathering and analysis tasks, as information is only a mouse click away, they are now able to focus on what is really important, improving efficiency, unlocking capacity and strengthening company revenue and bottom line.
To date the results of Viscount initiative have been astounding. In its Auckland factory alone they have;
* Decreased stock levels by scheduling more accurately in real-time.
* Produced 15% more last year compared to previous year.
* Reduced casual labour on an average of 6 people for whole year.
* Increased OEE by more than 10% in one year.
* Increased up time.
* Decreased rejects.
* Increased cycle efficiency.
* A 5% increased in on-time delivery.
* Reduced raw material stock significantly.
It is anticipated that this success will be emulated throughout Viscounts plants in New Zealand and Australia.