SMED applied to Plan Maintenance – recent case study

Oil Production

  • Issue: Oil producer was experiencing long and unpredictable plant maintenance turnarounds. Outage durations consistently exceeded plans and budgets resulting in lost production and excessive maintenance costs.
  • Solution: Applied lean techniques including:
    • SMED (task separation, conversion, and simplification to complete outage tasks outside the outage window),
    • Constraint Reduction (e.g., dramatically improved critical path management),
    • Visual Controls (e.g., optimized Outage Command Center),
    • Streamlined Collaborative Planning (e.g., earlier and greater involvement of contractors and cross functional personnel), and
    • High impact metric capture and utilization (e.g., shift in focus from “Cost only” to Cost and Duration).
  • Result:  Greater Profits – More stable outage planning and execution process with a reduction in outage durations of 10-15% resulting in increased production valued at $25 million increase in annual profit.  Reduced Costs – Decrease in outage costs valued at $2-3 million annualized.  Improved Collaboration – Significantly improved collaboration among all groups, greater performance reporting transparency, and improved continuous improvement through capture and application of lessons from one outage to another.
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z-Table

z Normal

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It’s time for Hoshin: Annual Operating Plan

Well its getting to be that time of year again… What did I promise to deliver this year, what do we need to do next year?

X-Matrix

The annual operating plan sometimes is developed and displayed using the X-Matrix.  Establish the results of goals for next year, take the strategies and tie them to tactics, make sure the tactics can be measured (targets) and have individuals assigned ownership of tactics and targets.

A3-TeamCharter

Little gets done without marching orders, i.e. a Charter.  The basic document of the hoshin process is the team charter. The A3 format connects the targets (goals) to the tactics and provides another level of critical thinking about execution.  The team charter is a contact between the company to  provide support and resources and the team and team members to do the hard work of problem solving, applying the scientific method, and running experiments on the management operating system.

BowlingChart

What gets measured gets better, and so we set plans and track key performance indicators.

Ready to make your hoshin for next year?

 

 

 

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How many kanban do you need?

Kanban is a system that supports level production by helping maintain stable supply and efficient operations.  The question of how many kanban are needed is at the core of designing and running a kanban system.  If your business process performs mostly standard, repeated operations the number of kanban can be calculated as follows:

Number of kanban = (Daily Demand * (Replenishment Time + Safety Margin))/Standard Container Quantity

  • Daily Demand = monthly orders / work days in the month;
    (Can use historical actual orders if demand is stable, may need to use current booked orders or forecast)
  • Replenishment Time = sum of all the processing, transportation, handling, and queue times from freshly empty container to full container back to empty again
  • Safety Margin = either a statistical calculation to accommodate variation in demand and/or supply, or an intuition to add zero to a few extra days
    (Regardless of which approach you pick, once up and running begin removing kanban one at a time until you’ve gone too far, then add one back and spend some time to figure out the cause – i.e. lower the water level and expose a few rocks.)
  • Standard Container Quantity is where we often have the greatest latitude.  We usually can’t change the daily demand.  Speeding up the replenishment time takes time.  Selecting the right size container we can do right now.  Sometimes we’ll turn the equation around and instead of solving for the number of kanban we’ll pick the number of kanban and then determine the right container size, like so …

Standard Container Quantity = (Daily Demand * (Replenishment Time + Safety Margin))/Number of Kanban

Rule of thumb: try to keep the number of kanban between 2 and 10 by adjusting the size of the kanban container.

 

 

 

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Total Landed Cost Project Plan

Let’s see, DMADV should work …

Define Form a small team and agree on the goals of the project in a written charter with the sponsor, customers, and stakeholders. The overall intent should be clear. Deliverables and milestones should be established.  Cross functional turf issues should be addressed up front.
Measure Quantify the customer needs as well as the goals of management.  Determine “What will project success look like and how will we know?”
Analyze Each of the cost categories of Price, Transportation, Customs, Inventory, Overhead, and Risks need to be mapped and taken to another level of detail. For each element we need to study the inputs, outputs, alternatives, existing reporting processes to determine the accuracy and timeliness.
Design Create, test,and document the new data collection and reporting process
Verify Confirm by sensitivity testing, simulation or otherwise, the performance of the total landed cost reporting design and its ability to meet the target needs

 

 

 

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