Loss Management Tool
Our Loss Management Tool can effectively save any business money and benefit the environment at the same time.
Is it only for manufacturing companies?
The short answer is no. Most of the loss types (cf. below) that should be taken into consideration are equally relevant to businesses within e.g the retail, service, construction, and public sectors.
Loss cannot be narrowed down to being e.g. scrap materials from a production line or idle time. In a nutshell, loss is any activity that does not add value to the business output, or which customers are not willing to pay for.
Japan Institute of Plant Maintenance (JIPM) has defined 16 loss types, which are meant to represent and cover any conceivable kind of loss in a business. Our Loss Management Tool (cf. below) adheres to the JIPM definitions and principles.
Some loss types are of course more common and have more impact than others. The following seven loss types are widely considered the most prevalent:
Defect & Rework loss
Other concepts related to loss management
A few acronyms, which one often comes across when working with loss management, are worth a mention at this point:
TPS: Toyota Production System, the precursor of Lean Manufacturing (see under WCM below), is a framework for eliminating losses. It was developed by Toyota Motor Corporation from 1948 to 1975. Read more about TPS at << Wikipedia >>
Total productive maintenance is a complete system for maintenance of equipment that aims at achieving an optimal production environment devoid of defects, downtime, stoppages and accidents
One distinct advantage of total productive maintenance is that it empowers the shop floor to work in a concerted manner to ensure that machines are functioning at their optimal performance.
In fact, in a lean production setup that is practicing TPM, you find it difficult to distinguish between normal operators and maintenance staff.
This is because they all are proactively involved in the maintenance of machines which leads to increased productivity, lower costs, improve quality and extended machine lifespan.
Developed in the early 50s, Total Productive Maintenance is a program for increasing efficiency of machines and processes which stands on eight pillars with 5S as its foundation.
More detailed information can be found at << Wikipedia >>
Total Quality Management is an extensive and structured organisation management approach that focuses on continuous quality improvement of products and services by using continuous feedback. Joseph Juran was one of the founders of total quality management just like William E. Deming.
Total quality management originated in the industrial sector of Japan (1954). Since that time the concept has been developed and can be used for almost all types of organisations such as schools, motorway maintenance, hotel management and churches. Nowadays, Total Quality Management is also used within the e-business sector and it perceives quality management entirely from the point of view of the customer. The objective of total quality management is doing things right the first time over and over again. This saves the organisation the time that is needed to correct poor work and failed product and service implementations (such as warranty repairs).
Total Quality Management can be set up separately for an organisation as well as for a set of standards that must be followed for instance the International Organisation for Standardisation (ISO) in the ISO 9000 series. Total Quality Management uses strategy, data and communication channels to integrate the required quality principles into the organisation’s activities and culture. Total Quality Management was developed with the approach to establishing a Continuous Improvement culture. Additional details can be found at << Wikipedia >>
WCM: World Class Manufacturing is a systematic approach to eliminating losses in business operations. The Wikipedia article about WCM redirects to Lean Manufacturing, WCM is the result of many centuries of production knowledge and ability. Starting with the guild structure in the Middle Ages, this knowledge and ability evolved via the manufacturing in the 18th century, scientific management/mass production, socio-technology and lean production in de twentieth century into the State-of-the-Art manufacturing companies in the beginning of the 21st century: World Class Manufacturing.
WCM starts from the theoretically ideal situation; this means that involved employees have the production processes always run without losses. Then one goes back to reality and focuses on differences between the ideal and real process. This difference is called loss. WCM aims to eliminate this loss. In this respect two things are of overriding importance
Well-known WCM methodologies and techniques are (TPM, TPS, Kaizen, TQM, Six Sigma, JIT, and Lean Manufacturing under the WCM umbrella). Read more about WCM at Management Study Guide.
OPE: Overall Plant Effectiveness is a key metric that represents the overall utilization of time in business operations. Increasing OPE is the principal objective of any TPM/TQM/WCM implementation. Overall Production Effectiveness (OPE) looks at the entire manufacturing process, including unconnected processes that cannot be captured on the machine or line level. This means that it includes activities like selective soldering, testing and manual assembly stations in order to identify productivity killers across all production steps. See the illustrations on our FAQ for further details of how OPE is defined and calculated.
Our Loss Management Tool is ideal for organisations that already implement WCM, TPM, TPS, or TQM. All of these concepts are fully supported by our software. During the initial deployment we configure our software to the particular needs of the organisation, and we also provide training for local administrators and other key users.
During subsequent operation our software offers various configuration options to local administrators. This allows organisations to maintain the software in accordance with occasional changes in local terminology and work practices.
How does it work?
The software basically consists of three elements:
- A user interface for data entry
- A loss database for data storage
- A deployment interface for data presentation
The figure above illustrates the data flow: Loss data is entered via the user interface and stored in the loss database. The deployment interface presents graphs and visualisations based on data in the loss database. There are several data views for e.g. basic users, production planners, department managers, and executive staff. Both database and interfaces are updated in real time, i.e. there is no information delay or need for running batch jobs to update current status.
The user interface has a number of mandatory fields in order to secure data consistency. As illustrated below, users cannot commit data to the loss database without entering valid data into these fields:
The following are the key benefits of using our Loss Management Tool:
- One single tool across the organisation
- Involvement of the entire organisation
- Common understanding and awareness of losses
- Easy overview on all organisational levels
- Current status of individual losses in the organisation
- Automatic generation of graphs and visualisations
- Replacement of manual preparation of reports, etc.
- Clear focus on loss eradication
In a nutshell, our Loss Management Tool allows organisations to save time by rendering manual loss data management redundant, thereby providing for a more focused, systematic, and holistic approach to loss management.
Please feel free to contact us, if you have any questions or if you would like a demonstration of our tool.