Case studies
UKAEA Harwell - Reducing Costs in Decommissioning
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Problem
UKAEA’s site at Harwell, like other nuclear facilities across the UK, has the task of decommissioning and cleaning up their nuclear legacy built up over 60 years of operation. Intermediate Level waste is stored at the Active Waste Retrieval Plant, where 10,000 waste cans are due to be processed and re-packaged. The cans need to be extracted from the tube store by a Retrieval Machine and taken to the Head End Cell (HEC) where they are tipped, assayed, sorted and repackaged and eventually grouted into 500l stainless Steel drums, ready for transportation to the national repository.
The end to end process involves a complex sequence of operations and plant interactions that constrain the throughput rate of cans and directly impact upon the completion end date. In addition, the performance of the plant is further under the spot light as it is on the critical path for the Harwell site clearance and subject to regulator attention.
UKAEA is aware of the need to accelerate the programme if at all possible and save upon the Nuclear Decommissioning Authorities annual spend of £2 billion to clean up facilities across the UK.
Solution
Two key bottle necks exist in the plant, the retrieval process and the HEC. The first required the investment in a new machine and the second needed production optimization. UKAEA asked oee to help with both aspects by applying modern “lean” manufacturing techniques from industry.
oee helped staff to understand the production losses in the HEC and to create a measure called Overall Equipment Effectiveness. The top 10 losses are then displayed graphically by the Cell and reviewed in detail every month by a team consisting of engineering and operations staff. The largest losses are prioritized and attention focused on them to reduce them, using a structured team based problem solving process.
The same approach was used to understand the losses with the existing retrieval machine and in the procurement of a new machine, which is due for operation in 2008. This measure was used to assess the relative performance between two competing designs and to predict the likely throughput rates and end dates for retrieval operations. Selection of the vendor was in part, based upon this assessment. During the design evaluation process scheme enhancements were identified and many have been implemented. Further improvements have been implemented by adopting another technique from industry, Single Minute Exchange of Dies (SMED), to reduce the change over times during the retrieval process.
Results
Throughput rates in the HEC have more than doubled since the adoption of the OEE measure and problem solving process. Further improvements are also being planned as the whole end to end process is optimised.
As Stuart Watson, the operations manager for the facility says "It’s given us the insight and process to focus our attention on the areas that really count … our staff think the approach is great as they can see how an issue in the Cell is captured and resolved for good.”
“We are also more confident about the purchase of a new piece of equipment, as we have studied its moves during the retrieval process using a 2D and 3D model and know where the delays occur. Our challenge now is to optimise the retrieval process and accelerate our end dates.”
Stannah Stairlifts Limited – Competitive Pressures and Declining Profits
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Problem
Even Stannah Stairlifts, whose name is synonymous with its product, is not immune from competitive pressures. Despite being the world leader in stairlifts since 1985, a Company graph produced in May 1999, (which became known simply as “the Graph,”) showed return on sales at a quarter of its 1994 high and still falling. The implications for the future were clear; what to do about them less so.
Stannah Stairlifts, based in Andover, Hampshire employs c.500 people and is still owned by the Stannah family who founded the Stannah Group in 1860. Continued family ownership had brought the advantages of stability and commitment to retaining manufacturing in the UK. However, it had also meant that a more paternalistic approach to managing the company had encouraged senior staff to see their role as taking all the decisions and being responsible for initiating all improvements. Showing “the Graph” to the whole Company was the starting point of an improvement programme.
In addition to articulating the crisis, Stannah realised that it needed support and oee were brought in to help. In many ways Stannah Stairlifts had become a victim of its own success. By concentrating on delivering the volumes created by customer demand, it became clear that Stannah had taken its eyes off the “cost, quality, delivery” ball. In the meantime, the competition was getting stronger and the two together were eroding the company’s profitability. Major changes were required if the company was to reverse the trend and deliver the performance required to remain market leader.
Solution
With the help of oee, an improvement strategy comprising three strands was developed. These strands were: Communication, Performance Management and Continuous Improvement (CI). The Communication strand built on the process that had already started with “the Graph.” In Managing Director David Walton’s words, “The Graph created a different company atmosphere and allowed us to start making changes”. The Communication plan succeeded in creating the buy-in necessary to engage the staff with the improvement process and helped them understand why change was necessary. The Communication process flowed into the next strand, Performance Management. Now, annually the Company plan and objectives are cascaded to everyone in small groups.
Stannah has always been a people orientated business, but oee identified new ways for the Company to help get the best from its staff. The process was about professionalising the workforce and everyone in Stannah was given personal objectives and personal development plans with a focus on increasing their own skills.
Finally, the most crucial strand and most difficult to achieve was the introduction of a highly effective CI programme. “With previous CI efforts people were told ‘okay go do it’ but with no support. Needless to say the CI activity dwindled until it stopped altogether. oee convinced me that I had to lead from the top and commit resource to our CI process to make it work,” says Walton. “We started with three full time people with oee supporting, at a cost which represented 10% of annual profits. That was commitment.” Over a year the three staff and oee trained the company in basic problem solving and team working. Today four out of five employees have been involved in CI projects and CI facilitation is only half of one person’s role. This reduction in full time CI effort results from the success oee have had embedding the improvement process into the business. Walton continues, “Our success is reflected in management activity compared to the past. We no longer think how can we solve the problems but how can we give our people the tools to solve the problems.”
