Watch yield and uptime in a 'continuous' process

Bangkok Post

This week's article is the final one in our series on what types of continuous improvement initiatives your manufacturing company should consider. We have suggested that, in order to choose the right improvement theme, you need to consider the nature of manufacturing process types used in your organisation.

The most appropriate improvement theme should focus on improving the critical aspect of each process type. In our previous articles, we have covered the first four process types, which are "project", "one-off", "batch", and "line". The last process we are going to discuss is the "continuous" process.

Companies with continuous process generally offer a narrow range of products in markets where product change and the rate of new product introductions are comparatively low. The company will sell products rather than capability, and large customer orders will be won principally on price. Examples are the processes of petrochemical refineries, steel or paper making, sugar producing, electricity utilities and beer brewing.

In a price-sensitive market, the key manufacturing target will be low-cost production. To help keep costs low, the process will be highly dedicated, where the cost structure is based on high production volumes and a need to achieve high plant utilisation. The fixed nature of capacity creates restrictions when increases or decreases in output are required, with the decision based upon whether or not to add capacity and/or build a new facility on the one hand, or how often to run the plant, known as campaigning, on the other.

The high-volume nature of these businesses lends itself to a centralised, bureaucratic organisational style. Manufacturing performance is measured against budgets while variance analysis is essential and investment proposals are centrally monitored. The production manager must understand the process and product technology, with the ability to co-ordinate the high level of specialist support for manufacturing.

The high plant investment and high volume output offer the opportunity to keep raw material inventory or a planned usage basis, with a built-in buffer to cover uncertainties. Work-in-process will be relatively low with inventory of finished goods high. This is due to the need to maintain output levels at all times against fluctuating sales patterns. In many cases, however, finished goods are held in the distribution system or in retail outlets.

Process investment is high, direct labour costs are small, and the highest cost is usually in materials. Site/plant overheads will be high in order to support the process and handle the high output levels involved.

Companies or business units with a continuous process should focus their improvement effort on two things that cost them the most: raw material yield efficiency and machine uptime. There is no common theme that focuses specifically on improving the yield efficiency of raw materials due to differences in yield characteristics.

Many companies, however, successfully apply statistical tools, as a part of a Six Sigma initiative, to improve yield efficiency. We have talked about Six Sigma in one of our previous articles.

To improve machine uptime, there are a few improvement themes. The best-known one is Total Productive Maintenance or TPM. TPM was developed by the Japanese Institute of Plant Maintenance (JIPM) to involve both production and maintenance people in increasing Overall Equipment Effectiveness or OEE.

Because the TPM concept has been around for decades, some companies have considered more recent maintenance-related improvement themes such as Business Centred Maintenance or BCM. BCM addresses all systems and activities needed to ensure maximum equipment availability and performance at an optimum cost by an asset care maintenance strategy.

A main focus is the prevention of equipment failures through an effective preventive maintenance programme and the analysis of the current failures to prevent re-occurrence. Inherent equipment availability, reliability and maintainability are also improved through phased maintenance prevention for new equipment and reliability modelling.

With this, we conclude our series. As we said at the outset, business success hinges on improvement from one year to the next, so approaches must be chosen carefully. However, since improvement initiatives are numerous, executives often have difficulty selecting the "right" one. We trust that our commentary has proved useful to you.