ARTICLE
INCREASE CAPACITY
Without Incurring Unnecessary Capital Expenditures
Companies are increasingly looking at ways to increase the capacity of their existing
assets without having to incur added costs or purchase more space or equipment to
meet their production requirements. This article will address key factors to consider when
determining if your equipment is fully optimized before making the decision to purchase
new equipment.
Benchmarking
Performance Optimization
Benchmarking is a vital step to take to ensure you
know what needs to be updated in your equipment or
manufacturing processes. Before deciding to increase
capacity, you must understand how your equipment is
currently performing relative to equipment specifications, other facilities within your network, or industry
benchmarks. By understanding the value of a one
percent increase in equipment effectiveness, you can
objectively evaluate and quantify improvement priorities for increasing capacity, quality, and output related
to equipment performance and availability.
Speed loss is a key culprit impacting output and yield.
Every machine has a designed optimal running speed
and it’s important to know those specifications when
looking to increase overall production capacity. So,
the next step is to ensure that you’re running your machinery to its designed production standards.
Availability
Performance is based on measuring a number of
factors in unison. Availability takes downtime loss into
account—some of which is planned and some of which
is more difficult to avoid or overcome. Since “zero
downtime” is unavoidable, it is important to create an
environment where the equipment remains “up and
running” for an optimal amount of time with good
quality and high performance. Of course, a first resort
for adding capacity is to add shifts. However, a more
detailed analysis of the root causes of your failure
modes related to downtime may reveal more cost-effective ways to increase availability without incurring
additional costs.
It is essential to measure, understand, and manage
downtime for each piece of equipment in your organization— and how you’re going to utilize or improve
each machine’s performance metric. By reducing the
amount of time each item is offline, you will immediately notice an increase in output.
Over time, companies often inadvertently allow machines to slow down, which can gradually erode the
capacity of the equipment. By really focusing on why
that machine is running slower, you can fix problems
both in quality and in throughput by increasing the
pace of the machine back to its optimal capacity. In
extreme cases, making this change can be like getting
a whole new machine!
Quality
Quality—the total number of good pieces as a percentage of total pieces—is also critical. Defects are a
waste of an asset’s available time. Once you understand the root causes of quality problems, you may
need to make adjustments in tooling, changeovers,
materials, temperatures, or speeds and feeds to ensure
adequate course corrections.
Asset Management
Asset utilization is largely a function of your asset management approach. Because it is virtually impossible
for equipment to be available 100 percent of the time,
it becomes critical to identify an ideal state where your
assets are optimized for both financial and operational
performance while meeting both customer requirements and satisfying the expected quality and
safety standards.
www.tbmcg.com
PG. 2
Asset management involves managing and creating
opportunities through the assets a company already
possesses—including equipment, facilities and associates. For all businesses, managing resources to
maximize and optimize opportunities inevitably leads
to improved performance on the bottom line. Understanding which assets are critical to your business and
focusing on those can have a significant effect on profitability and return on invested capital or net assets.
Focus on Measurable Improvements
Finally, it’s important to acknowledge as you go about
this process that you can’t change everything all at
once; it is better to focus on specific and measurable
improvements that will have the greatest impact on
customer needs with a keen eye on operational and
financial performance.
Consider the needs of the company alongside the
needs of customers (they may not always align perfectly) and balance them against each other. There will
always be trade-offs.
Although you can’t change everything overnight, by
understanding the necessity of trading off various internal and external needs, you will discover new ways
to increase capacity from any piece of equipment or
asset in your organization. By approaching the process
this way, you will more likely match-up your customer’s
requirements alongside your business requirements
without expending unnecessary amounts of capital
and expenditure to get there.
About TBM Consulting Group
TBM is a global operations management consulting firm that maximizes enterprise value and accelerates growth
by working with clients to leverage operational excellence. Our clients achieve growth rates 3-5X their industry
average and EBITDA growth at least 2X their topline. We focus on results with a bias for action and work side by
side with our clients to immediately improve EBITDA, accelerate organic growth, ensure the rapid realization of
results from newly acquired businesses, and generate immediate and long-term balance sheet improvements. Our
subject-matter professionals average 10–25 years of operational, management and executive experience in the
manufacturing sector and none are career consultants. We leave behind a customized framework and structure
for lasting change using our proprietary LeanSigma ® approach, which has been continuously improved since we
introduced it over 20 years ago.
06/2015
05/2015
The TBM logo and LeanSigma are registered trademarks of TBM Consulting Group, Inc.
TBM, the TBM logo and LeanSigma are registered trademarks of TBM Consulting Group, Inc.
© 2015 TBM Consulting Group, Inc.
04/2015
Consulting Group
Join us on
Accomplish More
www.tbmcg.com
Our
Blog
ChiJoin
na us
•on Brazil
•
France
•
Germany
•
India
•
Mexico
•
United Kingdom
•
TBM Consulting Group
Unitedwww.tbmcg.com
States
Our
Blo g
Chi na
•
Brazil
Read more blog postings from TBM Consulting. www.tbmcg.com/blog
•
France
•
Germany
•
India
•
Mexico
•
United Kingdom
•
United States