Results
Stannah’s results are clear:-
- 60% rise in sales and profits have risen steadily from 2000 onwards;
- 65% rise in productivity;
- 85% improvement in quality with ontime delivery running at 99.8% and quality defects have fallen by 75%;
- Over £1.7m savings have been attributed to the CI activity alone;
- Importantly, morale has also improved with employees now receiving
3.5 times what they were in 1999 through the company profit sharing
scheme.
The success that Stannah Stairlifts has achieved culminated in industry recognition when they became DTI Best Factory 2003.
David Walton sums up oee’s role in helping Stannah to succeed like this, “oee helped persuade me and my team of the likely benefits of CI, as well as helping with the planning and implementation. Importantly we achieved our mutual objective of becoming self sufficient in the approach over time. It was an ideal collaboration between our two companies.”
topAutomotive Supplier – Increased Capacity with Minimum Spend
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Problem
A supplier of consumable products to the automotive industry was under customer pressure to increase supply volumes by 30%.
Whilst a limited amount of investment capital was available, there was little additional factory space for new equipment. Additionally, the Board was demanding a significant improvement in return on asset investment. Tight margins did not allow the additional capacity requirement to be met by the application of overtime.
Solution
oee analysed the operation and found that once the OEE measure was applied a number of improvement opportunities were revealed. An in-house team with members representing relevant functions and shift teams was assembled to prioritise these opportunities and implement improvements.
The project was conducted over 3 months and featured:
- Introduction of OEE measure
- Identification of production bottle-necks
- Formation of structured Problem Solving Groups to identify, prioritise
and implement lasting improvements based around the application
of:
- Standard Operations
- Production scheduling based on the bottle-neck
- Changeover reduction (SMED)
- 5s
- Maintenance redesign – providing focused support and spares policy
- Cell redesign and layout implementation using existing equipment
Results
The project achieved the following improvements:
- OEE improvement from 62% to 84%, with consequential throughput targets reached
- Annualised savings of £700k
- Programme cost £150k
- Skills and measures transferred to the in-house team
- No additional space required
FMCG Manufacturer – Maximising productivity through focused improvement activity
This case study is also available as a pd, please click here to view (60kb).
Problem
A global competitor to our customer was poised to enter the European market with a novel product and was expected to begin a major marketing campaign within the next 6 months. The customer wanted to meet this challenge by launching a similar new product ahead of the competition, but needed to free up significant capacity to achieve this. The Overall Equipment Effectiveness (OEE) measure had been in place for a while, and the operation had lots of ideas for improvement, but no way of prioritizing these to ensure the biggest return on investment. Senior management was not confident that manufacturing was pursuing the optimum improvement plan.
Solution
Over an intensive 4-month period oee worked as part of a customer team with representatives from departments ranging from marketing, sales, purchasing through to shop floor teams to identify the optimal improvement programme. They began by quantifying the size of the opportunity (establishing what a 1% increase in oee was worth in terms of cost, sales, profit and service). They then identified the cost of various improvement interventions. The risk to both opportunity and cost was modelled, and an overall OEE Value Model developed.
This informed the focus of the improvement programme and subsequent interventions included:
- Vendor rework on critical equipment
- Application of process control tools
- Rapid change out on high wear components (SMED)
- Introduction of planned and routine maintenance regime
- Developed best practice standard operations procedures
- Identification of technician training needs
- Introduction of single point lesson
Results
The project resulted in the following improvements:
- AverageOEE increased from <20% to 40%
- Marketing campaign initiated ahead of competition
- Successfully delivered product to market before competition
- The gross profit from increased sales was in excess of £5M per annum
- Flexibility of production increased to meet variable market demand
- Skills were transferred into operations
- Return on investment greater than 10:1
Beverages – 35% Productivity Improvement
This case study is available as a pdf, please click here to view (60kb).
Problem
A Beverage brand owner had invested several million pounds in a new production facility. This was not achieving the planned production rates (nor oee targets), leading to an order backlog, combined with cost escalation and falling profit margins. Planned business development was based on similar production facilities and therefore under performance threatened further company growth.
Solution
oee conducted an audit of the new operation. Although the facility design had been based on an anticipated Overall Equipment Effectiveness rate of 80%, the actual OEE rate being achieved was only 64%. It was quickly established that the Availability and Performance rate losses were insignificant in comparison with Quality losses. On oee’s recommendation, an improvement team consisting of supervisors and shop floor operatives (and involving the supply chain), was created to look at the quality losses. The team was then trained by oee in:
- The systematic identification of OEE losses
- Team based problem solving
- Appropriate improvement techniques
Root-cause analysis by the team revealed that the automatic inspection equipment was neither correctly set, and its capability was not constantly measured. The team were then able to implement:
- Standard operations to ensure that automatic inspection equipment was correctly set
- Statistical measures to track the capability of inspection equipment
- A new maintenance regime for the inspection equipment
Results
Over an eight-month period the following tangible benefit were delivered:
- The OEE rate increased from 64% to 86%
- Customer Service improved, with the backlogs of outstanding orders being eliminated
- Savings in scrap and improved gross margin estimated at £1.4m annually
- Return on investment greater than 5:1
- Skills transfer – supervisors and operators self-sufficient in improvement techniques
- Suppliers received crucial feedback to improve their product design and approach to after sales service.
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