CUTE Capacity, Utilization, Time & Efficiency
Industrial Operations GROUPE DANONE
CUTE
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Introduction CUTE aims to provide a common terminology for the definition and control of Utilization and Efficiencies of our Lines and Factories. Our goals for sustainable growth whilst continuing to improve margin and yields, will not be achieved without improving the utilization and the efficiencies of our Factories and related Capital Assets. The definitions and indices in CUTE shall be implemented in all our factories and the respective CBU’s should use them to monitor their assets performance. It is essential that all CBU’s apply CUTE in a consistent way so that data is comparable within our operations. Only in this way can the effectiveness of the various Manufacturing Performance Improvement programs be seen. CUTE will provide consistent data to be used by GROUPE DANONE Divisions in analyzing sourcing scenarios. This reference handbook has been agreed by the Operations Directors of the three WWBU and the Group Operations Committee.
Prepared by:
CUTE
Luis Larracoechea
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Manufacturing Performance Dtor. Operations B&CF Division
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1. Background Within GROUPE DANONE Divisions, different factories and CBU’s use different terminology and criteria for the definition and measurement of utilization and performance indices. CUTE specifies terms and indices for harmonized measuring and reporting on the performance of machines, lines and WW factories in GROUPE DANONE. CUTE definitions are intended to ensure that any communication on aspects of time allocation, line utilization and efficiencies means the same to everyone involved. - Specifies Machine Time Definit ions (CUTE is meant to define machine operation, not labour utilization) for the analysis of Packing Lines, Plant or Processes * * The term “machine “ is used in a very general sense, and the same analysis is applicable to a group of machines in a line, any process or plant.
- Defines a number of Performance Indices for internal use within each CBU’s and for inter company benchmarks. - Provides a framework for the measurement of Plant Capacity that can be used for: short term planning and scheduling, calculation of long term capacity planning, factory masterplan and Capital Assets requirements. The expression “standard” has been deliberately avoided in this handbook. The word normally implies the building-in of allowances to cover losses of time or product. These are often associated with labour and invariably relate to local circumstances, but their inclusion would make inter-companies benchmark inconsistent.
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2. CUTE (Capacity,
Utilization, Time & Efficiency) Summary Diagram
C
Calendar Time
A
Av ailable ti me
D
Unavailabl e Time Avail abl e Unused Time
Disposable Time
O
Planned non Operational Time
Operation al Time
P
Production Time Net Production Time
NP
Routine Productio n Ac ti vi ti es
Unexpecte d Stoppages
Defini tion s of Machine Time
C
Calendar Time
Calendar Time defines the maximum time within a reporting period, such as: -
CUTE
52 weeks in a year 168 hours in a week 24 hours in a day 8760 hours in a year
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C
Calendar Time
A
Av ailable ti me
Unavailabl e Time
Av ailable Tim e is the time during which the machine/line could operate within the limits of local or industry working conventions. This means that it will effectively be the normal working pattern of the site (although overtime must be added to it when worked). Unavailable Time is the time during which the machine is not normally operated, owing to: Bank Holidays: - The time in which factory is planned to be closed due to bank holidays. Other Traditional or Enforced Closures: Weekends not worked, if the local regulations don't allow working on Sunday and (or) Saturday. Local holidays, specific to the region of the country, Traditional closures. For example: afternoon and night shift on Christmas Eve, religious holidays. Closures enforced by Union of Workers or Local Authorities. Shift working restrictions - Enforced factory shutdowns
These days are planned for the whole year during budgeting time.
Unavailable Time is effectively the time that is agreed within the CBU management to be outside the control of the factory management . (Note that: negotiating overtime operation could reduce it.)
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A D
Av ailable ti me Av ail abl e Unused Time
Disposable Time
Disposable Time is the time during which the machine is actually used by production and engineering, whether or not the machine is actually producing. Available unused Time is the time in which the machine/line could be used but production is not scheduled because there are no produc tion o rders planned from Supply Chain. (Note that: a Machine upgrade, overhauls or other types of Planned NonOperational activities, are not considered as unavailable time.) Calculation of Available Unused Time: The amount of time in this category cannot be calculated directly but has to be derived from the difference between the Available Time and the Disposable Time. Av ail abl e Unu sed Tim e = Avai lab le Ti me – Dis po sab le Ti me
Where the Disposable Time is the calculated time that would be required to produce the actual or estimated volume of production when the machine is operating at its Operational Efficiency plus any Planned Non-Operational Time.
