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NINE HABITS OF HIGHLY EFFECTIVE

CONTINUOUS IMPROVEMENT TEAMSDriving Continuous Improvement and Enabling Operational Excellence

Smart Solutions Powered by TrakSYS
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Nine Habits of Highly Effective Continuous Improvement Teams Page i

All print and electronic rights are the property of Parsec Automation Corp. 2012

TABLE OF CONTENTS

HABIT 1: DONT FALL INTO THE HIGH EFFICIENCIES TRAP ................................................................................... 1

HABIT 2: ASSEMBLE CROSS-FUNCTIONAL IMPROVEMENT TEAMS ......................................................................... 1

HABIT 3: DEFINE FOCUSED AND ACHIEVABLE GOALS ............................................................................................. 1

HABIT 4: USE AUTOMATED KPI-BASED METRICS .................................................................................................... 2

HABIT 5: SELECTIVELY INVOLVE OPERATORS IN THE DATA COLLECTION ................................................................ 2

HABIT 6: ROOT CAUSE ANALYSIS OF THE PRODUCTION LOSSES ............................................................................. 3

HABIT 7: RECOMMEND AND IMPLEMENT CHANGES THAT DELIVER SUSTAINABLE PRODUCTION IMPROVEMENT 3

HABIT 8: CONSIDER INCENTIVE PROGRAMS TO INCREASE MOTIVATION ............................................................... 4

HABIT 9: BENCHMARK WITH OTHERS IN YOUR INDUSTRY ..................................................................................... 4

ABOUT PARSEC ...................................................................................................................................................... 5

TERMS AND CONDITIONS OF USE .......................................................................................................................... 6


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Nine Habits of Highly Effective Continuous Improvement Teams Page 1


Continuous improvement is a journey, not a destination. It is more than a set of steps tofollowit is a culture that, when embraced by the entire company, results in significant

business value. Effective use of programs such as Lean Manufacturing, Six Sigma, and OEE yieldsresults that are too valuable to ignore. But where do you start? Here, we have compiled our

Nine Habits of Highly Effective Continuous Improvement Teams to help you get started.

Habit 1: Dont Fall into the High Efficiencies Trap

This may sound contrary to the popular opinion, but you may be stifling your continuous

improvement team with the metrics you are using. Businesses inherently want to see high

efficiency numbers reported for their annual reports, however, using these same metrics on the

factory floor may be hiding areas for improvement. Oftentimes these metrics do not consider

Availability Losses such as changeover, sanitation, or preventative maintenance in thecalculation. Instead, they are considered an unavoidable but necessary cost of doing business.

In order to improve efficiency, you have to measure it correctly without avoiding the factors

that would make the numbers look bad! You have to adopt a methodology that provides

unbiased, consistent, and real measurement. For example, you could consider OEE as a proven

metric for productivity improvement: it measures inefficiencies related not only to equipment

but also consumables, infrastructure, and personnel in one comprehensive metric.

Habit 2: Assemble Cross-Functional Improvement Teams

There is no doubt that operations, engineering, production, quality assurance, or maintenancedepartments can each assemble a continuous improvement team that produces results.

However, manufacturers exponentially receive more value when the continuous improvement

team members are from cross-functional disciplines. These teams regularly meet to discuss

issues and opportunities, prioritize them, and recommend solutions. This way the members of

the team agree on the solutions to the issues before they are implemented, thereby minimizing

any negative effects that the change might have on another department. This is a missing

ingredient in many continuous improvement programs today.

Habit 3: Define Focused and Achievable GoalsYou do not have to tackle the entire factory at once. You can begin with those areas, systems,

lines, or disciplines that will result in the most dramatic improvement in overall productivity.

You can do this by evaluating ways to improve the constraint or ways to reduce production

losses on the most profitable products. It is paramount to have a clear understanding of the

current performance level so you can set challenging, yet realistic, improvement goals.

Consider a system that is currently running at 30 percent OEE. Management wants to increase


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OEE, so they institute a 10 percentage-point improvement goal for the year. It must be

understood that improving OEE from 30, to 40 percent is the equivalent of asking production to

increase output by one-third in a year. Depending on the industry, state of current assets,

resources, and infrastructure, this may not be reasonable in that time frame.

A better way is to set specific goals for each of the OEE Components (Availability, Performance,

and Quality) based on the starting point. For example, the above manufacturer may consider

improving Availability by 5 points from 50 percent, Performance by 3 from 66 percent, and

Quality by 0.5 from 97 percent. Achieving these goals would improve OEE by 5 percent and

provide the ability to either increase the output, or reduce production time, by over 15.5

percent. While challenging, its an achievable goal that would result in a significant return on

investment.

Habit 4: Use Automated KPI-Based MetricsProviding your line-of-business managers and operators with real-time and accurate

information about performance is crucial to their effectiveness. Consider the value of one OEE

percentage-point improvement to your company. Many manufacturers using real-time

performance management software have improved OEE consistently and significantly by

collecting, analyzing, and reporting the right KPIs. Armed with the right information at the right

time, team members can effectively respond to events that affect performance, and eliminate

the root causes of inefficiency.

Using a manual production event monitoring system (e.g., clip-board and stopwatch) allows you

to only capture some of your production loss events. Manufacturers that have migrated toautomated systems have discovered that there were many more loss events than previously

captured by their manual techniques. The significantly enhanced and consistent information

about the various production loss events will lead to the identification of areas for

improvement. By analyzing the root causes of these loss events, you will find effective ways to

correct and minimize them.

