The Ghent, Belgium, plant of Taminco Corp. manufactures amine-based specialty chemicals for a wide range of markets including crop protection. Prior to its acquisition by Eastman Chemical Co., Kingsport, Tenn., the company was facing serious challenges delivering a consistent level of product quality. This was the result of ongoing diversification of its product slate, which increasingly is shifting from solid formulations to more-complex liquid, multi-component ones.
An assessment of business processes at the site over a four-week period revealed four key issues: a broken performance-management structure; lack of standard ways of working; suboptimal use of asset capacity; and fire-fighting maintenance behavior. To overcome these problems, a 32-week program was launched at the end of 2013 with distinct work streams to deliver improvements in these key areas, with changes implemented over three phases:
1. Stabilization — designing and installing the foundations of a new way of working;
2. Improvement — implementing the new way of working to drive and realize defined improvements; and
3. Preservation — sustaining improvements over the long term.
Implementing A New Way of Working
Product changeover represented a key area contributing to losses. To decrease changeover times, the site adopted single-minute exchange of die (SMED) — a lean production method for reducing waste in a manufacturing process. The issue Taminco was facing at Ghent, which many other chemical makers also face, is the need to thoroughly clean equipment before processing different materials; the time required varies depending upon the raw materials involved. For example, consider raw materials in terms of colors: switching directly from black to white would take longer than switching from black to white through gradations of gray. To achieve the most-rapid changeovers, this was factored into planning the running order of changeover operations.
In addition, we analyzed which activities were online versus offline and where efficiency improvements were possible. To ensure that all factors were considered, we physically observed the plant floor during the full changeover period, including preparation time. We also held cross-team workshops to determine how one activity in the production line actually affects another in terms of time on the plant floor. This end-to-end balancing was of significant importance in decreasing line downtime. Fairly simple but key changes — such as ensuring all tools and personnel required for the next step are upfront before switching off the production line, and identifying and working the key path — can reduce changeover times substantially. At the Ghent plant, changeover times fell on average 30–40%. In one line, the time went from 58 hours to only 18–19 hours; in another, it decreased from 81 hours to 41 hours.
A standardized way of working is paramount to delivering world-class manufacturing. Implementing operational excellence tools for the rigorous identification, analysis and management of all losses by cross-departmental teams at plant floor level can yield significant efficiency improvements.
Use of overall equipment effectiveness (OEE) metrics to evaluate a manufacturing operation can provide key insights. For instance, every piece of equipment has maximum possible capacity, i.e., the volume attainable by operating 24 h/d, 365 d/y. Actual capacity achieved, which depends upon the type of industry and planned downtime, as well as other considerations such as major overhauls, frequently does not even come close. Businesses often think it is not possible to impact actual capacity when, in fact, it is. World-class facilities have an OEE of 85–90%, compared to the norm of 40–65%. One of the key ways to reach world-class OEE is by challenging assumptions of actual capacity.
Changing The Maintenance Mindset
The program’s second work stream focused on tackling fire-fighting behavior in the maintenance department. We identified improper prioritization as the problem; it exemplifies a common situation in which changing the workforce’s behavior is just as important as having the right infrastructure systems in place.
Before the program, work orders regularly were rated as high importance, leading to an inability to prioritize correctly. Employees thought that labeling work orders as “high priority” would speed up maintenance. Instead, however, this led to a backlog of notifications and poor maintenance planning. In addition, the notifications frequently lacked specific detail on the maintenance work necessary, prompting unnecessary back and forth between departments.
To address these issues, we set clear criteria for the fields that team members needed to complete within the SAP notification system — for instance, the specific type of replacement parts required and their particular location on the faulty equipment. Plant staff also received guidance to help them correctly prioritize maintenance tasks and create maintenance plans. Constructive feedback and coaching on the plant floor for several weeks were key to changing previous deeply ingrained ways of working. Achieving results critically depends upon increasing empowerment and ownership through collaborative change.
The program also tackled the siloed nature of the plant’s performance management processes by installing an efficient performance management system (Hitachi MCRS) as the backbone. By refining existing key performance indicators (KPIs), creating new ones to build an integrated KPI “tree,” and discussing these at all levels in the organization with appropriate frequency, the site achieved a significant shift in focus toward end-to-end performance. To provide maximum value, KPIs must be cascaded from top to bottom, i.e., to show an obvious link to the root cause of an outcome. They also must be complementary; this may seem self-evident but is a real issue when different departments set KPIs without consulting each other. When this happens, it is common to find competing KPIs, which essentially lead to a plant striving for opposing goals, a hugely unproductive activity.
In this case, the fundamentals were in place; the site had a large number of KPIs but was only fully utilizing 50% of them. To address this, we established daily meetings as well as workshops with plant floor staff to identify and discuss issues and root causes. This enabled honing down the roster to key production, maintenance and planning KPIs. These KPIs were designed to interlink and cascade from top to bottom, forming KPI trees. For example, KPIs were cascaded from customer delivery performance level and customer complaints up to schedule compliance. The trees were presented on visual management boards, giving an overview of daily performance and leading to better involvement by the workforce on the plant floor level.
The project helped Taminco to structurally tackle issues with a clear KPI system that looks for real root causes, and ways of working that analyze and define clear and efficient actions and follow-up.
Overall, the program resulted in 20% volume/output growth. Feeding into this were a 25% increase in OEE and improvements in maintenance efficiency and planning rates. The quality of work order notifications rose to 82% from 32% and, as a result, scheduled maintenance compliance increased to 86% from 43%. The redefinition of planning processes also led to an improvement in planning rates to 70% from 50%.
All of this was made possible by the involvement and engagement of the teams, at all levels, throughout the process. Sustainable change cannot be top-down because significant business transformation hinges on tackling deeply ingrained behaviors starting on the plant floor. Everything within a business is interconnected, so everything within a change program must also link together.
PETER VAN HAUWERMEIREN is Benelux-based EMEA vice president at Hitachi Consulting. E-mail him at firstname.lastname@example.org.