Risk Monitoring is the measurement of operational risk to identify changes, both bad and good, so you ensure future success by proactively preventing the bad risks
To remove the effects of chance variation on your process performance you must identify where the risks are changing in your operation. You must do risk monitoring so you can control rising risks.
IONICS PROCESS 5 involves risk monitoring and proactive control to ensure least cost operation where equipment does not breakdown, is low cost to run, requires minimal minor maintenance, is supremely safe, maximizes throughput, and makes 100% quality product all the time.
PEW/PWW EAM Course Day 2 – Plant Wellness Way Processes Session 13 – Risk Monitoring
Plant Wellness Process 5 – Risk Monitoring and Measuring
Process Step Contribution Analysis
Once a process is operating, people’s concerns naturally turn to making the product on-time. The demand to make product on-time often overrides the need to make it cost effectively. This leads to situations where everyone is busy making product, but no one is busy making profit. If this situation occurs in an organisation, the creation of waste, instead of profit, dramatically rises. Process Step Contribution Mapping helps manager, supervisors and engineers collect the cost information needed to operate a production system efficiently and effectively.
Each process step has its own raw materials, which is the feed from the prior process step. It has its own added inputs needed to make the conversion. From each step come a ‘product’ and the wastes. Each process step is clearly identifiable from its predecessor and its successor and is self-contained in performing its conversion. Each process step is independent of the others and is a whole system in itself. This allows us to analyse each process step separately. To make clear which process step is being reviewed draw a boundary around it on the process flow diagram.
Process Step Contribution Modelling
Indicates the various money flows in and out of a production process. By analysing each process step, its true costs of the raw materials, the additional inputs and the wastes from it, the resulting contribution of the step to the final product cost can be determined. Monitoring the costs and value contributions of each process step provides a means to measure the efficiency of its conversion processes. The more value contribution generated from a process step the more financially efficient is the step.
Measure what Is Important in Achieving the Goal
A KPI can offer many perspectives on an event. It can permit intense focus and scrutiny, detect changed conditions, score performance, indicate a change from plan, identify potential problems and it can drive improvement. When a KPI monitors and trends a process, the resulting figure tells you something about the process performance and its effectiveness. The KPI should be an accurate, honest reflection of the process efficacy in delivering the outcome. With a reliable KPI measure of performance the effect of a change made to a process, or a new strategy implemented, reflects in the KPI results produced. The KPI will echo if the change improved the result, did nothing, or made it worse. Once you can monitor the effects of a change reliably, repeatedly and accurately by KPIs, they become tools to improve ongoing performance. Simply introduce the test change into the process and monitor its effect with the KPI. Keep those changes that work and discard those that do not produce useful results.
Asset Management and Business Performance
This slide overviews the asset management dependencies on business performance
Hierarchy of Performance Indicators
The various departments and levels in an organisation require KPIs relevant to their needs. The KPIs should be seen to cascade logically from level to level, each supporting the efforts necessary to achieve the corporate purpose.
The first rule of Performance indicators (PI) is they must provide information of importance, otherwise it is wasteful to collect data for unnecessary reports. The PI must be relevant to the user and help them to make good decisions. The PI must be graphed to visually indicate trends quickly. A PI must be collected and presented often and regularly enough to allow sufficient time for corrections to poor performance.
Adopt the Performance Drivers
This is an example of using a vision to set strategy and planning how to achieve it. Once the plans are decide the details of exactly what to do and how to do them can be developed for each plan. In the end you create a complete, well-founded, cascading set of actions that when complete deliver the vision.
Cascading objectives that tie directly back to the overall business goals
Here is an example of cascaded objectives and plans. You can see that they are line-of-sight, i.e. people can see each step of the way what they have to do, and that when they are achieved they will deliver the top most goal.
With this sort of detailed planning and road-mapping prepared:
– It is much simpler to convince people that the strategies will work;
– you identify what is important for the initiative to succeed;
– you show what to do and how to do it, and
– that when it’s all done we will hit our goal.
Developing KPIs for Business Processes
Activity – The Cross-Hair Game: Observing Business Process Outcomes
You develop a process to deliver repeatable outcomes. The process is built so that its inputs always result in a known output. If the process does not deliver the same result every time, it is a very poor process.
The ‘cross-hair’ game asks people to use a process and then identify how to improve it. Finally they are challenged to make the process error proof so it can never be done wrong.
The Attendees draw two lines crossing each other at right angles. The intersection point is the target. Using the intersection, i.e. the cross-hair point, as the centre, they draw a 5 mm diameter circle. The circle is the tolerance, and anywhere within the circle is a bulls-eye. A pen is dropped into the circle from a distance of 300 mm above the cross-hairs. 10 attempts are made to get the pen into the circle. After which the group discusses why they cannot get repeatable results.
The next task for the group is to develop a new process that will always have the pen land on the cross-hair point and to test the process actually works. The group discusses their learning and problems. One issue that the group needs to consider is how much human interaction is present in the process, because the risk of human error increases as the number of human activities present increase.
Lastly the group is asked to invent a process that is error-proof, with no possibility of human error. There is at least one known error-proof solution.
‘Cross Hair’ Manufacturing Process Results
The distribution of results from the ‘cross-hair game’ process after playing it some 500 times are shown on the slide. Of the around 500 people who played the game one person landed their pen in the circle 9 times out of ten. Some people are exceptional at what they do. The rest of us are not. But companies cannot only employ exceptionally talented people; there are very few of them about.
The process of dropping a pen by hand to make the marks inside the 10mm circle from 300mm height used can never deliver the required results except by great luck. If a company is to stay in business you need a process where the right outcomes are totally certain every time.
The results from the process in use prove that the output requirement cannot be met by this process—it is not capable of meeting the specification. Many company problems are the result of using a process that cannot reliably produce the needed result every time.
PEW SOLUTION: Measure the Business Process’ Statistical Stability and Capability
It is a surprise to learn that most businesses destroy their own machines. The screen in the slide shows the history of equipment breakdowns in a plastic pipe manufacturing business. Once you create the timeline of weekly number of breakdowns ,or the weekly hours spent on breakdowns ( as in the plot shown) you can see how stable the process of breakdown generation is in a business. Notice that every week there were breakdowns. Some weeks were a complete disaster, and some were not so bad – only a few lost. The results have been put into a control chart and limits placed at 3 sigma distances (The least number of breakdowns can only be zero, so the lower limit is 0). The fact that all results are within the process limits tells us that this process is stable. It has an average number of 31 hours lost weekly to breakdowns. This company makes breakdowns as one of its products!
PEW SOLUTION: Analyse if the Business has a Stable Process of Causing Breakdowns
This slide shows the raw breakdown data from the plastic pipe manufacturer over the weeks of the investigation. Its easy to put the weekly results into a spreadsheet and plot the graphs. The distribution of hours in the bottom bar chart shows a two-peak plot. The weeks in which there were many hours lost are not the same situations as the ‘normal’ weeks of hours lost on breakdowns. When investigated the large hours were due to severe breakdowns that sucked many people into their repair. Normally the breakdowns are small and easy to fix because the people in the operation have become experts at fire-fighting.
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