This resulted in a dramatic increase in capacity as well as an annual cost
savings of approximately $2,000,000 per year.
Description of Problem
A manufacturer of containers facing strong demand was seeking additional capacity. The firm operated several facilities across the United States. The management was looking for reduced costs while increasing throughput. Revenues were several billion dollars annually with losses of $2–3,000,000.
Approach
A reliability expert from Luftig & Warren was hired to evaluate the firms asset management program. The methodology included an evaluation of the facilities assets via growth analysis, failure rates, availability, efficiency, duty cycle and yield losses. An evaluation of the PMs in terms of their effectiveness was studied as well.
Results
The findings indicated the firm was over maintaining the equipment. Not only were there too many PMs, but also some were not effective. Major equipment overhauls were taking place across all large equipment on too frequent a basis. Failure rates of various equipment were evaluated. It was found that the facility was prematurely overhauling the equipment. New schedules were implemented that called for increasing the time between major overhaul by a factor of 2.5 to 1. This resulted in a dramatic increase in capacity as well as an annual cost savings of approximately $2,000,000 per year. Mean time between failures was seriously extended. Within the first two years, the firm was back in the black while asset utilization indices hit world class levels.
Submitted by LWI
Consultant
Bob Pahlkotter