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D O
Disposable Time Planned non Operational Time
Operation al Time
Operation al Time is the time during which the machine is planned to be operated for production purposes. Note that: Operational Time is normally the same as the shift hours.
Planned non-Operational Time is the time when the machine cannot be operated productively owing to planned activities for organizational or engineering reasons: Scheduled big Maintenance or Overhauls: Big maintenance planned on yearly or monthly basis (should be shown in weekly plan). Scheduled Machine Modifications: Modification aiming to improve machine performance, quality of product, safety of work or enabling the production of new product. It is often linked to capital investments. Always it is a planned activity not the reaction to a breakdown Trails w ith n o pr oductio n (R@D Trails): Trails done in order to develop new product or improve existing production technology. It is planned according to requirements of R&D or production department No sellable product is produced during these trails. General Factory fumi gation: - Periodical fumigation of the factory against the insects. Cleaning of baking plates (wafers): Regular planned cleaning of wafer plates that takes place after specified numbers of working hours.
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O P
Operation al Time Production Time
Routine Productio n Ac ti vi ti es
Production Time is the maximum time during which the machine is expected to effectively run and deliver finished products. Routine Production Activities is the time taken by operational activities that are required to enable the machine to produce. These activities normally occur whilst the machine is staffed and are included in weekly and daily production plans: Equipment changeovers, format changes: Time between last previous good product to first new good product. Measured on packing hall. Time for which the line was stopped due to change of production from one recipe or shape of product to another one. Also time for which the line was stopped for change of packaging without changing of recipe or shape of the product. Start-ups and Shutdowns: Time lost to start or close production. This is the time to prepare or finish the production while the line is staffed with regular crew. Normally it will be the time from beginning of the shift to the first product packed and from the end of packing to the end of the shift. Start-ups and shut-downs are preceded or followed by the period of nonproduction activities fe. Factory closure, time without the orders, planned maintenance etc. Sanitation & Routine cleaning: Cleaning necessary to preserve proper hygiene of the line. It is done on regular basis required by hygienic condition/regime of the line. Usually once per week, every other week, after end of a block of production, but sometimes planned in the middle of a production run. It is routine planned period used for manual cleaning of production line or automatic CIP. Can be done by regular or reduced number of workers. Trials with Production : Time lost due to trials organized by production and linked to start-up period or change of technical equipment. The product that is produced during these trials is valid for sales. Lunch or rest breaks: Time for which the machine/line was stopped due to staff lunch or rest break. Note that: CUTE defines machine/line operation, not labour and as such, if a machine/line is stopped for meals, breaks or other rest periods, the time is recorded as a Routine Production Activity. They may be avoided by providing with relief operators.
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P
Production Time Net Production Time
NP
Unexpected Stoppages
Net Prod ucti on Time is the theoretical time that a machine/line should take to produce the good output if it runs at TMP speed. It includes no allowances for interruptions, or any other time losses. Where a machine/line is producing a range of products, calculation of the NP for the output of each product, enables to report an average efficiency for the mix. ( NP=Weighted average for the output of each product) Calculation of Net Producti on Time: NP is not a time that can be recorded, but it must be calculated directly from the declared production. Net Production Time = Output Produced / TMP
Where TMP, is the maximum achievable speed of a machine/line for a particular product, without any allowance for loss of efficiency. It is expressed as a quantity per unit of time (pieces per minute, Packs per minute, Cases per hour) and converted into Kg/hr by applying the declared weight of the SKU produced. TMP will normally be set and agreed by production and engineering management in the factory after measurement and trial. As TMP may vary with the item being produced and other operating conditions, setting a target running speed for machines in different factories should be done with great care after analysis of the operating conditions taking into account: -
Upgrades of machines/lines Different pack sizes and formats of the same product Special wrappers for presentations, discounts or promotions Local improvements to the machine/line Local restrictions due to the quality of packing materials
Unexpected Stoppages is the time when the machine is unexpectedly stopped by identifiable and non-routine events, during its Production Time. The causes for Unexpected Stoppages are classified in four categories: (1) (2) (3) (4)
Technical Downtimes Technological Downtimes Organizational Downtimes Time and Waste Adjustments
(1) Technical Downti mes: The list of the technical downtimes will be specific to the factory and production line. We should include here, bulk ingredients delivery system and all machines and equipment used on the line The level of details is the internal factory decision and will depend on the frequency of breakdowns and data collection system that the factory is able to put in place. (2) Technological Downtimes:
