Keeping costs down while increasing productivity
European manufacturers are estimated to spend over €400bn every year on maintenance activities. Studies show that about 30% of failed machinery can be repaired at half the cost of buying replacements, which suggests a potential 15% saving. John Mitchell, business development manager, CP Automation, discusses the issues that stop manufacturers cutting costs and improving productivity – the essence of lean manufacturing.
Perhaps the first thing manufacturers should consider when addressing efficiency is keeping assets low. Manufacturers can easily eliminate excess inventory from their books, and thus get better return on net assets, simply by not purchasing the inventory until it’s needed. Methods of achieving this include Just in Time (JIT) inventory management, which is also sometimes called the Toyota Production System. Figures suggest this could result in a 60bn saving in plants across Europe.
As a service and commissioning engineer, I’ve often turned up on site to help a customer with a breakdown, only to find a host of spares out of their antistatic packaging and a confused client, not knowing whether or not the spares were functional.
The best way to prevent that from happening is to correctly test and label working equipment as it goes into the stores. Knowing that the part is ready to go into your application when needed is crucial for both maintenance and production teams. The savings made this way can be significant.
No matter how good your inventory management, unnecessary downtime costs coupled with the price of the support engineer’s visit, may not be factored in when it comes to actual losses. Engineers must be the first ones to understand how important it is to keep plant downtime to a minimum. Research shows that manufacturers spend 40% of their time on reactive maintenance with little left to get to the root cause of the problem. The irony is that 60 per cent of all preventative maintenance activities are actually unnecessary, so getting the right plan in place is a prerequisite.
Another question plant managers need to ask at this stage is whether energy reduction is still a key initiative within their business plan. The majority of enterprises have already implemented the quick wins. Throughout the years we have seen many government schemes meant to support reductions in carbon emissions come and go, from replacing lighting or fixing leaks in air supplies through to fitting energy efficient motors and variable speed drives to pumps and fans,. Yet with paybacks becoming harder to achieve in less than two years, many plant managers seem to have put the issue to one side.
Perhaps this needs to be reconsidered? I believe that energy efficiency should remain an integral part of the long term business plan of every engineering company.
For instance dynamic breaking resistors are often used in applications where companies could save significant amounts of energy over the years by fitting regeneration units, such as CP Automation’s own RevCon, to their variable speed drives.
Let’s take an electric bar heater as an example. The first thing that comes to mind is that it’s expensive to use if you leave it on 24/7. If the heater is needed to work throughout the day; logic indicates that radiators would be a more suitable choice. The same concept applies for drive applications, where instead of radiators you have regenerative units. The payback for this kind of system can be achieved well within two years. An additional perk comes in the form of savings even with energy prices going up; because all the energy returned to the grid is reflected financially in the bottom line.
Despite everything we have discussed, the increased need for budget cuts can put even the best manufacturing efficiency plans under pressure. However, if you place inventory management, energy management and knowledge management at the heart of your strategy, it is possible to both decrease expenditure and improve efficiency. And if every manufacturer did this, the €400bn spent on maintenance activities across Europe could very soon be reduced to a more tolerable figure.