Quantify Improvements

What would your senior management say if you told them you could increase operational productivity by 50%?  After the stunned silence it’s pretty likely they’d say 'show us how'.

Well it’s entirely possible! Organisations across the world have shown dramatic productivity increases from taking the journey from innocence to excellence. Reporting business improvements of:

• 98% reduction in machine downtime
• 30% reduction in maintenance cost
• 40% increase in equipment life and
• EBIT improved by 72.4%

Although it is generally recognised that improving people performance pays big dividends, it is still a relatively new field and across a big variation in work practices, so improvement benefits are difficult to quantify.

Not so the benefits of improving operations.  acm using the measure of Overall Equipment Effectiveness (OEE) and taking a maintenance perspective have developed a tool to quantify improvement benefits in dollars.

The tool is called the acm benefits calculator.   It divides the benefits in two categories.

Direct Benefits (equipment downtime)

• Reliability savings: reduce the amount of breakdowns that cause unscheduled process stoppages by applying the right combination of preventive and predictive maintenance.
• Availability savings: reduce the amount of scheduled equipment downtime by better planning, scheduling and project management.
• Labour efficiency savings: reduce the amount of time spent waiting for parts, getting job information and instructions, changing jobs due to poor planning or scheduling.
• Inventory management savings: reduce inventory costs by eliminating duplicate purchases and holdings, rationalising the level of inventory held and eliminating short notice hourly hire of equipment.

Consequential benefits (process downtime rate and quality losses)

Industry research indicates that consequential cost savings available from strategic maintenance are 4 to 5 times the direct maintenance savings.

They are derived from;

• Improved delivery performance.
• Improved processing rate.
• Reduced general overhead due to less run time required.
• Improved product value (quality).
• Reduced cost of sales – less process consumables, reduced distribution costs, etc.
• Improved Yield, reduced scrap. 
• Enhanced Market Goodwill.
• Reduced capital employed through lower stock holding levels.
• Greater employee productivity lower injury frequency rate.

In addition the acm benefits calculator generates the following graphs from operational performance data.

1. Blend of maintenance activity and maintenance performance compared to best practice,
2. Operational performance in terms of Overall Equipment Effectiveness metrics
3. Comparative analysis of breakdown and operating losses
4. Indicative timing that these benefits could be realised 

If you would like to see how your organisation rates then put your figures into our benefits calculator.