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Technolog ical Problem Time lost during production, which are related to process problems. The cause is not clearly identified and cannot be dedicated to another line in this section. Wrong size of product causing stop of the line due to problems with packing. Unexpected need for cleaning Short stoppages for cleaning needed to take place during Production Time. For example: Cleaning of milkwashing unit Short stoppage at the end of the shift for the machine cleaning Time for re-heating of the Chocolate Enrober Change of packaging port ion Short stops of machine for loading new portion of packing material. Usually registered only when TMP of the line is governed by the output of Packing machine. Change of reel of packing material when Packing machine is the bottleneck of the production line. Defective Raw or Packagin g Material Time lost is clearly connected to inadequate quality of Raw or Packaging Material
(3) Organizational Downtimes: Hygiene and Food Safety Line stopped for Hygienic or other Food Safety reason. The causes for stoppage are located in the factory. For example: Stoppage for the machine (line) sanitation, necessary to continue the production but previously not planned for. Line stopped due to contamination of production. The source of the contamination is internal. Lack of Raw or Packaging Material Raw or Packaging Material unexpectedly not available for production. Not delivered to the production line from the storage area Not delivered to the factory or in-hold for quality check. Lower number of s taff than planned Staff moved to continue production on another line despite the plan to produce. Not enough workers to run the line and line stopped Line run with slower speed due to less available number of workers than planned. Lost output should be recalculated to lost time Line stopped to pack the product accumulated due to lower number of workers than required Low sk ills and/or Operator mistake Time lost due to inadequacy of operator skills and/or by not following the working procedure. Ac ci den t Time lost due to accident of the operator.
(4) Time and Waste Adjustments:
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Time Adjustment This is the time that is calculated to be lost when the machine is not running at its specified TMP and/or due to unexpected stoppages, which are too short for manual recording. Waste Adjust ment Is calculated by converting the weight of collected waste during the production run into units of equivalent time. Note that: Concepts such as: Technological waste, “Burnt leftovers from wafer ovens” and waste from “cutting of wafer books” are not to be converted into time as they will not impact Line Output and Efficiency. Calculation o f Time Adjustment: The amount of time in this category cannot be calculated directly but has to be derived from the difference between the Production Time and the Net Production Time calculated from the TMP, plus all recorded Unexpected Downtimes. Time Adju stment s = P – (NP+(Techni cal+Technolo gic al+Organizational+Waste))
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3. Indices of Utilization, Efficiency & measures of Plant Capacity 3.1 UTILIZATION INDICES Questions on Asset Utilization are increasingly being raised at the GROUPE DANONE Divisions because of sourcing within regions and the importance of utilizing Capital resources effectively. The following indices have been defined for GROUPE DANONE benchmarks and for annual budget estimates. Utilization Indices primarily measure the use of the machine/line time but to a lesser extent also indicate how they perform. They will be improved by increase in sales volumes or by reduction in assets. However in some factories it will not be possible to eliminate all unutilized (waste) time, because some capacity has to be reserved to cope with peaks in sales demand. In these circumstances further improvement would depend on planning production to smooth the peaks in demand. 3.1.1 Available Utili zatio n (AU) It is a measure of how well the machines/lines are utilized, within the existing constraints of Available Time. AU measures how an asset is planned to be used in the time that it is normally operated when running at its current efficiency. AU= Operational Time (O) x 100 Available Time (A) 3.1.2 Operational Utili zatio n (OU) Top of mind indicator for Utilization It is a measure of how well the machines/lines would be utilized if the total Calendar Time was available. OU= Operational Time (O) x 100 Calendar Time (C) 3.1.3 Net Utilization (NU) It is a combined measure of both the performance (Efficiency) of a machine/line and the use of its time (Utilization). NU measures how much output can be obtained from an asset in the total Calendar Time when running at its current efficiency. NU= Net Production Time (NP) x 100 Calendar Time (C) NU= Operational Utilization (O/C) x Operational Efficiency (NP/O)
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This is a very severe measure of the asset’s use. It will primarily be of value for inter-company benchmarks when assessing how a line is being utilized over the long term. 3.2 EFFICIENCY INDICES It is essential in ALL statements of machine/line efficiency to mention the TMP used for calculation. The TMP will normally be set by the factory taking into account local machine/line constraints and may vary with the products produced. It will however be compared with centrally set reference speeds in case of key pieces of normalized equipment 3.2.1 Production Efficiency (PE) It is a measure of how effectively the machine/line has been run by the production department during the time it was under their control and could have run productively. PE= Net Production Time (NP) x 100 Production Time (P) Improvement in PE is normally tackled at the operating level in a factory by reducing the causes of unexpected stoppages, by ensuring adequate supplies of materials or clearance of product from the machine/line and by applying preventive or corrective maintenance. 