2/24/2009

A FAILING GRADE

Filed under: — Doug Contreras @ 2:22 pm on

On his second day as head of operations, John was assured by the maintenance manager that Excelsior had a solid PM program in place. With seemingly more important things to learn, John accepted the convincing response on face value. As a newcomer to the trade, John did not know that major customers routinely audited vendors’ facilities, procedures and practices to insure uninterrupted flow of materials and supplies.

Exactly two weeks after John’s start, Excelsior’s largest customer arrived unannounced to conduct an audit. Among other things, it cited the company on its unacceptable PM program awarding it a failing grade.

With only a month to comply, John jumped on the problem, finding that the company had an extensive set of procedures in place and a composition book assigned to each piece of equipment to document the required maintenance. While the procedures looked good, examination of the forty-eight composition books revealed a total of seven undated entries! Immediately, it was clear what was missing:

  • A way to monitor the what and the when;
  • A way to communicate the information; and
  • A way to track responsibility and insure completion.

John called in a local business consultant, who had significant experience in operations management and database design. The approach was as follows:

  • A database program was created to monitor and communicate maintenance actions.
  • Key people were trained.
  • Hard copy maintenance work orders were generated twice each week.
  • Upon completion of the maintenance, the maintenance work orders were signed, dated and returned to management.
  • Management recorded the action as complete in the database.
  • To track responsibility and progress, an open item report was established and issued to key maintenance and management personnel every Wednesday.

Since implementation, the program continually passes the toughest of audits including one performed to evaluate the company’s readiness for an FDA inspection. The most positive change has been the improvement in equipment reliability. Downtime due to breakdowns is practically non-existent - not bad for a company where the average equipment age is 30 years!

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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2/17/2009

APPLES TO ORANGES

Filed under: — Doug Contreras @ 3:40 am on

Allied provided machine shop services to a number of small automotive repair shops in Southern New Jersey. Sixty-five percent of their work comprised of limited production runs to replace or repair parts that were no longer available. Daily production reports were nothing more than a written chronicle of the previous day’s activity and included the following:

  • Customer Name
  • Product Description
  • Product Code
  • Work Order #
  • Line #
  • Production Operation Performed
  • Operator
  • Hours
  • Amount Produced

Absent of any comparison or analysis, each person reading the report saw a different result. And while it was probably equivalent to adding apples to oranges, the production clerk totaled the hours and totaled the production with the hope that these nondescript sums would inspire some action on the part of supervision. Copies of the report were distributed to the owner and each of the key managers while one was placed on file and never seen again.

Since most of Allied’s jobs were custom, individual expertise and effort played a major role in daily productivity. Viewing this as an opportunity for significant improvement, the game plan went as follows:

  • Define every single step in the production process;
  • Through consensus of key managers, set up interim standards;
  • Develop a database program to record and analyze the information;
  • Input the data daily and generate audience-specific reports for all;
  • Explain expectations with regard to interim standards;
  • After six months revise the standards to reflect history and achievability;
  • Insist on accountability and reward favorable results.

One year later Allied’s productivity increased by 22%. As an added benefit, the data collected afforded the company with reports and analysis on line utilization and equipment efficiency.

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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