One of the most overlooked areas for improvements highlighted by the OEE metric is

Availability Losses. This is an area that yields rapid rewards for many manufacturers through the

systematic review of the automated event monitoring and analysis. Some ripe-for-the-picking

opportunities include operator training, changeovers, sanitation, preventative maintenance,

and starvation due to bad planning.

Habit 5: Selectively Involve Operators in the Data Collection

The line operators have the firsthand look at what is occurring on their equipment and can

provide valuable insight in identifying and reporting efficiency losses. However, their main task

is operating the line rather than collecting detailed performance information (i.e.,


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recording/acknowledging/categorizing events and performing root-cause analysis) during

production. Continuous improvement teams MUST have the ability to non-intrusively ask their

operators for the vital information that will help to improve or eliminate production losses. This

is what is meant by selective involvement. Typical process automation alarm systems are

often ignored, but a system that requires minimal, yet effective involvement will be morereadily accepted and used.

When you use a real-time performance management system that selectively involves the

operator, it shows that you are serious about your continuous improvement program, and that

you value the positive role operators may play in its success. Many manufacturers have realized

significant percentage-point improvements for this very reason.

Habit 6: Root Cause Analysis of the Production Losses

Your critical production system is down. Do you know the real reason? Is it caused by anupstream or downstream event? Is it due to a machine failure, or perhaps caused by running

out of needed parts/supplies? To be able to analyze and understand the root causes of your

production losses, your continuous improvement team must have timely access to accurate

reports and analysis that are typically only available from a real-time performance management

system. The in-depth analysis and the availability of various reports make it possible to both

quickly and effectively identify the root causes of loss events, and help devise solutions to

eliminate them.

Habit 7: Recommend and Implement Changes That Deliver SustainableProduction Improvement

You must use cross-functional teams to analyze the root causes of production losses, prioritize

the issues to be addressed, and establish a consensus before implementing changes in order to

improve your chances of success. But how do you do this? Some companies have weekly

meetings for their cross-functional improvement teams. During the week, they enter the issues

and suggestions into a database, which are then reviewed during the weekly meeting.

Consensus is achieved before changes are implemented. Others have developed Intranet sites

where they record the issues that they would like the Continuous Improvement Team to

address. These methods are very effective because they keep the teams focused on those

priority issues that will yield the most valuable results.

Once changes are made, it is important to continually measure the performance to confirm that

the changes resulted in a sustainable improvement. Remember, continuous improvement

effort is just that: CONTINUOUS!


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Habit 8: Consider Incentive Programs to Increase Motivation

Your people are the key to your improvement speed. By using proven methods, your

continuous improvement program will yield significant results for your company. In many

instances, it is advisable to establish metrics-based incentive programs that will help motivateyour employees and team members to achieve measurable and sustainable performance

improvement. For example, companies have told Parsec that their operators were motivated by

a bonus for achieving a significant reduction in a routine availability loss. We regularly witness

significant reduction in productivity losses when the operators embrace a productivity-centric

culture that rewards them for their efforts to improve their performance. Its nothing short of

amazing! You can be creative with the incentives; they do not always have to be monetary.

Some companies hold parties or have their managers cook lunch for them, or have a team

outing when they achieve their goals. Get to know what would motivate your team. You may be

surprised.

Habit 9: Benchmark with Others in Your Industry

What are the efficiency metrics for others in your industry? How do you compare to world-class

OEE in your industry? How many companies are running at world class? What are truly world-

class companies doing to achieve and maintain their success? Is the textbook world-class OEE of

85 percent achievable in your industry? For example, textbook OEE may be achievable for the

food and beverage industry, but it may be unreasonable for the pharmaceutical industry due to

its complex regulations and constraints. It is important to know where you stand. For example,

if you are running in a track race and you improve your time from a previous personal best of

5.5 minutes per mile to 5 minutes, you have done very well. But how well have you really done

if everyone else in the race is running a sub 4-minute mile? Parsec offers annual industry

specific symposiums that allow executives to present their successes, discuss their continuous

improvement journeys, and participate in roundtable discussions about relevant industry

topics. The attendees have the opportunity to network with each other and take away practical

ideas that can readily be employed. They have commented how they have gone from skeptics

to believers in real-time performance management and metrics such as OEE, and how valuable

it has been to learn about what others in the industry were doing. Attending this type of

benchmarking event for your industry is of great value.

By applying these Nine Habits of Highly Effective Continuous Improvement Teams, you will lay asolid foundation for success. Put together a cross-functional team, use accurate, real-time

performance information to support these teams, monitor, implement, and control your

corrective solutions, and you will take your continuous improvement program to new

heightsguaranteed!


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ABOUT PARSEC

Parsec Automation Corp. (Parsec) is the developer of TrakSYS, the leading real-time operations and

performance management software. Manufacturing companies worldwide rely on Parsec for flexible

and configurable tools to execute manufacturing operations across the value stream more effectively.Without production disruption, TrakSYS helps manufacturers to significantly improve asset utilization

and efficiency, increase capacity with no new capital equipment, reduce production costs, decrease lead

time, and improve profitability. With measureable ROI, TrakSYS delivers the bottom-line results that

manufacturing companies are looking for. For more information about Parsec, please visit the corporate

Web site atwww.parsec-corp.com.

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this document serve informational purposes only.
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