3.2.2 Operatio nal Eff ici ency (OE) Top of mind indicator for Efficiency This is the most commonly used indicator of efficiency at both the CBU and GROUPE DANONE Division level, because it measures all the activities within the control of a factory. It is a measure of how efficiently the machine/line has been operated by the production and engineering departments of a factory during the time it was planned to run ( for example, how many and how well startups, changeovers etc… are handled). OE= Net Production Time (NP) x 100 Operational Time (O) Improvement in OE is normally tackled at the departmental level in an organization. By reducing frequency and times for start-up, shut-down and cleaning, by not stopping machines/lines for meal or other personnel breaks, by designing machines and operations to simplify changeovers, loading and unloading or by reducing causes of unexpected stoppages Note that: When seeking to reduce Working Capital, it may sometimes not be possible to increase the OE. This will happen when it is more beneficial to reduce CUTE
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stock levels by shortening production runs, which will tend to increase the number of changeovers and, hence, lower the OE.
3.3 CAPACITY MEASURES The capacity of a factory or an individual machine/line is the output that can be expected to produce, over a period when operating under specified conditions with a stated product mix. Plant Capacities are needed and used for different purposes:
3.3.1 GROUPE DANONE CBU’s and Inter Company Sourcing, need realistic figures showing what their factories can be expected to deliver in current circumstances. Maxim um Capacity (MC) It measures the potential or maximum output that could be obtained from a machine /line when operated at a stated efficiency over the total Calendar Time (8760 hr) in a year. MC= TMP x Operational Efficiency x Calendar Time Available Capaci ty (AC) It measures the output that can be expected from a machine /line when operated at an estimated efficiency in a full year taking into account the constraints for Unavailable Time, during which the machine/line will not operate due to the limits of local or industry working conventions. AC= TMP x Operational Efficiency x Available Time per year Note that: 1. MC and AC will normally apply to a specific product mix, so that, need to be calculated using their weighted average TMP. 2. When declaring machine/line capacity, the Operational Efficiency at which it was calculated should always be stated (fe. Available Capacity @ 80% OE)
3.3.2 Planners and schedulers need figures that are practically achievable; hence, allowing them to make efficient use of installed capacity. Operational Capacity (OC)
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It is a measure of the practical output that can be expected from a machine/line when operated at an estimated efficiency in a full year. It is used to investigate whether the forecast sales demand can be met. OC is measured over a long period, so that, it normally applies to a specific product mix and in effect is calculated using their weighted average TMP OC= TMP x Operational Efficiency x Operational Time per year Production Capacity (PC) It is a measure of capacity often used for shift scheduling with a short time horizon usually no more than days or weeks. When PC is measured over a short period, such as a shift, TMP used will often be specific to one SKU rather than to a mix of products. PC= TMP x Production Efficiency x Production Time per shift, day or week
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Aggregati on rules f or reportin g Uti li zatio n & Ef fici ency at Pl ant level
Operational Utilization (OU) Operational Time per SKU From SKU to Line (OU Line) = % Calendar Time
(OU per Line x Avg. TMP per Line) From Line to Plant (OU Plant) = %
Avg. TMP per Line
Operation al Effici ency (OE) Net Production Time per SKU From SKU to Line (OE Lin e) = % Operational Time per SKU Net Production Time per Line From Line to Plant (OE Plant) = % Operational Time per Line
NB. The Avg. TMP for a line is calculated using Operational Time per SKU as a weight
(TMP per SKU x Operational Time per SKU)
Avg. TMP Li ne =
kg/h. Operational Time per SKU
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Explanatory Notes to Comm on Questions Treatment of Changeovers and Cleaning Changeovers and routine Line/CIP Cleaning, are activities that regularly take place during the time the line is intended to be operated productively and which are necessary in order to produce the required product formats with the required quality. In highly utilized lines, they have to be carried out during normal operating hours and the times are planned for as Routine Product ion Activities and, as such, included inside Operational Time. However, some factories with low utilized lines may wish to carry out these Changeovers and routine Cleaning activities during night shift and at weekends, done by different and/or reduced group of people to the normal packing line crew and therefore allocate the time for those activities to Planned non-Operational Time. Within GROUPE DANONE Divisi on s , since flexibility is becoming increasingly important and quick Changeovers and Short Cleaning times increase Production Time availability, the decision has been taken that AL L Changeovers and routine Cleaning times must be closely monitored and included in Operational Time (their impact will be seen in Operational Efficiency) and taken as part of Routine Producti on Activities whenever they occur. This is to prevent inconsistencies in reported efficiencies when some low utili zed factories carry out Cleaning, for example, during weekends and other fully utilized factories have to do it during Operational Time (this would penalize the Operational Efficiency of the better utilized ones).
Productio n Efficiency vs. Operational Effici ency For an overall assessment of factory performance OE, Operational Efficiency has to be the focus. OE is also used to estimate long term Plant/Lines Capacity. The routine production stoppages which adds for the difference between OE and PE are the result of two factors: (1) Number of planned routine activities x (2) Time required for each operation (1) Managing the planned frequency for those routine activities can optimize factor (1) fe: Number of changeovers? How often do we need to clean? This is normally tackled at Supply Chain and Factory Management level. (2) Shortening the times required to do each operation can optimize factor (2). This is the task of Production + Maintenance +very often Engi neering. PE, Production Efficiency gives extremely useful i nformation for the Production Line Teams about unexpected breakdowns, unrecorded stoppages and the impact of waste generation during production on machine time loss. PE gives the operators the possibility to control, analyze, act and improve on their line. Planners and Schedulers also use PE for shift and short term Capacity Planning.
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Treatment of l ong t ime BREAKDOWNS When a line has a major breakdown, the time the line is stopped for this unscheduled maintenance, must be included in Operational Time until the line is available for production again, that is to say, that there is no difference between a short and a long unexpected stop. Remember that CUTE is measuring the efficiency and utilization of the lines and NOT the labour. Therefore this rule is not altered by reallocation of labour from the line that stops, to another line.
Does Overweight in fluence line Effic iency or TMP ? Overweight is not influencing the line efficiency or the TMP. Overweight is influencing cost of the product due to a variance in consumption of Raw Materials. When we refer about TMP, we have to remember that what machines produce are pieces and that the output in kg. is j ust a consequence of the different weight of the pieces. What we sell to our customers are packs so that our factories need to produce a certain number of packs (no a certain number of kgs.) in order to supply our demands. Example: 1 machine x 100 strokes (packs)/min x 8 pieces/stroke (pack) = 48000 pieces/h At specified weight of 25 gr./piece TMP = 48000 x 25 = 1200 kg/h If there is 2% overweight, the machine will still produce the same 48000 pieces/h but with 25.5 gr./piece, so that you will be giving away 24 kg/h of Raw material as overweight. This does not mean that the machine TMP is changed.
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CUTE (Capacity, Utilization, Time & Efficiency)
Implementation Guid elines/Requirements 1. To make sure that CUTE terminology is well understood by Managers and communicated to workers. 2. Reliable data collected on selected points of each line. This should include information about the waste generated and number of Changeovers. 3. Data must be true, recorded in real time and delivering Time Adjustment on level not higher than 1-2%. 4. The Production Line Teams must be fully involved into the process. 5. CUTE reports ready for everyday production meeting and used during the meeting to analyze the events and agree on corrective and/or improvement actions taken on the production floor. 6. Factory targets followed in CUTE methodology on shift, day, week on longterm basis. 7. To follow-up weekly/monthly/yearly evolution of line results. Make results visible (graphical representation) and available at the production lines. 8. To start use CUTE analysis for mid-term action plans during for example weekly meetings. 9. Use CUTE learning’s for Factory Budget and Masterplan projections.
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